SEATTLE WEATHER CAUSES DATA PROBLEMS
You may have heard about the 'Bomb Cyclone' that has hit the northwest area of the country. It is causing major power outages in the Seattle area, which is where StockCharts.com is located. The result is that some of our datasets have not updated or are incorrect. In particular our Silver Cross and Golden Cross Indexes all crashed to zero (0), except one which shot up to 100. So far we don't see any other problems, and since we don't know when the bad data will be corrected, we will publish in our normal timeframe. Please ignore the errors. We will correct those charts when we can.
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Below is a 5-minute candlestick chart that includes after hours trading. NVDA was lower on the day and the losses extended into after hours trading on the back of earnings. The earnings outlook was tempered so despite beating estimates, the stock traded lower in after hours trading. This could be a problem for the SPY tomorrow if these losses are extended.
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 8/14/2024
LT Trend Model: BUY as of 3/29/2023
SPY 10-Minute Chart: The news was that NVDA was down on the day and that took price lower to begin the trading day. However, by day's end the market had recouped all of its losses to close slightly higher.
SPY Daily Chart: Price is holding above support still and technically we do have a bullish hammer candlestick. It is coming near a low in price so we could see some upside followthrough. However, the PMO continued lower after its Crossover SELL Signal yesterday so no new momentum was added on the small rally.
The VIX is moving lower on our inverted scale which tells us that investors are getting nervous near this market top. Stochastics did turn up today.
Here is the latest recording from 11/18. Click HERE to get to our video list.:
S&P 500 New 52-Week Highs/Lows: Unfortunately this is a chart with no updates today. Ignore the High-Low Differential as it is reading as if we had no New Highs and no New Lows which we know isn't correct.
Climax* Analysis: There were no climax readings today. We do note that Net Advance-Decline Volume was negative on the day. The NYSE data did not update, but we're fairly certain we wouldn't have had climax readings.
*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 DOWN and the condition is OVERSOLD.
The Swenlin Trading Oscillators (STOs) switched seats today. The STO-B which had been falling, turned up today. The STO-V which had been rising yesterday, turned down today. The market is moving sideways and it is confusing our indicators right now. Their twitchy readings don't suggest bullish activity, nor bearish activity. At this point, they are oversold and we want to see both rising together. So we wait. Not surprisingly we didn't see much movement on %Stocks > 20EMA. The PMO dataset did not update.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is NEUTRAL.
The ITBM/ITVM are still falling which to us can be read as a bearish bias. The negative divergences suggest this decline could get going again. %PMO Xover BUY Signals did not update today.
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 BEARISH in the intermediate and long terms.
While the Silver/Golden Cross Indexes did not update, we know that the readings would still be below the signal lines so the biases remain BEARISH. Participation inched higher. We still see negative divergences on those participation indicators.
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 market is at equilibrium, not giving us a clear indication of its intentions. It managed a small rally at the end of the trading day. That did little to improve our participation readings. While they remain above our bullish 50% threshold, they are reading far too low considering how close we are to new all-time highs. Hence the negative divergences. This is a shaky foundation and price is already shaky. STOs are mixed and not very helpful, but the ITBM and ITVM are in decline with negative divergences. This should mean decline ahead. At this point we don't think support will hold, particularly if NVDA extends its losses tomorrow.
Erin is 60% long, 0% short. (This is intended as information, not a recommendation.)
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CALENDAR
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BITCOIN
Yesterday's comments still apply:
"We have a rising flag on a flagpole. Flags are bullish continuation patterns and are generally followed by a strong breakout and rally higher. The one problem here is that the flag is 'rising' not 'falling'. These patterns have a way of breaking down so we should be alert for a possible decline. For now the PMO looks very strong and sentiment is still very bullish for crypto so this rally could easily continue higher, we would just be alert to a possible decline to push the RSI out of overbought territory."
BITCOIN ETFs
INTEREST RATES
Yields were higher on the day. Today Erin's ETF scans returned quite a few Bond funds suggesting that yields are likely to cool moving forward. Ultimately we are still looking for them to rise to 2024 highs. It just may be time for a digestion phase.
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 in a rising trend, but dropped out of it yesterday. Today's rally did not bring it back within the rising trend. The PMO has topped and has triggered a Crossover SELL Signal suggesting it is time for a digestion phase. We would look for it to test 4.3%.
BONDS (TLT)
IT Trend Model: NEUTRAL as of 11/10/2024
LT Trend Model: BUY as of 7/17/2024
TLT Daily Chart: Today saw a bullish hollow red candlestick that implies we could see a rally tomorrow. Yields were up today, but they are long overdue for a break so we are cautiously bullish on TLT right now. It nearly saw a PMO Crossover BUY Signal today. Stochastics are moving higher. We expect to see some upside out of TLT in the near term.
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 broke out of a bullish flag formation today implying we have much further to fly. The PMO is turning back up and Stochastics are holding above 80. They are trying to turn up too. This is likely to put downside pressure on Gold.
GOLD
IT Trend Model: BUY as of 10/23/2023
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Gold managed a rally despite a rising Dollar today. It didn't break from its declining trend, but it is getting close. The PMO still looks pretty bearish, but Stochastics are rising again. The Dollar looks bullish right now and while that wasn't a problem today, it is likely to add gravity to price.
We aren't ready to rule out a rally continuation as sentiment has reached high levels of bearishness as displayed by the high discounts. Sentiment is contrarian and things have gotten very bearish. Notice the very negative correlation with the Dollar. This tells us that the Dollar should cause problems for Gold since the Dollar looks ready to rally further.
GOLD MINERS (GDX) Daily Chart: Gold Miners were stopped at overhead resistance. (Remember the Silver/Golden Cross Indexes did not update properly today.) The PMO has turned back up and participation is beginning to perk up a bit. However, we think the rally in Gold is suspect right now and that will cause problems for the Gold Miners. While GDX looks more bullish, we think that it is early to count on this rally right now.
CRUDE OIL (USO)
IT Trend Model: SELL as of 10/17/2024
LT Trend Model: SELL as of 9/10/2024
USO Daily Chart: Crude formed a bearish engulfing candlestick today. Middle East tensions are not concerning investors right now. Trading is sideways which has caused the PMO to flatten along the zero line. Stochastics are rising and so is the PMO so for now we will look for another test of overhead resistance.
Good Luck & Good Trading!
Erin Swenlin and Carl Swenlin
Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin
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