The headline today for DecisionPoint is the new Intermediate-Term Trend Model Neutral signal on TLT. I don't usually look at the Bond Yield array that Carl has in his "Weekly Wrap", but given the signal change I thought it would be interesting. Yields have normalized in that the longer Bonds show higher yields. Basically everything is in perfect order from shortest timeframe to longest. Given the remarks from the Fed today regarding the 2% inflation goal, it isn't surprising to see a shake-up on bonds and yields. TLT fell hard today, down 1.7% and that is what helped trigger the new Neutral signal.
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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: Prices continue higher and so does the PMO. The OBV is rising to confirm this rally. The VIX spiked well below the lower Bollinger Band on the inverted scale. Typically we consider a penetration to the downside as an indicator that we will see a rally pop. Well, it is different this time in that this pile of "fear" came on a fifth consecutive close at all-time highs. Part of the problem is how thin the Bollinger Bands have been squeezed. It is inevitable that you'd have a break of Bands. I'm seeing this as a negative divergence given we have bullish price activity and bearish sentiment.
Climactic Market Indicators: Breadth looks positive and seems to confirm today's move. The readings aren't particularly climactic. The VIX is the main problem.
Short-Term Market Indicators: The short-term market trend is UP and the condition is NEUTRAL. Based upon the STO ranges, market bias is NEUTRAL. STOs continue to rise and today participation broadened as we got a rise on the %Stocks indicators.
Intermediate-Term Market Indicators: The following chart uses different methodologies for objectively showing the depth and trend of participation for intermediate- and long-term time frames.
- The Silver Cross Index (SCI) shows the percentage of SPX stocks on IT Trend Model BUY signals (20-EMA > 50-EMA).
- The Golden Cross Index (GCI) shows the percentage of SPX stocks on LT Trend Model BUY signals (50-EMA > 200-EMA).
- The Bullish Percent Index (BPI shows the percentage of SPX stocks on Point & Figure BUY signals.
The BPI continued up and was joined by the SCI which ticked higher...another sign of rally participation.
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.
Mixed readings given the ITBM fell and the ITVM rose slightly. Overall they aren't particularly bullish and we didn't see much improvement on %Stocks with PMO BUY signals.
CONCLUSION: It does seem strange that we are seeing higher fear factor readings on the VIX when we are continuing to make all-time highs. In general a spike in the fear factor is bullish for the market. I suppose it could still be, but it makes me wonder if we won't start seeing profit taking as the wall of fear begins building.
IT Trend Model: NEUTRAL as of 5/28/2020
LT Trend Model: SELL as of 7/10/2020
UUP Daily Chart: Yesterday's comments still apply:
"So many islands...as I mentioned last week, what I find most important on the chart are the declining trendlines and gap resistance. I don't see support until the bottom of that March spike. Today both the 20-EMA and the declining tops trendline held up as resistance. The PMO BUY signal and rising RSI do make me less pessimistic, but overall I don't see a big resurgence for the Dollar anytime soon."
IT Trend Model: BUY as of 3/24/2020
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: When I saw Gold prices falling, I was concerned. When I looked at the chart end of day, I was actually encouraged by the price action. Despite the pullback, the 50-EMA and the rising trend continue to hold. The PMO is decompressing quickly which will set it up for the next leg higher by preventing overbought readings from arriving too quickly. We are still seeing discounts on PHYS and that is bullish for Gold.
Full Disclosure: I own GLD.
GOLD MINERS Golden and Silver Cross Indexes: We see the same type of activity on the Gold Miners. The rising trend and 50-EMA are holding up. This isn't to say we won't see a test at $37.50 given the negative PMO, OBV and now RSI. The BPI is still looking okay and we do have rising bottoms of %Stocks > 50-EMA. I'm cautiously optimistic on Miners.
CRUDE OIL (USO)
IT Trend Model: BUY as of 8/13/2020
LT Trend Model: SELL as of 2/3/2020
USO Daily Chart: Yesterday's comments still apply:
"Price continues to consolidate. The support area aligns with the gap from April and overhead resistance is at the March low. The RSI remains positive, but we did see the PMO trigger a SELL signal last week. I don't expect anything exciting in USO's future this week."
IT Trend Model: Neutral as of 8/27/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: The 20-EMA dropped below the 50-EMA while both were above the 200-EMA. That generated the new IT Trend Model Neutral signal. Had the crossover occurred below the 200-EMA, it would have been a SELL signal. At this point, support held, but the indicators are looking ugly with a very negative RSI and PMO that has just dipped below zero. I had thought that this area of support would hold, but the deep drop and negative PMO suggest to me there is more downside.
Full disclosure: I own TLT.
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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)