A look at the 10-minute bar chart below and you can see the sideways trading range. It appeared we were going to have a substantial loss booked on the major indexes today, but a last minute buying spree on heavy volume erased much of those losses. Even if the last minute push was a buying impulse, I am not expecting price to move out of this trading range given the indicators. Tomorrow is options expiration. Typically we will see very high volume and very little price movement which will likely keep this trading range going.
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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: If you want think positively, today's candle could be setting up an island reversal. We are at the bottom of the trading range or rectangle right now and price is sitting on the 50-EMA. It could be a bullish set-up in the very short term. I don't like that the VIX won't get above its EMA on the inverted scale. As long as it remains below its EMA, the market is vulnerable to more tossing and turning as well as decline. The RSI is now negative and the PMO is picking up speed on its current descent.
Climactic Market Indicators: No climactic readings. New Highs contracted which is bearish. Total volume was above its 250-EMA on a gap down decline which is also bearish.
Short-Term Market Indicators: The short-term market trend is NEUTRAL and the condition is OVERBOUGHT. Based upon the STO ranges, market bias is NEUTRAL. These indicators are rising but they are now in overbought territory. Despite them trending higher, the market hasn't done anything. The %Stocks indicators slipped slightly today.
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 has topped under its signal line which is negative, but the SCI turned back up. The GCI is gaining strength which is positive, but only 62% of the SPX have "golden crosses" in play.
The intermediate-term market trend is UP and the condition is NEUTRAL. The market bias is NEUTRAL.
Yesterday's comments still apply:
"I like the look of these indicators and the fact that we did see a positive crossover on the %Stocks with PMO BUY signals."
CONCLUSION: I don't see anything but short-term weakness. I think we will be lucky to get an upside breakout from this current consolidation zone. It's a rectangle shape and those are typically continuation patterns, meaning a breakdown ahead. It could possibly be avoided tomorrow given the possible island reversal. Price is sitting on important support at the 50-EMA. With options expiration I don't really expect this rectangle to resolve itself tomorrow, but it does have me concerned about next week.
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:
"We have a nice cup shape developing at the end of a protracted decline. Additionally there is a gap that needs covering. The declining trend in the Dollar really hasn't been broken in a meaningful way yet. The PMO is rising though and the RSI is trying to get into positive territory."
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 with adds:
"I see a bearish descending triangle on Gold. However, you could also make a case for a symmetrical triangle on a possible flag pole which is bullish. Right now I'm watching support at 1900 closely. The PMO has turned down and the RSI is neutral. We are still seeing discounts on PHYS. I think Gold will continue to hold up, but I'll certainly feel better when the declining tops trendline is broken."
Full Disclosure: I own GLD.
GOLD MINERS Golden and Silver Cross Indexes: I had annotated a similar bearish descending triangle on Gold Miners like the one above for Gold, but looking at it, I think we are looking at a trading range for right now which could mean a test of support at the bottom before price breaks out. The indicators still look pretty good with the PMO nearing a positive crossover and the RSI remaining positive. Gold Miners have been dominating my Diamond PMO Scan results so I'm looking for a nice breakout, but we might have to wait on that a bit longer.
CRUDE OIL (USO)
IT Trend Model: SELL as of 9/8/2020
LT Trend Model: SELL as of 2/3/2020
USO Daily Chart: I suspect the rally in Oil will be stopped at resistance around $31. It was very bullish to see price leap back above the 20-EMA. Next up is the 50-EMA and given that the RSI is now positive and the PMO is beginning to rise, I expect price to break above it.
IT Trend Model: Neutral as of 8/27/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: Yesterday's comments still apply:
"We just got a PMO BUY signal on TLT. However, I'm not overly bullish here as price is struggling to get above the 20/50-EMAs" and the RSI is still negative as well.
Full disclosure: I own TLT.
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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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