What's interesting to note today is the large-cap big names are really driving this market. The SPX was up 0.5%, the SPY was up 0.7% and yet the Equal-Weight SP500 ETF (RSP) was only up 0.14%. The indicators are also telling us the market is getting lopsided toward large-cap stocks.
The SPX whipsawed back into a ST Trend Model BUY signal as the 5-EMA crossed above the 20-EMA. The SPX is attempting to breakout of the symmetrical triangle. The PMO is also trying to turn back up. The reverse divergence with the OBV is still in play but I'll talk about that more in the section on Stocks. What's interesting to note is the large-cap big names are really driving this market. The SPX was up 0.5%, the SPY was up 0.7% and yet the equal-weight SPX ETF (RSP) was only up 0.14%.
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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 symmetrical triangle is still in play. Remember this is a continuation pattern so the expectation would be a breakout. Although Carl and I have seen plenty of these break to the downside. The PMO is turning up again. The reverse divergence is getting worse as the OBV continues to break above its previous tops while price has been declining. Price should follow volume so this is not bullish.
Climactic Market Indicators: We had negative readings on the Net A-D indicators on a day when the SPY was up 0.7%. Not healthy as this implies that the big name large-cap stocks are the ones leading this rally. On the bright side, the VIX pushed past its moving average on the inverted scale. Moving into the upper have of the Bollinger Bands generally is bullish.
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 have now reached positive territory and continue to rise. This is bullish for the short term. %Stocks indicators also make it clear that the big stock names are leading this rally as we aren't seeing the kind of participation we should.
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 continued somewhat higher today which is bullish. The GCI and SCI are decelerating but haven't turned up yet.
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. Yesterday's Comments Still Apply:
"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 and STOs look positive but I don't like the Net A-D numbers today. Overall the intermediate term looks safe. I am neutral to bullish going into tomorrow. I'm off for my vacation shortly! I'll be writing as always but my comments may be a little more brief than usual.
IT Trend Model: NEUTRAL as of 5/28/2020
LT Trend Model: BUY as of 5/25/2018
UUP Daily Chart: The Dollar is now forming a double-top. The PMO is still rising but seeing the inability of UUP to stay above the 20-EMA is concerning; in addition to that fact, this is the second time UUP has been unable to challenge overhead resistance at the October top. It is struggling with the November tops right now. I suspect we will see the Dollar continue lower.
IT Trend Model: BUY as of 3/24/2020
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: Today Gold pulled back to the rising bottoms trendline. That keeps the rising trend intact. I also note that despite an over 1% decline, the PMO is still rising. The RSI is in positive territory and not overbought. I'm looking for higher prices for Gold. If the Dollar declines as I suspect, that will only help Gold.
GOLD MINERS Golden and Silver Cross Indexes: The cup and handle pattern executed with a decisive breakout today. Next up is testing resistance at $38. The PMO is rising nicely after a crossover BUY signal. 100% of the components of the Gold Miners ETF (GDX) have price above their 20/50-EMAs. While that is a very overbought reading, overbought readings can be sustained in a longer-term uptrend. Members of this group are rallying strongly. Full disclosure: I own Newmont Mining (NEM).
CRUDE OIL ($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 20-EMA continues to hold as support but overhead resistance is strong at $41 or the top of the gap from March. The PMO is still declining. I would look for more sideways action.
IT Trend Model: BUY as of 6/26/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: I didn't add TLT to my portfolio today mainly because I'm packing for my trip and didn't have a chance to watch intraday charts this morning. I like Bonds right now given the positive PMO and RSI. Strong support is available along both the 20/50-EMAs. I may go with a limit order around $162.25 since I can't watch the market as closely as I normally would.
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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)