Today the Real Estate Sector (XLRE) 20-day EMA crossed up through the 50-day EMA (Silver Cross), generating an IT Trend Model BUY Signal. Price peeked above resistance briefly but fell back below today. Participation looks shaky as we see declining trends on %Stocks > 20/50/200EMAs. The Silver Cross Index and Stochastics also topped. Relative strength is declining. We aren't looking for a big rally at this time.
XLRE is at least traveling within a rising trend channel and could inch higher. The weekly PMO does look ready to turn back up.
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:
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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: We have a bearish double top on trading today that could imply a decline on tap for Tuesday. The 10-minute PMO is in decline.
SPY Daily Chart: The declining trend was broken yesterday, but price did nothing today keeping it below the all-time high. The PMO is still rising and the RSI is positive and not overbought.
The VIX is above its moving average on the inverted scale which is positive and Stochastics have just moved above 80. Mega-caps continue to take charge as we see the rising relative strength line of SPY to equal-weight RSP. The Mag Seven look mixed right now with some displaying weakness and others strength. The strength could keep the index elevated despite deteriorating internals.
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SPY Weekly Chart: We have two rising wedges on the weekly chart that imply we will eventually see a breakdown. The weekly PMO is in decline but price seems uninterested in pulling back in a meaningful way.
New 52-Week Highs/Lows: Not much change on New Highs/New Lows today. The High-Low Differential did turn back up today which is bullish.
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 NEUTRAL.
The Swenlin Trading Oscillators (STOs) are both rising again and look fairly bullish. As we noted yesterday, we aren't impressed with the STO-B right now. It is jagged and really hasn't picked a direction as the STO-V has. So while it is rising, we aren't going to put too much emphasis on it. Participation continues to trend lower and we are again losing Rising PMOs.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is NEUTRAL.
The ITBM fell today so it is no longer confirming rising STOs. The ITVM did have a strong up day, but mixed readings are not bullish. We continue to see fewer PMO BUY Signals within the index.
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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.
The highest IT Bias belongs to Semiconductors (SMH) which are finally seeing some action in the intermediate term as the Silver Cross Index increases. However, temper that bullish outlook as the Golden Cross Index lost ground.
The worst IT Bias goes to Industrials (XLI) because the Golden Cross Index is more healthy than the Silver Cross Index. We have mixed results here as the Silver Cross Index gained ground while the Golden Cross Index lost percentage points.
This table is sorted by SCI values. This gives a clear picture of strongest to weakest index/sector in terms of intermediate-term participation.
Gold Miners are very bullish as can be seen by its position at the top of the SCI table. It saw a rise this week so the group is still bullish.
Biotechs (IBB) are in the lowest position and they lost another percentage point this week. It has a negative IT Bias and doesn't have a good chart right now.
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) lead on the GCI table. This has been a very strong area of the market, but both did lose points on the Silver Cross Index so it may be time for Financials to cool.
Semiconductors (SMH) lost 12 percentage points on the GCI this week. The foundation is clearly cracking in the longer term.
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.
The Silver Cross Index is still rising, but isn't likely to continue that rise given we have fewer stocks above their 50-day EMA than Silver Crosses. The Silver Cross Index has a marginally bullish value above our bullish 50% threshold. It is currently above its moving average so the IT Bias is BULLISH. The Golden Cross Index did stop its steep decline, but it also is in danger of falling further because in this case there are fewer stocks above their 200-day EMAs versus those with Golden Crosses. At this time it is below its signal line so the LT Bias is BEARISH.
Participation continues to drain as we see declining trends on stocks above key moving averages. This isn't a healthy situation for the index, but so far we haven't seen a strong decline. Thank you cap-weighting.
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 Bias Table above doesn't look particularly bearish in the intermediate term. The STOs are rising, as is the ITVM. The PMO and Stochastics are also positive. However, the internals are still a problem as participation continues to be leached out of the market. We have only marginally bullish readings on participation of stocks above key moving averages. So far weak internals haven't really been a problem for the index likely due to cap-weighting, but eventually this will be a problem. Mag 7 stocks are mixed with AMZN, GOOGL, MSFT and TSLA looking weak and AAPL, META and NVDA looking bullish. We are still expecting a decline based on those weak internals and seeing the majority of Mag 7 stocks looking bearish. All-time highs aren't out of the question, but we have to wonder how much longer the index can go up without the help of the broad market.
Erin is 15% long, 0% short. (This is intended as information, not a recommendation.)
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CALENDAR
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BITCOIN
Bitcoin Daily Chart: The double top is a problem on Bitcoin and suggests that we could see support at 90,000 broken. Working in its favor is rising Stochastics which could indicate more sideways trading ahead, but the now negative PMO tells us to be cautious with Bitcoin right now.
Bitcoin Weekly Chart: After breaking out from a bullish flag, we saw the start of another flag pole. Unfortunately this time around the consolidation has formed a double top and not a flag. The weekly PMO is nearing a Crossover SELL Signal which is why we advise caution.
BITCOIN ETFs
Today:
This Week:
INTEREST RATES
Yields are in pullback mode again. What looked like the beginning of a breakout move on long-term yields is failing miserably. We are still on the lookout for higher rates, but for now we see more decline ahead. The market likes this.
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 back below the declining tops trendline. The rising trend was broken on today's big decline. The PMO has topped beneath its signal line which is especially bearish and that is accompanied by declining Stochastics. It looks like yields will be in pullback mode longer.
10-Year Bond Yield Weekly Chart: Overhead resistance had been met at the 2024 high so it isn't a complete surprise that we would see a decline here. The weekly PMO has topped so we should expect more 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).
--
This week the 30-Year Fixed Rate changed from 6.89 to 6.87.
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 looks pretty good right now coming out of a reverse head and shoulders pattern. We do have a bearish candlestick today. It is a shooting star and filled black which does tell us to expect a decline on Tuesday. The PMO is now in positive territory and Stochastics are rising so we think there is more upside ahead for TLT and Bond funds in general.
Getting a decline on Tuesday based on the bearish candlesticks would make sense given TLT is again attempting to break for an intermediate-term declining trend channel. We would find it very bullish if it can rally out of this pattern.
TLT Weekly Chart: TLT is bouncing off support at the 2024 low. The weekly PMO is rising now, but we'd like to see a breakout from the declining trend channel above.
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 double top on the Dollar and today's decline confirmed it with a drop below the January low. The PMO has topped beneath the signal line and Stochastics are falling. We did see a bullish hollow red candlestick but we would still look for more decline out of the Dollar.
UUP Weekly Chart: We had a very bullish breakout from a bearish rising wedge, but since then we can see the topping formation. The weekly PMO has topped so we would expect more downside in the intermediate term too.
GOLD
IT Trend Model: NEUTRAL as of 12/23/2024
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Despite the decline in the Dollar, Gold saw extra sellers to move it down heavily today. The short-term rising trend has been broken. The RSI was quite overbought, but this decline has brought back. Gold has been due for a pullback or pause for some time and we are finally getting it. We would look for some more downside, but not a lot given the weak chart of the Dollar.
Discounts are relatively low so investors aren't that bearish on the metal. How could they be given this strong rally? They could certainly move lower from here. The reading is delayed by a day so it will be interesting to see where it lies on Tuesday.
GLD Weekly Chart: Gold is in another parabolic advance. We see how it broke down from the prior parabola with a drop and consolidation. The rally is getting vertical and that is hard to maintain. The weekly PMO is on a new Crossover BUY Signal so we probably have more upside to go before a significant breakdown. Consolidation would help relieve this vertical advance and the overbought RSI tells us to at least expect a pause soon.
GOLD MINERS Daily Chart: As often happens, GDX slid heavily on the decline in Gold. They have been very overbought based on the RSI, but this decline helped alleviate that somewhat. They dropped back below support. Participation is beginning to wane so maybe we'll see some consolidation or a decline on Gold. However, if the Dollar continues to fall, Gold and Gold Miners should avoid a big breakdown.
GDX Weekly Chart: The rally is nearly vertical and like a parabolic advance it is hard to maintain. It begs for a correction. However as noted above with the Dollar looking weak Gold Miners could continue to make their way higher. The weekly PMO is nearing a Crossover BUY Signal so we do expect an eventual breakout above resistance. We just may have to experience some pullback or consolidation first.
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 has found support but we believe it is very weak. If we do get a rally here it would set up a bullish double bottom, but indicators certainly suggest a breakdown not a rally. The RSI is negative and the PMO is in decline. Stochastics look particularly bearish as they have topped in negative territory below net neutral (50).
USO/$WTIC Weekly Chart: Price is essentially in a trading range. It hit resistance and immediately headed back down again. The weekly PMO has topped. We would look for support to be tested at the 2024 low.
Good Luck & Good Trading!
Erin Swenlin and Carl Swenlin
Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin
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