This month two indexes finished at all-time highs. Many may already know that the Dow Industrials (DIA) and SPY finished at all-time highs, but did you know the broad market NYSE also finished at an all-time high?
We'll discuss the SPY later. The Dow has been looking very good out of the August lows and right now shows a new weekly PMO Crossover BUY Signal. The rising trend looks good in the intermediate term. Right now in the short term, it is little steep.
If there was any question whether the broad market is participating in this rally, there shouldn't be after looking at this chart. As with DIA the short-term rising trend is particularly steep, but the intermediate-term trend looks safe. There is a new weekly PMO Crossover BUY Signal.
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/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 8/14/2024
LT Trend Model: BUY as of 3/29/2023
SPY 10-Minute Chart: Trading was choppy today, but we saw a late day thrust higher that bodes well for Tuesday.
SPY Daily Chart: Today SPY hit a new, all-time closing high. The rounded top doesn't look like much of a problem right now. The PMO is accelerating higher again and the RSI is positive above net neutral (50) suggesting price is not overbought at this time.
Stochastics are working their way back up again and are holding above 80. The VIX has found a zone above its moving average which is positive. Readings are not what we would call "complacent" at this level, but certainly there is no "fear" detectable.
Here is the latest recording from 8/26. Click HERE to get the link to video library.
SPY Weekly Chart: As noted earlier, the SPY finished at new all-time highs this week. The weekly RSI is getting overbought, but those conditions can persist in a bull market move like we are currently in. The weekly PMO is nearing a Crossover BUY Signal. The rising wedge ended up executing on the August decline. Price is back inside it having recuperated.
SPY Monthly Chart: The parabolic formation on the monthly chart did see a breakdown, but the worst seems to be over as we made new all-time highs. The monthly PMO is rising, but we do note that price is overbought in the long term given the overbought monthly RSI. But, we can see that those overbought conditions can hang around for months at a time.
New 52-Week Highs/Lows: New Highs expanded on the rally and we saw very few New Lows. The High-Low Differential has been rising for some time but now it is getting overbought. It has seen higher readings than this so we could still get more upward movement.
Climax Analysis: Today there were unanimous climax readings on the four relevant indicators, giving us an upside initiation climax. We're a little unsure of this conclusion because the downside initiation climax on Wednesday was a little weak and marginal, while today's climax was quite strong. SPX Total Volume was 114% of the one-year daily average, not at all a blowoff. Next week is shortened by Monday's holiday, so there may be some churn instead of upside follow-through.
*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 to OVERBOUGHT.
The Swenlin Trading Oscillators (STOs) are not overbought, but participation certainly is. The STO-V still hasn't turned up, but we did see an expansion in rising PMOs.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is OVERBOUGHT.
The ITBM and ITVM moved upward. This is a reversal for the ITVM. We have the same amount of PMO Crossover BUY Signals as we did yesterday. It is a very robust 80% of stocks holding PMO Crossover BUY Signals. We pointed out positive divergences on all of these indicators this week and now we have new highs to back them up.
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PARTICIPATION TABLES: 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 belongs to Consumer Staples (XLP). This sector is continuing to pour it on with gains on both the Silver and Golden Cross Indexes.
Semiconductors (SMH) continue to hold the lowest IT Bias by a mile. This is due the stronger reading on the Golden Cross Index. We did see some movement on the Silver Cross Index, but it still remains at a very low 40%.
This table is sorted by SCI values. This gives a clear picture of strongest to weakest index/sector in terms of intermediate-term participation.
Regional Banks (KRE) hold the highest Silver Cross Index value as they continue to see more expansion. This group is running very hot and is very overbought, but with such a strong foundation on the SCI and GCI, it should continue to move upward.
Energy (XLE) holds the next lowest SCI value and it did not see any improvement. With Crude prices likely to head lower, this isn't likely to be a good sector to be in.
This table is sorted by GCI values. This gives a clear picture of strongest to weakest index/sector in terms of long-term participation.
Regional Banks (KRE) also hold the top spot on the GCI value and suggests this group is very bullish.
Biotechnology (IBB) holds the lowest GCI value, but it did see at least one gain this week. Still, the foundation is very weak and the SCI doesn't look much better.
PARTICIPATION CHART (S&P 500): The following chart objectively shows the depth and trend of participation for the SPX 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 intermediate and long terms.
Participation expanded greatly this month, but has reached overbought levels on %Stocks > 20EMA. Still this is a very strong foundation to keep prices elevated. The Silver Cross Index (SCI) and Golden Cross Index (GCI) have spent the last part of this month on the rise and both look very healthy. Participation of stocks above key moving averages are reading higher than the SCI and GCI so they should continue to rise. Both are above their moving averages so the IT and LT Biases are BULLISH.
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 BIAS table immediately above shows that most segments of the market are doing just fine. Nearly all of the Silver Cross and Golden Cross Indexes are above their moving averages, meaning that the percentage of their component stocks are holding steady or trending upward. This condition, of course, can change for the worse, but it is surprising that it looks so good, considering the recent turbulence. Much of the problem can be attributed to underperforming mega-caps which kept the index down. The NYSE is looking very good. Today's end of day thrust and the upside initiation climax have us looking for a likely move up next week, but if mega-cap darlings like NVDA don't pick up, we could see more sideways consolidation in the large-cap indexes.
Erin is 45% long, 0% short.
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CALENDAR
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BITCOIN
Bitcoin Daily Chart: Bitcoin has formed a more accelerated declining trend after it failed to reach above the prior top. This is another failure to get back toward new all-time highs. It has hit support right now and it is fairly strong, but the PMO is nearing a Crossover SELL Signal below the zero line so we don't know that this level will hold. Trading over the weekend will likely reveal whether this is going to hold as support.
Bitcoin Weekly Chart: We are still traveling within a high level of consolidation that came from the big parabolic move higher. We don't like that price couldn't test the top of that declining trend channel before turning back down. That isn't very bullish and neither is the decline weekly PMO.
BITCOIN ETFs
Today:
This Week:
INTEREST RATES
Interest rates are going through a period of consolidation near prior support levels. They do look ready to trend back up but with rate cuts coming next month, we don't think they'll be rising very vigorously.
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
In bullish fashion, $TNX broke out of the symmetrical triangle. It was supposed to break down given the triangle is a continuation pattern. That is quite bullish and does seem to suggest we'll see it rise further. The PMO is rising on a Crossover BUY Signal and Stochastics are rising vertically so we would expect more upside.
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 6.46 to 6.35.
Here is a 50-year chart for better perspective.
BONDS (TLT)
IT Trend Model: BUY as of 6/5/2024
LT Trend Model: BUY as of 7/17/2024
TLT Daily Chart: TLT looks more and more bearish. Today it formed a bearish engulfing candlestick. The PMO is declining on a Crossover SELL Signal and Stochastics are diving lower so we should see Bond funds continue to struggle.
Support at the 20-day EMA has now been lost so we should consider a possible drop toward 94.00.
TLT Weekly Chart: We see a bullish reverse head and shoulders on the weekly chart that does imply we will see more upside on Bonds. Right now the short-term picture isn't bright, but intermediate-term we should expect they will reverse back up. The weekly PMO backs this up with its rise.
TLT Monthly Chart: The head and shoulders is very visible on the monthly chart. We have an upside breakout above support and the neckline of the head and shoulders pattern. This implies more upside in the long term. The monthly PMO is on the rise and confirms this bullish outlook in the long term.
DOLLAR (UUP)
IT Trend Model: NEUTRAL as of 8/5/2024
LT Trend Model: BUY as of 5/25/2023
UUP Daily Chart: The Dollar decided to rally this week and it reversed before testing support which is very bullish. The PMO has turned back up and Stochastics are rising. The declining trend hasn't been broken yet, but we expect it to be next week.
Today's rally pushed price past the 200-day EMA.
UUP Weekly Chart: The intermediate-term picture is far from bullish as we see a breakdown from a bearish rising wedge. Support has been met though and the pattern really just tells us which way it will break, not how far it will break. However, the falling weekly PMO leaves us less optimistic about the strength of this support level.
UUP Monthly Chart: The monthly chart is still mostly bullish as we see the Dollar holding onto a rising trend. Yet we should be alert to the topping monthly PMO. It implies we may see a drop to test that rising trendline.
GOLD
IT Trend Model: BUY as of 10/23/2023
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: We see flat tops and rising bottoms on Gold in the short term and that generally means we should look for a breakout. However, we can see a very bullish Dollar and that is going to put downside pressure on Gold. We also see the PMO is turning over and Stochastics have topped. We could see it hold its own as it has been reluctant to fully break down on the Dollar's rally this week. We do however see that Gold's relative strength to the Dollar is fading. We also got a spike on discounts which means traders are getting bearish again.
GLD Weekly Chart: The weekly chart looks pretty good for Gold as it rallied out of the prior trading range and is trending upward. The weekly PMO is rising on a Crossover BUY Signal well above the zero line so we do eventually see Gold rising to new all-time highs again soon.
$GOLD Monthly Chart: We do have a parabolic advance on the monthly chart and that does imply a pending breakdown, but the trend so far is holding up and we have a monthly PMO on a BUY Signal well above the zero line. The monthly RSI does tell us that Gold is overbought here, but we've seen it get far more overbought before we see a decline. Ultimately Gold will likely struggle in the short term, but rise overall in the intermediate and long terms.
GOLD MINERS: Gold is going to be under pressure with the rising Dollar and that will put a damper on Gold Miners. However, they are also exposed to the winds of the market in general and if we are going to see another upswing, that would likely get GDX moving up again. We don't want to write it off completely as we do have a textbook bull flag formation that suggests we'll see an upside breakout. It just may be slow going to the upside if it has to slog against a drop in Gold.
CRUDE OIL (USO)
IT Trend Model: BUY as of 6/21/2024
LT Trend Model: BUY as of 2/27/2024
USO Daily Chart: Crude dropped precipitously today on news that OPEC+ will be expanding their output. Earlier in the week it was about Libya shrinking supply that led it higher and now we have an upcoming glut in supply that will likely keep prices moving lower. This double bottom formation could find its way into a triple bottom formation before long. With the PMO topping below the zero line, we have to wonder if that level would be able to hold.
Stochastics have topped which is another indication we may need to test support once again.
USO/$WTIC Weekly Chart: In the intermediate term we see flat tops and rising bottoms or a bullish ascending triangle. There is still room for it to move lower to test the long-term rising trend. The weekly PMO Crossover SELL Signal does suggest it will.
WTIC Monthly Chart: We are in a consolidation zone right now after the big drop from the 2022 high. The monthly PMO is falling and the monthly RSI is negative. We will probably see a test of support at the 2023 low eventually.
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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