Today the Crude Oil ETF (USO) 50-day EMA crossed up through the 200-day EMA (Golden Cross), generating a LT Trend Model BUY Signal. We will cover this more thoroughly in the Crude Oil section of this report.
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Today the Technology ETF (XLK) 20-day EMA crossed up through the 50-day EMA generating an IT Trend Model BUY Signal. It has lost important support but does appear to be ready to bounce higher. This signal puts XLK in a bearish configuration and the PMO is still falling. Participation did improve, but not by much. If we get a bounce it isn't likely to be lasting at this point in time. We need to get participation up.
XLK lost its bull market rising trend. The strongest level of support doesn't arrive until 190. The weekly PMO is falling fast so we don't like what we're seeing in the intermediate term presently.
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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: Today saw choppy trading as the market tried to decide whether it wanted to close up or down. It did finish on a high note and the 10-minute PMO just had a Crossover BUY Signal so we could see some followthrough on the end of day rally.
SPY Daily Chart: This looks like a pretty good bounce off support that could see price advance further. We don't think we're out of the woods on the bearish reverse flag. If we do see this bounce continue, that would set up a bullish double bottom formation so we'll be watching closely. The PMO is flat beneath the zero line and that does imply that we're only seeing diminished weakness not necessarily new strength.
The VIX is back above its moving average on the inverted scale and that is bullish short term. Stochastics however are still falling and are in negative territory. Overall it isn't that bullish that the VIX is over its moving average given the look of Stochastics.
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S&P 500 New 52-Week Highs/Lows: New Highs contracted on the rally. New Lows also contracted which we'd expect off a rally. The High-Low Differential can't make up its mind which direction to go. It has whipsawed back up again. It is still a weak reading.
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 DOWN and the condition is NEUTRAL.
Swenlin Trading Oscillators (STOs) are still mixed today with the STO-B rising and the STO-V declining. That's not a big vote of confidence for this rally. Participation inched higher, but still remains below our bullish 50% threshold. We have a healthy number of rising PMOs and that could push the market higher from here.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is NEUTRAL.
The ITBM continued to rise in positive territory but that is underscored by the ITVM which is falling in negative territory. The intermediate-term picture is mixed as we also see an improvement in the number of PMO Crossover BUY Signals.
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 had a Bullish Shift across the signal line yesterday which moved our IT Bias to BULLISH. The reading is still low and not particularly bullish, but this is a start. Participation remains higher than the Silver Cross Index so it could continue to rise from here. The Golden Cross Index is declining and it is vulnerable to even more decline given we have fewer stocks above their 200-day EMA than those 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: We did get a positive close, but price action was not impressive coming off yesterday's strong upside reversal. There are signs that we could see this rally continue. In particular the rising STO-B and ITBM. However, there are still problems underneath the surface with mediocre participation and the STO-V and ITVM still in decline. The PMO is flat and Stochastics are falling. We are going to look for higher prices for now. Stay true to your stops and exercise great care if you're going to expand your portfolio. We still aren't convinced that this rally will have staying power.
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 rallied strongly today and appears ready to test the declining trend again. The PMO has turned up above its signal line so we would say there is new strength coming back into Bitcoin. Stochastics also turned back up. The declining trend has held strong. We would look for it to test that declining tops trendline. We're not so sure we'll get the breakout just yet. It depends on the voracity of the coming rally.
BITCOIN ETFs
INTEREST RATES
Yields are pulling back and they look as if they will fall further. Declining trends have now formed again and rising trends are being broken. We'll look for a move back down to the next support level.
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 just got the expected breakdown out of the bearish rising wedge. Support has been met but we believe it is highly vulnerable right now given the PMO top well below the zero line. Stochastics are also falling precipitously.
BONDS (TLT)
IT Trend Model: BUY as of 2/25/2025
LT Trend Model: SELL as of 12/13/2024
TLT Daily Chart: We are still hanging our hat on the bullish cup with handle. Today saw a breakout from the handle. The RSI is positive and the PMO is rising toward a Crossover BUY Signal above the zero line. Stochastics also look very positive right now. We can see the decline in the 20-year yield as well. We should look for higher prices.
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 attempting another rally. Given the PMO is rising and Stochastics have reversed, we are looking for some more upside out of UUP. We don't expect a rip roaring rally though due to the PMO being below the zero line.
GOLD
IT Trend Model: BUY as of 1/10/2025
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Gold cooled today and given the RSI is overbought, we think that will continue a bit longer. We still like Gold for more upside, it just needs to cool off to prevent overbought conditions. The PMO looks great and Stochastics are above 80 so we do expect more upside eventually.
Discounts have expanded meaning investors are mostly bearish on the metal. We want to see them get very bearish as that typically leads to more upside for Gold. Discounts are not yet oversold. Relative strength is holding up for Gold against the Dollar which is good given it appears the Dollar may see a small rally.
GOLD MINERS (GDX) Daily Chart: Gold Miners lost some ground today, but not much. With Gold overbought we do expect to see GDX pull back a bit. We're looking at support at 44.00. Participation is slowly leaking out of the group so there is some internal weakness becoming visible. Stochastics also dropped below 80.
CRUDE OIL (USO)
IT Trend Model: NEUTRAL as of 2/27/2025
LT Trend Model: BUY as of 4/1/2025
USO Daily Chart: Today the Crude Oil ETF (USO) 50-day EMA crossed up through the 200-day EMA (Golden Cross), generating a LT Trend Model BUY Signal. Because Crude has essentially been in a trading range for months, the EMAs have gotten very close together so we could see some whipsaw ahead on those signals. For now this looks pretty good. The 20-day EMA is about to cross above the 50-day EMA for a Silver Cross. The PMO just reached positive territory and Stochastics look comfortable above 80. We think this rally will continue.
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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