Today the Consumer Discretionary ETF (XLY) 20-day EMA crossed up through the 50-day EMA (Silver Cross), generation an IT Trend Model BUY Signal. Price has not been doing much, it is stuck in a tight trading range, but because it is above both the 20/50-day EMAs, it brought the 20-day EMA above the 50-day EMA. We don't see this as a strong signal. Participation is somewhat light and Stochastics are headed lower. It could certainly eke out more upside, but if it hasn't participated in the rally yet, we have to wonder if it will.
We have a negative divergence on the weekly PMO and price has formed a bearish rising wedge which implies a likely breakdown below the rising bottoms trendline. Support is still holding, but we note a downturn right here would set up a bearish head and shoulders pattern.
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: The market managed a positive close today. As expected we saw very little volatility on quarterly options expiration. We are still seeing a lack of Total Volume on this rally.
The VIX is very overbought right now. One interesting thing to note is the rising relative strength line to equally-weight RSP. This means that mega-caps are showing leadership through this rally. It isn't quite as broad as it may appear. Stochastics are very favorable and suggest internal price strength.
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SPY Weekly Chart: The market set fresh all-time highs this week. The weekly PMO triggered a Crossover BUY Signal so the intermediate-term picture is still bullish.
New 52-Week Highs/Lows: New Highs are pulling back on the rally now. More interesting is the deceleration of the High-Low Differential. Currently there is a negative divergence between price and the differential, but that won't be 'official' until we see a top on the High-Low Differential.
Climax Analysis: There were no climax readings today. We saw no climaxes this week.
*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 OVERBOUGHT.
Even though the Swenlin Trading Oscillators (STOs) are indecisive, they are showing us new negative divergences with price. We also notice that we're losing rising PMOs.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is OVERBOUGHT.
The ITBM and ITVM continue to rise, but we are declaring them overbought which could pose a problem eventually. The good news is that we don't detect any negative divergences at play. We did not see any new PMO BUY Signals today.
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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.
Utilities (XLU) still hold the most favorable IT Bias. They continue to outperform as both the Silver Cross Index and Golden Cross Index gained strength this week.
Industrials (XLI) holds the most negative IT Bias. It did see some improvement to its Silver Cross Index but a look at the chart and you have to be cautious. XLI looks toppy.
This table is sorted by SCI values. This gives a clear picture of strongest to weakest index/sector in terms of intermediate-term participation.
Real Estate (XLRE) gained the most Silver Cross Index percentage points this week. The sector is finally coming back to life. It also saw a three point increase to the Golden Cross Index.
Biotechnology (IBB) holds the lowest SCI percentage, but it did see a small gain. This is a rather beat down area of the market, but we are starting to see bullish indications on its chart.
This table is sorted by GCI values. This gives a clear picture of strongest to weakest index/sector in terms of long-term participation.
Energy (XLE) has the strongest Golden Cross Index so the foundation is strong for an upside reversal. It didn't make any improvements this week, but it also didn't lose any ground.
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 all three timeframes.
While participation above the 20/50-day EMAs appears to have stagnated, the readings are still high enough to consider the ST Bias as BULLISH. The Silver Cross Index made strides this week and is above its moving average so the IT Bias is BULLISH. The Golden Cross Index is on the rise and made it above its signal line this week setting up a BULLISH LT Bias.
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: The market set new all-time highs this week as the rally progressed steadily higher. Participation readings are holding up, but we notice a slow down that could indicate a top or some churn is in order. We also see negative divergences developing on our short-term indicators. Total volume has been lacking suggesting some trepidation by investors. Yet, the VIX remains very low. We have the components necessary to keep the rally moving higher, but enthusiasm is muted considering we've reached all-time highs again. Employ your stops and let the market take you out. For now, we should hold tight. Portfolio expansion is risky business given STOs are diverging from price.
Erin is 40% long, 0% short.
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BITCOIN
Bitcoin Daily Chart: Bitcoin did not need to test the bottom of its declining trend channel and that set up this breakout. Indicators are very favorable right now so we are expecting another run at all-time highs.
Bitcoin Weekly Chart: We got the breakdown from the parabolic rise. That breakdown dragged the weekly PMO lower. It could turn itself back around on this new rally. So far it's managed to avoid a Crossover SELL Signal. We have to say this also looks like a possible flag formation that price is beginning to break out of.
BITCOIN ETFs
Today:
This Week:
INTEREST RATES
Yields are reversing again, but rising trends haven't been recaptured just yet. We still think they look near-term weak.
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 finished the week on a high note, but it wasn't enough to turn the PMO back up or even see it decelerate. We are still bearish on yields in the short term.
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 7.09 to 7.02.
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: TLT has turned down right at the declining tops trendline. We are still near-term bearish on yields so we do expect a breakout here. The PMO is in line with this thinking.
Stochastics did top but remain above 80 so there is still some internal strength that could be taken advantage of.
TLT Weekly Chart: We have a bullish falling wedge on the weekly chart that does give us some evidence that the rally could continue. Price bottomed long before testing the bottom of the wedge and that could be setting it up for a breakout. The weekly PMO is turning around.
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 looks bearish in spite of the rising trend channel it is within. It is holding horizontal support, but given the decline in the PMO we are expecting price to break down. Stochastics are also very bearish and the RSI is negative, not oversold.
It may take more time for UUP to break down given this is an area of strong horizontal support.
UUP Weekly Chart: We have a bearish rising wedge on the weekly chart that implies an upcoming breakdown. The weekly PMO has topped so lower prices are likely for the Dollar.
GOLD
IT Trend Model: BUY as of 10/23/2023
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Gold is on the move. Carl did an excellent article on Gold today that you can read HERE. Rather than repurpose it, we think you should take a look at the more detailed article. He didn't cover the weekly chart, so you can skip ahead for that.
Read Carl's article HERE.
GLD Weekly Chart: The only negative on the chart is the overbought weekly RSI. Remember overbought conditions in a bull market move like Gold is having, those conditions can persist and we think they will. The weekly PMO is ready to support a new all-time high.
GOLD MINERS: With Gold enjoying a strong rally, Gold Miners are having a field day. Another big move up for GDX. The rally doesn't appear to be over yet either. The RSI did just enter overbought territory so we could see them cool somewhat, but overall it looks great. The PMO has given us a Crossover BUY Signal well above the zero line and participation is near or at 100%. Even Stochastics are rising above 80. Look for more rally out of the Gold Miners.
CRUDE OIL (USO)
IT Trend Model: BUY as of 2/12/2024
LT Trend Model: BUY as of 2/27/2024
USO Daily Chart: Crude Oil has been churning sideways. This has given us a flat PMO. We are looking for a breakout from the short-term declining trend mainly because Stochastics are rising as well as the RSI. We have a positive OBV divergence that could mean a good rally is on the way.
If price stays above the 50-day EMA it will be able to avoid a negative crossover of the 20-day EMA. That would preserve its IT Trend Model (Silver Cross) BUY Signal.
USO/$WTIC Weekly Chart: We see a long-term symmetrical triangle or pennant formation on the weekly chart. This pattern would suggest an upside breakout given the prior trend was up. You could also look at the prior rising trend as a flagpole to this pennant. Unfortunately, the weekly PMO is still in decline. If we get the upside reversal we are expecting, the weekly PMO should right itself, it just may not avoid a Crossover SELL Signal first.
Good Luck & Good Trading!
Erin Swenlin and Carl Swenlin
Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin
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