The beat-down Energy sector has new life with its new "silver cross" of the 20/50-EMAs. I'll look at the XLE chart in the section on "Sectors". The Dow also triggered a new IT Trend Model BUY signal on a "silver cross" of the 20/50-EMAs. Market action today was surprising to me based on the numerous bearish indicators I covered in my interview with Market Views TV on Friday morning. As one reader told me it seemed that today it was the small-caps turn to lead the way, but after that... Carl wrote in his StockCharts article today about the Dow and the fact that Apple (AAPL) and Microsoft (MSFT) were the worst performers today.
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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:
XLE IT Trend Model BUY Signal: You can see the positive 20/50-EMA crossover that generated today's IT Trend Model BUY signal. Currently we are still seeing a negative divergence with the OBV and BPI. The gap has yet to be covered on XLE so I would be on alert for a decline at that resistance area near $40.
IT Trend Model: BUY as of 5/8/2020
LT Trend Model: SELL as of 3/19/2020
SPY Daily Chart: Well everyone came back from the holiday ready to get the party started with a gap up that led price easily out of the zone of resistance. The PMO is now very overbought, even for a bull market bias--we have a bear market bias (50-EMA < 200-EMA) currently. Volume did increase nicely for the day, but I took a look at the 10 min bar chart and noted that much of that volume came in on the end of day decline.
Climactic Market Indicators: Readings are somewhat climactic today. The VIX hit the upper Bollinger Band and turned lower on the inverted scale. I would've expected the VIX readings to move lower not higher on a rally like we had today. I also would've expected more climactic readings. I read this as a possible buying exhaustion. The small-caps had their day and likely will join the larger caps on a near-term decline.
Short-Term Market Indicators: The ST trend is UP and the market condition is NEUTRAL based upon the Swenlin Trading Oscillator (STO) readings. Both of the STOs continued lower on a gap up rally...? This is a red flag in my estimation. %Stocks indicators are rising modestly. Again on a big rally, I would look for a big upside move like we saw on the previous gap up.
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 but I would like to see those negative divergences clear.
CONCLUSION: The ST trend is UP and IT trend is UP. Market condition based on ST indicators and IT indicators is NEUTRAL. The market was up on a gap at the beginning of the day and then fell apart at the end. The STOs are falling on a gap up day! I have to read that as bearish for the short term. The IT indicators are bullish for now. We could see a short-term pullback and a resumption of the rally.
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. It was a big gap down, but support held. The PMO continues to decline which suggests a breakdown coming up. Yet, we have to look at this decompression of the PMO in a positive light given that price didn't deteriorate despite momentum shifting negative. 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: More decline for Gold and given the top below the PMO signal line, it doesn't look that good. If the blue rising trendline fails here and price falls below 1700, I would look for a move down to the April low. The best news is that 1700 has held and it could find support at the April low.
GOLD MINERS Golden and Silver Cross Indexes: I have wanted to get into Miners for some time but today's disintegration is a problem. It's one thing to pullback to the rising trend line and another when you break below it. I noticed a bearish rising wedge. The BPI is ugly, but SCI and GCI are hanging in there. I am looking toward support at $32 as a possible entry should the technicals look alright.
CRUDE OIL ($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 at $35 is holding. The PMO is now very overbought. We could see a "silver cross" tomorrow which would trigger an IT Trend Model BUY signal, but I believe it will be coming in too late.
IT Trend Model: BUY as of 1/22/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: I still think the bearish head and shoulders is viable. Should the neckline be broken, the minimum downside target would be around $152. The PMO is certainly suggesting lower prices.
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Technical Analysis is a windsock, not a crystal ball.
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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.
Helpful DecisionPoint Links (Can Be Found on DecisionPoint.com Links Page):
DecisionPoint Shared ChartList and DecisionPoint Chart Gallery
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)