Remember, a Silver Cross is a 20-day EMA moving above the 50-day EMA. This means a stock has a bullish bias. The Silver Cross Index measures how many stocks hold a Silver Cross or a bullish bias.
We were reviewing the Silver Cross Index for the three major indexes, SP500, Nasdaq Composite and NYSE. The broad market is participating well as can be seen by the healthy 73% reading on the Silver Cross Index for the NYSE. The SP500 is fairing well with a 77% reading. However, we can see that the Nasdaq Composite has fallen behind as it only holds a reading of 51%. While it is above our bullish 50% threshold, it does indicate that there are internal problems in the Nasdaq Composite. It has been underperforming and that is evident by its lower Silver Cross Index reading.
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
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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: The market closed higher but not at an all-time high. We are seeing the churn that our last upside exhaustion climax from Thursday portended.
SPY Daily Chart: It was a rather uninspired day of trading. Total Volume was below its annual average but we did see a closing all-time high. Price is in churn mode.
The VIX is above its moving average on the inverted scale. Stochastics are rising above 80 and the PMO is also on the rise. We still detect internal strength.
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S&P 500 New 52-Week Highs/Lows: New Highs saw an expansion and New Lows were barely detectable. With new all-time highs, we would like to see readings not in a declining trend. The High-Low Differential looks very bullish as it rises well above the zero line.
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) continued to make their way lower and have now exited overbought territory. Their decline does imply we should be on the lookout for a pullback. Participation did gain a bit and remains very robust at 81%. We don't like that rising momentum is fading as %PMOs Rising is in a declining trend.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is OVERBOUGHT.
A spot of good news, both the ITBM and ITVM are back to rising again. They are unfortunately overbought, but could accommodate more upside should price continue to expand. %PMO Xover BUY Signals has flattened out and is just slightly above our bullish 50% threshold.
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 is very robust with over 80% of stocks holding above their 20/50/200-day EMAs. This can support this rally further. The Silver Cross Index and Golden Cross Index are still on the rise above their signal lines 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 intermediate-term picture is still quite bullish. Participation is very strong, the Silver Cross Index and Golden Cross Indexes are rising above their signal lines with robust readings and now the ITBM and ITVM have turned higher. Unfortunately the short term has some problems. Primary are the declining STOs and declining %PMOs Rising. We are experiencing churn since the upside exhaustion climax. The market was salivating over interest rate cuts and now that we have them, we aren't seeing a rip roaring rally to the upside. New all-time highs have been met, but trading seems somewhat lackluster. Be prepared for a possible decline in the short term. Indicators currently suggest it won't catch fire.
Erin is 60% long, 0% short.
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CALENDAR
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BITCOIN
Bitcoin has now hit overhead resistance as we suspected it will. The short-term declining trend was dispensed with and it looks ready to test the next level of resistance at the July top. Indicators are strong and the RSI is not overbought so we will look for more upside.
BITCOIN ETFs
INTEREST RATES
Yields were mixed today. We are watching for a bottom just above the current support level. The rate cut has helped move short-term rates lower, but rates are still inverting the yield curve.
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 is showing diminishing weakness not necessarily new strength. The declining trend is still intact, but there are signs of life that could see this advance multiply. There is a new PMO Crossover BUY Signal and Stochastics are nearly in positive territory. This is the best it has looked in some time, but we've seen the PMO and Stochastics moving in similar fashion on the last little rally and it failed.
BONDS (TLT)
IT Trend Model: BUY as of 6/5/2024
LT Trend Model: BUY as of 7/17/2024
TLT Daily Chart: With the 20-year yield moving higher, pressure has been put on TLT. Yields do look bullish right now so we could see more downside for Bond funds in general. The indicators are beginning to break down, but there is still strength in the PMO given it is so far above the zero line and flat. The rising trend is being compromised so it does appear TLT has further to fall.
The 50-day EMA is arriving as support so we will see if it can hold.
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 has established a new trading range and based on flat indicators we don't see it leaving its confines yet.
GOLD
IT Trend Model: BUY as of 10/23/2023
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Gold continues to make new all-time highs. It looks very bullish, but we have seen price cool after new all-time highs are met. The RSI has gotten overbought so we should look for a pause.
Discounts remain elevated for Gold despite making all-time highs. This tells us that traders still on sold on Gold. When they do start to get bullish with lower discounts, we should see even higher prices.
GOLD MINERS (GDX): Interestingly, Gold Miners did not have a good day. It was an up day for the market and Gold made new all-time highs. You may think that the group has gotten overbought, but a look at the RSI tells us that is not the case. We think more decline in GDX offers a pretty good entry as Gold should continue to make its way higher and typically that is good for Gold Miners.
CRUDE OIL (USO)
IT Trend Model: NEUTRAL as of 8/1/2024
LT Trend Model: SELL as of 9/10/2024
USO Daily Chart: USO was down on the day but held above support. We have a bearish engulfing candlestick today and that would suggest more decline tomorrow. The PMO is flattening so we don't have new strength in momentum, more like diminishing weakness. We think it makes Crude more vulnerable to decline. It is off to a good start with the breakout above overhead resistance and strong Stochastics, but it may struggle here as momentum begins to wane somewhat.
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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