Today the U.S. Oil Fund ETF (USO) 20-day EMA crossed up through the 50-day EMA (Silver Cross), generating an IT Trend Model BUY Signal. USO has been range bound for the last year, so we have to wonder if a breakout is likely.
The weekly chart shows that USO has been range bound for over two years. We'll discuss this further in the section on Crude Oil.
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: Today was the last trading day before options expiration. While we expect low volatility on the last two trading days, yesterday was a bit volatile; however, today fit our expectations. End-of-quarter expirations have higher than normal SPX Total Volume on the last day (233% of one-year average daily volume!) , but we also got that on Thursday (121% of one-year average daily volume).
Despite a second down day in the market, the PMO continues to make its way higher. Stochastics did tip over, but remain comfortably above 80 signifying internal price strength. We are noticing that the VIX is getting very close to the lower Bollinger Band on our inverted scale. Punctures generally lead to some upside.
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SPY Weekly Chart: Fresh all-time highs were set this week. Price is overbought based on the weekly RSI, but what else is new? The weekly PMO is on its way up on a Crossover BUY Signal which could support higher prices.
New 52-Week Highs/Lows: The High-Low Differential is on a rising trend, but it does look toppy right now. New Highs pared back on the decline as we would expect, but on one New Low was established which is good.
Climax Analysis: There were no climax readings today. Pink "*" on Total Volume denotes options expiration.
*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.
Both the Swenlin Trading Oscillators (STOs) rose on the day somewhat unexpectedly. We also saw a small expansion in participation as well as the number of PMOs rising. We do note we have negative divergences peeking out on all four indicator windows.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is NEUTRAL.
The ITBM finished higher today but the ITVM was lower. Weakness is still being detected in the intermediate term. We did see a slight expansion in the number of PMO BUY Signals, but it is still reading below our bullish 50% threshold.
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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.
The highest IT Bias goes to Semiconductors (SMH) which also saw improvements to both the Silver Cross Index (SCI) and Golden Cross Index (GCI). However, with NVDA on its way down, this condition could change quickly.
Energy (XLE) holds the lowest IT Bias by far. However, we are looking for improvement to arrive for XLE on the Crude Oil rally and bullish flag formation on its chart.
This table is sorted by SCI values. This gives a clear picture of strongest to weakest index/sector in terms of intermediate-term participation.
The greatest gains on the SCI were accomplished by Consumer Discretionary (XLY) which is showing new strength. However, it did lose points on the GCI so all is not rosy.
The biggest loss to the SCI was on Utilities (XLU). XLU enjoyed quite a rally, but it is in correction mode right now. We did see them gain on the GCI however so the foundation is strong in the longer term.
This table is sorted by GCI values. This gives a clear picture of strongest to weakest index/sector in terms of long-term participation.
Gold Miners (GDX) hold the highest reading on the GCI and they held their ground. Unfortunately we do see weakness in the intermediate term based on the loss in the SCI.
Biotechs hold the lowest GCI reading and that is getting lower. This group should be avoided as it also lost ground on the SCI.
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 BEARISH in all three timeframes.
We do have more than 50% of stocks above 20/50-day EMAs but we aren't ready to move the ST Bias to bullish just yet. We see weakness seeping in with the decline starting in NVDA. The Silver Cross Index is rising again and could move above its signal line soon. That would switch the IT Bias to bullish but for now it is below that signal line so we have to read the IT Bias as BEARISH. The Golden Cross Index is on its way down and given we have a lower percentage of stocks below the 200-day EMA, we could see it continue lower. It is 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.
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CONCLUSION: We're still getting mixed signals from our indicators. On the one hand we have expanding participation and now rising STOs, but we see weakness based on negative divergences and a declining ITVM. Bellwether, NVDA, is starting to crack and that leaves us more cautious about the market in general. Will the rest of the market pick up the slack? There aren't a whole lot of stocks with bullish biases based on the Silver Cross Index. We would stay cautious right now as mega-caps appear vulnerable finally. Keep your stops in play.
Erin is 48% long, 0% short.
Calendar
Tuesday - Consumer Confidence and Case Schiller Home Price Index
Wednesday - New Home Sales
Thursday - Initial Jobless Claims and Durable Goods Reports
Friday - Michigan Consumer Sentiment Survey and PCE Reports
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BITCOIN
Bitcoin Daily Chart: Bitcoin is now losing support as it spent all week declining. The PMO has dropped below the zero line and Stochastics are well below 20 so we expect Bitcoin won't have a good weekend.
Bitcoin Weekly Chart: We see a large double top formation on the weekly chart that suggests we are going to see more correction from Bitcoin. It appears to still be digesting the parabolic move coming out of 2023. The weekly PMO is also in decline giving us a bearish outlook in both the short and intermediate terms.
BITCOIN ETFs
Today:
This Week:
INTEREST RATES
Yields didn't do much today, but overall they are in decline and likely will continue to fall given the declining tops trendlines. Support could be reached on this decline.
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 see an intermediate-term double top formation on $TNX, but we also note a short-term bullish falling wedge. We expect the double top to hold sway with the 10-year yield sliding down further. We do see the PMO is decelerating. Stochastics are rising but are below 20 flashing weakness not strength.
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 6.95 to 6.87.
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 20-year yield stabilized and moved sideways so TLT didn't make much headway this week. It formed a bearish filled black candlestick today which does imply a decline for Monday, but the indicators are still favorable so we expect the rally to resume.
TLT Weekly Chart: We have a bullish falling wedge. Price does look ready to breakout based on the daily chart. The last low didn't have to test the bottom of the wedge and that is bullish. The weekly PMO is on the rise on a Crossover BUY Signal so the outlook is good for Bond funds.
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 back on the rise. This will put downside pressure on metals and large-caps which have to deal with global money flow issues. It has broken out and is ready for more upside based on the positive RSI, rising PMO and Stochastics above 80.
This looks like a convincing breakout.
UUP Weekly Chart: We do have a very large bearish rising wedge on the weekly chart, but that is paired with a weekly PMO that is surging above the signal line. We could get a bullish conclusion to a bearish chart pattern on a breakout. That would be especially bullish 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 felt the heat on the Dollar's rally. It has tried to rally, but can't get it going. The PMO has topped beneath the signal line and we do have a large bearish double top to contend with. Best case is more sideways consolidation.
Relative strength is also working against Gold as we see a declining trend on the relative strength line to the Dollar.
GLD Weekly Chart: Gold does look toppy and the bearish double top is quite visible on the weekly chart. The weekly PMO is in decline right now so we think a breakdown is possible.
GOLD MINERS: We aren't very bullish on Gold right now and we think that along with a strong Dollar will continue to hurt Gold Miners. Participation did improve this week on the rally, but damage is already being done with this one decline. Be careful with this industry group.
CRUDE OIL (USO)
IT Trend Model: BUY as of 6/21/2024
LT Trend Model: BUY as of 2/27/2024
USO Daily Chart: As mentioned in the opening, we got a new IT Trend Model "Silver Cross" BUY Signal today as the 20-day EMA crossed above the 50-day EMA. The rally looks solid and with demand likely to pick up this summer, we think we will see a continuation. The PMO has now moved above the zero line and Stochastics are holding above 80 signaling strength.
USO/$WTIC Weekly Chart: The weekly chart shows that USO has been range bound for over two years. There is a large double top on the chart. That bearish pattern would be busted if we get a breakout here. This looks like a good bounce of the rising bottoms trendline. We're looking for a breakout.
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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