Yesterday the Dow (DIA) and SPY saw negative PMO Crossover SELL signals. Today, the SP100 (OEF) joined in with its own PMO Crossover SELL Signal. We still see a rising trend intact, but we do see a possible double top in the very short term. Notice that participation is dropping quickly. Stochastics have also dropped below 80. We believe the index is very vulnerable to decline.
The short-term picture is somewhat bearish, but the weekly chart is still very bullish showing a bullish "V" Bottom and a weekly PMO Crossover BUY Signal. Ultimately we should see all-time highs, but we think we have some decline to absorb first.
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: The market fell most of the day, extending yesterday's declining trend. The late day rally did get the 10-minute PMO to turn back up, but Stochastics topped.
SPY Daily Chart: We see a bearish double top that has formed over the past week. Price is still holding above support, but the rising trend is about to be compromised. The PMO is on a new Crossover SELL Signal, but we do see that it is flat above the zero line still and that does imply there is some strength available.
The VIX nearly punctured the lower Bollinger Band on the inverted scale. We pay attention to those punctures as they often lead to reversals. Given the Bollinger Bands are so close together, any puncture is possible with any injection of volatility so punctures are little less important right now. Stochastics did drop below 80.
S&P 500 New 52-Week Highs/Lows: New Highs dropped as we would expect and we did see an expansion in New Lows. The High-Low Differential is still in decline.
Climax* Analysis: Today we saw climax readings on three of the four relevant indicators making today a downside initiation climax. SPX Total Volume was a little light and not confirming.
*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.
You can see the double top in the very short-term easier on this line chart. Both Swenlin Trading Oscillators (STOs) dropped into negative territory today. This is very bearish. Participation dropped significantly taking the reading of stocks above their 20-day EMA below our bullish 50% threshold. Less than one quarter of the index hold rising momentum. Negative divergences are visible on all indicators.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is NEUTRAL.
The ITBM and ITVM are still moving lower. Negative divergences are clear. We continue to see PMO BUY Signals disappearing.
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 of stocks above their 20-day EMAs dropped below our bullish 50% threshold, with %Stocks > 50EMA closing in on 50%. Negative divergences are a clear problem with these participation indicators. The Silver Cross Index and the Golden Cross Index topped today. At this time 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: The market does seem ready to turn over right now. The Bias Table above is starting to see more "Bear" entries. PMOs Rising and PMO BUY Signals are low and that will make it hard to keep price moving higher. The STOs have moved into negative territory and the ITBM/ITVM continue to slide lower. Negative divergences plague nearly every indicator. We have a PMO SELL Signal on the SPY. We also had a downside initiation climax today that implies the decline will continue. Make sure your stops are updated and ready. Tomorrow we get the FOMC rate decision and press conference. Investors will be listening closely to see what the Fed plans are for the end of the year.
Erin is 60% long, 0% short. (This is intended as information, not a recommendation.)
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CALENDAR
BITCOIN
Bitcoin is consolidating sideways and we believe that will continue. This consolidation is turning into a new flag on a flag pole which is bullish. However, the RSI has moved into negative territory and the PMO is in decline. Stochastics have also topped. We're looking for more sideways consolidation, building this new flag out further.
BITCOIN ETFs
INTEREST RATES
Yields were down on the day. Longer-term rising trends are intact so we are looking for rates to melt upward 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
We have a bullish falling wedge on $TNX that implies that we'll get an upside breakout. The rising trend out of the April low is intact for the most part. Indicators don't look bullish so we may see another test of the bottom of the pattern before an eventual breakout.
BONDS (TLT)
IT Trend Model: SELL as of 4/14/2025
LT Trend Model: SELL as of 12/13/2024
TLT Daily Chart: We have a bearish rising wedge on TLT that implies we'll get a breakdown soon. The indicators are still fairly bullish so we could see a little more upside, but ultimately we think yields will stay in their rising trends and push Bonds lower.
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 had a nice rally that took it above the 20-day EMA. We still have two declining tops trendlines to contend with. Given price hit support, we aren't surprised that we're getting some upside. We think we could see a bit more upside, but we think the declining trends will stay intact a bit longer. We're on the lookout for a rally here.
GOLD
IT Trend Model: BUY as of 1/10/2025
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: The Dollar was up but that didn't really stop Gold which managed a small increase today. It is holding above the declining tops trendline and is in a clear rising trend out of the May low. The PMO is flat above the signal line implying pure strength. We don't like that Stochastics have topped and that we got a new PMO Crossover SELL Signal. This could mean we'll see some upcoming consolidation.
Gold is still outperforming based on the rising relative strength line. The Dollar may see some upside right now, but given it is outperforming, it may not hurt Gold that much.
GOLD MINERS (GDX) Daily Chart: Gold may start consolidating sideways and that will likely put downside pressure on Gold Miners. We see a new bearish rising wedge that would imply an upcoming breakdown so be careful with your Gold Mining positions. The internals aren't really negative right now, but this wedge tells us we may be in for some decline anyway.
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 popped today after pulling back yesterday to digest the previous day's gap up. We would expect something similar to happen tomorrow after today's giant rally higher. Overhead resistance is arriving soon and the RSI is very overbought so that may be where we see some consolidation. $OVX is continuing to puncture the lower Bollinger Band and that is bullish for price. Stochastics are also camped out above 80. It isn't out of the question that we could see a breakout at 85.
USO Weekly Chart: Yesterday's comments still apply:
"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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