Part of my preparation to write the DecisionPoint Alert is to review our ETF Tracker ChartList* to see which major commodities, industry groups and indexes led and lagged on the day. I've noticed that Regional Banks have been doing very well the past two days. I discussed the new IT Trend Model BUY signal that appeared on XLF yesterday, so it was no surprise to KRE logging the same BUY signal today. I suspect given the very positive PMO, healthy RSI above 50 and a new "silver cross" of the 20/50-EMAs that we will see a continuation of the rally. However, there is the problem of closing the gap. Again other than the OBV which has a negative divergence, KRE looks good. I even see what could be considered a bullish double-bottom that is executing.
*StockCharts.com Extra members can get the ETF Tracker ChartList by downloading the DP Trend & Condition ChartPack. It is the first ChartList of the bunch. Heads up! We will soon be charging for those ChartPacks so download them soon!
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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: The market meandered sideways today and held the gap created yesterday. The rising wedge is still visible and could be a problem, but the PMO and OBV look healthy. We did see a pop in volume on today's decline which generally is bearish short term.
Climactic Market Indicators: The VIX continues to flirt with the upper Bollinger Band on the inverted scale. This typically would be a sign of a downside reversal, but it hasn't reversed yet. Readings are somewhat climactic and I do note that New Highs fell as did Net A-D Volume.
Short-Term Market Indicators: The ST trend is UP and the market condition is OVERBOUGHT based upon the Swenlin Trading Oscillator (STO) readings. STOs look great and are rising. The %Stocks indicators have topped which isn't good.
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 nearly topped today. The SCI is getting overbought now which isn't good for the intermediate term.
The IT trend is UP and the market condition is NEUTRAL based upon the ITBM and ITVM. Both ITBM and ITVM look great as they rise and have overcome their previous tops. The %PMO Crossover BUY signals turned over which is a sign of internal weakness.
CONCLUSION: The ST trend is UP and IT trend is UP. Market condition based on ST indicators and IT indicators is NEUTRAL to OVERBOUGHT. The indicators are mixed right now as far as direction which suggests to me we will likely see a leveling off on prices but not necessarily a giant decline.
IT Trend Model: NEUTRAL as of 5/28/2020
LT Trend Model: BUY as of 5/25/2018
UUP Daily Chart: Both the PMO and RSI are oversold and declining. I think this is setting up for a nice reversal at the $26 level as price has been on a continuous slide since the end of May. If we do rebound here, I would consider it more of a dead cat bounce. The chart is very weak.
IT Trend Model: BUY as of 3/24/2020
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: Well Gold managed to hold the rising trendline once again. The RSI turned back up and we are seeing more discounts which is bullish as far as sentiment goes. The PMO has decelerated. Looks like Gold may make another trip to the top of this symmetrical triangle. It's a continuation pattern so I keep looking for a breakout.
GOLD MINERS Golden and Silver Cross Indexes: Gold Miners rebounded today and consequently held the 50-EMA as support. I don't like the PMO or RSI right now, but I do note in the thumbnail that we could be looking at a positive divergence between the rising OBV bottoms and price lows. This is a major support area that I would expect to hold.
CRUDE OIL ($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: "Price is making its way into the gap resistance area. The PMO is topping and overbought. The RSI is getting overbought. I didn't expect price to even move into the gap. I still don't have high hopes for a gap closure."
IT Trend Model: BUY as of 1/22/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: The chart pattern shuffle continues on TLT. I think I finally got it right this time with a bearish descending triangle. Today's gap down executed that pattern. The PMO reached negative territory. The RSI is declining below net neutral, but isn't particularly oversold. I would look for more decline.
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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)