After the Dow triggered a ST Trend Model BUY signal last Friday, we now have a new PMO BUY signal to add. Now ST Trend Model BUY signals have arrived for the others. I don't emphasize the Short-Term Trend Model signals. They are generated by 5/20-EMA crossovers. We generally see quite a bit of whipsaw with those ST Trend Model signals, so I like to wait to put them in the DP Scoreboards. Today three of the indexes (SPX, NDX & Dow) had new Price Momentum Oscillator (PMO) BUY signals. The bullish bias right now is undeniable. I've included all four index charts below the Scoreboards so you can see those new signals up close. Additionally, the Financial SPDR (XLF) switched to an IT Trend Model BUY signal when it had a "silver cross" of the 20/50-EMAs. I'll write more under the "Sector" section.
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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.
XLF has been in a wide trading range since mid-June. This week price broke out of a short-term declining trend. The PMO triggered a BUY signal in oversold territory just under the zero line. The RSI has moved positive. I was surprised to see the high percentage of stocks with price above their 20/50-EMAs. Those indicators are now overbought. However, you have to like the positive crossovers on the Silver Cross Index (SCI) and BPI.
One WEEK Results:
IT Trend Model: BUY as of 5/8/2020
LT Trend Model: BUY as of 6/8/2020
SPY Daily Chart: Today was a great trading day after yesterday's end of day free fall. The president rolled back on his tweet yesterday and opened the door for some piecemeal aid which helped recoup yesterday's losses and then some. The reverse head and shoulders is looking more attractive, but we need a breakout above the neckline to make it official. I do see a small negative OBV divergence.
Climactic Market Indicators: More climactic readings today. I hesitate to call this an initiation or exhaustion. All of this positive breadth and increase in New Highs hasn't pushed the market past resistance. That worries me. VIX Bollinger Bands are so tight as to make penetrations in either direction mostly meaningless. I will say that in the past two weeks we've only seen three days with negative readings which tells us of the bullish bias.
Short-Term Market Indicators: The short-term market trend is UP and the condition is OVERBOUGHT. Based upon the STO ranges, market bias is BULLISH.
This is the fourth consecutive day of strong positive readings on the STOs. Generally you see a peak, then decline. They are overbought, but so far it hasn't been a big problem. The %Stocks indicators are rising and aren't that overbought.
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.
All of these indicators are rising which is bullish for the intermediate term. Today we had a positive crossover on the SCI.
The intermediate-term market trend is DOWN and the condition is NEUTRAL. The market bias is NEUTRAL.
Yesterday's comments still apply:
"ITBM and ITVM have now reached positive territory which is bullish. %Stocks with PMO crossover BUY signals is not overbought and moved over 50% for the first time since August. The intermediate term doesn't look as problematic as the short term."
CONCLUSION: I am concerned that volatility is going to become an issue given the plethora of climaxes that keep appearing on the Climactic Indicator chart and that can be very difficult to maneuver. The very short-term OBV negative divergence could be an issue. Overall, I am not going to underestimate the bullish bias in this market and ignore new BUY signals coming in.
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:
"The cup and handle pattern continues to mature. The expectation is an upside breakout. The PMO has reached positive territory and the RSI is back in positive territory. I'll be watching to see if the declining tops trendline that forms the "handle" in the pattern is penetrated. That could finally trigger this pattern."
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:
"Gold dropped and remains underneath overhead resistance at the 2011 top. With this short-term rally, the PMO had turned up nicely, now it has turned back down. The RSI turned down before reaching positive territory above 50. We are still seeing discounts on PHYS and that is bullish for Gold, however, given the bullish pattern on the Dollar, I'm not expecting Gold to breakout here."
Full Disclosure: I own GLD.
GOLD MINERS Golden and Silver Cross Indexes: Miners rebounded today to prevent a breakdown. Price is now approaching major support at the May top. The PMO has topped under its signal line and the Silver Cross Index turned down below its signal line. Long-term indicators (GCI and %Stocks > 200-EMAs) are still positive, but the other indicators are deteriorating. The good news is this is a very strong area of support and now we have very oversold readings on %Stocks > 20/50-EMAs.
CRUDE OIL (USO)
IT Trend Model: SELL as of 9/8/2020
LT Trend Model: SELL as of 2/3/2020
USO Daily Chart: Yesterday's comments still apply:
"Huge uptick in Oil yesterday and again today. It doesn't change the price chart much, but it does appear we will see a move back to the top of the trading range. In yesterday's DecisionPoint Show we discussed some of the areas we are "stalking" in Energy. I do want to point out on the 6-month chart below that the 200-EMA is finally becoming visible in the upper left-hand corner. Talk about 'beat down'!"
IT Trend Model: Neutral as of 8/27/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: Bonds dropped and failed to reacquire support at $160. The RSI is negative and the PMO turned down below the zero line so I'm not looking for a bounce just yet; but if there were a time for Bonds to bounce, this is it given we have now lost support and the 200-EMA is right there ready to provide it.
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)