Today the Semiconductor ETF (SMH) 50-day EMA crossed up through the 200-day EMA (Golden Cross), generating an LT Trend Model BUY Signal. As long as price stays above the 200-day EMA, this signal will stick. It does appear we are getting a breakout from a bull flag. The PMO has surged (bottomed) above the signal line. Participation is strong and both the Silver and Golden Cross Indexes are above their signal line. We would just warn that things get as good as they can get just before things go south. At this point participation should hold things together a bit longer.
We have a bullish "V" Bottom on the weekly chart that does imply we'll see a breakout to new all-time highs. The weekly PMO is also in agreement as it rises on a Crossover BUY Signal above the zero line.
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
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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: Trading started out strong to open the day as the jobs report seemed to suggest the FOMC will cut rates in September. However, weakness seeped in and we got a new declining trend. The 10-minute PMO is accelerating downward so we would look for a weak open tomorrow.
SPY Daily Chart: Price is now struggling against resistance. The PMO has topped in overbought territory. We have a slight negative divergence with the OBV.
The VIX managed to stay above its moving average on the inverted scale and Stochastics are above 80 so there is still a little bit of internal strength visible. Notice that the SPY has been consistently outperforming equal-weight RSP. This means the index is especially sensitive to the direction of mega-caps right now.
S&P 500 New 52-Week Highs/Lows: New Highs pared back slightly and today we saw some New Lows.
Climax* Analysis: There was one climax reading today, so we don't have a climax day.
*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) reversed and moved lower today which doesn't bode well. Participation inched lower on the decline and not surprisingly we lost more 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 are both in decline out of overbought territory. This suggests we are going to continue to see mixed trading. We continue to lose PMO BUY Signals with only half the index holding them. Given we only have 38% with rising PMOs, this indicator is likely to lose more ground tomorrow.
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.
We still see participation as holding negative divergences with price as they are in declining trends. They are reading above our bullish 50% threshold, but readings are mediocre at best. The Silver Cross Index is acting like it wants to top. It is above its signal line so the IT Bias is BULLISH still. The Golden Cross Index did tick upward today. It should keep on rising given we have more stocks above their 50/200-day EMAs versus the Golden Cross Index reading. It is also above its signal line so the LT Bias is also 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: We believe the market is ready to turn over here. STOs are falling alongside falling ITBM and ITVM. The PMO turned down today as well. The VIX and Stochastics still look fairly bullish so we could eke out more upside, but given the failure of today's rally, we are expecting some more downside. Participation is still holding up and the Bias Table looks bullish so we don't expect a deep decline at this point. Keep your stops in play. It may be a good time to reevaluate them.
Erin is 60% long, 0% short. (This is intended as information, not a recommendation.)
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CALENDAR
BITCOIN
Bitcoin tumbled today and is setting up a bearish head and shoulders pattern. We thought we would see it rebound off 100,000, but it looks pretty weak. The RSI is negative and the PMO is moving lower. Stochastics just dropped below 20. Expect more downside.
BITCOIN ETFs
INTEREST RATES
Yields were mixed today. We do have short-term declining trends, but that hasn't been destructive yet.
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 think the bullish falling wedge is still viable, but indicators don't look very good. $TNX is sitting on support at the 200-day EMA so we'll know very soon whether it will be able to reverse course higher. Ultimately we still have a rising trend off the April low. We aren't especially bullish here, but we do see an opportunity for a push to the upside.
BONDS (TLT)
IT Trend Model: SELL as of 4/14/2025
LT Trend Model: SELL as of 12/13/2024
TLT Daily Chart: TLT formed a bearish filled black candlestick today that does imply we'll see a decline tomorrow. The indicators are still looking somewhat bullish. The RSI just hit positive territory. The PMO is rising on a Crossover BUY Signal, but it is below the zero line and is moving very slowly to the upside. We think there is a bit more upside coming.
We've spotted a reverse head and shoulders on the chart that was confirmed with yesterday's breakout. Its upside target would take price to the late April top.
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 continues to travel lower in its short-term declining trend. There is a longer-term declining tops trendline. Support is arriving soon at the April low, but we think it will likely break down there. The PMO is on a new Crossover SELL Signal and Stochastics are below 20. We also have a negative RSI. Look for support to be tested.
The strongest level of support lies at 26.75.
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 take advantage of a falling Dollar which is especially bearish. However, we still believe Gold will rally out of this consolidation zone. The PMO is nearing a Crossover BUY Signal and Stochastics are currently holding above 80.
We have a nice rising trend on relative strength to the Dollar. Discounts are highly elevated and that generally will work in Gold's favor, but we see that this declining trend channel has formed during a period of very high discounts. We can't count on sentiment yet.
GOLD MINERS (GDX) Daily Chart: Gold Miners pulled back slightly at resistance. It did form a higher high. The indicators are all very bullish. Participation is about as strong as you can get. The Silver Cross Index is at 100%! As we noted in the opening, things get as good as they can get before they start to go bad. For now with a weak Dollar, we think that GDX has more rally ahead.
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 popped above resistance, but promptly retraced back below it. It formed a filled black candlestick and that does imply a decline ahead. Stochastics have topped. We do see new strength as the PMO has moved into positive territory. We think it will probably break out here, but the declining trend is likely to stay intact. We do have summer arriving where we will likely see demand pick up and that could get Crude moving in the right direction.
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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