Today the NYSE Composite Index ($NYA) 20-day EMA crossed up through the 50-day EMA (Silver Cross), generating an IT Trend Model BUY Signal. We've seen a strong rally this month and based on the internals, it could continue on. However, while participation of stocks above key moving averages somewhat healthy, readings are still not as strong as they should be given the strength of the rally. The Golden Cross Index is decelerating. The Silver Cross Index looks bullish, but it is still reading below our bullish 50% threshold.
The NYSE weekly chart shows that the index is above the rising trend line and climbing. The weekly PMO has bottomed and is moving sideways well above the zero line. Bullish.
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/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 held its own in the morning, but downside pressure began to increase and we saw a declining trend established. We did see a nice little pop to finish the day which could bode well. The 10-minute PMO did turn up to finish the day.
SPY Daily Chart: Price did see a new intraday all-time high, but it was unable to hold it into the close. It isn't surprising to see some churn now that we've hit all-time highs. The PMO is rising nicely and the RSI tells us that the SPY isn't near-term overbought.
Stochastics did top today but remain comfortably above 80 indicating internal price strength. The VIX is so far avoiding an upside puncture of the Bollinger Band on our inverted scale. A puncture could spell trouble, but for now the VIX is safely above its moving average.
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SPY Weekly Chart: The SPY is in a strong rising trend on the weekly chart. We note that it did not have to test that rising bottoms trendline before turning back up. That is very bullish and could indicate more upside ahead. The weekly PMO has turned back up.
New 52-Week Highs/Lows: Note that New Highs are contracting as price moves higher. It sets up a negative divergence. The High-Low Differential still looks very bullish on its rise out of oversold territory.
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.
Maybe we should've paid more attention to the Swenlin Trading Oscillators (STOs) topping given today's decline. They continue to decline which does set us up for more churn or a possible decline. Not much headway was made as far as %Stocks > 20EMA and %PMOs Rising.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is NEUTRAL.
The ITBM and ITVM are still rising and are not overbought yet. We note that %PMO Xover BUY Signals is still rising, but the indicator is now in overbought territory. This is where we've seen prior weakness appear.
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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.
Semiconductors (SMH) are making a move and it has caused the Silver Cross Index to gain 24 points! We aren't seeing any headway in the long term based on the Golden Cross Index, but this is very interesting.
Regional Banks (KRE) have the worst IT Bias, but we are seeing some positive action on the Silver Cross Index. The main reason it is so negative is that the long-term picture is still very strong. The group is improving.
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 biggest gain was on the NDX (QQQ) which gained an incredible 41 points this week. It pushed it right to the top of the table. Don't count technology out yet.
The lowest Silver Cross Index readings go to Consumer Staples (XLP) and Real Estate (XLRE). On the bright side they did see some gains this week.
Overall all of the 26 we follow did not see any declines on the Silver Cross Index. A sign of strength internally for the market.
This table is sorted by GCI values. This gives a clear picture of strongest to weakest index/sector in terms of long-term participation.
The strong rallies in Financials (XLF) and KRE cemented strong readings on the Golden Cross Index, but no headway was made. They are reading at 96% so not much room for improvement anyway.
Semiconductors (SMH) are making a move, but the Golden Cross Index is the lowest of all. There is a lot of work to do on this previously 'go nowhere' 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 market bias is BULLISH in the intermediate term.
The market bias is BEARISH in the long term.
Participation didn't go anywhere this week and while readings are holding above our bullish 50% threshold, we think these numbers should be higher given we are near all-time highs. The broad market is participating, but needs to kick in more. The Silver Cross Index is healthy and rising, but is reading below our bullish 50% threshold. The Golden Cross Index did decline today as we were thinking it would given we have fewer stocks above their 200-day EMA than those with Golden Crosses. The Silver Cross Index is above its signal line so the IT Bias is BULLISH. The Golden Cross Index is below its signal line so the LT Bias is still reading 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: Price hit new all-time highs this week, but we have a few problems. The STOs are still declining and we've detected a negative divergence between New Highs and price. The rally seems to be losing some steam going into the end of the week. Participation is at healthy levels, but should be higher given our proximity to all-time highs. We are also concerned about %PMO Xover BUY Signals reaching overbought territory. There are signs that we could be in for turbulence. Probably a good idea to employ stops if you haven't already. We have the FOMC rate decision next week, but more importantly we have some big earnings reports coming out for five of the Magnificent Seven. It is hard to say which way they will swing, but it certainly promises to make the week interesting.
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 had really begun to look toppy but then it retraced back to all-time highs. It is in consolidation mode and given the somewhat flat PMO we could see more of the same. Our thought is that it will continue to consolidate in preparation for a breakout. It ran hot after the election and now it is digesting the move.
Bitcoin Weekly Chart: We thought Bitcoin was going to top here, but the recent rally has changed the appearance. It is seeing higher prices and the weekly PMO is on a Crossover BUY Signal. As noted above we think Bitcoin is consolidating in preparation for a pop higher.
BITCOIN ETFs
Today:
This Week:
INTEREST RATES
Yields were lower on the day. Short-term yields are moving sideways while long-term rates continue to see rising trends. We suspect all rates are going consolidate sideways for the time being.
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 now need to monitor a possible head and shoulders pattern on $TNX. If this turns out to be a top, the pattern would call for a decline to 4.3% which would break the rising trend. For now we do think it will find support at 4.5% given now rising Stochastics.
10-Year Bond Yield Weekly Chart: We nearly hit 2023 highs, but instead resistance held at the prior 2024 high. It could certainly breakout from here, but we do note that the weekly PMO has topped so it could be time for some decline.
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 6.91 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 yields moving lower today, Bond funds had the opportunity to rally. This is looking a lot like a reverse head and shoulders pattern. The upside target of the pattern would take price just below resistance at 92, right around the 200-day EMA. This seems reasonable.
The longer-term rising bottoms trendline is holding with the recent bounce. We think this rally is going to be short-lived and that the trendline is very vulnerable to a breakdown.
TLT Weekly Chart: Price is bouncing off support right now. It is trading mostly sideways. We do see higher prices coming off this support level but with the weekly PMO still in decline, upside potential is likely limited.
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 finally broke down out of the bearish rising wedge this week and looks as though it will continue to fall from here. The RSI has moved into negative territory and the PMO is displaying new weakness as it gets further from its signal line. Stochastics are below 20 also indicating weakness. It wouldn't be out of the question that we would get a small bounce here now that support has been reached at the 50-day EMA, but ultimately we would look for it to move lower based on the indicators.
28.50 is the next strongest level of support available.
UUP Weekly Chart: In an especially bullish move, the Dollar saw an upside breakout from a bearish rising wedge. Price is coming back down though as it ran too hot. The weekly PMO has topped which also is evidence of the Dollar's new found weakness.
GOLD
IT Trend Model: NEUTRAL as of 12/23/2024
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: With the Dollar failing, Gold is rallying as we would expect. Price is getting ever closer to all-time highs and based on the weak Dollar chart, we should look for a breakout. The RSI is not overbought so it could certainly move higher before getting overbought. The PMO is rising and Stochastics are holding above 80.
Investors are definitely warming to Gold based on the decline in discounts. This should help it along. Technically the Dollar and Gold have decoupled as the correlation is near zero. However, we believe this will revert back to the normally high inverse correlation with the decline in the Dollar.
GLD Weekly Chart: We saw high level consolidation out of the parabolic rise and now price is making its way out of it. The weekly RSI is positive and not yet overbought. The weekly PMO has turned back up so there is a clear bullish bias on Gold.
GOLD MINERS Daily Chart: GDX is enjoying a nice rally alongside Gold. Overhead resistance is nearing, but given the bullish participation numbers, positive PMO and strongly rising Silver Cross Index, we expect Miners will continue to outperform.
GDX Weekly Chart: This looks like a solid rally off support at 32. In fact, it reversed higher before having to test that level which is bullish and suggests the rally could continue. We also have a rising weekly PMO now.
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 in pullback mode and we think it has further to fall. It really was the perfect storm. Price had hit strong overhead resistance at the top of its very long-term trading range and now we have a 'national energy emergency' that will mean more production and the pressure of lower prices. We think this is just the beginning of the decline.
The PMO has topped and Stochastics are diving lower. Support has been reached at the 20-day EMA, but it isn't likely to hold.
USO/$WTIC Weekly Chart: The sideways trading range is holding tough. Price is likely to continue to make its way lower despite the rising weekly PMO. This resistance level is just too strong.
Have a great weekend! Good Luck & Good Trading!
Erin Swenlin and Carl Swenlin
Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin
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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.
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