
Today the Industrial Sector ETF (XLI) 20-day EMA crossed up through the 50-day EMA (Silver Cross), generating an IT Trend Model BUY Signal. The rally looks genuine at this time and the PMO has moved into positive territory. We do see some damage to participation despite the rally which is troublesome, but readings are still healthy at this time. Stochastics are above 80 and relative strength has really kicked in.
The XLI weekly chart is bullish, with price in a rising tend channel. The weekly PMO is generally moving sideways well above the zero line and that is a sign of strength.
__________
Also today, the Transportation ETF (IYT) 20-day EMA crossed up through the 50-day EMA (Silver Cross), generating an IT Trend Model BUY Signal. This also looks like a good rally on this signal. The PMO just entered positive territory and participation readings are generally strong. Stochastics are holding above 80 showing internal strength. Relative strength doesn't look very good so there are probably better areas to pick from.
The IYT weekly chart shows a bearish rising wedge formation, so a correction is likely. Otherwise, the chart looks pretty good.
__________
Today the Retail ETF (XRT) 20-day EMA crossed up through the 50-day EMA (Silver Cross), generating an IT Trend Model BUY Signal. The declining trend has been broken and the PMO has turned up. Participation is gaining strength. Relative strength is a problem so as with IYT, there are probably better areas of the market to invest in.
The XRT weekly chart is generally bullish, but the rising wedge formation warns of the potential for a correction. The weekly PMO is flat and above the zero line, a bullish look. Although we must mention that the weekly PMO is on a new Crossover SELL 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/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 market began the day down, but saw a steady rally from there. Interestingly we saw a big push higher to finish the day suggesting we could see some followthrough tomorrow.
SPY Daily Chart: We now have a strong breakout to new all-time highs. The boundary has been pushed past and that does leave the market open to more upside. The PMO is rising on a Crossover BUY Signal above the zero line and the OBV broke to a new high on this price breakout avoiding a reverse divergence.
The VIX is still relatively low as investors are feeling bullish on this breakout. Stochastics are above 80 indicating internal price strength. Notice that relative strength to equal-weight RSP is gaining again. This means mega-caps are helping to push the market higher.
Here is the latest recording from 1/3 (No trading room 1/10 or 1/27). Click HERE to get to our video list.:
S&P 500 New 52-Week Highs/Lows: New Highs fell again today on the rally which we don't like to see. New Lows expanded slightly. Fortunately, the High-Low Differential is still on the rise and is 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 OVERBOUGHT.
The Swenlin Trading Oscillators (STOs) are both falling now. They are overbought and part of the decline could be due to overbought readings. As we say, oscillators must oscillate. Still this is an attention flag. Participation did see an increase unlike yesterday and we saw slightly more rising PMOs. Nothing spectacular but bullish all the same.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is NEUTRAL.
We are more comfortable with declining STOs primarily because the ITBM and ITVM are still on the rise. We also saw an increase in PMO BUY Signals.
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 term.
The market bias is BEARISH in the long term.
Unlike yesterday, participation readings did move higher on the rally as we would expect. The Silver Cross Index looks very bullish on its rise. It is above its signal line so the IT Bias is BULLISH. The Golden Cross Index is still technically on the rise, but it is vulnerable to a decline right now. We have fewer stocks above their 200-day EMA than we have Golden Crosses. We need to see improvement here soon or the Golden Cross Index will begin falling. It is currently below its signal line so the LT Bias is 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.
*****************************************************************************************************
CONCLUSION: The only issue today would be the declining STOs. We aren't going to get too worked up about this given the ITBM and ITVM are still rising and participation is at healthy levels. Mega-caps are beginning to outperform again and that should work well for the index to move higher. Broad market participation will need to continue however. We still need more stocks above their 200-day EMAs in order to get the Golden Cross Index moving higher. The barrier to new all-time highs has been broken and this could spur more rally, but remember things can turn and if mega-caps lose strength again, the index will likely struggle. Set stops for protection and let the market take you out.
Erin is 55% long, 0% short. (This is intended as information, not a recommendation.)
*****************************************************************************************************
CALENDAR
Have you subscribed the DecisionPoint Diamonds yet? DP does the work for you by providing handpicked stocks/ETFs from exclusive DP scans! Add it with a discount! Contact support@decisionpoint.com for more information!
BITCOIN
Yesterday's comments still apply:
"Bitcoin has hit overhead resistance. We could see this trading range continue, but we did notice Stochastics turned up and the PMO continues to rise on a Crossover BUY Signal. There is a bullish bias on the chart that does favor a breakout, but we wouldn't be surprised if this trading range remains intact a bit longer."
BITCOIN ETFs
INTEREST RATES
Yields were mixed today with longer-term yields rising and shorter-term yields falling. We expect sideways movement on yields in general. However, the Bond market does seem to be pricing for inflation as long-term yields rise.
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 headed higher and we suspect that will continue in the short term as the reversal occurred above support. The PMO has not switched directions, but the RSI is positive and Stochastics have turned back up. If it does top here, it would set up a bearish head and shoulders pattern. Stay tuned.
BONDS (TLT)
IT Trend Model: NEUTRAL as of 11/10/2024
LT Trend Model: SELL as of 12/13/2024
TLT Daily Chart: With the 20-year yield back on the rise, TLT is going to have a hard time. The decline is occurring just as price hit overhead resistance. The PMO is still technically on the rise, but we detect more weakness as Stochastics have topped before getting above 80. Look for this decline to continue a bit longer.
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 has a clear topping formation, but price refuses to drop below support. Given the negative PMO configuration and Stochastics falling below 20, we would look for this support level to be broken.
GOLD
IT Trend Model: BUY as of 1/10/2025
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Gold fell slightly, but the indicators still look very good and the Dollar looks iffy. We are expecting Gold to make its way back to all-time highs. It may be slow going, but ultimately it is in a rising trend.
Discounts continue to move lower suggesting a more bullish outlook by investors on Gold. They are still elevated, but they are going in the right direction. Notice that the correlation between Gold and the Dollar is almost non-existent. This means Gold isn't as tied to the Dollar's direction in the short term.
GOLD MINERS (GDX) Daily Chart: GDX remains on a solid rising trend. The PMO just entered positive territory. The Silver Cross Index is moving swiftly higher and participation is strong. Stochastics are also above 80. The technicals look very good and we like Gold to make new all-time highs. Expect price to continue rising.
CRUDE OIL (USO)
IT Trend Model: BUY as of 12/24/2024
LT Trend Model: BUY as of 1/10/2025
USO Daily Chart: Crude Oil pulled back greatly today. Pressure is starting to be applied to OPEC+ to increase production. The Trump administration's national energy emergency will mean more production in the US too. More than likely prices will continue to fall. The PMO looks very negative and Stochastics are falling quickly. This support zone is being tested and we suspect it won't hold.
Good Luck & Good Trading!
Erin Swenlin and Carl Swenlin
Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin
(c) Copyright 2025 DecisionPoint.com
Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. DecisionPoint newsletters, blogs or website materials should NOT be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.
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.
Helpful DecisionPoint Links:
DecisionPoint Alert Chart List
DecisionPoint Golden Cross/Silver Cross Index Chart List
DecisionPoint Sector Chart List
Price Momentum Oscillator (PMO)