I don't want to overwhelm you with too many charts in today's introduction; however, we had four important new BUY signals land on all four Scoreboard indexes! With last Friday (5/29) being the end of the week and the end of the month, it was time to review the location of the PMO on both the weekly and monthly charts. We finally saw the SPX, OEX and Dow join the NDX with weekly PMO crossover BUY signals. When I reviewed the monthly charts, I found the NDX had a monthly PMO crossover BUY signal. That gives the NDX a completely "green" Scoreboard with six BUY signals in three timeframes. I've included the pertinent charts below the Scoreboard Summary.
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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.
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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: Given civil unrest and the coronavirus were backdrops to today's trading, investors turned a blind eye and the market was up to finish the day. Volume pulled way back from last week on this gain. Overall the indicators are positive with the PMO rising (although very overbought), rising OBV lows and a VIX that is staying above its moving average on the inverted scale.
Climactic Market Indicators: Readings weren't climactic today, although I note that they are more positive than the prior two trading days.
Short-Term Market Indicators: The ST trend is UP and the market condition is OVERBOUGHT based upon the Swenlin Trading Oscillator (STO) readings. The STOs are now rising which is good for the market. %Stocks above their 20-EMA is also rising. The declining trend is continuing on %PMOs Rising.
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. Technically the BPI did top last week and set up declining tops going into this week. So far it hasn't been a problem and given the very short-term nature of the drop, I'm not putting too much weight on the negative divergence.
The IT trend is UP and the market condition is NEUTRAL based upon the ITBM and ITVM. None of these indicators topped last week. Until they pass their previous tops from April, they are still vulnerable for a negative divergence to hit when they top next.
CONCLUSION: The ST trend is UP and IT trend is UP. Market condition based on ST indicators and IT indicators is NEUTRAL to OVERBOUGHT. Overall the indicators look good. We just got three new weekly PMO BUY signals on four of the major indexes as well as a LT PMO BUY signal on the NDX. I don't see evidence of a breakdown in the making yet so I'll stay short-term bullish.
IT Trend Model: NEUTRAL as of 5/28/2020
LT Trend Model: BUY as of 5/25/2018
UUP Daily Chart: Since finally breaking down, UUP has now dropped below its 200-EMA. That's critical support that's been broken. I would look for further downside especially given the very negative PMO configuration.
IT Trend Model: BUY as of 12/26/2019
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: There is a 'zone of resistance' setting up on Gold between the May top and April top. The new PMO BUY signal is encouraging so I'll be looking for a move to at least test that new short-term area of overhead resistance.
GOLD MINERS Golden and Silver Cross Indexes: Gold Miners woke up after a pretty hefty decline. The BPI has turned up and the rally is off and running. The SCI is very overbought, but we saw that condition stay with GDX from late June to early September. I might be watching some of the Miners tomorrow for entry if we see a pullback off this 3%+ rally.
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: Price is now testing overhead resistance at the March gap. The PMO is decelerating. We did just get a "silver cross" of the 20/50-EMAs, but I suspect gap resistance will hold for a bit longer.
IT Trend Model: BUY as of 1/22/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: I'm still watching a possible head and shoulders formation, but now I'm starting to see a bullish falling wedge. Since price hasn't been able to get above the 20-EMA and test the top of this wedge, I am leaning toward a bearish conclusion and an activation of the H&S with a drop below the downward sloping neckline.
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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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