Today the S&P 400 Mid-Cap Index ETF (MDY) 50-day EMA crossed down through the 200-day EMA, generating an IT Trend Model SELL Signal. It managed a positive close today, but we can see that participation still remains below our bullish 50% threshold. The PMO has topped well below the zero line. We still detect plenty of weakness under the hood. The Silver Cross Index is at a very low 28% and only half have Golden Crosses based on the Golden Cross Index. Stochastics have just dipped into negative territory. We would look for more downside.
Price has broken down from a rising wedge on the weekly chart. We do see very strong support ahead, but the declining weekly PMO seems to suggest that it will not hold.
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MARKET/INDUSTRY GROUP/SECTOR INDEXES
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THE MARKET (S&P 500)
IT Trend Model: NEUTRAL as of 3/4/2025
LT Trend Model: BUY as of 3/29/2023
SPY 10-Minute Chart: The market gapped down at the open, but managed a nice rally into the end of the day. The 10-minute PMO is very bullish and Stochastics are above 80 so we could see some followthrough tomorrow.
SPY Daily Chart: The SPY continues to flirt with correction territory. A correction is defined as a 10% plus decline from highs. This is a strong area of support so we wouldn't be surprised if we saw more rally at this level. The PMO is attempting to whipsaw out of its Crossover SELL Signal that occurred last week.
The VIX has now dropped below its moving average on the inverted scale. Price may've reversed but market participants are still concerned given we saw a higher VIX reading on the rally. Stochastics have just entered negative territory so we detect internal weakness.
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S&P 500 New 52-Week Highs/Lows: New Lows popped as did New Highs. These are intraday readings so today's reversal probably softened how many New Lows we actually finished with. New Highs look good on the rally. The High-Low Differential did top again which puts a bearish spin on all those New Highs.
Climax* Analysis: The intraday upside reversal was quite impressive. There was one climax reading and one"almost" today. SPX Total Volume was 131% of the one-year daily volume, which is not quite enough to be a blowoff, but it does look like a sign of a bottom. While this doesn't qualify as a climax day, it is close enough for us to believe that we have seen a bottom.
*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.
Swenlin Trading Oscillators (STOs) are still in decline, but we can say that the STO-V is in near-term oversold territory and could be ready to reverse higher. Participation improved, but it is still reading below our bullish 50% threshold. Rising PMOs zipped higher today which does suggest that we could be near a bottom in the short term.
Intermediate-Term Market Indicators: The intermediate-term market trend is DOWN and the condition is NEUTRAL.
The ITBM did turn back up today, but the ITVM continues lower in negative territory. We do think that the reversal of the ITBM is also suggesting we likely have a bottom. Notice that %PMO Xover BUY Signals turned back up above the zero line.
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.
Today saw a Bullish Shift by the Silver Cross Index. By moving above its signal line we now have a BULLISH bias in the intermediate term. This also bodes well for a possible market bottom. Participation is still not what it should be to support a rally, but at least we do have some stocks set up for bullish outcomes as they get above key moving averages. There is definitely room for improvement. The Golden Cross Index is below its signal line so the LT Bias is still 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: It didn't look good in this morning's trading room, but as the day progressed we saw a very convincing rally. It was accompanied by a rising STO-B and ITBM. The Bias Table above shows us Bull biases already coming back into the market. The Silver Cross Index had a "Bullish Shift" across its signal line. We didn't get a climax but today saw solid volume and two almost readings. We should start looking for higher prices, at least in the near term. Participation is still not as strong as it could be so we won't make any sweeping conclusions about this being an intermediate-term bottom. Think short-term for now. We still have "liberation day" ahead for tariffs on Wednesday.
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 is still traveling in a declining trend. The PMO is essentially flat beneath the zero line and that is a sign of pure weakness. Stochastics have just dipped below 20 and the RSI is negative. We think that this decline will likely continue.
BITCOIN ETFs
INTEREST RATES
Yields can't seem to make up their minds. Rising trends are being broken on long-term yields and short-term yields are moving sideways, but melting lower. We should look for Bonds to rally somewhat, although it does look like we could see consolidation on both yields and Bonds.
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 will soon know more about $TNX as it is very close to breaking below the short-term rising trend. Price is contained in a bearish rising wedge formation so the expectation is a decline. We do note that we have a bullish hollow red candlestick so a bounce off this rising bottoms trendline could occur tomorrow. The PMO has topped below the zero line so we shouldn't expect a big advance if we even get one.
BONDS (TLT)
IT Trend Model: BUY as of 2/25/2025
LT Trend Model: SELL as of 12/13/2024
TLT Daily Chart: The handle on the bullish cup with handle pattern seems to have extended outward. We don't have a breakout from the declining trend yet and we are still keeping an eye on the double top at the end of this handle. It does appear based on the now rising PMO and Stochastics that we will see more rally out of TLT.
DOLLAR (UUP)
IT Trend Model: NEUTRAL as of 3/5/2025
LT Trend Model: BUY as of 5/25/2023
UUP Daily Chart: The Dollar is in a holding pattern right now. The PMO is rising on a BUY Signal so our best guess is that it will start rising again, but with Stochastics topping it is likely to be slow going.
GOLD
IT Trend Model: BUY as of 1/10/2025
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Gold made yet another new all-time high. It looks very bullish but the RSI is overbought again. This led into the last bit of consolidation and small decline so it is time to look for a pause. If the market begins to rally again, Gold may see some selling. Overall the picture is very bright for the metal.
The PMO is on the rise and Stochastics are above 80 so any decline we get will likely be small. Notice that the correlation between the Dollar and Gold is near zero. This means that they can travel separately from each other. They have decoupled for the moment.
GOLD MINERS (GDX) Daily Chart: Gold Miners started the day much lower and then recovered with the market. Gold is due for a pause with an overbought RSI so we should look for GDX to start to cool. Participation is slowly leaking out so prepare for a pause.
CRUDE OIL (USO)
IT Trend Model: NEUTRAL as of 2/27/2025
LT Trend Model: SELL as of 3/18/2025
USO Daily Chart: Crude rallied strongly to pushing the Energy sector higher. This rally looks solid right now with a rising PMO that is nearly back above the zero line. Stochastics have turned up above 80 and we just had a Golden Cross of the 50/200-day EMAs. We expect to get more upside here, but also expect it to find trouble at the next resistance zone.
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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