Earlier this week we were looking at a promising short-term double bottom, but Tuesday's sell-off knocked the wind out of the rally that began last week. As of today's decline, it is obvious that the most optimistic we can be about this chart is a potential triple bottom. We can't rule that out, but given the market's recent behavior, we think it is not likely. Also working against a bullish outcome is the potential for a rounded top.
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 market gapped down on the open on the strong jobs report that suggested the FOMC will limit rate cuts and could even raise rates again. We note that the 10-minute PMO is seeing a Crossover SELL Signal developing.
SPY Daily Chart: The PMO is very close to negative territory. The OBV is trending lower and the RSI is in negative territory. These are short-term signs of stress.
Investors are definitely getting more nervous about the market as the VIX continues to march lower on our inverted scale. It is not oversold. Stochastics topped in negative territory and continue to fall. Mega-caps are beginning to lose their dominance as the relative strength line to equal-weight RSP is beginning to flatten out.
Here is the latest recording from 1/6. Click HERE to get the link to video library.
SPY Weekly Chart: The original rising wedge resolved as expected with a drop below the rising bottoms trendline. By incorporating the new price top, we still have a bearish rising wedge so the rising trend out of the late 2023 low could be in jeopardy.
New 52-Week Highs/Lows: New Lows spiked on today's decline as the broader market felt the pain today. The High-Low Differential continues to make its way lower after topping beneath the zero line which is very bearish.
Climax Analysis: There were unanimous climax readings on the four relevant indicators today, which gives us a downside initiation climax. We'll be looking for a few days of churn before continued downside, or continued downside without the churn. SPX Total Volume was solid but not at blowout levels.
*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 NEUTRAL.
As we suspected, the Swenlin Trading Oscillators (STOs) reversed lower on today's decline. Both are in negative territory. Participation took a big hit today as more stocks lost support at their 20-day EMAs and we lost quite a few rising PMOs.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is OVERSOLD.
The ITBM and ITVM also reversed lower today. This occurred well below the zero line. %PMO BUY Signals which had been rising for some time, topped today.
_______
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.
As with last week, there are no positive IT Biases. Every entity shows a Silver Cross Index that is lower than the Golden Cross Index. This is a sign of deterioration and weakness that is pervading the market. The worst IT Bias belongs to Regional Banks (KRE) which saw a decimation of the Silver Cross Index while the Golden Cross Index stayed at very high levels. The Golden Cross Index is a slow mover so we watch for deterioration or strength on the Silver Cross Index.
This table is sorted by SCI values. This gives a clear picture of strongest to weakest index/sector in terms of intermediate-term participation.
Retail (XRT) holds the highest Silver Cross Index reading, but it is very low at only 56%. A sign of the deterioration of the market despite being near all-time highs.
Materials (XLB) hold the lowest reading and continued to lose ground this week on both the Silver Cross Index and Golden Cross Index.
This table is sorted by GCI values. This gives a clear picture of strongest to weakest index/sector in terms of long-term participation.
Energy (XLE) is the only one that saw an increase in the Golden Cross Index as that sector has begun to see improvement to its internals. Interestingly it didn't see a gain on the Silver Cross Index.
The biggest deterioration to the Golden Cross Index was Consumer Discretionary (XLY). As the sector begins to pull back, we are seeing problems with the Silver Cross Index as well.
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.
Participation had begun to improve but has since started to pare back again. We clearly have problems given the low readings on %Stocks > 20/50/200EMAs. The Silver Cross Index is beginning to reach oversold territory, but we know it could move lower, particularly given we have fewer stocks above their 20/50-day EMAs. It is below its signal line so the IT Bias is BEARISH. The Golden Cross Index is not at all oversold yet and given we have fewer stocks above their 200-day EMA, it is likely to continue lower. It is 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: Blame for today's decline was given to the strong jobs report this morning that suggested a more hawkish stance from the FOMC moving forward. We believe there is more going on as this market is very overvalued and internally weak. Our primary indicators all turned down today and we saw a downside initiation climax that does suggest more turbulence ahead if not a continued decline. Participation is thinning again and it wasn't all that strong to begin with. Bearish biases cover our Bias Table so weakness is everywhere. Sometimes these climaxes bring with them churn so at the very least we should expect that. However, the deterioration of so many of our indicators does seem to suggest more decline.
Erin is 30% 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
Bitcoin Daily Chart: We have a rounded top of Bitcoin that does suggest we will see this support level broken. The PMO is still in decline as are Stochastics. We are looking for a breakdown and a likely test of 85,000.
Bitcoin Weekly Chart: This has been a good opportunity for Bitcoin to digest the vertical rally out of the prior bull flag. When this consolidation completes it does look like a new flag so in the long term we are cautiously bullish.
BITCOIN ETFs
Today:
This Week:
INTEREST RATES
Yields are back on the rise as the Bond market is pricing in more inflation. They look quite bullish, particularly the longer-term yields so we do expect another run toward 2024 highs and for longer-term yields, a run toward 2023 highs.
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
We have an accelerated rising trend on $TNX and it looks like that rising trend is being accelerated once again. The bearish rising wedge has been busted at this point and with the acceleration of the PMO, we are looking for a continued run higher for the 10-year yield.
10-Year Bond Yield Weekly Chart: We now broken above the 2024 high and are headed to the 2023 high. The weekly PMO is bullish. $TNX is likely to see an upside breakout at 2023 highs.
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).
--
This week the 30-Year Fixed Rate changed from 6.91 to 6.93.
Here is a 50-year chart for better perspective.
BONDS (TLT)
IT Trend Model: NEUTRAL as of 11/10/2024
LT Trend Model: SELL as of 12/13/2024
TLT Daily Chart: With Bond yields rising strongly, TLT is being punished. The RSI is very negative and the PMO is declining well below the zero line. Stochastics are about as weak as they can get. We don't see any indication that TLT will recover anytime soon.
Support is arriving at 84.50 but it isn't likely to hold onto it.
TLT Weekly Chart: There is a declining trend and a nearing breakdown of support. The weekly PMO has moved below the zero line and the weekly RSI is negative. We would look for the 2023 low to be tested at a minimum.
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 is still rallying, putting downside pressure on Gold and multinational companies. The indicators are still quite bullish so the rally could easily continue. We are monitoring a large bearish rising wedge, but so far we don't detect weakness.
UUP Weekly Chart: Price broke from a bearish rising wedge on the weekly chart and is continuing higher. The only problem we see is the overbought weekly RSI, but in a strong bull market move, overbought conditions can persist. The weekly PMO is rising strongly so other than the bearish rising wedge on the daily chart, the Dollar looks bullish.
GOLD
IT Trend Model: NEUTRAL as of 12/23/2024
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Gold is managing to rally despite a rising Dollar which is very bullish in our opinion. The PMO is back in positive territory indicating new strength. Stochastics are above 80. We saw a huge spike in volume today as well so interest in returning to Gold.
Discounts are still quite elevated so bearish sentiment is still visible. This could work in Gold's favor. For now the charts are bullish enough to look for the prior tops to be challenged.
GLD Weekly Chart: Gold is seeing high level consolidation out of a parabolic rally. When that completes, we are looking for another rally higher. We'd like to see the weekly PMO decelerate its decline further.
GOLD MINERS Daily Chart: GDX has broken out of a bullish falling wedge. The RSI has moved into positive territory and the PMO is rising on a Crossover BUY Signal. We saw a Bull Shift on the Silver Cross Index today that changed the IT Bias to BULLISH. Participation has improved and Stochastics are on the rise. We are bullish on Gold so consequently we are also bullish on Gold Miners.
GDX Weekly Chart: Price still looks a bit toppy on the weekly chart and the declining trend is still essentially intact. The weekly PMO is in decline. We think that a reversal is coming, but until then we would keep GDX in the short-term timeframe at this juncture.
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 broke out today from the trading range it has been in for months. Today saw a Golden Cross giving us a LT Trend Model BUY Signal. The RSI is overbought now and today we saw a bearish filled black candlestick so some consolidation is in order. It's hard to say if we'll get that as Crude looks quite bullish right now. The PMO is accelerating higher. Stochastics are also rising above 80.
The next level of overhead resistance is arriving at the April top.
USO/$WTIC Weekly Chart: We are bullish on Crude Oil but we do note that very strong overhead resistance is nearing. We do see a positive weekly RSI and the weekly PMO is rising on a Crossover BUY Signal. The ground is fertile for a breakout.
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)