Today the Consumer Staples Sector (XLP) and Retail Industry Group (XRT) 50-day EMAs crossed down through their 200-day EMAs (Death Cross), generating LT SELL Signals for both indexes. Both are in narrow 10-month trading ranges, so these signal changes may just be whipsaws instead of predictive.
XLP does have the advantage of a PMO that is turning up with Stochastics rising, but we don't think this will be a meaningful price bottom.
XRT's PMO is in decline and the Silver Cross Index has topped beneath its signal line.
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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MARKET/INDUSTRY GROUPS/SECTOR INDEXES
CLICK HERE for Carl's annotated Market Index, Sector, and Industry Group charts.
THE MARKET (S&P 500)
IT Trend Model: BUY as of 3/30/2023
LT Trend Model: BUY as of 3/29/2023
SPY Daily Chart: Price has essentially pressed pause on the early September decline. The PMO is attempting to erase yesterday's Crossover SELL Signal. Overall the PMO is twitchy and not very helpful.
The VIX was likely lower on CPI news which was received mostly positively. It remains above its moving average on the inverted scale and Stochastics are hovering in positive territory. There appears to be some internal strength based on these two indicators, but price hasn't reflected it.
Here is the latest recording from 9/11:
S&P 500 New 52-Week Highs/Lows: The 10-DMA of the High-Low Differential continued its decline. New Highs and New Lows aren't enlightening.
Climax* Analysis: There were no climax readings 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.
Swenlin Trading Oscillators continued to move higher today which also suggests there may be some internal strength that could be taken advantage of. The problem is we are losing stocks with rising momentum.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is NEUTRAL.
IT indicators were mixed with the ITBM moving lower and the ITVM rising slightly. We want them to both be rising in order to confirm the upside reversal in the Swenlin Trading Oscillators. Less than half of the index hold PMO Crossover BUY Signals so there isn't much strength out there to tap into.
PARTICIPATION: 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 bias is BEARISH in all three time frames.
It is important to note that %Stocks > 20/50EMAs were lower on today's rally.
Short term, we have %Stocks > 20/50EMAs below our bullish 50% threshold. Intermediate term, the Silver Cross Index is declining after topping beneath the signal line. The Silver Cross Index percentage is above %Stocks > 20/50EMAs so it will continue to decline. Long term, the Golden Cross Index is falling and we have %Stocks > 50/200EMAs reading lower. This means the Golden Cross Index will continue to fall.
BIAS Assessment: The following table expresses the current BIAS of various price indexes based upon the relationship of the Silver Cross Index to its 10-day EMA (intermediate-term), and of the Golden Cross Index to its 20-day EMA (long-term). When the Index is above the EMA it is bullish, and it is bearish when the Index is below the EMA. The BIAS does not imply that any particular action should be taken. It is information to be used in the decision process.
The Nasdaq 100 (QQQ) Silver Cross Index crossed up through its 10-day EMA shifting the intermediate-term BIAS to bullish. Also for the Materials Sector (XLB) the Golden Cross Indexes crossed down through its 20-day EMA shifting the long-term BIAS to bearish.
CONCLUSION: Swenlin Trading Oscillators were up again today, but we aren't seeing complete confirmation from the ITBM/ITVM. Participation shrunk on today's rally including a loss of stocks with rising momentum. We believe we are experiencing a pause in the decline that began at the beginning of the month and it will likely resume given the Bearish Bias in all three timeframes. While there is some visible internal strength on the VIX and Stochastics, the rest of the indicators are lukewarm at best. Keep your stops in play.
Erin is 40% long, 0% short.
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Bitcoin is holding true to the trading range that developed in mid-August. We note that a Long-Term Trend Model SELL Signal is nearing at the 50/200-day EMAs prepare for a Death Cross. The PMO does look encouraging and Stochastics are rising, but we would look for this trading range to hold up a bit longer.
Yields continued lower and in some cases have formed very short-term declining trends. Intermediate-term rising trends remain intact.
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
Yesterday's comments still apply:
"We see a possible reverse island formation building on the gap up after the big rally of support. Indicators are mostly neutral, but given Stochastics are rising so we aren't expecting a gap down just yet."
IT Trend Model: SELL as of 5/16/2023
LT Trend Model: SELL as of 1/19/2022
TLT Daily Chart: Yesterday's comments still apply:
"TLT wants to form a reverse head and shoulders but right shoulder looks suspicious as price meanders sideways. Stochastics are topping beneath net neutral (50) and the RSI is negative. There is a PMO Crossover BUY Signal, but the PMO is moving sideways. It will be tough going for TLT to rally here, but it needs to if the bullish chart pattern is going to properly develop."
IT Trend Model: BUY as of 8/3/2023
LT Trend Model: BUY as of 5/25/2023
UUP Daily Chart: The Dollar has started forming a small declining trend. Indicators are still quite positive so we aren't expecting this trend to hold for very long.
IT Trend Model: NEUTRAL as of 8/2/2023
LT Trend Model: BUY as of 1/5/2023
GLD Daily Chart: Gold is clinging to support at the 200-day EMA, but today did close beneath it. The PMO is barely staying on a BUY Signal. With the RSI negative and Stochastics falling we expect price to continue lower.
GOLD Daily Chart: Gold's strength against the Dollar is declining. Another reason to expect support to be tested at 1900.
GOLD MINERS Golden and Silver Cross Indexes: Gold Miners lost some participation with today's decline. Participation is still meager, but the PMO is holding its BUY Signal after surging above the signal line. The Silver Cross Index is turning back up. We see this as a nice bottoming formation, but we have to remember the EMAs are configured negatively, so there is risk involved with this industry group right now.
CRUDE OIL (USO)
IT Trend Model: BUY as of 7/12/2023
LT Trend Model: BUY as of 8/3/2023
USO Daily Chart: Crude Oil paused today but given the highly bullish indicators, we do expect the rally to continue. The one issue is the overbought RSI. A pause would help clear that condition, but USO doesn't look that interested in pausing right now.
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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