Today the U.S. Oil Fund (USO) 20-day EMA crossed up through the 50-day EMA (Silver Cross), generating an IT Trend Model BUY Signal. More discussion follows in the Crude Oil section below.
Also today the 20+ Year Treasury Bond ETF (TLT) 20-day EMA crossed down through the 50-day EMA (Dark Cross), above the 200-day EMA, generating an IT Trend Model NEUTRAL Signal. More discussion follows in the BONDS section below.
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: The surged on the open continuing the rally that began end of day yesterday. Price then meandered mostly sideways and closed near the high for the day. We do have Stochastics turning down as well as the 10-minute PMO so we could see the late day decline continue into Monday.
SPY Daily Chart: New all-time highs were set today. We have nice short-term rising trend coming off the 20-day EMA. The PMO is continuing its rise after narrowly avoiding a Crossover SELL signal last week. Total volume was very light today on the rally.
The VIX is still somewhat elevated considering we are at all-time highs. It remains below its moving average on the inverted scale so there is some weakness being detected. Stochastics on the other hand are flashing internal strength.
Here is the latest recording from 10/7. Click HERE to get the link to the video library.
SPY Weekly Chart: We have a bearish rising wedge on the weekly chart that implies we will eventually see a breakdown. The weekly PMO had a positive crossover its signal line today which does suggest we will likely see prices inch higher. A flat PMO above the zero line does represent pure strength so the rising trend should hold up.
New 52-Week Highs/Lows: With broader participation today we saw a surge in New Highs that took out the declining trend. The High-Low Differential isn't that enlightening right now as it is traveling sideways. Currently it is pointed up.
Climax Analysis: There were two climax readings today, so we will be calling it an upside exhaustion climax. Potential for next week is churn and/or reversal. Look for the first clue at Monday's open.
*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 NEUTRL.
Swenlin Trading Oscillators (STOs) are sitting in neutral territory. The STO-V ended up falling on the day. We think that could be due to the light volume we've been seeing this week. The STO-B is back in positive territory and looks bullish. Participation is inching back up with more stocks finding their way above their 20-day EMAs. We're also seeing a rising trend in %PMOs Rising.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is SOMEWHAT OVERBOUGHT.
Both the ITBM and ITVM are rising in concert which takes some of the sting away from the falling STO-V. We still don't have %PMO Xover BUY Signals above our 50% bullish threshold, but now we do have more rising PMOs so it should make its way higher still.
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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 Discretionary (XLY). This sector isn't performing that well right now as can be seen by the loss in the Silver Cross Index (SCI). We don't care for its price chart right now.
The lowest IT Bias goes to Regional Banks (KRE). The SCI needs to catch up to the Golden Cross Index (GCI) readings, that will alleviate the negative bias. Unfortunately it is still losing SCI percentage points. With the turnaround in big banks today, we could see some follow on by KRE.
This table is sorted by SCI values. This gives a clear picture of strongest to weakest index/sector in terms of intermediate-term participation.
Utilities (XLU) have 100% of stocks with Silver Crosses. The sector is starting to see some damage on a pullback so we expect to see both the SCI and GCI lose ground soon.
Semiconductors (SMH) hold the lowest SCI reading, but it did show improvement this week. The group does look ready to rally higher off a double bottom formation.
This table is sorted by GCI values. This gives a clear picture of strongest to weakest index/sector in terms of long-term participation.
Materials (XLB) gained the most points on the GCI this week, but at the same time it lost SCI points so we are mostly neutral on this sector.
Biotechnology (IBB) holds the lowest GCI reading, but that did see a one percentage point improvement this week. They have a lot of work to do on both the SCI and GCI. At least they are going in the right direction.
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.
Yesterday saw a Bearish Shift on the Silver Cross Index which moved the IT Bias to Bearish, but today it turned itself around and had a Bullish Shift across the signal line giving us a BULLISH IT Bias. It could still move lower as we have fewer stocks above their 50-day EMA than we have Silver Crosses so stay tuned. The Golden Cross Index is making its way higher again. It has some room to move higher given there are more stocks above their 200-day EMA than Golden Crosses. It is above its signal line so the LT Bias is 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: It would've been a near perfect day, but we had the STO-V turn down and we logged an upside exhaustion climax. The indicators still look very good especially the pop in New Highs and the now rising ITBM and ITVM. The Silver Cross Index even erased yesterday's Bearish Shift to move back into a Bullish Bias. With the broad market now participating we would expect to see some follow through on today's move to all-time highs. However, we aren't ready to throw caution to the wind given the climax. More than likely we will see some churn rather than a reversal but as we said earlier, we need to take our cue from Monday's open.
Erin is 55% long, 0% short. (This is intended as information, not a recommendation.)
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CALENDAR
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BITCOIN
Bitcoin Daily Chart: Bitcoin saw an excellent reversal off the 200-day EMA. This was enough to turn the PMO back up and move the RSI back into positive territory. Bitcoin has been traveling in a wide trading range and we don't see anything here to tell us that won't continue. We still have a declining trend off the September top so we still advise caution.
Bitcoin Weekly Chart: We're still monitoring the bull flag on Bitcoin that does imply it will eventually breakout in a big way. For now we wait. The weekly PMO is flat, but it sure looks like price wants to head back down to the bottom of the flag.
BITCOIN ETFs
Today:
This Week:
INTEREST RATES
With the exception of a few yields, everyone moved higher today. The rising trends are strong and we suspect they will continue rising toward resistance. We'll be watching for short-term yields to drop below some of these longer-term yields. That would ease the inversion of 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 paused its rocket higher as it put on the brakes at the 200-day EMA. We expect it to continue its rise given the strongly rising PMO and Stochastics holding above 80. It makes sense that we would run into some trouble at overhead resistance, but it should only be a stumble with the yield making its way higher again soon.
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 6.12 to 6.32.
Here is a 50-year chart for better perspective.
BONDS (TLT)
IT Trend Model: NEUTRAL as of 10/11/2024
LT Trend Model: BUY as of 7/17/2024
TLT Daily Chart: As noted in the opening we have a new IT Trend Model Neutral signal on TLT. Price has been making its way lower as yields show strength. We don't see the ship turning around soon. The rising bottoms trendline has now been broken and the PMO is headed lower below the zero line. Stochastics are hung up below 10 which implies incredible weakness. While this would be a good place for a bounce, the 20-year yield is in a strong rising trend so it is highly doubtful we'll get a turnaround here.
TLT Weekly Chart: The bullish reverse head and shoulders is failing to reach its upside target. Price is dropping below the 43-week EMA and the weekly PMO is now in decline. This is a bearish setup.
DOLLAR (UUP)
IT Trend Model: BUY as of 10/9/2024
LT Trend Model: BUY as of 5/25/2023
UUP Daily Chart: The Dollar rallied again today after a brief pause yesterday. Yesterday's candlestick looked pretty bearish with its shooting star, but UUP ignored it and moved higher. The Dollar is very bullish right now albeit overbought. Overhead resistance is nearing so we could finally see it digest the vertical rally properly. We do expect a breakout there given the very bullish indicators, but are looking for some consolidation soon.
UUP Weekly Chart: What strikes us about the weekly chart is the rising trend channel that implies price will continue higher. Price is currently bouncing off the bottom of the channel and looks headed to the top of the channel next. The weekly PMO is confirming the rally as it has turned up.
GOLD
IT Trend Model: BUY as of 10/23/2023
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Gold is holding its short-term rising trend after bouncing off horizontal support. The PMO is attempting to bottom above the zero line. Sentiment has been slowly declining so we do have traders getting a bit more bullish and that could help keep this rally alive. The big problem is the bullish Dollar.
But the Dollar isn't completely a problem given the correlation between Gold and the Dollar is non-existent right now. Normally they are negatively correlated so a rising Dollar is bad for Gold. The Dollar does look ready to consolidate soon and that would afford Gold an opportunity to continue toward all-time highs. Overall we are tentative about this current rally. It looks pretty good, but we know how recalcitrant Gold can be.
GLD Weekly Chart: The weekly chart looks very bullish. We have a strong rising trend and moves to all-time highs. The weekly PMO is rising and putting margin between it and its signal line so at this point we should see Gold continue higher. Unfortunately, the weekly RSI is very overbought so a pause is definitely in order soon. We don't see 'correction' in its future just yet.
GOLD MINERS Daily Chart: Gold Miners have enjoyed a nice rally with Gold these past two days. We are lukewarm on Gold right now due to the rising Dollar. Gold Miners could rally without Gold should the market heat up, but the way is much clearer when Gold is rising. The PMO hasn't turned up yet and until the Dollar cools, we aren't big fans of this part of the market. We do have to admit that participation is returning to the group, but we need Gold to heat up. We think this rally may be short-lived.
GDX Weekly Chart: Overhead resistance is arriving at the 2020 high, but given the nice rising trend and positive weekly PMO we ultimately see this group breaking out. We just think it is too early to look for that right now.
CRUDE OIL (USO)
IT Trend Model: BUY as of 10/11/2024
LT Trend Model: SELL as of 9/10/2024
USO Daily Chart: Crude Oil is bouncing around right now below a resistance zone. It makes sense that we'd see some weakness at this level. The new IT Trend Model Silver Cross BUY Signal, rising PMO and rising Stochastics all suggest that resistance should eventually be overcome.
USO/$WTIC Weekly Chart: Crude Oil has been in a trading range for years and we don't foresee anything to push it out of the range yet. Certainly Middle East tensions could rise further and there is now discussion about AI chip power needed. Both could push for a breakout. For now we will look for the top of the range to be tested again. The weekly PMO is rising again so maybe it is time for that 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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