(Editor's note: Some of our data did not come in on time today. We will update the Total Volume later this evening when the data becomes available.)
The Dow did rally today, but it wasn't enough to prevent today's negative crossover by the Price Momentum Oscillator (PMO). We still see a possible bearish double top in the making, but so far the short-term rising trend remains. The Silver Cross Index doesn't look healthy, but it is reading at 70% for now. Participation is beginning to wane even with the rally. We see negative divergences with price tops. Stochastics are also falling right now. We could certainly see the rally progress as the market seems uninterested even with a Middle East conflict to move lower. We would just say that DIA is vulnerable.
The weekly chart looks bullish. There is a nearing weekly PMO Crossover BUY Signal that could materialize on Friday. There is a bullish "V" Bottom formed off the rising bottoms trendline that does seem to imply an ultimate breakout to new all-time highs. We are sitting at overhead resistance, however, and given some of the issues with the daily chart, this could be where we'll see a pullback.
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: The market soared on the open on news that Iran wants to negotiate now, but the conflict is far from being solved so we could still see some turbulence on various headlines. We don't expect strong volatility leading up to the FOMC rate decision on Wednesday, but that wasn't the case today.
SPY Daily Chart: Price did manage a bounce off support. The 20-day EMA is also holding as support. We had a positive PMO Crossover BUY Signal on today's rally. It's barely there so any strong decline could take it away. Ultimately it is flat above the signal line and that implies strength.
The VIX is still essentially below its moving average on the inverted scale which implies weakness. Stochastics look strong enough as they hold above 80. Mixed messages on the VIX and Stochastics tell us internal strength may be waning.
S&P 500 New 52-Week Highs/Lows: New Highs did pop on today's rally which is good. We did see some New Lows though. The High-Low Differential is the big problem as it continues to move lower even as price moves higher.
Climax* Analysis: Today we saw climax readings on two of our four relevant indicators making today an upside initiation climax. We don't have Total Volume readings for confirmation at this time.
*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.
In spite of the rally, Swenlin Trading Oscillators (STOs) continued to move lower. Participation did expand as we would expect, but the reading is not impressive. We only have 39% with rising momentum and that will make it difficult to maintain the rally. Negative divergences are visible on all of these indicators.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is NEUTRAL.
The ITBM and ITVM continued moving lower today. Both hold negative divergences with price. We continued to lose PMO BUY Signals. They are reading below are bullish 50% threshold.
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 and long terms.
Participation indicators did tick up today, but they all hold negative divergences with price. Readings aren't particularly robust either. Good news is that both the Silver Cross Index and Golden Cross Index turned back up. They are above their signal lines so the IT and LT Biases are 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: Even a war couldn't keep the market down today. We are starting to think that the market is internally correcting and that is allowing price to slowly inch upward. We aren't out of the woods. We have plenty of negative divergences on our indicators and the STOs/ITBM/ITVM are falling again. On the bright side, we have a bullish upside initiation climax that could get price moving higher again tomorrow. With somewhat weak readings on rising PMOs and PMO Crossover BUY Signals, we aren't sure how much further the market will go, but those numbers could improve if the rally sticks around a bit longer. We would expect low volatility going into trading the next few days with the Fed rate decision arriving Wednesday, but the market has been so headline driven that we can't count on that.
Erin is 60% long, 0% short. (This is intended as information, not a recommendation.)
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CALENDAR
BITCOIN
We were concerned about a likely double top building on Bitcoin, but the recent rally suggests that we could see more consolidation sideways rather than a drop below the 50-day EMA. The RSI looks very bullish and the PMO is beginning to decelerate. We aren't expecting a breakout to new all-time highs yet as the previous rally may need to be worked out further with consolidation.
BITCOIN ETFs
INTEREST RATES
Yields rose on the day. The FOMC rate decision arrives on Wednesday. It is widely thought that they will keep rates the same. We believe rates will stay elevated for now.
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 is moving mostly sideways, but we are detecting a short-term bullish double bottom that has formed within a bullish falling wedge so we're looking for a breakout. The PMO is turning back up and Stochastics are rising again.
BONDS (TLT)
IT Trend Model: SELL as of 4/14/2025
LT Trend Model: SELL as of 12/13/2024
TLT Daily Chart: The bearish rising wedge fulfilled on TLT with today's breakdown. The RSI is now negative and the PMO has topped beneath the zero line. Stochastics are also falling. We would look toward support at 84.
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 rallied the last two days but it hasn't improved the picture for the Dollar. The declining trends are still intact. The PMO is flat beneath the zero line implying pure weakness. The RSI is negative. Stochastics are reading below 20. We have hit support and that could mean a bottom ahead, but the indicators and price movement are bearish enough that we would look for a breakdown.
Stronger support lies at the 2024 lows around 26.75. That would be an area that we would look for an upside reversal. At this point, we think it is headed lower.
GOLD
IT Trend Model: BUY as of 1/10/2025
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: With the Middle East looking less problematic, Gold pulled back heavily. It still holds a nice short-term rising trend and it hasn't dropped back into its prior declining trend so we see some possible upside ahead. The PMO is hesitating, but Stochastics are holding above 80 so there is some internal strength.
Discounts are contracting so we do have some bullish sentiment appearing. That could work in Gold's favor right now as certainly discounts are not exceedingly bullish yet. Gold is still showing outperformance against the Dollar and the Dollar is weak.
GOLD MINERS (GDX) Daily Chart: It may be time for Gold Miners to pull back a little further to test the rising bottoms trendline. Gold looks fairly bullish so we aren't expecting a breakdown necessarily. We do have to admit that we are seeing a second top on what could turn into a bearish double top. With the PMO still on the rise and participation being as strong as it is, it may avoid a big decline off the double top. Let's not get too far ahead of ourselves. The double top won't be confirmed until we see a decline below the last bottom.
CRUDE OIL (USO)
IT Trend Model: BUY as of 6/11/2025
LT Trend Model: SELL as of 3/18/2025
USO Daily Chart: Crude pulled way back today as it was determined that oil supplies won't be that disrupted with the conflict between Israel and Iran. It got way ahead of itself and is likely to pull back a bit further. The PMO looks very bullish, but the RSI is overbought right now implying we'll see more downside. This looks like a parabolic breakdown. We'll see if summer demand can keep prices elevated.
USO Weekly Chart: With war-related volatility, we think it is a good idea to keep the weekly chart close at hand. Note that USO still maintains its long-term trading range and a distinct impression of stability. The most obvious top of the range is 85, but it could be stretched to about 93, if circumstances require.
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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