As a special treat for our subscribers, our DecisionPoint Show that airs on Thursday mornings will be sent Wednesday evenings so our subscribers get an opportunity to preview and watch the show early. We've already sent out today's! Carl and I discussed the titled question. The "crash prevention" team (Fed) has thrown quite a bit of money into the market and we may be seeing more of the results. I'll review our indicators and see if I can answer the question. Looking at the 10-minute bar chart below we can see a very bullish breakout from a bearish rising wedge. That can be considered especially bullish. The RSI is very overbought, but it can remain that way for awhile before a breakdown. I noticed that the gap from Tuesday wasn't quite closed before price reversed. That is also bullish. Volume was also strong at the end of the day as noted by the OBV. The rising PMO suggests higher prices tomorrow.
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TODAY'S Broad Market Action:
Past WEEK Results:
Top 10 from ETF Tracker:
Bottom 10 from ETF Tracker:
On Friday, the DecisionPoint Alert Weekly Wrap presents an assessment of the trend and condition of the stock market (S&P 500), the U.S. Dollar, Gold, Crude Oil, and Bonds. Monday through Thursday the DecisionPoint Alert daily report is abbreviated and covers changes for the day.
Watch the latest episode of DecisionPoint on StockCharts TV's YouTube channel here!
Each S&P 500 Index component stock is assigned to one, and only one, of 11 major sectors. This is a snapshot of the Intermediate-Term (Silver Cross) and Long-Term (Golden Cross) Trend Model signal status for those sectors.
One WEEK Results:
IT Trend Model: BUY as of 5/8/2020
LT Trend Model: SELL as of 3/19/2020
SPY Daily Chart: We saw the zone of resistance broken yesterday. Today the intraday high took us above the December 2019 low (finish of the correction). This came on heavy volume which is bullish.
Climactic Market Indicators: Readings are climactic today to the upside. They are higher than yesterday. The Bollinger Bands on the VIX have pinched so breaks of either the upper or lower bands don't carry as much significance. In any case it continues to hover just below the upper band. The PMO is rising. I have to consider this as confirmation of yesterday's breakout.
Short-Term Market Indicators: The ST trend is UP and the market condition is SOMEWHAT OVERBOUGHT based upon the Swenlin Trading Oscillator (STO) readings. The STOs turned up today. They've been leading indicators, but they were lagging on this rally. They are rising nicely and the %Stocks indicators continue to rise and aren't that overbought. We have rising tops on the STOs and possibly %Stocks indicators when you look in the thumbnail. It seems to be confirming this breakout rally.
Intermediate-Term Market Indicators: The Silver Cross Index (% of SPX stocks 20EMA > 50EMA) and the Golden Cross Index (percent of SPX stocks 50EMA > 200EMA) are rising. All of these indicators are bullish, no arguing that.
The IT trend is UP and the market condition is NEUTRAL based upon the ITBM and ITVM. We now have positive crossovers on all of these indicators and they are rising nicely. A little bit higher and we will have rising tops instead of declining tops which would confirm the rally in the intermediate term.
CONCLUSION: The ST trend is UP and IT trend is UP. Market condition based on ST indicators and IT indicators is NEUTRAL to SOMEWHAT OVERBOUGHT. I have to look at this as a buying initiation based on all of the indicators. I'll admit that doesn't sit well with me or Carl. However, I was reminded that the stock market is not the economy. They are different animals. So as usual I will defer to my indicators and they tell me to expect the rally to continue.
IT Trend Model: BUY as of 3/12/2020
LT Trend Model: BUY as of 5/25/2018
UUP Daily Chart: The trading range continues for UUP. Support continues to hold up at the bottom of the trading range despite a PMO that is continuing to decline and has reached negative territory. Overall, I still expect a breakdown.
IT Trend Model: BUY as of 12/26/2019
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: Gold was up but if you look in the thumbnail, the declining trend remains in the very short term. However, on a more intermediate-term basis, the blue rising bottoms trendline is holding tight. The PMO continues lower. We are seeing premiums continue to dominate which suggests that interest still remains in Gold.
GOLD MINERS Golden and Silver Cross Indexes: More decline for Miners but support is nearing. I'll be watching the BPI closely. If it switches direction, it may be time to get in to Miners. The SCI and GCI still show internal strength is there.
CRUDE OIL ($WTIC)
The oil market is under severe pressure due to a lack of demand, and we do not believe that USO is an appropriate investment vehicle at this time. Until further notice we will use $WTIC to track the oil market. Since this is a continuous contract dataset, it doesn't "play well" with our Trend Models, and we will not report Trend Model signals for oil.
$WTIC Daily Chart: Overhead resistance is holding at $35 which I suspect will continue. Despite what I think is a stop for the rally in Oil, $WTIC had a "silver cross" 20/50-EMA positive crossover that gives us an IT Trend Model BUY signal. Carl doesn't feel that $WTIC plays nice with our Trend Models so you can take it for what it is worth. I see the PMO beginning to plateau so I am not bullish on Oil.
IT Trend Model: BUY as of 1/22/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: I redrew the head and shoulders pattern with a proper down sloping neckline. So far support seems to be holding, but the expectation of this pattern is a decline to $152.
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Technical Analysis is a windsock, not a crystal ball.
Happy Charting! - Erin
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NOTE: The signal status reported herein is based upon mechanical trading model signals, specifically, the DecisionPoint Trend Model. They define the implied bias of the price index based upon moving average relationships, but they do not necessarily call for a specific action. They are information flags that should prompt chart review. Further, they do not call for continuous buying or selling during the life of the signal. For example, a BUY signal will probably (but not necessarily) return the best results if action is taken soon after the signal is generated. Additional opportunities for buying may be found as price zigzags higher, but the trader must look for optimum entry points. Conversely, exit points to preserve gains (or minimize losses) may be evident before the model mechanically closes the signal.
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