Today the Real Estate Sector ETF (XLRE) 20-day EMA crossed up through the 50-day EMA (Silver Cross) generating an IT Trend Model BUY Signal. Today saw a new PMO Crossover BUY Signal to go with today's Silver Cross. Price is currently stuck below resistance, but given we have decent participation under the hood as well as both the Silver Cross Index and Golden Cross Index being above their signal lines so the IT and LT Bias is bullish. Stochastics have also made it above 80. We think there is a good chance we'll see a breakout here.
We have a symmetrical triangle on the weekly chart. These are continuation patterns and will usually break in the direction of the prior trend. In this case it is up so we should expect an upside breakout. The weekly PMO is decelerating.
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.
MARKET/INDUSTRY GROUP/SECTOR INDEXES
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: Price opened lower, but rebounded and stayed in the green all day. We saw nice little rally to finish the day which has moved the 10-minute PMO close to a Crossover BUY Signal.
SPY Daily Chart: We like what we're seeing on the daily chart with three good days of rally. The new declining tops trendline is about to be tested. A breakout would suggest to us that this rally has staying power. Right now we are still concerned about the bearish reverse flag. A strong rally here would actually set up a bullish double bottom on the end of the chart. The PMO is still flat beneath the zero line implying weakness despite the relatively new PMO Crossover BUY Signal.
The VIX is still holding above its moving average on our inverted scale, but it is very close to that average so we don't see this as internal strength. On the bright side, Stochastics did reverse upward. They are still technically in negative territory below net neutral (50).
S&P 500 New 52-Week Highs/Lows: New Highs did expand today, New Lows were about the same. We'd have liked to have seen more New Highs on the rally as confirmation. The High-Low Differential is flat but reading very close to the zero line which we see as weakness.
Climax* Analysis: Today there were two climax readings (and one "almost") on the four relevant indicators. While Monday didn't quite make the grade as a climax day, we still think was close enough that we should think of it as an upside initiation day. This in turn would classify today as an upside exhaustion day. SPX Total Volume was only average, so not confirming.
*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.
Swenlin Trading Oscillators (STOs) are both rising again which is quite bullish despite today's upside exhaustion climax. Participation moved slightly higher and is above our bullish 50% threshold. It needs to be higher but at least we see a rising trend. %PMOs Rising also gained and is at a very healthy 73%.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is NEUTRAL.
Both the ITBM and ITVM are now in positive territory with both rising again. This is a good sign that this rally could continue moving higher. We are getting more PMO BUY Signals as well.
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.
We're starting to see new rising trends in participation of stocks above their key moving averages. The Silver Cross Index continues to rise above its signal line so the IT Bias is BULLISH. The Golden Cross Index is falling and should continue to a bit longer given we have fewer stocks above their 200-day EMA than we have stocks with Golden Crosses. The Golden Cross Index is below its signal line so the LT Bias is 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: Out of the gate, the bad news for the day is the mild upside exhaustion climax which does suggest we'll see lower prices tomorrow. It could also mean this rally is set up for failure. However, we like what we see on our indicator charts. STOs are rising with the ITBM and ITVM. We also see rising trends in participation readings. We have a healthy amount of rising PMOs and PMO BUY Signals within the index. The rally is set up for a continuation, we just may see a small stumble along the way given today's climax readings. We see jobless claims and PMI tomorrow so there is a chance we could get some volatility.
Erin is 15% long, 0% short. (This is intended as information, not a recommendation.)
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CALENDAR
BITCOIN
Bitcoin tested its declining tops trendline today and was turned away. It closed near lows for the day. Price did close above the 200-day EMA so we do think there is some more upside available here. A breakout would do wonders to the chart, but so far Bitcoin is recalcitrant. The PMO surge above the signal line (bottom above the signal line) is especially bullish right now and Stochastics look bullish too. This is the best chance we've seen at an attempted breakout.
BITCOIN ETFs
INTEREST RATES
The 30-year yield closed higher and above the 20-year yield so the yield curve inversions have nearly gone away. Yields are declining quickly now so we are looking for them to move even lower from here. We'll see what happens with the 30-year. Rather strange that it was up and the others were mostly down.
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're not sure why the yield chart above shows 10-year yield as falling because we did see a gain on this chart. It is reversing off support, but given the PMO Crossover SELL Signal today and declining Stochastics, we don't expect it to hold.
BONDS (TLT)
IT Trend Model: BUY as of 2/25/2025
LT Trend Model: SELL as of 12/13/2024
TLT Daily Chart: Bonds were down slightly today. We are still monitoring the bullish cup with handle pattern. Today Erin's scans turned up multiple Bond funds as possible "Diamonds in the Rough" so we do think that TLT will rise higher out of this cup with handle pattern. The PMO is crossing over its signal line to the upside. Stochastics are rising strongly.
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 waning. It has turned over long before reaching the declining tops trendline. The PMO is still technically rising, but it is below the zero line. Stochastics are falling. It looks like we'll see another trip down to the 200-day EMA.
GOLD
IT Trend Model: BUY as of 1/10/2025
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Gold managed a small rally. Given the inverse correlation of Dollar and Gold, we should've actually seen Gold rise further than it did today. The RSI is still overbought so we are thinking we'll see a small decline or possibly some consolidation given Gold's strength right now. Either would work to bring the RSI lower.
Discounts shrunk yesterday suggesting investors might be a bit more bullish on Gold. That could keep it elevated.
GOLD MINERS (GDX) Daily Chart: Gold Miners look toppy right now. Participation is still very strong and Gold still looks very good, but the PMO has topped. GDX needs to cool a bit longer before we look for a rally. Of course, if Gold continues to rocket skyward, GDX will likely go along for the ride. As we mentioned above though, Gold is due for a cooling off period.
CRUDE OIL (USO)
IT Trend Model: NEUTRAL as of 2/27/2025
LT Trend Model: BUY as of 4/1/2025
USO Daily Chart: The rally in Crude continues and given the PMO is now above the zero line we have newfound strength in an already good looking rally. We could see a Silver Cross of the 20/50-day EMAs in the next day or two. Stochastics are rising above 80 suggesting internal strength. We think the rally will continue, but with resistance nearing, we could see it tripped up a bit.
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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