The SPX logged another all-time high today on an end-of-day breakout. I decided to take a look at the 10-minute chart for the past 10 days. You can see how the market was consolidating until yesterday's gap up breakout. The rising trend began off last week's low and has been steady; however, we do now have a very short-term bearish ascending triangle. Other than that, the chart looks healthy with the RSI in positive territory and the PMO on a BUY signal and rising.
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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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SECTORS
SIGNALS:
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.
TODAY'S RESULTS:
One WEEK Results:
STOCKS
IT Trend Model: BUY as of 5/8/2020
LT Trend Model: BUY as of 6/8/2020
SPY Daily Chart: The PMO had whipsawed into a SELL signal last week, but it is rising nicely on its BUY signal. Total volume fell and remains below the annual average, but I suspect that with volatility calming down, we are really looking at numbers similar to those of a year ago. Speaking of volatility, the Bollinger Bands on the VIX have squeezed very close together and could be setting us up for the next period of high volatility. You'll note that after tight squeezes of the Bands, a period of high volatility usually ensues.
Climactic Market Indicators: Yesterday's positive climactic readings were a buying initiation and suggested a rally pop within the next few days. Well, we got the pop. They are very neutral today, but I do note that we had negative breadth on a rally, though not significant.
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 are still rising, although just like in the climactic indicator chart above, I note that %Stocks indicators topped and ticked lower.
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 today, but the SCI is still in decline. The GCI moved from its holding pattern to rise slightly today.
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.
These indicators haven't turned up yet which continues the negative divergence of price rising and indicators falling.
CONCLUSION: Based on analysis yesterday, Carl and I expected a rally pop in the next few days given the buying initiation climax that set up yesterday on breadth. At this point, the short-term indicators are positive. The intermediate-term indicators are showing negative divergences and are moving lower despite price moving higher. We likely will see some more rally, but those negative divergences in the intermediate term tell me the market will make a turn.
DOLLAR (UUP)
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."
GOLD
IT Trend Model: BUY as of 3/24/2020
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: Yesterday's comments still apply:
"Gold is ready to test overlapping support of the 50-EMA, 2011 top and rising trendline. The PMO is on a SELL signal and falling. The RSI just turned negative by moving below net neutral (50). The good news is that discounts continue on PHYS which is positive for Gold. My sense is these levels of support will hold and price will consolidate."
Full Disclosure: I own GLD.
GOLD MINERS Golden and Silver Cross Indexes: I really like the candle today on GDX. It's a bullish hammer which tells us to expect prices to rise tomorrow. This would make great technical sense given price tested the 50-EMA and the rising trend today. The indicators aren't particular positive given they are mostly in declining trends, but if we get a nice reversal at this inflection point, they will of course improve.
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."
BONDS (TLT)
IT Trend Model: BUY as of 6/26/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: Big gap down after price was unable to get above both the 20/50-EMAs. This could be an island reversal setup, but the RSI is negative and the PMO has just turned negative.
Full disclosure: I own TLT.
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Technical Analysis is a windsock, not a crystal ball.
Happy Charting! - Erin
Email: erin@decisionpoint.com
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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Price Momentum Oscillator (PMO)