I already wrote about this in the Diamonds Report and I plan to do my ChartWatchers article on UNG Friday so you're getting the heads up. Here's what I wrote in today's Diamonds Report about UNG:
"I know many of you have been enjoying the ride, but UNG is starting to look rather bearish right now. I've added a tight trailing stop to my position in case it bounces off support. I've had many subscribers write to me and tell me just that one pick has paid over and over for their annual subscription to Diamonds, so I want to make sure you have an alert that it is beginning to turn. Note the rounded top on price. The PMO has turned over in very overbought territory and is headed for a crossover SELL signal. The RSI is falling fast, though it isn't negative yet. Volume has been pouring in as people begin to take profits. The SCTR completely spiraled lower. We're about ready to hit strong support at $13 which is about 3% less than the closing price."
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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: Well, so much for all of those bearish indicators! The market ignored the bearish technicals and launched higher. I don't want to be a "Debby Downer", but this could be an island reversal. I'll explain more in the indicator sections. The RSI is very overbought now and while overbought conditions can persist in a bull market, it is something to consider. The VIX on its high so we are now seeing the Bollinger Bands spreading. Typically high readings are bullish for the market as it measures "fear". The more fearful or bearish investors are, the more bullish it is for the market. I'm reminded of someone explaining that prices can climb the 'wall of worry'. In this case, the wall of worry continues to build even as prices climb it. The market is overdue for a drop and everyone knows it...yet....no one can stop buying.
Climactic Market Indicators: We saw VERY climactic readings today. Carl texted me and we both agree that this is likely a buying exhaustion. When we see highly positive readings on breadth after a rally, it typically is a buying climax. The VIX climbing during a rally (again) could also be read as bearish in the short term.
Short-Term Market Indicators: The short-term market trend is UP and the condition is OVERBOUGHT. Based upon the STO ranges, market bias is NEUTRAL. These indicators are also experiencing a possible buying climax or exhaustion. The good news is that more stocks are climbing above their 20-EMAs. Although we should note that %PMOs rising barely moved. I would think that on a big rally we would have seen more rising PMOs.
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.
We saw all of these indicators improve today, but I still note negative divergences remain in play.
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.
I like the ITBM and ITVM rising, but the problem I have would be the declining trend on the %PMO BUY signals. We've seen a nearly 2.4% rally over the past two days and this number has not budged. It was 38% yesterday and remains at 38% today.
CONCLUSION: I like that our standard indicators have turned up and look healthier, but the details underneath are a problem. With the rallies of the past two days, we should've seen some improvement on %PMOs Rising and %PMO BUY Signals. In the short term, this looks like a buying exhaustion climax coming on an island reversal bar.
IT Trend Model: NEUTRAL as of 5/28/2020
LT Trend Model: SELL as of 7/10/2020
UUP Daily Chart: The Dollar rallied today, but as I have been saying all week, I won't pay much attention until we see a break out of the declining trend. The PMO has turned up which is positive, but I don't like the negative RSI and possible shooting star/island reversal candle on today's trading.
IT Trend Model: BUY as of 3/24/2020
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: Big drop for Gold today after the nice breakout from the symmetrical triangle. I'm not happy about the loss of the 20-EMA as support, but the 2011 top is holding up. The PMO continues to unwind as Gold goes nowhere. The discounts remain on PHYS which is bullish for Gold.
Full Disclosure: I own GLD.
GOLD MINERS Golden and Silver Cross Indexes: I changed the annotation of the symmetrical triangle on GDX. The rising bottoms trendlines are intact. I do not like the shrinkage of stocks with their price above the 20-EMAs. The rest of the indicators are still positive.
CRUDE OIL (USO)
IT Trend Model: BUY as of 8/13/2020
LT Trend Model: SELL as of 2/3/2020
USO Daily Chart: The rising wedge remains on the shorter-term chart below (easier to see price action), but it was challenged a bit today. Ultimately price closed within the wedge. The RSI on the second chart just moved negative. The PMO is flat but underneath its signal line so currently USO is on a PMO SELL signal. I would expect a breakdown soon.
IT Trend Model: Neutral as of 8/27/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: Much prettier chart today on TLT. The RSI has just entered positive territory and we saw price recapture the long-term rising trend. Price also closed above the 20-EMA for the first time in weeks. The PMO has now turned up. I would look for an eventual test of overhead resistance around $170.
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)