Today the 50-EMA crossed above the 200-EMA on the Materials ETF (XLB). This triggered a new Long-Term Trend Model BUY signal. The chart below (from our Sector ChartList on DecisionPoint.com) shows that XLB broke out of a symmetrical triangle continuation pattern. The PMO is turning up, the RSI is rising nicely. I also note that %Stocks > 20/50-EMAs are rising and not that overbought. That could certainly support higher prices for XLB. For those who aren't DP Diamonds subscribers, I presented Wheaton Precious Metals (WPM) as a "diamond in the rough" yesterday. It broke out along with XLB.
** Announcement **
I will be traveling July 1 - July 15. I will be writing on the road, but broadcasting will likely be suspended during that time. It's going to be an adventurous road trip for me and my husband. We will be taking a train from Los Angeles to New Orleans, visiting family, checking out retirement areas and then renting a car to make our way back to California with various sightseeing stops along the way. I'll be sure to post a picture or two and I'm sure I'll have funny stories to share along the way. It'll be interesting to see the various stages of the reopening of America. A heads up to Bundle subscribers, the LIVE Trading Room is on hiatus as Mary Ellen will also be out of pocket in the upcoming month. We hope to reopen in late-July. Please direct questions to firstname.lastname@example.org.
DP INDEX SCOREBOARDS:
As noted in the title, the OEX saw a whipsaw and is now back on a ST Trend Model BUY signal. This occurred when the 5-EMA crossed above the 20-EMA. The SPX missed it by just a few hundredths of a point so look for that one tomorrow.
TODAY'S Broad Market Action:
One 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: BUY as of 6/8/2020
SPY Daily Chart: Carl and I have decided to concentrate on the symmetrical triangle that has formed in the short term on the SPY. These are continuation patterns, meaning they should resolve in the direction of the trend that came before it. That would imply an upside breakout. The PMO is decelerating but hasn't turned up quite yet. Volume was average on a day that saw a 1.28% price rise. Notice that the OBV tops are straight across while price tops are on a declining trend. That would be a bearish reverse divergence. It tells us that despite plenty of upside volume, price wasn't able to break out of the declining trend. Remember that price should follow volume.
Climactic Market Indicators: I went with a 'soft' buying initiation yesterday and it did seem to materialize. The readings remain climactic to the positive side and we see that the VIX is now above its EMA on the inverted scale. I would look for a continuation of the rally. The big question is whether it will have the strength to break the declining trend that began after the June top. The symmetrical triangle suggests it will.
Short-Term Market Indicators: The short-term market trend is BEARISH and the condition is NEUTRAL. Based upon the STO ranges, market bias is NEUTRAL. The STOs are still negative, but they are retreating. This means that the STOs are 'rising'. That typically means more upside. However, they are neutral and as such could swing either way.
Intermediate-Term Market Indicators: The Silver Cross Index (% of SPX stocks 20EMA > 50EMA) and the Golden Cross Index (% of SPX stocks 50EMA > 200EMA) are falling. The BPI turned up today which is bullish. The GCI and SCI are now decelerating.
The intermediate-term market trend is UP and the condition is NEUTRAL. With most of the ITBM/ITVM readings since the end of April being above the zero lines, the market bias is BULLISH. These indicators are declining which isn't good for the intermediate term. Yet, the bias in the intermediate term is clearly bullish given the 'green'.
CONCLUSION: The VIX moving above its EMA is bullish as are the Net A-D bars. The STOs are neutral but rising. The ITBM/ITVM are neutral but falling. Overall I would look for a rally continuation and a likely breakout from the declining trend.
IT Trend Model: NEUTRAL as of 5/28/2020
LT Trend Model: BUY as of 5/25/2018
UUP Daily Chart: Price is really struggling with resistance along the 200-EMA and at the previous price top. The PMO continues to look very positive so I would expect a breakout and a challenge of the $26.75 resistance level.
IT Trend Model: BUY as of 3/24/2020
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: Gold continues to rally. It has now overcome resistance at $1800 (barely). The technicals still look very bullish for Gold given the rising PMO. The RSI is positive but not yet overbought. I would look for higher prices to continue.
GOLD MINERS Golden and Silver Cross Indexes: The cup and handle pattern I annotated yesterday has resolved as expected to the upside. The PMO BUY signal has now been logged. My immediate concern would be the very overbought readings, especially all of those "100%"ers. Given it is a small index, I suspect it will be able to hold onto those numbers. Indeed, I believe it will continue higher. The RSI isn't overbought yet.
CRUDE OIL ($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: Yesterday's Comments Still Apply:
"Overhead resistance at the 200-EMA and gap resistance continues to confound Oil. The bright side is that the 20-EMA is holding tight. Until the PMO turns to the upside, I won't look for a breakout yet."
IT Trend Model: Neutral as of 6/5/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: I still am a fan of bonds. I didn't add TLT to my portfolio today. This pullback today makes it more attractive. The PMO is still rising and the RSI is above net neutral (50).
Have you subscribed the DecisionPoint Diamonds yet? DP does the work for you by providing handpicked stocks/ETFs from exclusive DP scans! Add it with a discount AND get the LIVE Trading Room for free! Contact email@example.com for more information!
Technical Analysis is a windsock, not a crystal ball.
Happy Charting! - Erin
Erin Swenlin will be presenting at the The MoneyShow Las Vegas August 16 - 20 at Bally's/Paris Resort! You'll have an opportunity to meet Erin and discuss the latest DecisionPoint news and Diamond Scans. Claim your FREE pass here! You can watch online with this pass too!!
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):