Utilities have been in a declining trend since the beginning of the month and now they have formed a large double-top on the daily chart. The IT Trend Model SELL signal triggered when the 20-EMA crossed below the 50-EMA while the 50-EMA was below the 200-EMA. If the 50-EMA had been above the 200-EMA then the signal would have been "Neutral". Not only is there a double-top, but this week's breakdown executed a bearish rising wedge. The indicators are all pointed in the wrong direction basically confirming the current decline.
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DP INDEX SCOREBOARDS:
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.
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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 selling exhaustion played out as we thought it would, today we saw a nice rally pop at the end of the day. I annotated a rare 'diamond' chart pattern. It's a reversal pattern so seeing that breakout and a move back into the previous week's trading range is bullish. I note that on an intraday basis, the RSI is overbought but the PMO looks healthy for now.
We are still seeing the rising trend channel holding up despite the SPY hitting a lower low today. Volume pulled back on today's nice rally which is concerning. The PMO is still in decline.
Climactic Market Indicators: Somewhat positive climactic readings today. I don't think it's enough to draw a conclusion about an exhaustion or initiation like yesterday. The rally pop today came after highly negative climactic readings. The VIX is staying below its moving average on the inverted scale which tells us there is still the problem of internal weakness.
Short-Term Market Indicators: The short-term market trend is BEARISH and the condition is OVERSOLD. Based upon the STO ranges since the March price low, market bias is NEUTRAL. What stands out to me here are the oversold readings. I note that location and readings for all of these indicators are in near-term oversold lows. The bright spot would certainly be the tick up for the %Stocks indicators.
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. These indicators are quite bearish despite the rising trend. The GCI has now turned down. The BPI is moving swiftly lower and the SCI just had a negative crossover. The intermediate and longer terms do not look favorable.
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. The ITBM/ITVM are in declining trends and remain above zero. %PMO Xover BUY Signals has reached very oversold territory and are declining which is not what we want to see. Components of the SPX need to participate fully to charge up a rally.
CONCLUSION: We got our rally "pop" off the highly climactic readings from yesterday. That "pop" may not be over just yet as the intraday chart looks promising. Overall the indicators are less than positive but clearly we still have a bullish bias to this market. Price just moved back into last week's trading range and I believe it will continue further upward and into it where we will likely see more chop.
IT Trend Model: NEUTRAL as of 5/28/2020
LT Trend Model: BUY as of 5/25/2018
UUP Daily Chart: I would say we have a double-bottom that has formed off support. One thing to note, the reverse island that formed the second bottom...it didn't go all the way down to the support level before turning higher. That generally is especially bullish. I very much like UUP right now.
IT Trend Model: BUY as of 3/24/2020
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: Gold moved lower again but continues to preserve its station above the declining trend. With a strong PMO BUY signal, I am expecting Gold to rebound here.
GOLD MINERS Golden and Silver Cross Indexes:
Yesterday's Comments Still Appy:
"Miners pulled back today and could be forming a reverse island. Given the strength of the indicators I am expecting this group to resume the rally out of the bullish flag formation. Currently all of the GDX stocks have 20-EMAs above 50-EMAs. That's overbought but we know that overbought conditions can persist. I'll be keeping an eye on the RSI and 20/50-EMAs."
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 held onto support along the 20-EMA. I doubt it will be able to continue to given the very negative PMO. However, I can't dismiss the still healthy RSI. Maybe it's time for some consolidation within the gap resistance channel.
IT Trend Model: Neutral as of 6/5/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: FINALLY a breakout on TLT. The PMO has been telling us to expect this. On this breakout we have a rising RSI above net neutral and not overbought combined with a rising oversold PMO on a BUY signal. The setups don't get much better than this. Might be time to add Bonds to the portfolio.
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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)