The Bitcoin ETFs began trading on January 11. They soared higher at the open, then deflated, closing well down for the day. The expected stampede onto them did not materialize. A steady downward trend was interrupted on Tuesday, but so far it doesn't look too energetic.
You will notice that GBTC and DEFI actually have price histories. We understand this is because they have been traded but not to ordinary folk. It is not clear to us that they are actually ETFs, so do your research if you want to trade them.
It is interesting to note that GBTC is out-performing $BTCUSD in the last year.
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!
MARKET/INDUSTRY GROUP/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 11/14/2023
LT Trend Model: BUY as of 3/29/2023
SPY Daily Chart: Yesterday's bearish filled black candlestick did not portend a decline after all. The market had a strong finish in today's trading and thus avoided another filled black candlestick. The PMO has now given us a positive crossover, but the RSI is very overbought.
Interestingly despite a nice rally today, the VIX gained and thus dropped beneath its moving average on our inverted scale. This suggests some weakness. Stochastics on the other hand look very positive as they rise above 80.
Here is the latest recording from 1/22:
S&P 500 New 52-Week Highs/Lows: New Highs pared back on the rally and we are detecting New Lows again. The 10-DMA of the High-Low Differential paused today but looks healthy.
Climax* Analysis: Today there were unanimous climax readings on the four relevant indicators, and SPX Total Volume was strong. We see this as an upside exhaustion 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.
Swenlin Trading Oscillators (STOs) continue to rise. We are happy to see an expansion in %PMOs Rising, but it isn't enough to erase negative divergences. That will take some significant short-term strength and we're not sure the market is prepared for that kind of a surge upward given overbought conditions.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is NEUTRAL.
The ITBM and ITVM reversed higher today which does confirm already rising short-term indicators. %PMO BUY Signals crossed above the signal line, but remain awfully low.
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 market bias is BULLISH in the short term.
The market bias is BEARISH in the intermediate term.
The market bias is BULLISH in the long term.
We saw %Stocks > 20/50/200EMAs expand slightly today and given all remain above our bullish 50% threshold, we read the short-term bias a Bullish. The Silver Cross Index is falling and is below its signal line so the bias is bearish in the intermediate term. The Golden Cross Index has topped again. However, it is above its signal line giving us a bullish long-term bias. We would note that the GCI is not nearly as elevated as it was 2021 and price is much higher than it was then. That sets up a long-term negative divergence.
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 items with highlighted borders indicate that the BIAS changed today.
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CONCLUSION: There is no denying positive indicators. We have a new PMO Crossover BUY Signal, strong Stochastics and rising ST and IT indicators. The problems are price being very overbought and negative divergences. Today's upside exhaustion climax suggests we will see lower prices tomorrow. We're not sure the decline will catch on just yet given the strong STOs and rising ITBM/ITVM, but overbought conditions will need to be alleviated soon. It is generally not an opportune time to add to portfolios while price is so overbought. With less than half of the index showing rising momentum and even fewer holding PMO BUY Signals, your chances of picking a winner are lessened considerably.
Erin is 70% long, 0% short.
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BITCOIN
Bitcoin is getting ever closer to a Dark Cross of the 20/50-day EMAs. That would give Bitcoin a Bearish Bias. Stochastics did tip upward, but the PMO is declining in negative territory. While we could see a small rally here, we would look for more downside based on the PMO.
BITCOIN ETFs
INTEREST RATES
Yields were lower on the day. We've identified a new support area for rates and we believe that will hold in the intermediate-term timeframe while yields continue to make their way higher within new rising trends.
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 rising trend is intact on $TNX. Stochastics have turned up and are above 80 again. The RSI is positive and the PMO looks strong. We see more strength ahead for the 10-year yield.
BONDS (TLT)
IT Trend Model: BUY as of 11/28/2023
LT Trend Model: SELL as of 1/19/2022
TLT Daily Chart: With yields on the rise, Bond funds are succumbing to gravity. We see more of the same ahead. The RSI is negative and the PMO is slowly declining toward the zero line. Stochastics are very weak as they reside below 20. We see more trouble ahead for TLT.
DOLLAR (UUP)
IT Trend Model: BUY as of 1/23/2024
LT Trend Model: BUY as of 5/25/2023
UUP Daily Chart: The Dollar is currently struggling to overcome resistance. The indicators remain positive so we do expect a breakout here.
Price basically failed at overhead resistance, but as noted above, we should see this level overcome soon.
GOLD
IT Trend Model: BUY as of 10/23/2023
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Yesterday's bearish engulfing candlestick did not provide us with the expected downside result. Price looks far from strong however. The PMO is still in decline and the RSI remains negative.
Of interest is the spike in discounts yesterday. We don't have today's readings yet, but this spike suggests heightened bearish sentiment and it is near oversold territory which could result in a rally for Gold in the near term. We aren't looking for a big rally, but we could see this support level hold awhile longer.
GOLD MINERS Golden and Silver Cross Indexes: GDX managed a rally and is setting up a new short-term rising trend. Of course there is a stronger declining trend that hasn't been broken yet. We are not enthusiastic about this industry group given the lack of participation based on %Stocks > 20/50/200EMAs. The Golden Cross Index dropped beneath its signal line today. However, the Silver Cross Index is beginning to decelerate. We will be on the lookout for a short-term rally when %Stocks indicators show more upside movement.
CRUDE OIL (USO)
IT Trend Model: NEUTRAL as of 11/7/2023
LT Trend Model: SELL as of 12/18/2023
USO Daily Chart: Crude Oil broke out today from the December top. There is still more resistance ahead, but this is a good sign. The PMO has now entered positive territory and Stochastics are rising above 80. Additionally, even with this rally, the RSI is not overbought. We see more upside ahead for Crude Oil. This will continue to goose the Energy sector (XLE). Sector rotation is starting to benefit XLE and it now looks good in the short term. Crude is a big reason.
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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Price Momentum Oscillator (PMO)
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Bear Market RulesRT: 01-23-2023