We can see the breakout today from the trading range on the SPY. The chart looks healthy overall with the PMO rising after bottoming above its signal line. I do have one beef with this chart and that would be the lack of volume today. Granted it is still above its 250-EMA, but on a breakout day with a move +1.7% should've seen more. The VIX isn't quite challenging the upper Bollinger Band on the inverted scale, so we could see some follow-on rally.
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.
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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: Price has now reached the top of the "zone of resistance". A convincing rally above this area would be very bullish. I added a pink vertical line to show you what happened the last time volume began to wain on the rally just before the last pullback.
Climactic Market Indicators: Readings were somewhat climactic to the upside today which usually bodes well for a rally continuation.
Short-Term Market Indicators: The ST trend is UP and the market condition is NEUTRAL based upon the Swenlin Trading Oscillator (STO) readings. The STOs are accelerating upward and both have broken above their last top. It appears that the %Stocks indicators could form a higher high if they continue to rise and then fall. At this point, they are getting healthy and are not overbought.
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. The BPI had a positive crossover on today's rally, but we still have declining tops (best seen in the thumbnail).
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The IT trend is UP and the market condition is NEUTRAL based upon the ITBM and ITVM. It is good to see these indicators rising, but we haven't seen positive crossovers just yet, so I can't get particularly excited. Additionally we are seeing declining tops on these indicators.
CONCLUSION: The ST trend is UP and IT trend is UP. Market condition based on ST indicators and IT indicators is NEUTRAL. The short-term indicators are positive and the climactic positive readings on very short-term indicators is bullish. Intermediate-term looks a little suspect given the declining tops. I'd also like to see positive crossovers on those indicators. Overall I'm bullish for the short term, but Neutral for the intermediate term.
IT Trend Model: BUY as of 3/12/2020
LT Trend Model: BUY as of 5/25/2018
UUP Daily Chart: The Dollar is holding above support, but price wasn't able to challenge overhead resistance at the late April top. Typically when we decline without testing overhead resistance, you will see a breakdown. Given the negative configuration of the PMO, I would expect to see support broken on this next test.
IT Trend Model: BUY as of 12/26/2019
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: I still like Gold. The PMO looks more bullish and we do have a solid breakout from the pennant formation. Expectation on the breakout from this pattern would be a breakout above the April top.
GOLD MINERS Golden and Silver Cross Indexes: Today's pullback makes Gold Miners very interesting for entries. The SCI and GCI are positive. Carl and I discussed in this week's DecisionPoint Show (airing 5/21) that even though the SCI and BPI are overbought, you can see that between July and into September these indicators stayed overbought. That can certainly happen again.
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: The rally in oil continues with a huge +4.79% gain today. Overhead resistance at $35/barrel is looming and the PMO is very overbought (albeit rising). I suspect when gap resistance is met, price will turn back down.
IT Trend Model: BUY as of 1/22/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: TLT isn't at all interested in breaking down despite all of the indicators suggesting that it should do so. The head and shoulders pattern is still viable, but a break above the 20-EMA would likely break up this pattern.
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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.
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)