Attention: your browser does not have JavaScript enabled!

For full functionality of this site it is necessary to enable JavaScript.
Click Here to learn how to enable JavaScript.

decision point logo
  • Home
  • About Us
  • Subscriptions
  • Blogs and Links
New around here? Subscribe now! Forgot password?

Manage Account

  • HOME
  • ABOUT US
  • SUBSCRIPTIONS
  • BLOGS AND LINKS

DP ALERT SPECIAL EDITION: Correction and Reassessment

Published on April 11, 2020 at 12:27 PM by Carl Swenlin

DecisionPoint Alert

I was awakened very early this morning by the realization that in Thursday's DP Weekly Wrap I had made an error in my assessment of the Technology Sector (XLK) chart. I referred to the downward slope of OBV versus the price rally from the March low as being a negative divergence. It is actually a reverse divergence, which is a positive sign, because it shows that the negative volume flow has been unable to drag price down. Nevertheless, there are still some negative issues on the chart. Price has moved up into a bearish rising wedge, and the Bullish Percent and Silver Cross Indexes are at the top of their ranges, all of which raises the expectation of a price top.


There is also the issue of whether or not we are in a bull market. The S&P 500 (SPY) has rallied +25% from the March low, and by definition that is at least a cyclical bull market. Perhaps we should be open to the possibility that, at a minimum, Bear Market Rules may not be in effect for the time being. For example, from the 1929 low, the market rallied +48%. That didn't change the ultimate outcome, but things looked pretty good for a while.


CONCLUSION: While my original bearish OBV assessment for XLK should have been bullish, I have identified other bearish signs that leave the overall message of the chart no less negative. Conversely, the size of the current rally puts us in the realm of a bull market, so perhaps we should dial back our expectations of negative outcomes just a bit.



Technical Analysis is a windsock, not a crystal ball.


Helpful DecisionPoint Links:

DecisionPoint Alert Chart List

DecisionPoint Golden Cross/Silver Cross Index Chart List

DecisionPoint Sector Chart List

DecisionPoint Chart Gallery

Trend Models

Price Momentum Oscillator (PMO)

On Balance Volume

Swenlin Trading Oscillators (STO-B and STO-V)

ITBM and ITVM

SCTR Ranking



Blog Archive
Previous Article
Next Article

Contact Us

Email: support@decisionpoint.com

© Proudly created by Alamo City Marketing Solutions

Socialize With Us

DecisionPoint logo

DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. None of the DecisionPoint newsletters or web site materials should be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.

DecisionPoint does not represent or endorse the accuracy or reliability of any of the information, content, or advertisements contained on, distributed through, linked from, downloaded or otherwise accessed from any of the services contained on this web site or in our newsletters, nor the quality of any products, information or other materials displayed, purchased, or obtained by you as a result of an advertisement or any other information or offer in or in connection with the materials. You hereby acknowledge that any reliance upon any Materials shall be at your sole risk. It is your responsibility to verify from other sources, such as your broker, critical elements of a decision to act. DecisionPoint reserves the right, in its sole discretion and without any obligation, to make improvements/changes to, or to correct any error or omissions in any portion of the Materials.

THE SERVICE AND THE MATERIALS ARE PROVIDED BY DECISIONPOINT ON AN "AS IS" BASIS, AND DECISIONPOINT EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SERVICE OR ANY MATERIALS AND PRODUCTS. IN NO EVENT SHALL DECISIONPOINT BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES OF ANY KIND WHATSOEVER WITH RESPECT TO THE SERVICE, THE MATERIALS AND THE PRODUCTS.