Today the Energy Sector (XLE) 20-day EMA crossed up through the 50-day EMA (Silver Cross), generating an IT Trend Model BUY Signal. This signal is arriving late to the party as XLE has been rallying for quite some time. Today saw a breakout above resistance. Price looks headed higher and with 100% of stocks above the 20-day EMA and 95% above the 50-day EMA. Stochastics are above 80. We do worry that with Crude Oil hitting strong overhead resistance that this sector could find some trouble at the next level of overhead resistance. For now, it looks bullish.
This is a very strong area of overhead resistance when we review it on the weekly chart. Price is moving sideways in a trading range. The weekly PMO has turned up so we could see a breakout.
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Today the Retail ETF (XRT) 20-day EMA crossed down through the 50-day EMA (Dark Cross), above the 200-day EMA, generating an IT Trend Model NEUTRAL Signal. Price is in a declining trend and does not look healthy. We are at a new support level near the 200-day EMA, but the PMO looks very negative as it falls below the zero line. This would be a good area for a reversal and we do note that participation is beginning to expand. Given the declining trend is still intact, we will look for price to move a bit lower.
Price dropped beneath strong support this week. There is a new weekly PMO Crossover SELL Signal. The long-term rising trend is still intact. Price will need to reverse soon to avoid a break in that trend.
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: After the gap up on the open, price basically consolidated sideways. It dipped on the close and the 10-minute PMO is in decline with Stochastics topping. We could see a decline tomorrow.
SPY Daily Chart: We would say that the rounded top is still intact, but we did see a breakout from the declining trend channel. The PMO is nearly above the zero line on its rise. The RSI is positive and not overbought.
The VIX is comfortably above its moving average on the inverted scale and Stochastics are nearing 80. There is internal price strength visible.
Here is the latest recording from 1/6 (No recording 1/13 or 1/20). Click HERE to get the link to video library.
SPY Weekly Chart: Price very nearly tested the rising bottoms trendline. It reversed higher before touching the line and that is bullish. The weekly PMO is currently on a SELL Signal, but it is decelerating. It is also very flat above the zero line and that implies pure strength. The bull market is alive and well.
New 52-Week Highs/Lows: New Highs expanded on the rally as we would expect. There were no New Lows so we do see health in this market. The High-Low Differential is bullishly rising toward the zero line.
Climax Analysis: There was only one climax reading and one "almost" on the four relevant indicators. SPX Total Volume was solid. We think that is enough to declare an upside exhaustion climax, which could be a sign that the market is about to run out of steam.
*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 OVERBOUGHT.
The Swenlin Trading Oscillators (STOs) look good on their rise, but they are now in overbought territory and thus vulnerable to a downturn. We are still very happy with participation of stocks above their 20-day EMA and we now have a robust 82% with rising momentum that could continue to push things along.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is NEUTRAL.
The ITBM and ITVM look bullish as they rise and confirm already rising short-term indicators like the STOs. They are still in negative territory so it isn't a full vote of confidence. We do see 62% now with PMO Crossover BUY Signals which is healthy and could support higher prices.
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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.
We now have two positive IT Biases with Energy leading. It gained an incredible 24 percentage points this week on the Silver Cross Index. Semiconductors have a positive IT Bias and did see a big pick up in the Silver Cross Index. It isn't one of the more bullish charts out there, but certainly internals are improving.
The lowest IT Bias belongs to Utilities (XLU). They have since reversed after a very long decline. That set up a low Silver Cross Index reading against the very strong Golden Cross Index reading. The sector is in a strong rally so we do expect the Silver Cross Index to start seeing even bigger gains.
This table is sorted by SCI values. This gives a clear picture of strongest to weakest index/sector in terms of intermediate-term participation.
The Silver Cross Index readings in general are not impressive. The highest is 57% for XLE. It popped to the top of the chart after its incredible gain this week on the SCI.
The lowest SCI reading goes to Real Estate (XLRE) with a very weak 13% reading. We did see one gain to the SCI so it does appear to be moving in the right direction. However, the Golden Cross Index lost the most points this week. Still a mixed chart.
This table is sorted by GCI values. This gives a clear picture of strongest to weakest index/sector in terms of long-term participation.
Financials (XLF) and Regional Banks (KRE) are at the top of the Golden Cross Index table, holding at a very high 96%. This area is sure to benefit from the new administration so we expect more upside here.
Semiconductors (SMH) hold the lowest GCI reading, but they did see highest expansion this week so the picture may be improving for this industry group.
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 bias in the intermediate term is BULLISH.
The bias in the long term is BEARISH.
The big news today was the Bull Shift on the Silver Cross Index. It crossed above its signal line giving us a new BULLISH bias in the intermediate term. Participation is much more healthy as we now have over 50% above their 50-day EMA so we should see the Silver Cross Index rise further from here. The Golden Cross Index is still technically in decline. We need to see a higher number of stocks above their 200-day EMA to get it moving higher again. It's close but still reading below the Golden Cross Index. Given the Golden Cross Index is below its signal line, the LT Bias remains 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.
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CONCLUSION: In general we like what we are seeing with expanded participation. We had a Bull Shift on the Silver Cross Index and most indicators are on the rise. We did detect a mild upside exhaustion climax and the 10-minute PMO and Stochastics look somewhat negative so we could be in for some decline when trading returns on Tuesday. A look at the Magnificent Seven and we see mostly mediocre to weak charts. Their demise would likely bring down the whole house of cards. The broad market is participating, but a major decline on those stocks would bring the index lower and likely see most stocks fall in sympathy. For now, the broad market is participating and indicators are healthy.
Erin is 42% 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 broke its declining trend and has come out of the bearish rounded top. Given the new PMO Crossover BUY Signal, we would look for a charge to new all-time highs. Stochastics also look very good above 80.
Bitcoin Weekly Chart: We still see a rounded top on the weekly chart, but we also have a strong bounce of support at 90,000. The weekly PMO is still rising. We think we've seen the consolidation out of the parabolic vertical rally and it could now be ready to move to all-time highs.
BITCOIN ETFs
Today:
This Week:
INTEREST RATES
Rates mostly were up although the long-term 20 and 30-year rates were lower. Long Bonds still look bearish and we still have a rising trend on long-term yields. This decline is likely temporary.
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 bounced today but still set a lower high and lower low. They are in decline and likely will continue to decline to at least the 4.5% level. It could be deeper than that if it goes to test the rising bottoms trendline. The PMO triggered a Crossover SELL Signal today so we should look for it to decline further.
10-Year Bond Yield Weekly Chart: The declining trend was broken and $TNX looks to be headed to 2023 highs. We do see some hesitation at the 2024 high, but ultimately we are looking for it to rise further given the bullish weekly PMO.
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 6.93 to 7.04.
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: TLT is still in a longer-term declining trend out of the September top. It does look like we'll see some more upside given the PMO Crossover BUY Signal, but we see this signal as diminishing weakness not necessarily a sign of new strength. We see some more upside ahead for TLT, just not that much.
We have a strong resistance level arriving at 89. That's where we think it will run into trouble.
TLT Weekly Chart: Interestingly, price is bouncing right off support so we could see a bit more upside. The weekly PMO is still quite bearish which is another reason we don't expect to see much out of this rally.
DOLLAR (UUP)
IT Trend Model: BUY as of 10/9/2024
LT Trend Model: BUY as of 5/25/2023
UUP Daily Chart: We have a bearish rising wedge on the Dollar chart, but we have to say the Dollar looks very bullish as it holds the rising trend. We also have a flat PMO above the zero line which implies pure strength. The Dollar is well overdue for a breakdown, but for now we don't really see any deterioration on the chart. The PMO is on a SELL Signal, but barely. It is more important that it is flat above the zero line.
UUP Weekly Chart: We had a powerful breakout from a bearish rising wedge on the weekly chart that can be considered especially bullish. The weekly PMO is rising strongly. We do have the problem of a very overbought RSI, but that really hasn't been a problem for weeks. We still see more upside for the Dollar but will continue to monitor the bearish rising wedge on the daily chart.
GOLD
IT Trend Model: BUY as of 1/10/2025
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Gold dropped slightly on the Dollar's rally. It remains in a rising trend, but has hit overhead resistance. Indicators look bullish so we think there is a good chance that Gold will rally to all-time highs again. The PMO is rising and Stochastics are holding above 80.
Discounts are in a declining trend which implies that investors are less bearish. That could help push Gold higher from here. The correlation with the Dollar is very positive so they can travel in concert. With the Dollar still looking bullish, that could be good for Gold when it normally isn't.
GLD Weekly Chart: Price moved into high level consolidation to digest the parabolic rally. It now looks ready to resume the rise. The weekly RSI is positive and not overbought. The weekly PMO is trying to turn back up. We think Gold has a good chance of returning to all-time highs.
GOLD MINERS Daily Chart: We are bullish on Gold and that means we should be bullish on Gold Miners. We are. Participation is very strong and we see a very positive RSI and PMO configuration. The Golden Cross Index is nearing a Bull Shift across the signal line that would give GDX a BULLISH LT Bias. Stochastics are above 80. It looks good for more rally.
GDX Weekly Chart: The weekly chart isn't that bullish. We do see a bounce that occurred above support which is positive, but the weekly PMO is in decline and we can still see a declining trend. We should be cautious in the intermediate term.
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 is on a nice rally in a strong rising trend. Another decline today took the RSI out of overbought territory. The PMO is still on the rise and Stochastics are holding above 80.
We saw a breakout above strong overhead resistance but it is now pulling back. This could continue despite the strong indicators on the daily chart as this is VERY strong overhead resistance.
USO/$WTIC Weekly Chart: We do see positive indicators on the daily chart and this week did see a tiny breakout. The weekly PMO is rising and the weekly RSI is positive. We wonder if the new administration being installed on Monday will affect Oil prices and push them lower in anticipation of more drilling. It is certainly in a vulnerable spot given its location on 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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