Indicators yesterday already had me exercising caution. Today's readings continue to concern me. On the 10-minute bar chart, we have a break of the rising trend channel and an RSI that stayed negative all day. The PMO was looking positive, but it topped below the zero line before the day ended. I've circled a new island formation from the past two days which could precede a gap down. There is one bullish note on the 10-minute bar; the OBV has a positive divergence with price bottoms.
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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: The 5-month candle chart also displays the recent break of the steeper rising trend line. On the bright side, the RSI remains positive and the PMO is still rising. For perspective, the normal PMO range for the indexes is usually between -2 and +2. Obviously that has not been the norm coming out of the bear market low, but it should be considered when it starts getting closer to that level.
Climactic Market Indicators: Readings were somewhat climactic on the negative side. New Highs fell again. Total volume increased on today's sell-off which is concerning. The VIX is mostly above its EMA on the inverted scale which is generally bullish, but it is falling. High negative readings could be warning us of a selling initiation.
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.
Reading remained at about the same level as yesterday for the STOs. They are overbought but do signify that the short-term bullish bias hasn't left yet. Unfortunately, %Stocks indicators contracted quite a bit. We still have 75%+ SPX members with price of above their 20-EMA and rising PMOs which is good participation. Mainly I don't like that it is falling so fast.
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 GCI rose today. It had been flat over the past few days. All of these indicators are now rising which is bullish in the intermediate term.
The intermediate-term market trend is UP and the condition is OVERBOUGHT. The market bias is BULLISH.
All of these indicators are rising, but are now somewhat overbought.
CONCLUSION: Short-term weakness is increasing as far as Net A-D indicators and the contraction of New Highs and %Stocks with a PMO Rising and %Stocks with price above the 20/50-EMAs. The intermediate term is beginning to get overbought, but overall those indicators look okay. The short term is the problem so proceed with caution on your trades.
IT Trend Model: NEUTRAL as of 5/28/2020
LT Trend Model: SELL as of 7/10/2020
UUP Daily Chart: I included a 1-year daily and a 6-month daily so we can decipher the latest movements. I still believe the cup and handle pattern is a valid one. If it drops below $25, I'll scuttle it. We got a nice rally on UUP today, but not enough to breakout from the 'handle'. The RSI did an about-face today with price, nearly jumping back into positive territory. The PMO is on a SELL signal right now, but that huge black volume bar is a good sign.
IT Trend Model: BUY as of 3/24/2020
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: Gold hit the top of the bullish falling wedge and then dropped significantly. The PMO turned down below the signal which is very bearish. It appears that Gold will test the bottom of the wedge again.
Full Disclosure: I own GLD.
GOLD MINERS Golden and Silver Cross Indexes: I mentioned to my Diamonds readers that a number of gold mining stocks were in the results of my Diamond PMO Scan, among others that I run. I didn't present any as "diamonds in the rough" today because I'm not enamored of GDX's chart. It's so close to being positive given that price is remaining above the 20/50-EMAs and the pair of August September tops I've annotated. The PMO is on a BUY signal and the SCI is nearing a positive crossover. However, before I present a Diamond, I want everything to really be lined up on the chart. We have very overbought readings on %Stocks indicators and the BPI is flattening again. My other issue with Miners is that Gold looks ready for a pullback and that won't help them.
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:
"USO has been in a trading range between $24 and $31 for months. The last two times that Oil rallied, it was unable to hold a position above the 20/50-EMAs. Basically it didn't even make it to the top of the trading range. The PMO isn't giving us much help, but the negative RSI tells us to expect further weakness."
IT Trend Model: Neutral as of 8/27/2020
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: TLT broke out nicely today on a gap up. I've included the 6-month chart under the 1-year chart so we can decipher price action more closely. The RSI and PMO are still negative but rising. We need to see a decisive move above the 20/50-EMAs which TLT has not been able to accomplish the past two months.
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)