Erin sent mail to our subscribers that we wouldn't be publishing today. I decided that we could at least send the current charts. In 40 years I've only missed publishing the DPA several years ago, when I had my quadruple bypass. COVID? Meh.
(Erin and her mom found out they have COVID, likely brought home from the hospital. Comments will be very brief. Carl tested positive today, but his symptoms are quite mild. Still quite a bit of fatigue.)
The DecisionPoint Alert Weekly Wrap presents an end-of-week assessment of the trend and condition of the Stock Market, the U.S. Dollar, Gold, Crude Oil, and Bonds. The DecisionPoint Alert daily report (Monday through Thursday) is abbreviated and gives updates on the Weekly Wrap assessments.
Watch the latest episode of DecisionPoint on StockCharts TV's YouTube channel here!
MAJOR MARKET INDEXES
Each S&P 500 Index component stock is assigned to 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.
RRG® Chart: $ONE Benchmark
RRG® charts show you the relative strength and momentum for a group of stocks. Stocks with strong relative strength and momentum appear in the green Leading quadrant. As relative momentum fades, they typically move into the yellow Weakening quadrant. If relative strength then fades, they move into the red Lagging quadrant. Finally, when momentum starts to pick up again, they shift into the blue Improving quadrant.
CLICK HERE for an animated version of the RRG chart.
CLICK HERE for Carl's annotated Sector charts.
THE MARKET (S&P 500)
IT Trend Model: NEUTRAL as of 1/21/2022
LT Trend Model: SELL as of 5/5/2022
SPY Daily Chart: Note that SPY is above its 20EMA and 50EMA. That's a setup for a Silver Cross BUY signal.
Here is the latest recording:
S&P 500 New 52-Week Highs/Lows: Despite the strong rally, prior damage is clear given there were no New Highs Highs. The 10-DMA of the High-Low Differential continues to rise which is bullish.
Climax* Analysis: As we would expect, there was not much continuation of yesterday's upside exhaustion climax. Nevertheless, the market managed to ad a little more upside today.
*A climax is a one-day event when market action generates very high readings in, primarily, breadth and volume indicators. We also include the VIX, watching for it to penetrate outside the Bollinger Band envelope. The vertical dotted lines mark climax days -- red for downside climaxes, and green for upside. Climaxes are at their core exhaustion events; however, at price pivots they may be initiating a change of trend.
Short-Term Market Indicators: The short-term market trend is UP and the condition is NEUTRAL.
Intermediate-Term Market Indicators: The intermediate-term market trend is DOWN and the condition is MIXED.
PARTICIPATION and BIAS Assessment: The following chart objectively shows the depth and trend of participation in two time frames.
- Intermediate-Term - the Silver Cross Index (SCI) shows the percentage of SPX stocks on IT Trend Model BUY signals (20-EMA > 50-EMA). The opposite of the Silver Cross is a "Dark Cross" -- those stocks are, at the very least, in a correction.
- Long-Term - the Golden Cross Index (GCI) shows the percentage of SPX stocks on LT Trend Model BUY signals (50-EMA > 200-EMA). The opposite of a Golden Cross is the "Death Cross" -- those stocks are in a bear market.
CONCLUSION: None today.
Erin is 40% exposed to the market.
Have you subscribed the DecisionPoint Diamonds yet? DP does the work for you by providing handpicked stocks/ETFs from exclusive DP scans! Add it with a discount! Contact firstname.lastname@example.org for more information!
Tuesday's comments still apply:
"Bitcoin has formed a rising trend channel. The indicators suggest it will continue higher, but overhead resistance at the 50-day EMA has been sturdy. Price hasn't been above it since the March top. It might be time for it to test the bottom of this thin rising trend channel."
Rate inversions continue. Long-term rates are in declining trends while the 1-month/3-month yields soar higher toward long-term rates.
The Yield Curve Chart from StockCharts.com shows us the inversions taking place. The red line should move higher from left to right. Inversions are occurring where it moves downward.
10-YEAR T-BOND YIELD
$TNX broke the declining trend, but really it was more of a "drift" than a breakout. Still, the PMO is bottoming and the RSI broke back into positive territory. Stochastics have turned around but are still negative which tempers our bullish expectations.
IT Trend Model: BUY as of 6/22/2021
LT Trend Model: BUY as of 8/19/2021
UUP Daily Chart: No comments today.
IT Trend Model: NEUTRAL as of 5/3/2022
LT Trend Model: SELL as of 6/30/2022
GLD Daily Chart:
GOLD Daily Chart:
GOLD MINERS Golden and Silver Cross Indexes: No comments today.
CRUDE OIL (USO)
IT Trend Model: NEUTRAL as of 7/8/2022
LT Trend Model: BUY as of 3/9/2021
USO Daily Chart: Yesterday's comments apply:
"Yesterday's breakout from the bullish falling wedge is suggesting the correction is over. However, we've seen this set up on the prior two rallies with the RSI and Stochastics bottoming and then failing. The PMO is flat and not confirming. We wouldn't get too excited until price gets back above resistance at the 20/50-day EMAs."
Looks like a bullish double-bottom, but beware of a possible reverse island setting up.
IT Trend Model: NEUTRALas of 1/5/2022
LT Trend Model: SELL as of 1/19/2022
TLT Daily Chart: Yesterday's comments apply:
"The 20-year yield rose and that caused TLT to top below the 50-day EMA and resistance at the prior July top. This could be setting up a short-term double top. The indicators are deteriorating. The RSI moved into negative territory. Stochastics have topped and the PMO is preparing to follow suit. There isn't much upside potential even if it does rally as there is a strong resistance zone waiting for it between $117.50 and $120."
Good Luck & Good Trading!
Erin Swenlin and Carl Swenlin
Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin
(c) Copyright 2022 DecisionPoint.com
Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
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:
DecisionPoint Alert Chart List
DecisionPoint Golden Cross/Silver Cross Index Chart List
DecisionPoint Sector Chart List
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. DecisionPoint newsletters, blogs or website materials should NOT be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.