We rarely talk about the Short-Term Trend Model, mainly because it isn't very helpful when it starts to jump around too much. DecisionPoint follows a more intermediate-term view of the markets. When we created the DP Scoreboards, we decided to use the ST Trend Model on that signal table. I also use it on Diamonds which are shorter-term in nature. The signals are determined by 5/20-EMA crossovers. Below is a chart from ChartSchool on StockCharts.com that explains how it works. Basically it is the same as the Intermediate-Term Trend Model, we just use different EMAs. 5/20-EMA positive crossovers are always BUY signals. Negative crossover signals are determined by where the crossover occurs in relation to the 50-EMA. If the crossover occurs below the 50-EMA, it is a ST Trend Model SELL signal. If it occurs above the 50-EMA, it is a ST Trend Model Neutral signal. Well, today and yesterday all four major indexes on the DP Scoreboards triggered ST Trend Model Neutral signals. These signals replaced early August BUY signals. It tells me that the short-term market bias has moved to neutral from bullish.
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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: I pulled out the 5-month candlestick chart out today. We have a bearish engulfing candle which suggests a decline tomorrow. The RSI which had just about reached positive territory, has now turned down below net neutral (50). The PMO is moving quickly downward. For today's Chartwise Women show, I talked about how the VIX is under its 20-EMA on the inverted scale. When that happens, the market is in for churn or decline.
Climactic Market Indicators: Another day of climactic readings, this time to the negative side. Honestly, I hate calling these out as initiations or exhaustions right now. We are experiencing readings that were similar to the bear market decline. I don't like the similarities right now. Remember we would have one day of a great rally and the next a terrible decline--all on climactic readings. Back and forth we went until we had a very clear positive divergence going into the March low. That's what I'll begin looking for rather than call an exhaustion or a climax.
Short-Term Market Indicators: The short-term market trend is DOWN and the condition is OVERSOLD. Based upon the STO ranges, market bias is NEUTRAL. STOs popped lower today which actually could be a sign of exhaustion, but I'm not sold on that idea. The % Stocks indicators are falling but still haven't reached the depths we saw during the bear market. They could move 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 is really accelerating downward and is far from oversold territory. The same goes for the GCI and SCI.
The intermediate-term market trend is UP and the condition is NEUTRAL. The market bias is NEUTRAL.
Indicators continue to move lower in the intermediate term. We actually saw a negative reading on the ITBM today.
CONCLUSION: I said that we would know today whether this correction had been resolved. To the contrary, I do not think it has been resolved. We have new ST Trend Model Neutral signals, the climactic readings were very negative, the bearish engulfing candle and more drop in participation on % Stocks indicators. I would tighten up those stops. I'm hoping to sell into some last minute dead cat bounce strength.
IT Trend Model: NEUTRAL as of 5/28/2020
LT Trend Model: SELL as of 7/10/2020
UUP Daily Chart: The Dollar rose slightly today. I have annotated the gap area that will likely be a problem for UUP. The RSI has just moved into positive territory and the PMO is rising nicely.
IT Trend Model: BUY as of 3/24/2020
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: Gold is still within a symmetrical triangle. That is a continuation pattern that suggests a breakout. Today Gold managed to recapture the rising trend line and it remains above support at the 50-EMA and 2011 top. With discounts still in play, the sentiment is still somewhat bearish and that works in Gold's favor.
Full Disclosure: I own GLD.
GOLD MINERS Golden and Silver Cross Indexes: Yesterday's comments apply:
"Price hasn't quite exited the descending triangle. Generally those patterns resolve to the downside. I'll feel much better if that declining trend is broken. The %Stocks Above 20/50-EMAs improved quickly which does give me hope that we will see that breakout."
CRUDE OIL (USO)
IT Trend Model: SELL as of 9/8/2020
LT Trend Model: SELL as of 2/3/2020
USO Daily Chart: USO is oversold based on the RSI, but I don't see anything that would tell me to expect a rally. The PMO has now moved below zero and there is new resistance at $28.
IT Trend Model: Neutral as of 8/27/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: We could be seeing the formation of a small reverse head and shoulders, but we need to see a rally back to the September top to complete it. I'm happy to see the PMO and RSI rising a bit.
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.
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