Busy day for DecisionPoint! We opened the free live "DecisionPoint Trading Room" at 12:00p ET today! Carl joined me for a live look at the markets and to answer questions! Here is a link to the recording! If you'd like to join next Monday's free trading room, here is the link. After doing our live trading room, we recorded today's "DecisionPoint" show episode for StockChartsTV. It will be sent out later tonight.
While doing the DecisionPoint Trading Room and Show, Carl and I were waiting on some our indicators to go final. This chart was one of them. I promised to post it in today's DP Alert because we knew that we would see some interesting movement on these indicators given the rally today and the sneak peek we got of our climactic indicators during the show taping. We were expecting a pop on these numbers, but I honestly was surprised to see this much participation given the dismal decline of these indicators during the rally that ended last week. I think this chart suggests a buying initiation, especially when paired with our climactic indicators chart which you'll find below.
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Here is the link to the recording from Monday (8/24/2020) with panelist Carl Swenlin!
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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.
Watch the latest episode of DecisionPoint on StockCharts TV's YouTube channel here!
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 market closed near the top of its range today. It is now taking price out of the bearish ascending wedge. I consider it especially bullish when price breaks to the upside out of a bearish chart pattern. It's not a decisive breakout by any means, but this is a very good start.
Climactic Market Indicators: This chart was the eye opener this afternoon. It updated right before we went on air for the show. Of particular concern were the previous negative Net A-D numbers at the end of last week. Price was moving higher, but breadth was negatively diverging, telling us that participation was thin. Today is a different story with highly climactic readings as well as a nice bump in New Highs. There was an expansion of volume, but it is still under the annual EMA. The VIX's Bollinger Bands are squeezing which tells us there isn't much volatility out there. So how does it expand? When we do get volatile market action coming out of complacency, it is usually to the downside.
Short-Term Market Indicators: The short-term market trend is UP and the condition is OVERSOLD. Based upon the STO ranges, market bias is NEUTRAL. The STOs have turned back up which confirms this breakout.
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 ticked up today, but the SCI is still in decline. The GCI has carried the same reading for the past three days.
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 are still in decline, but are now in near-term oversold territory. If this breakout does turn out to be an initiation, these indicators will begin moving higher.
CONCLUSION: The negative divergences didn't really play out as expected, but they aren't 'gone'. I believe today was a step in the right direction now that we are seeing some increased participation in the rally. The STOs are now rising and the buying initiation climax is suggesting higher prices this week.
IT Trend Model: NEUTRAL as of 5/28/2020
LT Trend Model: SELL as of 7/10/2020
UUP Daily Chart: 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: 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 am somewhat bullish on Miners right now. They are holding their rising trend and the 50-EMA. The PMO is decompressing and moving lower, the OBV is confirming the downtrend and Stocks > 20/50-EMAs is contracting. However, the strength of the components is good given we have 100% on golden crosses and prices above the 200-EMA. The SCI is at 96.55% which is excellent. At this point the picture is mixed or neutral.
CRUDE OIL (USO)
IT Trend Model: BUY as of 8/13/2020
LT Trend Model: SELL as of 2/3/2020
USO Daily Chart: 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: BUY as of 6/26/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: I like that price didn't need fully reach the support level at the May/July lows. I would like to see a close above the 20-EMA, but this is a start. The RSI isn't positive just yet, but the PMO is turning up just above the zero line. I am looking for a retest of the April top.
Full disclosure: I own TLT.
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Technical Analysis is a windsock, not a crystal ball.
Happy Charting! - Erin
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)