The Nasdaq 100 ($NDX) is the first major index to lose its IT Trend Model BUY Signal. On Friday the 20-day EMA crossed below the 50-day EMA. Since the negative crossover occurred beneath the 200-day EMA, it is labeled a SELL signal. If it had occurred beneath the 200-day EMA, it would've been logged as a "Neutral" signal.
As with the SPY, support was lost at November/December lows. The PMO generated a crossover SELL signal last week as well. The market is rolling over being led by big tech based on the quick deterioration of the NDX.
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
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:
CLICK HERE for Carl's annotated Sector charts.
THE MARKET (S&P 500)
IT Trend Model: BUY as of 11/15/2022
LT Trend Model: SELL as of 5/5/2022
SPY Daily Chart: It was the last trading day before options expiration, and we got huge end-of-quarter volume. The reason we always make a point of this is so that the high volume isn't attributed to something else. Indicators look terrible. The RSI is in negative territory and the PMO is accelerating lower on an overbought crossover SELL signal.
Additionally, internal weakness is a problem given the VIX is oscillating below its moving average and Stochastics have topped in negative territory.
Here is the link to last Monday's episode:
SPY Weekly Chart: What we see is a large bugle or broadening chart pattern. Volatility is rarely our friend and these patterns suggest it is worsening. Interestingly, though not surprisingly, price topped right on the declining tops trendline. If the pattern is right, we should see a move to test at least $330. The weekly PMO is already topping.
New 52-Week Highs/Lows: This week, the 10-DMA of the High-Low Differential topped. We now have a strong negative divergence in play based on rising price tops and declining New Highs.
Climax Analysis: We got unanimous climax readings today, but for the most part, not as strong as yesterday. The result was a downside exhaustion climax. However, we wouldn't be entirely surprised if the decline continues.
*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 DOWN and the condition is NEUTRAL.
STOs reversed their uptrend this week. They are in neutral territory. However, %Stocks above their 20-day EMA and %Stocks with rising momentum are clearly oversold. Note that oversold conditions can persist in a bear market or bearish market trend. We need to get STOs oversold before we start looking for an end to this decline.
Intermediate-Term Market Indicators: The intermediate-term market trend is DOWN and the condition is NEUTRAL.
The ITBM/ITVM also reversed lower this week after a brief rise. This suggests the decline will stay longer than we like. %PMO BUY signals are oversold, but can move lower given there are fewer stocks with rising momentum versus stocks with PMO BUY signals.
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.
The one-week changes show us the continued deterioration of the Energy sector, but Transports were hurt the most.
This table is sorted by SCI values. This gives a clear picture of strongest to weakest index/sector in terms of participation.
The strength really only lies in Utilities (XLU). Gold Miners were leading last week, but they are beginning to show some deterioration in the intermediate term.
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 BEARISH. We have very thin participation of stocks above their 20/50-day EMAs.
The intermediate-term bias is BEARISH. This week the SCI not only topped, but we saw a negative crossover the signal line. This is very bearish.
The long-term bias is now BEARISH. We have fewer stocks above their 50/200-day EMAs than we have golden crosses. The GCI is also decelerating over time.
CONCLUSION: It was a volatile week the ultimately ended in a breakdown out of the bearish rising wedge and $390 support level. We saw a downside exhaustion climax, but given the falling STOs and ITBM/ITVM we don't see this resulting in a lasting rally. More likely we will see consolidation out of this climax. Participation has thinned to a point that the bias in all three timeframes is bearish. It is hard to imagine a lasting upside reversal. Carefully review portfolio positions and understand that there will be serious downside pressure by a weak market that should be accounted for.
Erin is 12% exposed with a 5% hedge.
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BITCOIN
The rally in Bitcoin looked solid as indicators were rising and confirming. However, the rally quickly fell apart and support was lost. The PMO has ominously turned down below the zero line and the RSI is negative. Stochastics are dropping vertically. This decline is holding support at December lows, but given the condition of the indicators, we expect it to be broken next week.
This chart is to show where some of the support/resistance lines come from.
INTEREST RATES
Rates spent the week lengthening their declining trends. We do believe a reversal is due on rates, but so far those declining trends are not cooperating yet.
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
The declining trend held on $TNX this week as it attempted to bounce off 3.4% support. A decision point is arriving for $TNX as it not only nears strong support at 3.4% and 3.3%. There is a high likelihood that price will drift sideways out of the declining trend. We wouldn't consider that a breakout.
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 has been shrinking, home prices have come under pressure.
--
This week the 30-Year Fixed Rate fell from 6.49 to 6.31.
DOLLAR (UUP)
IT Trend Model: NEUTRAL as of 11/14/2022
LT Trend Model: BUY as of 8/19/2021
UUP Daily Chart: The Dollar continues to decline but appears to be forming a bullish descending wedge right now (not annotated yet). The PMO has flattened and is now rising toward a crossover BUY signal. The RSI is negative, but Stochastics are turning back up. The Dollar is due for a breakout and given indicators are beginning to firm up, we do expect an upside breakout not a breakdown.
Strong support is continuing to be held at the August low so this is a good area to see that breakout. A drop below this support level would have us back to bearish as the next level of support below that doesn't really arrive until $27.
UUP Weekly Chart: As we always expect with parabolic formations, we saw a strong breakdown on the Dollar. Based on the weekly PMO and weekly RSI, this level won't likely hold.
GOLD
IT Trend Model: BUY as of 11/14/2022
LT Trend Model: SELL as of 6/30/2022
GOLD Daily Chart: Gold broke down from the bearish rising wedge, but it is already working on a recovery. The PMO managed to hold above its signal line, but it is tenuous at best.
While the RSI remains positive, but Stochastics and the PMO are not encouraging. We will likely redraw the rising bottoms trendline next week. We will still be looking at a bearish rising wedge. $GVZ remains above the upper Bollinger Band on our reverse scale. That condition usually results in a downside move so we have to be neutral to bearish on Gold going into next week.
GOLD Weekly Chart: The intermediate-term picture is far more bullish. Last week price managed to peek above overhead resistance. The weekly RSI is comfortably seated in positive territory and the weekly PMO is rising on an oversold crossover BUY signal. Based on the weekly chart, we should expect a move above $1800 soon.
GOLD MINERS Golden and Silver Cross Indexes: GDX looks very toppy right now. It may be holding above support at the 200-day EMA and November tops, but participation is diminishing and worse yet, the SCI has dropped below its signal line. Probably time to reevaluate your miner positions. Erin owns GDXJ (Junior Gold Miners) and she has a tight stop that is nearing execution.
CRUDE OIL (USO)
IT Trend Model: NEUTRAL as of 11/21/2022
LT Trend Model: SELL as of 12/6/2022
USO Daily Chart: Crude Oil made an attempt at rallying out of its short-term declining trend. Unfortunately it instead turned down before even reaching the declining tops trendline. The RSI is negative, the PMO has topped beneath its signal line and Stochastics topped in negative territory. $OVX may be oscillating above its moving average on the inverted scale, but see supreme weakness for USO.
USO/$WTIC Weekly Chart: The weekly chart is also negative though not as negative as the daily chart; mainly due to the deceleration of the PMO's decline and the holding of the long-term rising trend. The rising trend is close to breaking, but it's so far holding. The weekly RSI is rising, but remains negative. We expect lower prices to persist and continue to put pressure on the Energy sector (XLE).
BONDS (TLT)
IT Trend Model: BUYas of 12/2/2022
LT Trend Model: SELL as of 1/19/2022
TLT Daily Chart: The short-term parabolic advance has resolved, so far, with a continuation pattern, rather than a complete breakdown. The daily PMO is overbought and going flat, so price could still head south.
TLT Weekly Chart: The weekly chart is bullish and getting more bullish. The shorter-term declining trendline has been broken. The weekly RSI just managed to get into positive territory and the weekly PMO is rising nicely. However, we do believe the 20-year yield will turn back up as it is now sitting on support at 3.5%.
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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