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Today the Utilities Sector ETF (XLU) 20-day EMA crossed up through the 50-day EMA (Silver Cross) generating an IT Trend Model BUY Signal. Price is essentially in a trading range and that has the 20/50-day EMAs 'braiding' or crossing over multiple times so we have to take today's Silver Cross with a grain of salt. Resistance is very close. However, we do have nice participation of stocks above key moving averages and the PMO is rising above the zero line so we could see a breakout this time around, particularly if the market begins to weaken as defensive sectors tend to hold up before the market declines.
The rising bottoms trendline is still intact, but we do see a slight declining trend out of the 2024 high. More than likely price will continue to move within the current trading range.
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: SELL as of 4/16/2025
SPY 10-Minute Chart: Price started up on the day, but then declined into the afternoon. We did see a nice rally to finish the trading day. This has the 10-minute PMO rising and Stochastics above 80. It does look promising for tomorrow.
SPY Daily Chart: We finally have a breakout above the declining tops trendline, but it does look a bit tentative. The RSI is currently positive and the PMO continues to put margin between it and its signal line. We do notice that Total Volume is waning on this rally.
The VIX looks healthy as it rises above its moving average on the inverted scale. Stochastics also look very bullish above 80. We also note that mega-caps are starting to outperform equal-weight RSP and that is generally a good condition for the market to rally.
S&P 500 New 52-Week Highs/Lows: Not many New Highs are New Lows as the market makes its way out of a period of equilibrium. We don't have wildly bullish stocks but at the same time we don't have a high number of bearish stocks. The High-Low Differential is flat on the zero line which is another sign of equilibrium.
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 OVERBOUGHT.
Swenlin Trading Oscillators (STOs) look very bullish with the exception that they are now overbought. We've certainly seen higher readings than these (although the STO-V is very overbought), but this is definitely near-term overbought for this market. Participation did inch higher and is at a healthy 70% of stocks above their 20-day EMA. We also saw a few more rising PMOs join the mix.
Intermediate-Term Market Indicators: The intermediate-term market trend is DOWN and the condition is NEUTRAL.
The ITBM and ITVM are rising nicely and are not overbought at all. They can accommodate far more upside. We have more PMO BUY Signals. This is a very healthy number at 76% and it isn't really overbought yet.
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.
Short-term we have good participation and the Silver Cross Index is above its signal line and rising. We still need to see more stocks above their 50/200-day EMAs so we can get the Golden Cross Index rising again. The IT Bias may be BULLISH due to the Silver Cross Index being above its signal line, but the reading is still very low suggesting 75% of stocks are still in possible corrections. More Silver Crosses are needed to fuel the market back to all-time highs. 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: The market looks bullish in the short term. The STOs are rising and we have some good participation numbers of stocks above their 20-day EMA. The addition of rising PMOs and PMO BUY Signals is short-term bullish. One issue is that STOs are overbought and this could be the signal that this rally is on its last legs. For now we will go with the bullish rising indicators and favorable Bias Table above to look for a bit more upside in the short term. The declining trend has been broken and that does typically mean you'll see follow-through.
Erin is 10% long, 0% short. (This is intended as information, not a recommendation.)
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CALENDAR
BITCOIN
Bitcoin had a great breakout from its declining trend. The rally got a bit heated and now it is consolidating the move. It appears we're getting a bull flag. The flag is trending up and those flags don't generally work out but we like the indicators. The RSI is positive and not overbought yet and the PMO is rising bullishly. Stochastics are also above 80. We are looking for more upside after this period of consolidation.
BITCOIN ETFs
INTEREST RATES
Yields are currently headed down. We are waiting for a reversal as we see flags on long-term rates. We do see that prior support levels are starting to be reached by some of the yields and that is where we should start looking for upside reversals.
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 monitoring a bull flag formation coming off the April low. The indicators are still quite bearish so a reversal may take more time. The RSI is negative and the PMO just entered negative territory itself. Stochastics look very bearish.
BONDS (TLT)
IT Trend Model: SELL as of 4/14/2025
LT Trend Model: SELL as of 12/13/2024
TLT Daily Chart: Bonds have formed a short-term double bottom formation that was confirmed with the breakout above the confirmation line. The upside target of the pattern would take it very close to 91 or 92 which seems doable given the indicators. The RSI just entered positive territory and the PMO is nearing a Crossover BUY Signal. Stochastics also entered positive territory. Look for more upside as we await the flag formations on yields to resolve upward.
DOLLAR (UUP)
IT Trend Model: NEUTRAL as of 3/5/2025
LT Trend Model: SELL as of 4/25/2025
UUP Daily Chart: The Dollar's rally is already beginning to fail. Stochastics have topped. This top is occurring well below the declining tops trendline which is a sign of weakness. The PMO is flat so there is still a chance that we will see a possible resumption of the rally. More than likely upside potential will be limited, if it sees any, particularly given Stochastics have topped in deeply negative territory.
GOLD
IT Trend Model: BUY as of 1/10/2025
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Gold rallied today after a small pullback. We think it needs to correct, but that may not happen given Stochastics turned back up in positive territory. The PMO is also beginning to rise again. The Dollar is looking weak already so we could see another upswing in Gold.
Also pointing to a possible upside reversal are discounts. They have gotten very oversold, implying that investors are quite bearish. This extreme in bearish sentiment generally leads to upside movement. It looks like there is no stopping Gold. Although we did show in today's trading room that Barron's headline was "Gold Rush". By the time this stuff gets to print, it is generally a sign of too much exuberance so in spite of discounts, Gold may still find itself in trouble.
GOLD MINERS (GDX) Daily Chart: Support was reached and we got a rally. Participation has slumped a bit and the PMO is headed for a Crossover SELL Signal. At the same time, if Gold takes off again, this group will soar. For those with some risk appetite, a small position for a possible upside reversal could be interesting.
CRUDE OIL (USO)
IT Trend Model: NEUTRAL as of 2/27/2025
LT Trend Model: SELL as of 3/18/2025
USO Daily Chart: We definitely have a bull flag on Crude Oil right now. The flag is sideways though and those do tend to not work out as expected. If the flag is activated with a breakout, the upside target of the formation would put price near 77.50. The RSI is still negative and the PMO is flat so we aren't so sure that breakout will occur.
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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