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Today the Retail Industry Group ETF (XRT) 20-day EMA crossed down through the 50-day EMA (Dark Cross) above the 200-dat EMA, generating an IT Trend Model NEUTRAL Signal. Price has been moving sideways for some time, and this is the third signal change in three months, so we do not view this as a convincing action signal.
The weekly chart shows a double top with the confirmation line at about 69.00 and a weekly PMO that is falling.
Also today, the Regional Banking ETF (KRE) 20-day EMA crossed up through the 50-day EMA (Silver Cross), generating an IT Trend Model BUY Signal. Here again we have a narrow trading range situation which births a series of whipsaw signals. There is nothing to say if this signal will have any longevity.
Longer term the weekly chart shows upward progress from the 2023 low, and KRE has been consolidating this year, presumably digesting the advance in preparation for the next leg up.
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/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: More all-time highs were set keeping the RSI well into overbought territory. The PMO is still rising. The OBV is confirming this rally as it is making new highs as well.
Bollinger Bands continue to squeeze together as we see little to no volatility on the VIX. Stochastics are still very bullish holding above 80.
Here is the latest recording from July 8th:
S&P 500 New 52-Week Highs/Lows: New Highs expanded on the rally, but we still have a negative divergence there. The High-Low Differential continues to sink.
Climax* Analysis: There were no climax readings today. We do note negative Net A-D on a rally day.
*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) are still rising which bodes well. However, we are seeing no expansion in participation or rising PMOs.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is NEUTRAL.
The ITBM and ITVM are mixed again with the ITBM falling and the ITVM rising. We need to see the ITBM join forces with the ITVM. We saw a one percentage point gain on %PMO Xover BUY Signals but the reading remains below our bullish 50% 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 intermediate-term and long-term biases are BEARISH.
Yesterday's comments still apply:
"The Silver Cross Index has now dropped below 50%. This is an anemic reading given the steady rally to new all-time highs. Both the Silver Cross Index and the Golden Cross Index are below their signal lines so the IT and LT Bias is considered 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 are seeing a clear bifurcation of the markets given only the tech heavy Nasdaq, the OEX and the SPX are making all-time highs. All other indexes including the NYSE and small- and mid-caps are not. Most of those charts show double tops. We would also purport that the SPY itself is bifurcated with mega-caps leading and the rest languishing. The indicators are bullish enough right now to indicate more rally is likely for the SPY in the short term, but in the intermediate term we are concerned about participation and negative divergences.
Erin is 40% long, 0% short.
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CALENDAR
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BITCOIN
Bitcoin is consolidating after losing support at the May low. It is holding beneath the 200-day EMA so at this point we expect to see another failure. The PMO is flat and could be looking to move back up, but Stochastics are still negative and are flattening.
BITCOIN ETFs
INTEREST RATES
Yields were mixed today. Declining trends are intact and should lead to more downside in the short term.
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
Yesterday's comments still apply:
"Currently we have a declining trend channel and $TNX is headed to test the bottom of the channel. The PMO has topped below the zero line suggesting we will see more downside. If it travels to the bottom of the channel it would put the yield close to 4%."
BONDS (TLT)
IT Trend Model: BUY as of 6/5/2024
LT Trend Model: SELL as of 1/19/2022
TLT Daily Chart: The 20-year yield was one of the yields that rose today causing TLT to lose ground. We are bearish on yields in the short term so we are bullish on Bonds currently. However, we do note that the PMO is topping beneath its signal line, but Stochastics are still rising.
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 has now turned up before testing the rising bottoms trendline. That is a bullish configuration. However, the other indicators are not in agreement that this is the start of a new rally. The PMO is declining on a Crossover SELL Signal and Stochastics have dropped below 20.
GOLD
IT Trend Model: BUY as of 10/23/2023
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: The short-term double bottom is bullish for Gold. The pattern won't be busted unless we lose support at the bottom of the chart pattern. So far so good. The RSI is positive and the PMO is rising on a Crossover BUY Signal. Stochastics are suspect, but we will rely on the RSI and PMO and stay bullish.
GOLD MINERS (GDX): Gold Miners stagnated today as Gold lost ground. We still see bullish indications on Gold and GDX itself is showing good strength in participation. The Silver Cross Index looks especially bullish right now. We expect this rally will continue a bit longer.
CRUDE OIL (USO)
IT Trend Model: BUY as of 6/21/2024
LT Trend Model: BUY as of 2/27/2024
USO Daily Chart: We got bearish on Crude Oil yesterday and we think that was wise. The PMO has now topped and Stochastics look particularly bearish. We will monitor this closely as it could end up forming a bull flag in the process of pulling back.
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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