As part of the Friday Diamond Mine trading room for Diamond subscribers only, Erin seeks out a Sector to Watch and an Industry Group to Watch. This week she liked Industrials (XLI), in particular the Heavy Construction group.
This industry group has already been on the rise, but we should see it move even higher from here. We have a loose reverse head and shoulders pattern that would imply a move that could test the January highs. The RSI is getting overbought due to the rally, but we can see that historically it has been able to maintain those conditions when it is in a good bull market move like it is right now. There is a nearing Silver Cross and Stochastics are holding above 80. The PMO is rising strongly, but isn't overbought. The OBV is confirming the current rally. A few symbols that Erin found within this group that look enticing are: AGX, STRL, IESC and ROAD.
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.
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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: SELL as of 4/16/2025
SPY 10-Minute Chart: Everything pointed to a decline today but instead the market rallied. It consolidated the morning rally into the close. The 10-minute PMO is drifting lower so we could see a decline on Monday.
SPY Daily Chart: This has been a steady rally with weeks of upside. It is hard to argue with this rising trend. The RSI is not at all overbought despite the lengthy rally. The PMO is rising toward the zero line and looks quite bullish.
Overhead resistance is nearing at the January low so price could run into some trouble soon. The VIX looks very bullish above its moving average on the inverted scale. Stochastics are extremely bullish as they sit well above 80. Notice that mega-caps have started to take the lead as the SPY is showing rising relative strength to equal-weight RSP. If they're performing well, so will the market.
SPY Weekly Chart: Ultimately the rising trend out of the 2022 low is holding up. We have a nice bounce off this 480 level. The weekly PMO has turned up so this does suggest we will continue to see higher prices in the intermediate term.
SPY Monthly Chart: The monthly chart isn't as favorable. There was a parabolic breakdown. We have a new monthly PMO Crossover SELL Signal. However, the rising trend is holding up without issue even with the bear market decline.
New 52-Week Highs/Lows: New Highs continue to expand which is what we would expect in a good rally. It is interesting that we haven't seen spikes though. It tells us that stocks did get beat down on the bear market decline and are still trying to recapture prior highs. The High-Low Differential turned up this week and is now above the zero line which bodes well.
Climax Analysis: There were unanimous climax readings today on the four relevant indicators, giving us an upside exhaustion climax. Total Volume was on its annual average so enthusiasm was somewhat muted.
*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.
Today the Swenlin Trading Oscillators (STOs) turned back up which does tell us this rally could continue on. However, these indicators are in overbought territory so we have to wonder if we won't see some kind of pullback soon. Participation did expand as it should and we saw more rising PMOs. 85% rising PMOs is very bullish.
Intermediate-Term Market Indicators: The intermediate-term market trend is DOWN and the condition is SOMEWHAT OVERBOUGHT.
The ITBM and ITVM continue to rise but they have gotten into near-term overbought territory. They could certainly rise higher from here and if this is a new bull market move, we would expect them to move even higher. %PMO Xover BUY Signals turned back up today, but won't likely rise too much further given the amount of buy signals is near the same number of rising PMOs. This indicator is also overbought now.
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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.
The lowest IT Bias belongs to Financials (XLF), but we do note that we are seeing the Silver Cross Index expand. The reading is still quite low at 25%, but it is improving.
The highest IT Bias goes to Consumer Staples (XLP). This sector isn't poised to do as well as the more aggressive areas of the market. We wouldn't look to this sector at this time.
This table is sorted by SCI values. This gives a clear picture of strongest to weakest index/sector in terms of intermediate-term participation.
The biggest gain on the Silver Cross Index goes to Materials (XLB) which are definitely staging a comeback.
The highest reading belongs to Gold Miners (GDX), but we note it is beginning to contract as the group is pulling back again.
This table is sorted by GCI values. This gives a clear picture of strongest to weakest index/sector in terms of long-term participation.
Gold Miners (GDX) also hold the highest GCI reading, but that is beginning to contract. This has been an extraordinarily strong area of the market, but it is on the decline now.
Transportation (IYT) lost quite a few points off the GCI. However, this group is actually beginning to see some action as it comes back from the dead.
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.
Participation has definitely improved but we'd like to see more growth in stocks above their 50/200-day EMAs. Readings are high enough to push the Golden Cross Index higher, but we need to see better readings if we're going to get back to all-time highs. The Silver Cross Index looks very bullish as it rises. It is above its signal line so the IT Bias is BULLISH. The Golden Cross Index holds a higher reading than the Silver Cross Index, but it is still 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 STOs are now back on the rise and we're seeing more New Highs. Participation continues to expand, but could be better. Readings aren't overbought yet. The Bias Table looks very bullish with all but Gold Miners showing Bullish Biases in the intermediate term. However, this rally has gotten rather hot and needs to cool down. The upside exhaustion climax is a great excuse for the market to move lower. We don't expect a deep decline given the positive indicators, but it is definitely time for a break. Next week is the Fed interest rate announcement. Given there is speculation about rate cuts happening this year, positive remarks could push the market higher. At this time there is no indication we will see a rate cut this time around.
Erin is 10% long, 0% short. (This is intended as information, not a recommendation.)
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CALENDAR
BITCOIN
Bitcoin Daily Chart: We like Bitcoin right now. It had a strong rally followed by a period of consolidation. It is now ready to move higher from here. The only issue we see is that the RSI has gotten overbought. Some more consolidation could clear that condition, but ultimately Bitcoin can live in overbought territory as you can see it did in November. Resistance is arriving so maybe that will be where it stumbles.
Bitcoin Weekly Chart: Bitcoin formed a large rounded top and saw a correction down to support at the top of the prior flag formation. Price is now rebounding off that support level. The weekly PMO is turning up so we think it is ready to go test all-time highs again.
BITCOIN ETFs
Today:
This Week:
INTEREST RATES
Yields have decided to reverse higher. We were looking for them to continue lower, but it appears they've hit support and are headed higher again.
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 can see a strong rally on $TNX. The declining trend out of the April high is being broken so this does look like we have a breakout from a bull flag formation. The RSI is back in positive territory and the PMO has turned back up toward a Crossover BUY Signal. Stochastics are also rising. We should expect yields to start making their way back up.
10-Year Bond Yield Weekly Chart: They haven't hit the strongest support level at the bottom of the trading range, but this is a good reversal point off this near-term support level. The weekly PMO is turning back up.
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 6.81 to 6.76.
Here is a 50-year chart for better perspective.
BONDS (TLT)
IT Trend Model: SELL as of 4/14/2025
LT Trend Model: SELL as of 12/13/2024
TLT Daily Chart: Bond funds are likely to experience a downturn given yields have now reversed higher. The PMO is topping beneath the zero line which is especially bearish. Stochastics are also falling. Watch support at 84.
TLT Weekly Chart: This is a good place to see a rally, but yields aren't cooperating. Twice price has been unable to reach the top of the trading channel. The weekly PMO has topped beneath the zero line. We have a strong feeling that this current rising bottoms trendline will be compromised.
TLT Monthly Chart: The monthly chart does imply we will see more downside. Price has drifted out of a bearish rising wedge and is destined to move lower from here. The weekly PMO is still on the rise, but we aren't optimistic.
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 hiccuped today, but did form a bullish hollow red candlestick. We are expecting more rally, but nothing spectacular given the PMO is so far beneath the zero line. It is on a Crossover BUY Signal and Stochastics are rising so we should at least see the declining trend challenged.
Horizontal resistance could hold strong at 27.75.
UUP Weekly Chart: The Dollar is trying to recapture its former rising trend, but so far no luck. It does look bearish given the broken rising trend. The weekly PMO is also in decline so we could see some intermediate-term trouble.
UUP Monthly Chart: Price broke above the bearish rising wedge which was especially bullish. However, price has failed since and the rising trend is broken. The monthly PMO is on a Crossover SELL Signal so we should expect long-term weakness as well.
GOLD
IT Trend Model: NEUTRAL as of 12/23/2024
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: We don't think Gold is out of the woods just yet, but we do note that we have a bullish falling wedge developing. The PMO still looks very negative so we still expect more downside here, but this pattern is very encouraging.
This does have the earmarks of a bull flag on the one-year daily chart. Long flagpole followed by a declining trend to form the flag. Discounts have gotten extremely high so bearish sentiment is very strong. That usually leads to upside movement. We see near-term weakness still in Gold, but it does seem to be setting up for an upside reversal soon.
GLD Weekly Chart: We have a parabolic advance on the weekly chart and these do beg for correction or at the very least some sideways consolidation as we saw the last time the parabola broke down. This decline hasn't affected the parabolic advance at all.
GLD Monthly Chart: We have a strong parabolic advance on the monthly chart as well. The rally has gone almost vertical. The monthly RSI is exceedingly overbought. The monthly PMO is rising strongly still, but eventually we will see at least some high level consolidation to alleviate the vertical rally.
GOLD MINERS Daily Chart: Gold has been pulling back and that has started a corrective move on Gold Miners. We believe they will continue to struggle from here having lost support. Participation has taken a real hit and the Silver Cross Index dropped beneath its signal line for a BEARISH IT Bias. We think there is more downside to absorb.
GDX Weekly Chart: We have a near vertical rally on the weekly chart. It looks very bullish on this rising trend with the weekly PMO rising. However, the weekly PMO is decelerating on the recent decline. We are looking for a possible move down to 44 if Gold keeps looking weak.
CRUDE OIL (USO)
IT Trend Model: NEUTRAL as of 2/27/2025
LT Trend Model: BUY as of 3/31/2025
USO Daily Chart: Crude hit overhead resistance and was turned away this week. The PMO is well below the zero line on a Crossover SELL Signal so we aren't expecting a rebound. Support is near, but we think it is vulnerable. Stochastics are below 20 now and the Crude Volatility Index ($OVX) is below its moving average so internal weakness is visible.
USO/$WTIC Weekly Chart: There is more downside likely for USO. It is near the bottom of its trading range, but we think it is likely to break down there. The administration is working very hard to lower oil prices and they are likely to see more success. Price hasn't tested support yet on the weekly chart, but we think it will very soon.
WTIC Monthly Chart: We lost a line of horizontal support on the monthly chart. Price for $WTIC could move all the way down to 40.00 given there isn't strong support visible until that level. The monthly PMO is picking up speed to the downside so the long-term picture is quite bearish.
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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