The market closed up two days in a row but it hasn't made much headway as intraday tops continue to slide lower. The new PMO SELL signal confirms this declining trend on the SPY. There now is a longer-term rising wedge in play and today's bar dropped just below it. Notice also that volume declined again on another positive close.
The SP100 also triggered a PMO SELL signal today. Notice that it failed at gap resistance just like the SPY/SPX.
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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: BUY as of 6/8/2020
SPY Daily Chart: The rising wedge technically resolved lower on the drop below the rising trendline that forms the bottom of the pattern, but I need to see a close below that to consider it formally 'executed'. I do note that price is sitting on rather strong support of the rising bottoms trendline, horizontal support at the 2019 July/September tops, the 50-EMA and the 200-EMA. It could hold here and simply consolidate sideways.
Climactic Market Indicators: Readings weren't really climactic today except for the Net A-D. What interests me most is the VIX which has continued to puncture the lower Bollinger Band on the inverted scale. Given the last two days were rallies, it's disconcerting to see the VIX staying with high readings. On the other hand, typically we see a rally when the VIX begins rising on that inverted scale. However, I direct you back to the end of March where we saw the lower Bollinger Band continually being broken and price continually hitting new lows.
Short-Term Market Indicators: The ST trend is DOWN and the market condition is NEUTRAL based upon the Swenlin Trading Oscillator (STO) readings. The STOs are still looking very bearish as they continue to decline. %Stocks >20-EMA popped today, but notice that of all 500 stocks in the SPX, only 11% have PMOs that are rising. On the bright side it is an oversold reading. Unfortunately in order to push a rally, you need more than 11% with positive momentum.
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 SCI has topped in overbought territory. The BPI is falling. A few stocks managed to have 'golden crosses' so the GCI is rising.
The IT trend is UP and the market condition is OVERBOUGHT based upon the ITBM and ITVM. All of these indicators look very bearish as they top.
CONCLUSION: The ST trend is DOWN and IT trend is UP. Market condition based on ST indicators is NEUTRAL and IT indicators condition is OVERBOUGHT. Seeing such negative indicators and getting a PMO SELL signal after two days of rally is a big problem for me. I'm bearish right now but hoping to see consolidation along that strong support area rather than a nasty decline like Thursday's.
IT Trend Model: NEUTRAL as of 5/28/2020
LT Trend Model: BUY as of 5/25/2018
UUP Daily Chart: UUP reversed on support at $26, but pulled back today. The PMO is flat and the RSI is falling back down toward oversold. Volume was very light on today's decline, so I am looking for higher prices. Overhead resistance would be the 200-EMA.
IT Trend Model: BUY as of 3/24/2020
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: Gold continues to travel sideways but has narrowed into a symmetrical triangle. Since the previous trend was rising, the expectation is an upside breakout. The PMO is flat but looks ready to turn higher. The RSI is neutral. I do note that the very high negative correlation reading with the SPX suggests that a market downturn could be good for Gold. I like seeing discounts on PHYS, that generally leads to higher prices.
GOLD MINERS Golden and Silver Cross Indexes: Miners had a great day today and held onto important support. This is looking like a large bull flag. Indicators are rising in most cases, albeit some are quite overbought. The OBV is moving sideways during a declining trend which is somewhat bullish. The RSI is in neutral and rising. I like Miners but want to see a rising PMO.
CRUDE OIL ($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 pullback or possibly correction for Oil is underway. The PMO just generated a SELL signal today. Support is currently holding at $35, but I doubt it will maintain it...that PMO is very negative.
IT Trend Model: Neutral as of 6/5/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: Interestingly, the past two days my PMO scans have been picking up numerous Bond ETFs. It's not surprising when I look at this chart. The PMO is turning up and support is currently holding at $162.
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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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