Today the S&P 600 Small-Cap Index ETF (IJR) 20-day EMA crossed up through the 50-day EMA (Silver Cross), generating an IT Trend Model BUY signal. Unlike the SPY, IJR's PMO is above the zero line and is already turning back up.
A few long-term signals arrived today as well with the Dow, IJH and IJR seeing new weekly PMO crossover BUY signals.
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.
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MAJOR MARKET INDEXES
For Today:
For the Week: 
SECTORS
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.
For Today: 
For the Week:
RRG® Daily Chart ($ONE Benchmark):
There are two obvious sectors in trouble in the short term. XLY may be in the Improving quadrant, but it is headed quickly to Lagging. XLC was already in Lagging and the picture is getting worse. All others are in the Leading quadrant, but they all have headings that are deteriorating. XLE and XLK actually have bearish headings and could be the first to hit the Weakening quadrant.
RRG® Weekly Chart ($ONE Benchmark):
The weekly RRG had some interesting changes. XLE continues to hold leadership. XLF has hooked around into a bullish northeast heading toward the Leading quadrant.
XLI, XLB and XLV have done an about face and now have bullish northeast headings. XLP has turned around, but still has a westward component to its heading. Still this looks good for the sector.
The remaining sectors don't look good in the intermediate term.
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: SELL as of 9/8/2022
LT Trend Model: SELL as of 5/5/2022
SPY Daily Chart: Today's candlestick stayed above yesterday's tentative rising trend line, setting a higher low, and putting in a short-term bottom. The candlestick is also looking like a bullish hammer. Today's close also was above the 20-day EMA.
The PMO is now turning back up but remains below the zero line. The RSI is almost back in positive territory. Stochastics still look very negative. One thing that kept us from moving entirely bearish on this decline is the VIX. Notice that this "fear" index is showing investors are complacent. They aren't worried.
SPY Weekly Chart: The weekly PMO is still rising despite this week's hiccup. This week also saw the declining trendline broken. Unfortunately price wasn't able to close above it.
New 52-Week Highs/Lows: New Highs and New Lows were about even given the volatile trading day. Most important is the upside reversal of the 10-DMA of the High-Low Differential.
Climax Analysis: There were unanimous climax readings today, although most were marginal. This gives us an upside initiation climax.
*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.
The STOs continued lower which is not good news, but participation ultimately expanded with nearly 3/4ths of the index holding rising momentum.
Intermediate-Term Market Indicators: The intermediate-term market trend is DOWN and the condition is SOMEWHAT OVERBOUGHT.
The ITBM/ITVM are now beginning to reverse higher which leaves us less bearish about this decline. We did see a negative crossover on %PMO BUY signals. The intermediate term is not looking so bullish.
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.
The following table summarizes participation for the major market indexes and sectors. The 1-Week Change columns inject a dynamic aspect to the presentation.
All but XLU carry a positive intermediate-term bias. To be clear, a "positive" bias, not a bullish one.
This table is sorted by SCI values. This gives a clear picture of strongest to weakest index/sector in terms of participation.
Energy continues to be the leader of the pack based on the GCI and SCI percentages. Gold Miners show a +45 IT Bias, but the reason is that the GCI is so low in comparison to the SCI. Still, the improvement on the SCI this week makes the group look more bullish than it has.
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.
The short-term bias is BULLISH. We've waffling back and forth on the short-term bias. We are going with bullish given that %Stocks above their 20/50-day EMAs are much higher than the SCI percentage.
The intermediate-term bias is NEUTRAL. The SCI is rising, but it has decelerated and the reading is below 50%.
The long-term bias is NEUTRAL. Today the GCI crossed above its signal line suggesting a new leg up. However, we note that the GCI is very slow moving and the last crossover came near the end of that summer bear market rally. We do see a higher percentage of stocks above their 50/200-day EMAs versus the GCI reading which also takes the long-term out of a bearish bias and into a neutral one.
CONCLUSION: It was a wild day of trading, but ultimately price closed above the 20-day EMA and a new short-term rising trend has developed. The STOs need to turn back up. However, we do have bullish indications. The ITBM/ITVM are rising again, there is an upside initiation climax and participation is still expanding. Additionally, the VIX isn't picking up "fear". We've been saying there will be chop and churn on the way up and that seems to be the case. We are going into next week cautiously bullish.
Calendar: Next Friday is Veteran's Day. The stock market will be open, but banks will be closed, and treasuries will not trade.
Erin is 50% exposed.
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BITCOIN
Bitcoin broke out today and indicators support a continuation. The PMO has bottomed above its signal line which is especially bullish. The RSI remains positive and Stochastics have turned up. We wouldn't look for a strong rally necessarily as we've seen these breakouts fizzle into consolidation rather quickly.
This chart is to show where some of the support/resistance lines come from.
INTEREST RATES
Yields finished higher on the week but paused somewhat today.
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 almost broke the rising bottoms trendline but ultimately held support and the trend. This strikes us a bullish and given the RSI and Stochastics are looking positive, we would brace for higher yields. This will be confirmed when the PMO turns back up.
MORTGAGE INTEREST RATES (30-Yr)**
**We watch the 30-Year Fixed Mortgage Interest Rate, because, for the most part, people buy homes based upon the maximum monthly payment they can afford. As rates rise, a fixed monthly payment will carry a smaller mortgage amount. As buying power shrinks, home prices will come under pressure.
--
This week the 30-Year Fixed Rate fell from 7.08 to 6.95.
DOLLAR (UUP)
IT Trend Model: BUY as of 6/22/2021
LT Trend Model: BUY as of 8/19/2021
UUP Daily Chart: The Dollar rallied this week overall and then took it all back today. Indicators turned south. The RSI is now back in negative territory and the PMO has topped beneath the signal line. Stochastics turned down before getting above 80. The bearish descending triangle is ultimately intact and suggests a breakdown below $29.50.
UUP Weekly Chart: Looking at the parabolic advance, the Dollar is fortunate that it didn't break down further. At this point it is holding support. The weekly PMO has topped so the Dollar is vulnerable in both the short and intermediate terms.
GOLD
IT Trend Model: NEUTRAL as of 5/3/2022
LT Trend Model: SELL as of 6/30/2022
GOLD Daily Chart: We had additional buyers of Gold today given the Dollar was down about 1.8% and Gold was up 3.07%. It broke the declining trend which is a breakout from a bearish descending triangle (declining tops, flat bottom). Bullish conclusions to bearish chart patterns are especially bullish. The PMO is rising strongly, the RSI is back in positive territory and Stochastics are favorable as well. $GVZ is oscillating above its moving average on the inverted scale suggesting there is some internal strength.
Discounts popped again suggesting overall investors are still very bearish on Gold. These readings are historically high. Typically we see an upside reversal on conditions like these, but it appears this time around it has prevented a serious breakdown more than anything. We are cautiously bullish on Gold.
GOLD Weekly Chart: The weekly PMO is now attempting to bottom in very oversold territory. We still don't like the large double-top formation that technically was confirmed on the break below the 2021 lows, but with historically high discounts and a support zone holding, we again are cautiously bullish on Gold.
GOLD MINERS Golden and Silver Cross Indexes: Gold Miners saw a huge upside reversal on what appears to be a breakaway gap. If we're correct about the gap, that would mean higher prices ahead with a challenge of $26 at least. Participation shot up and the SCI has reversed higher. Gold having a good day helped, but given we are cautiously bullish on Gold, we have to say the same about Gold Miners right now. Just know that we could see this trading range continue on.
CRUDE OIL (USO)
IT Trend Model: BUY as of 11/4/2022 NEW SIGNAL!
LT Trend Model: BUY as of 3/9/2021
USO Daily Chart: USO gapped up and broke out above the October high. The Energy sector as a whole has been rallying strongly, but USO has only been inching higher. Today's breakout suggests more follow-through as do the indicators.
USO/$WTIC Weekly Chart: The long-term rising trend continues for USO. The weekly PMO isn't hinting at much, but the RSI and strong rally this week do suggest higher prices ahead. XLE will likely soar now that Oil is on board.
BONDS (TLT)
IT Trend Model: SELLas of 8/19/2022
LT Trend Model: SELL as of 1/19/2022
TLT Daily Chart: It wasn't surprising to see the declining tops trendline hold. The PMO was finally starting to move up, but instead it has topped well below the zero line. The RSI hasn't seen positive territory since early August. We would look for Bonds to continue to trickle lower.
TLT Weekly Chart: The weekly PMO is highly oversold, but with yields on a straight path upward, TLT is on a straight path downward. Note that the weekly RSI topped below 30--not a good sign.
Good Luck & Good Trading!
Erin Swenlin And Carl Swenlin
Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin
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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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