Lots of news! I'll talk about the new PMO BUY signal on the SPX further down in my report. The Russell 2000 (IWM) had a "golden cross". This triggers a Long-Term Trend Model BUY signal. The PMO also returned a new crossover BUY signal yesterday. While all of this is positive, there are still concerns. There is a bearish rising wedge and price is getting perilously close to strong overhead resistance at the June top and February low.
The NDX managed another all-time high today finally busting out of a consolidation zone. The PMO has turned up but I don't like that island reversal that could be setting up.
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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: As you can see in the thumbnail, the PMO had a crossover BUY signal today. With price moving mostly sideways, the PMO has flattened and we are likely to see more criss crossing of the PMO. We're not out of the woods from an island reversal. Total volume was underwhelming on another solid rally day. Good news is that the gap from February has finally been closed. The top of gap resistance was at 329.19 and today's high/close was 330.06 so price made it 0.87 above the gap.
Climactic Market Indicators: Indicators were far from climactic on the rally and we saw fewer New Highs. A bright spot could be that the VIX remains above its EMA on the inverted scale which suggests a bullish bias.
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 continuing to rise which is positive and they have now reached positive territory.
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.
Yesterday's comments still apply:
"The SCI negative divergence has firmed up as it topped. The BPI negative divergence is still in play despite its ticking up."
The intermediate-term market trend is UP and the condition is OVERBOUGHT. With most of the ITBM/ITVM readings since the end of April being above the zero lines, the market bias is BULLISH. Indicators are mixed with the ITBM declining and the ITVM ticking back up. %Stocks is flat/no improvement. I see these as mostly neutral.
CONCLUSION: The STOs are giving me comfort that we shouldn't be blind-sided by a big decline. However, I still do not like the island that is forming. Price may have gotten past gap resistance today, but I see more sludge ahead as it tries to challenge all-time highs.
IT Trend Model: NEUTRAL as of 5/28/2020
LT Trend Model: SELL as of 7/10/2020
UUP Daily Chart: That rally was certainly short-lived. We could see price begin to chop around sideways here, but the close on the low today and the declining PMO tell me there is more downside for the Dollar.
IT Trend Model: BUY as of 3/24/2020
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: And I thought this one was ready to pause... Gold is still marching higher and amazingly we are STILL seeing discounts on PHYS; in fact, we saw a huge expansion. The PMO is strongly rising and although the RSI is very overbought, as I often say, "overbought conditions can persist in a bull market configuration" and this is a very bullish configuration.
Full Disclosure: I own GLD long-term.
GOLD MINERS Golden and Silver Cross Indexes: Okay now I am officially sad I left NEM, but that said, I believe I will watch for a pullback so I can find a good looking Miner...stock that is, not man. The technicals are very strong on the Miners so I am hoping that we do see a pullback, but today's action was explosive and could easily carry over to further highs.
CRUDE OIL (USO)
IT Trend Model: NEUTRAL as of 1/27/2020
LT Trend Model: SELL as of 2/3/2020
USO Daily Chart:
The PMO ticked up today but overhead resistance is holding tight. The RSI is positive so I have been waiting for Oil and the Energy sector as a whole to begin showing solid strength. A breakout for USO or WTIC will likely get that rotation to Energy going.
IT Trend Model: BUY as of 6/26/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: Glad I held on to TLT today. Looks like we will see a breakout here after all.
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Technical Analysis is a windsock, not a crystal ball.
Happy Charting! - Erin
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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.
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