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The SPY had a nice rally today alongside the Nasdaq (ONEQ) and Nasdaq 100 (QQQ). We noticed however that the SP400 Mid-Caps (MDY) and SP600 Small-Caps (IJR) were down on the day. We can see on both charts that there is a new declining trend.
On MDY, the PMO is nearing a Crossover SELL signal and Stochastics are falling in negative territory. Participation continues to leak out of the index with %Stocks > 20/200EMAs are below our bullish 50% threshold. Both the Silver Cross Index and Golden Cross Index are headed lower. It is fairly obvious from the price pattern, but we can see based on relative strength that MDY is underperforming the SPY.
The picture is even more bleak for IJR. Not only do we have a new declining trend, we have a nearing PMO Crossover SELL Signal. %Stocks > 20/50/200EMAs are all below our bullish 50% threshold. Both the Silver Cross Index and Golden Cross Index are in decline. Stochastics are dropping in negative territory.
Conclusion: The SPY and other large-cap indexes may be on the rise, but the rally is not broad or broadening. This could be a sign that the large-cap indexes may be vulnerable.
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: We are ultimately traveling in a consolidation pattern. Price did drop on the open, but took back all losses by lunchtime. It continued to rally from there. Both the 10-minute PMO and Stochastics are rising suggesting we could see some follow-through tomorrow.
SPY Daily Chart: Price is consolidating sideways. We do see a possible bearish double top in the very short term that could pose a problem soon. The pattern will bust if price does rally above overhead resistance. The RSI shows us that price is not overbought currently. The PMO is back to rising on today's rally.
The VIX is holding above its moving average on the inverted scale so investors aren't particularly worried right now. Stochastics did tip upward and are very close to territory above 80 so it isn't out of the question that we'll see more rally.
S&P 500 New 52-Week Highs/Lows: New Highs did expand on the rally as we would expect. Unfortunately, the High-Low Differential topped today.
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 NEUTRAL.
The Swenlin Trading Oscillators (STOs) were mixed today with the STO-B declining and the STO-V rising. Participation slid on a rally day and we also lost some rising PMOs within the index.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is OVERBOUGHT.
The ITBM and ITVM both fell again today. They are still somewhat overbought so this remains a problem and does seem to suggest we have some downside ahead. We lost more PMO BUY Signals on the rally 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 and long terms.
Participation inched lower for %Stocks > 20/50/200EMAs. This is not what you want to see on a rally day. The Silver Cross Index held the same value today. It looks very toppy. The Golden Cross Index still looks pretty good as it accelerates higher. Given we have more stocks above their 50/200EMAs, the Golden Cross Index will continue to rise. This is good to build a foundation in the long term, but we do need to recognize the problems of shrinking participation on a rally.
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 rally was centered mostly around tech today. Both the mid- and small-cap indexes are underperforming. We need to get broad support to keep the rally out of the May lows going. We are seeing declining indicators on nearly every chart. Participation deteriorated today putting a damper on the rally. The STO-B turned down which is also a warning shot. We should have seen more rising PMOs today and we didn't. The Bias Table still looks quite bullish, but we have a feeling that will begin to change. We need to be cautious.
Erin is 60% long, 0% short. (This is intended as information, not a recommendation.)
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CALENDAR
BITCOIN
Bitcoin broke down out of the bearish rising wedge as expected. The pattern doesn't really give us a downside target, but we'd look toward support at 100,000. The PMO is in decline and Stochastics are negative so we do think it will decline a bit further before we get another rally back to all-time highs.
BITCOIN ETFs
INTEREST RATES
Yields rose today but are essentially in declining trends. Based on what we're seeing on the 10-year yield chart, we do think they have an opportunity to move higher from here.
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
As expected we got a small breakout from a bullish falling wedge. The wedge is attached to a flagpole. This tells us to expect a rally higher. We do see a solid rising trend out of the April low. The PMO is trying to drop beneath its signal line and Stochastics are falling. This seems like an inflection point as $TNX holds above support and the 50-day EMA. We vote for a breakout.
BONDS (TLT)
IT Trend Model: SELL as of 4/14/2025
LT Trend Model: SELL as of 12/13/2024
TLT Daily Chart: Bonds made their way out of a declining trend channel, but are starting to fall back already. Yields do look like they could start rising again and that will depress TLT. Price is failing at the 20-day EMA. We did get a PMO Crossover BUY Signal, but we have a feeling it will melt away quickly.
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 attempted a rally out of the April low, but it failed before reaching the declining tops trendline (bearish). It is now in a new short-term declining trend. We have a PMO Crossover SELL Signal nearing and Stochastics are dropping below 20. Look for support to be tested soon at 27.
GOLD
IT Trend Model: BUY as of 1/10/2025
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Gold did not need to test the bottom of the declining trend channel before rallying out of it. That is quite bullish. The PMO is rising again and Stochastics are almost above 80. We think the rally is back on for Gold.
Gold is showing relative strength to the Dollar and that will continue to work in its favor given the weak outlook for UUP.
GOLD MINERS (GDX) Daily Chart: Gold Miners soared today! They took advantage of the strong rally in Gold and the rally in the market to break out above the April high. The RSI isn't overbought yet so we should continue to see more upside here. Participation is at 100% for stocks above key moving averages. The Silver/Golden Cross Indexes are at the top of their range. If we want to worry about something, all of these readings are highly overbought, but looking at past rallies, we can see that participation can hold in overbought territory for some time.
CRUDE OIL (USO)
IT Trend Model: NEUTRAL as of 2/27/2025
LT Trend Model: SELL as of 3/18/2025
USO Daily Chart: Crude rallied strongly today but remains below resistance. It formed a bearish filled black candlestick today so it closed below the open today. The PMO has accelerated higher so maybe we will finally get a breakout above resistance. Stochastics also turned back up. We aren't exceedingly bullish here, but it does look like we'll see a breakout. The declining tops trendline isn't far away and that would be where we would see a rally failing.
Good Luck & Good Trading!
Erin Swenlin and Carl Swenlin
Technical Analysis is a windsock, not a crystal ball. --Carl Swenlin
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