We'll discuss the Silver Cross Index in our bias assessment section.
With Crude Oil rallying, we were beginning to wonder when Energy (XLE) would reawaken from its months long slumber. With the demise of the Technology (XLK) sector money seems to be rotating into this struggling part of the market.
The PMO crossed above its signal line for a Crossover BUY Signal today. The RSI moved into positive territory and Stochastics are rising strongly. Participation has shot straight up as evidenced by %Stocks > 20/50/200EMAs. This will bring the Silver Cross Index higher given it is at a much lower percentage than %Stocks > 50EMA. We expect this rally to catch on.
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 our 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: Another decline today as NVDA continued to spiral lower along with the Technology sector. For bears: the PMO has now turned down. For bulls: This could be a bull flag chart pattern building.
Stochastics have topped which isn't good, but they are above 80 so it isn't terrible. The VIX has been angling lower on our inverted scale and worry begins to seep into the market participants.
Here is the latest recording from 6/24:
S&P 500 New 52-Week Highs/Lows: New Highs did expand today suggesting possibly broader participation. The High-Low Differential continues to trend higher.
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 (STOs) shot up today and we did see a nice expansion in participation. More evidence that participation may be broadening out.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is NEUTRAL.
The ITBM was up on the day confirming what we are seeing with STOs. However, it wasn't a full confirmation given the ITVM is still in decline. We saw more PMO BUY Signals. The indicator is now above our 50% bullish threshold.
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 and intermediate terms.
The market bias is BEARISH in the long term.
Today the Silver Cross Index crossed above its signal line for a Bullish "Shift". This has moved the intermediate-term bias to BULLISH in the intermediate term. The value is only slightly above 50% so it isn't a resounding vote of confidence. %Stocks > 20/50EMAs are well above our bullish 50% threshold so we must list the ST Bias as BULLISH. The Golden Cross Index is still below its signal line so the LT Bias remains BEARISH.
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.
**************************************************************************************
CONCLUSION: The Dow was up today, but NVDA's -6.68% loss tripped the Nasdaq and S&P500. What was interesting is that participation actually expanded on the decline suggesting that money rotated out of Technology and into other areas like Energy and Financials. Small-caps (IJR) were also up. The index may've been down but internals held up. In fact, the STOs were up quite a bit today. We expected the market to suffer greatly when AI darlings began to fail, but instead the rest of the market held things together for the most part. The Silver Cross Index saw a Bullish Shift, but it still tells us that almost half the index hold bearish biases. We see this rotation as healthy, but it's only been one day. Keep your stops in play and honor them. A decline could take hold quickly.
Erin is 45% long, 0% short.
CALENDAR
Tuesday: 10:00 am Consumer Confidence
Wednesday: 8:30 am Initial Jobless Claims
Thursday 10:00 am Pending Home Sales
Friday: 8:30 am PCE Index
10:00 am Consumer Sentiment
**************************************************************************************
Have you subscribed the DecisionPoint Diamonds yet? DP does the work for you by providing handpicked stocks/ETFs from exclusive DP scans! Add it with a discount! Contact support@decisionpoint.com for more information!
BITCOIN
Bitcoin fell off the map today as it broke down heavily below support. It is already at the first line of defense, the 200-day EMA. Most concerning is a large double top formation. Right now price is about test the confirmation line of the pattern. The indicators are very negative so we expect a confirmation.
BITCOIN ETFs
INTEREST RATES
Yields are consolidating in the very short term. We expect the current declining trends to hold up longer.
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
We annotated a bullish falling wedge on the chart that does suggest we will see a reversal in the 10-year yield. Stochastics are rising again and the PMO has decelerated. However we believe the pattern will need to mature with more decline before we see a breakout.
BONDS (TLT)
IT Trend Model: SELL as of 3/20/2024
LT Trend Model: SELL as of 1/19/2022
TLT Daily Chart: As the 20-year yield consolidates so too is TLT. We are expecting and upside breakout based on the rising PMO and Stochastics holding above 80. There is also a clear declining trend on the 20-year yield.
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 was down today but remains in a rising trend. It also held above support today. The PMO is still on the rise and so are Stochastics which are already above 80. We still see internal strength and expect the Dollar to continue its rising trend.
GOLD
IT Trend Model: BUY as of 10/23/2023
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Gold is making its way slightly higher on a gentle short-term rising trend. It won't breakdown even as the Dollar begins to rally. The indicators don't 'wow', but they aren't that bearish. We expect more sideways melt up from Gold.
GOLD MINERS (GDX): Gold Miners rebounded and didn't have to touch the support line which is bullish, but we don't trust this rally, primarily because the Dollar looks bullish and that will put downward pressure on Gold and consequently Gold Miners. The PMO has flattened, but we didn't see much improvement under the hood today. Handle with care.
CRUDE OIL (USO)
IT Trend Model: BUY as of 6/21/2024
LT Trend Model: BUY as of 2/27/2024
USO Daily Chart: Nice rally in Crude Oil today which formed a bullish engulfing candlestick that implies another up day tomorrow. The PMO is rising above the zero line and Stochastics are comfortably above 80. We expect Crude to continue to rise based on the technicals and summer demand could also push prices higher.
Good Luck & Good Trading!
Erin Swenlin and Carl Swenlin
Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin
(c) Copyright 2024 DecisionPoint.com
Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. DecisionPoint newsletters, blogs or website materials should NOT be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.
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.
Helpful DecisionPoint Links:
DecisionPoint Alert Chart List
DecisionPoint Golden Cross/Silver Cross Index Chart List
DecisionPoint Sector Chart List
Price Momentum Oscillator (PMO)