Today the Real Estate ETF (XLRE) 20-day EMA crossed down through the 50-day EMA (Dark Cross) above the 200-day EMA, generating an IT Trend Model NEUTRAL Signal. We note that a double top has formed. Should the confirmation line be pierced, the minimum downside target would be about 33.
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/SPX SECTOR/INDUSTRY GROUP INDEXES
Change Today: 
Change for the Week:
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: SPY has been dawdling in a fairly farrow range for about seven weeks, and it is currently moving back to the bottom of that range, in the process forming a bearish rounded top. The PMO negative divergence seems to be delivering on the negative expectations.
SPY Weekly Chart: SPY has topped, breaking down through the rising trend line, and the weekly PMO has topped, prompting expectations that the decline will continue.
New 52-Week Highs/Lows: There is a High-Low Differential negative divergence, and New Highs are trending downward.
Climax Analysis: Today there were unanimous climax readings on the four relevant indicators. Since there was a downside initiation climax on Wednesday, this will have to be a downside exhaustion climax. While that sounds like there is finality to today's move, we wouldn't count on it.
*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 somewhat OVERSOLD.
The STOs ticked down again, and we see the possibility that they will be taking out this months lows. The SPX % PMOs Rising and SPX % Stocks > 20EMA are very oversold, but the STOs have plenty of room to go lower.
Intermediate-Term Market Indicators: The intermediate-term market trend is RISING but appears to be shifting downward, and the condition is NEUTRAL.
The ITBM/ITVM negative divergences are finally paying off.
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PARTICIPATION: The following tables summarize participation for the major market indexes and sectors. The 1-Week Change columns inject a dynamic aspect to the presentation. There are three groups: Major Market Indexes, Miscellaneous Industry Groups, and the 11 S&P 500 Sectors.
This table is sorted by SCI values. This gives a clear picture of strongest to weakest index/sector in terms of intermediate-term participation.
This table is sorted by GCI values. This gives a clear picture of strongest to weakest index/sector in terms of long-term participation.
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 potential downside target for the SCI is now 58%, and for the GCI it is 75%.
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: Yesterday we said: The market remains in a narrow trading range, and we wonder when it will finally exit the range and in which direction. Intermediate-term indicators still favor a move to the downside, but short-term indicators favor a rally in that time frame. If the short-term internals move the market in a positive direction, it could turn the intermediate-term internals positive. Conversely, the intermediate-term internals could turn the short-term direction down.
It has been a tedious seven weeks watching the market tease its way higher then run flat, but today the it is clearly moving toward a breakdown from the range. Both our short- and intermediate-term indicators have plenty of room to move lower, so it is reasonable to expect more price decline. The weekly PMO has topped, which is a fairly reliable indicator of a trend change in progress. The current 6-month period of favorable seasonality goes to April 30, but the 6-month period of UNfavorable seasonality seems to have begun early. Intermediate-term BIAS for the market indexes we follow (table above) is almost solidly bearish (SCIs have dropped below their 10EMAs), showing broad-based deterioration. We don't have a specific downside target, but it's probably going to be rough for a while.
Erin is 60% long, 0% short.
Calendar: Next week is options expiration, so we should expect low volatility on Thursday and Friday. It is not an end-of-quarter expiration, so SPX Total Volume should be normal.
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BITCOIN
Bitcoin Daily Chart: Bitcoin has been consolidating within a triangle formation, which we would argue, also looks like a bullish pennant formation.
Bitcoin Weekly Chart: The parabolic arc has been broken. That normally brings us a sharp correction, but so far we're getting a high-level consolidation, which is a bullish outcome.
BITCOIN ETFs
Today:
This Week:
INTEREST RATES
Yields are rising within the range set during the last 18 months or so. We are currently expecting that range to hold for several months, or until the Fed does something.
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
It appears to us that the 10-Year Yield is going higher. It broke out of the rising wedge formation and has just completed a snapback to the point of breakout. Very bullish behavior.
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, which shuts many buyers out of the market, and potential sellers will experience pressure to lower prices (to no effect so far).
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This week the 30-Year Fixed Rate changed from 6.79 to 6.82.
Here is a 50-year chart for better perspective.
BONDS (TLT)
IT Trend Model: SELL as of 3/20/2024
LT Trend Model: SELL as of 1/19/2022
TLT Daily Chart: The declining tops lines are accelerating downward.
TLT Weekly Chart: The weekly PMO has turned down below the zero line. This represents pure weakness in this time frame.
DOLLAR (UUP)
IT Trend Model: BUY as of 1/23/2024
LT Trend Model: BUY as of 5/25/2023
UUP Daily Chart: Earlier today both the Gold and UUP were up strongly, not a normal thing, but UUP won and Gold closed down.
UUP Weekly Chart: There was a strong long-term breakout this week.
GOLD
IT Trend Model: BUY as of 10/23/2023
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: GLD rallied strongly early in the day, making new, all-time highs, but there was a strong reversal and it closed down. GLD is in a rising trend channel and is due for a trip to the bottom of the channel.
Today GLD reached the apex of a parabolic advance, so we should expect a pullback, possibly to about 205.
GLD Weekly Chart: The parabolic is especially steep in this time frame. As we always say, parabolics beg for correction.
GOLD MINERS Golden and Silver Cross Indexes: Notice that Stocks > 20/50/200EMAs have been near the top of their range for about six weeks. Possibly it is time for a little pullback.
CRUDE OIL (USO)
IT Trend Model: BUY as of 2/12/2024
LT Trend Model: BUY as of 2/27/2024
USO Daily Chart: As with GLD, USO was strong early, then faded later. This makes me think that the problem wasn't with gold or crude specifically.
Here is a Commodities Index showing today's behavior across a wide range of materials. We presume that there was some news item behind this, but have not found it yet.
We see that longer-term resistance is at play.
USO/$WTIC Weekly Chart: It looks as if the horizontal resistance is more relevant than the triangle formation.
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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