We wrote about the American Association of Individual Investors (AAII) poll results a few weeks ago. Since then the bearish activity on the chart has broken a record for the poll. Since the poll's inception in 1987 we have never seen four weeks in a row of bearish readings above 55%. We are now at bearish extremes for this indicator.
Remember that sentiment, which this poll measures, is contrarian. This means that when market participants are extraordinarily bearish it is a bullish indication. The opposite also applies, extraordinarily bullish readings are bearish for the market.
Clearly you can see that even after and during the bear market in 2022 we never saw a cluster of readings this high. This has put the bull/bear ratio at a very low reading. This has typically resulted in an upside reversal.
One thing we would say is that sometimes poll takers are RIGHT! So while we do see extremely bearish readings, we wouldn't bet the house that this isn't a bear market. At DecisionPoint.com we have been monitoring our indicators and participation and we are considering that we are in the throws of a bear market rally and that it isn't likely to stick around. However, charts like this do have us wondering if the correction is all we'll get.
Conclusion: Sentiment is extremely bearish on AII and typically this will lead to a sustained rally. However, we have to understand that sometimes the respondents are correct and we'll see more downside after all.
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: NEUTRAL as of 3/4/2025
LT Trend Model: BUY as of 3/29/2023
SPY 10-Minute Chart: Trading was in negative territory all day long until the final 10 minutes where we got a big spike. The best we can tell it is due to remarks by President Trump that tariffs coming in April would be "flexible". This seemed to dispel some fear.
SPY Daily Chart: The intermediate-term declining tops trendline is still caging price. Today saw a lower low and a lower high so it wasn't a big vote of confidence that price finished in the green. This week's trading definitely can be filed under "churn". The PMO had topped earlier in trading, but by day's end, it managed to continue to move upward. It is very negative in its reading and that suggests to us that this is just diminishing weakness, not new strength.
We still a bearish reverse flag which is one reason we think we could be in a bear market situation. The VIX did not see any negative movement today and it sits above its moving average on the inverted scale, so there is some strength here. Stochastics are rising more strongly now so we do have some internal strength to hold onto.
Here is the latest recording from 3/17/2025. Click HERE to get the link to video library.
SPY Weekly Chart: The SPY managed a positive close this week, but the damage has been done to that rising bottoms trendline. We also can see a bearish double top. The weekly PMO is declining rapidly. More evidence that we could be entering a bear market.
SPY Monthly Chart: We're including the monthly chart today despite it not being the close of the month. We wanted to point out the drop from the parabolic advance. This could be all we get out of it, but we're not so sure given the monthly PMO has topped.
New 52-Week Highs/Lows: New Lows were quite prevalent today showing internal deterioration of this rally. New Highs were visible but contracted. We note that the High-Low Differential has topped beneath the zero line which is very bearish.
Climax Analysis: There were no climax readings today. SPX Total Volume spiked, as it usually does on an end-of-quarter options expiration day. We shouldn't read too much into it.
*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.
The Swenlin Trading Oscillators (STOs) dropped a great deal today. They are coming out of overbought territory. Participation slid on a rally, but price was negative most of the day so it isn't surprising. We lost more rising PMOs. That indicator is now under our bullish 50% threshold.
Intermediate-Term Market Indicators: The intermediate-term market trend is DOWN and the condition is NEUTRAL.
The ITBM moved lower today while the ITVM kept up its advance. We don't like seeing this deterioration especially given STOs topped today. We did see more PMO BUY Signals, but given we have 49% with rising PMOs and only 40% BUY Signals, it could continue to move higher. It isn't a strong vote of confidence given readings are below 50%.
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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.
Nearly all members of our list have bearish IT Biases and they are quite high for the most part. This is a sign of internal weakness.
Consumer Staples (XLP) has the highest IT Bias, but it is beginning to turn over and you can see it lost points on the Silver Cross Index.
The worst IT Bias belongs to Regional Banks (KRE). KRE built a strong foundation on the Golden Cross Index and because the Silver Cross Index is so far below the Golden Cross Index we're seeing this very bearish bias.
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 (GDX) hold the highest SCI reading and no wonder given their meteoric rise. They gained double digit points on the SCI as well.
Regional Banks (KRE) and Semiconductors (SMH) hold the lowest SCI values. KRE actually lost two more points this week. They are in oversold territory for certain, but that condition could persist given their strong bearish biases.
This table is sorted by GCI values. This gives a clear picture of strongest to weakest index/sector in terms of long-term participation.
Again not a surprise to see Gold Miners (GDX) leading the way on GCI readings. It even gained a huge 14 points on the GCI this week. We do see them as ready to turn over right now as they are overbought and Gold looks ready to pull back.
Semiconductors (SMH) have continued to struggle. Over time the foundation of the GCI has crumbled as price declined. It is oversold, but this group is very vulnerable to more decline should the market be unable to continue a rally next week.
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.
Ultimately we did lose ground on participation this week. Declining trends are still in force. Both the Silver Cross Index and Golden Cross Index are falling. They are below their signal lines so the IT and LT Bias is BEARISH. Readings are not oversold and with participation in declining trends, it isn't likely that they will advance in a meaningful way. The Bias chart is not bullish.
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: We have the majority of indexes, sectors and groups holding negative IT Biases based on our Silver Cross Index/Golden Cross Index tables. Of immediate concern are the topping STOs. They lost quite a bit of ground today which is worrisome. The ITBM also fell today. The High-Low Differential topped beneath the zero line. We aren't certain that today's late day rally will see a strong continuation next week. Investors were interestingly soothed by the "flexible" tariff comment from President Trump, but will that hold up as tariffs go into effect? Our best guess is that we will likely continue to experience churn, mostly sideways choppiness while it finds its way. We do think that it is best to start applying "Bear Market Rules". Here is an article on them.
Erin is 20% 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 very short-term rising trend continued this week on Bitcoin. This is encouraging given the PMO BUY Signal and rising Stochastics, but ultimately the declining trend out of the second of the two tops is holding. The PMO while on a Crossover BUY Signal is flat beneath the zero line and that implies pure weakness or at best diminishing weakness. We can't count on this rally based on the PMO. We will watch for more rally based on Stochastics, but we won't get fully bullish until that declining trend has been broken.
Bitcoin Weekly Chart: We saw a strong rally out of the election but then Bitcoin formed a large double top or rounded top. Price has essentially moved to the downside target of the double top pattern and this does look like a good area for it to rebound. The weekly PMO is still negative, but we are encouraged given price did reverse before hitting support at 75,000.
BITCOIN ETFs
Today:
This Week:
INTEREST RATES
Yields were mixed on the day with longer-term yields rising and shorter-term yields falling further. The declining trends are still holding up so we expect them to move lower from here.
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 rebounded today, but this week broke down out of the bearish rising wedge. The PMO is flat and unresponsive below the zero line. Its location below the zero line tells us we still have pure weakness to contend with. Stochastics have topped as well so we expect to see more decline next week.
10-Year Bond Yield Weekly Chart: We have a long-term trading range with price appearing to be headed to the bottom of the range. It should rejoin the declining trend shortly. The weekly PMO is falling on a Crossover SELL Signal leading us to believe that it will drop toward the bottom of the range.
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 6.65 to 6.67.
Here is a 50-year chart for better perspective.
BONDS (TLT)
IT Trend Model: BUY as of 2/25/2025
LT Trend Model: SELL as of 12/13/2024
TLT Daily Chart: We're monitoring a bullish cup with handle pattern on TLT. We got the breakout from the handle but today it dropped back toward the breakout point. Yields look bearish to us right now so we are expecting TLT to get going again and move to 94.00. The PMO is technically on a Crossover SELL Signal, but it is flat above the zero line and that implies pure strength. Not huge as the reading is below 1.0, but certainly gives us a bullish spin. We'd like to see Stochastics pick it up.
It looks like a good rebound off the 50-day EMA.
TLT Weekly Chart: There is a nice rising trend on the weekly chart. The rally is coming off very strong support. The weekly PMO is rising on a Crossover BUY Signal and has broken the near-term declining tops trendline. It's a bullish chart.
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 staging a reversal. We have a small double bottom leading into this rally. The PMO has turned back up and Stochastics are no longer below 20. We think UUP will breakout here.
This is a good place to look for an upside reversal coming off support at the October high and 200-day EMA.
UUP Weekly Chart: We had a positive upside breakout from the bearish rising wedge, but price has retreated back into the pattern. As noted above this does look like a good place to see a reversal. The weekly PMO is not particularly encouraging, but it has to digest the previous sharp decline.
GOLD
IT Trend Model: NEUTRAL as of 12/23/2024
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: The RSI got overbought and that signaled that it was time to start looking for Gold to decline or at least consolidate. We think that it will continue down to support at the February high. The PMO has topped. Stochastics are still holding above 80 which is one of the reasons we think that this decline will be brief and not so painful.
We can see that Gold is losing relative strength against the Dollar and given the Dollar looks like it will rally, that condition is likely to persist. The correlation is very negative so a rising Dollar will hurt Gold. Sentiment is getting more bearish, but is not at extremes yet. We believe it is pointing out the current weakness in Gold right now.
GLD Weekly Chart: Gold is still in the midst of a parabolic advance so we should expect some downside soon. The rally has started to go vertical and that is usually when you'll get the parabolic breakdown. Still, the daily chart doesn't look that bearish and the weekly PMO is rising. There is also some room for a decline before it breaks the parabola.
GOLD MINERS Daily Chart: The Gold Miners are also pulling back alongside Gold. With new weakness in Gold we think that GDX will see a strong decline. Support could hold at the February high, but we believe it will go lower than that if Gold retreats quickly. Participation remains incredibly strong and the Silver Cross Index is almost at 100%. There is a lot of internal strength, but ultimately it is tied to Gold and that is likely to bring it down quickly.
GDX Weekly Chart: Gold Miners broke out above strong overhead resistance, but now it is time for a mechanical pullback toward the breakout point. The weekly PMO looks very strong, but this rally looks almost vertical and that sharp incline will be hard to maintain. It's time for a good pullback or possibly a correction.
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 continued to inch higher this week, maintaining its current rising trend. It finally broke from its intermediate-term declining trend and we have a new PMO Crossover BUY Signal. It does appear that new strength is making its way back. Stochastics also look promising. Given this week's Death Cross of the 50/200-day EMAs, we are only cautiously bullish. A break above the 200-day EMA would be the high sign that price could be ready to challenge the resistance zone between 79 and 80.
Price is rebounding off a strong area of support at the June low.
USO/$WTIC Weekly Chart: Overall Crude remains in a long-term trading range. It did not test the bottom of the range which leads us to believe that it could head back toward the top of the range. As we said above though, we need price to get above the 200-day EMA on the daily chart.
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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