Today the SEC approved 10 new Bitcoin ETFs. To clarify, there are now 11 Bitcoin ETFs -- Grayscale Bitcoin Trust (GBTC) has been trading since 2015. We note that the first day of trading has resulted in loses for most of the new ETFs. Here's the current list:
Here's a performance chart of $BTCUSD (Bitcoin to U.S. Dollar Index) and GBTC from 2015. Note that the ETF performance has lagged $BTCUSD over that period.
Here's the same comparison over the last year. Obviously, the ETF has taken the lead by a bunch.
These comments are not intended as an endorsement or recommendation of these products.
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/INDUSTRY GROUP/SECTOR INDEXES
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THE MARKET (S&P 500)
IT Trend Model: BUY as of 11/14/2023
LT Trend Model: BUY as of 3/29/2023
SPY Daily Chart: Today saw an intraday all-time high on both the $SPX and the SPY. We closed below. The PMO is still in decline.
The VIX saw an even lower reading today suggesting market participants are still very complacent in spite of today's unwelcome economic news regarding jobs and inflation which are still sticky suggesting the Fed will not cut rates as soon as the market would like. Stochastics did get above 80 today so there is some internal strength in the very short term.
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S&P 500 New 52-Week Highs/Lows: The 10-DMA of the High-Low Differential is moving out of overbought territory on its decline. New Highs did pick up but we note that we have a new negative divergence given today's move above all-time highs.
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.
Swenlin Trading Oscillators (STOs) are rising in positive territory. So besides Stochastics, we do see some diminishing weakness. There was no change in %PMOs Rising so internals are still weak as far as momentum.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is OVERBOUGHT.
%PMO Xover BUY Signals kept their reading from yesterday. It is still in bearish territory and given we have fewer rising PMOs, this indicator is still vulnerable to decline.
PARTICIPATION: The following chart objectively shows the depth and trend of participation 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 short term.
The market bias is BEARISH in the intermediate term.
The market bias is BULLISH in the long term.
We still see more than 50% of stocks above key moving averages so we are keeping the short-term bias as bullish. The $SPX and other indexes lost their bullish intermediate-term biases as the SCIs dropped beneath their signal lines. It is doubtful we will see the same out of the GCI for some time, but we note it has been decelerating its rise.
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.
(We have changed the background colors on this table to minimize confusion with the Signal Table above.)
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CONCLUSION: PMO weakness is our primary concern right now, but today didn't see the loss of any more rising PMOs or PMO BUY Signals. STOs are rising. There is some internal strength left based on the high readings of the Silver Cross Index, but yesterday most Silver Cross Indexes dropped beneath their signal lines moving their bias to bearish in the intermediate term. Given the dichotomy between our rising ST indicators and falling IT indicators, we are beginning think that we may experience sideways movement in the very short term. Past that, IT indicators tell us the next step will be a more concerted price decline. We would avoid expanding exposure at this time and stops should be evaluated.
Erin is 75% long, 0% short.
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BITCOIN
The first day of trading on the new Bitcoin ETFs has done nothing for Bitcoin. Our best guess is that the addition of new ETFs was priced in over the past three months. The PMO is looking vulnerable and Stochastics did tip lower, but the RSI remains positive. We expect to see more sideways action with a melt up.
INTEREST RATES
Yields were lower on the day which is keeping most declining trends intact. Short term we are expecting them to rise further.
We do see rates rising in the short term, but ultimately when they are ready to decline again, we will be watching 2023 lows as support. The yield curve is still highly inverted given short-term rates are so much higher than longer-term rates.
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
The RSI won't get positive and this congestion zone isn't helping matters. We continue to look for a breakout here given the rising PMO. Stochastics and the RSI suggest we may have more sideways movement ahead.
BONDS (TLT)
IT Trend Model: BUY as of 11/28/2023
LT Trend Model: SELL as of 1/19/2022
TLT Daily Chart: The 20-year yield has formed a declining trend, barely, but it does tell us that TLT may not lose support at the 50/200-day EMAs. We still don't like the PMO or Stochastics, but support could still hold up for a while longer.
This is a very strong area of support so we could see more sideways movement as it attempts to hold on to it.
DOLLAR (UUP)
IT Trend Model: NEUTRAL as of 11/27/2023
LT Trend Model: BUY as of 5/25/2023
UUP Daily Chart: Yesterday's comments still apply:
"The Dollar broke from its bullish falling wedge, but marginally. It 'drifted' sideways and out of the pattern. We should see the Dollar get going based on the PMO and Stochastics above 80, but for now the 50-day EMA is posing a problem. We are still bullish on the Dollar, but suspect we won't see a tremendous amount of upside."
GOLD
IT Trend Model: BUY as of 10/23/2023
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: The Dollar is moving sideways and consequently so is Gold. UUP is stuck beneath the 50-day EMA while GLD is holding just above it. Gold doesn't look that weak and the Dollar doesn't look that strong. Stochastics did tip upward so price should hold support a bit longer.
GOLD MINERS Golden and Silver Cross Indexes: Gold Miners continue to weaken and given we see sideways action as the best case scenario for Gold and the market, GDX will likely continue to weaken. The SCI is tumbling lower and many miners continue to lose support at the 50-day EMA. We also note that the GCI is about to move beneath its signal line which would mean a Bearish Bias in both the intermediate and long terms.
CRUDE OIL (USO)
IT Trend Model: NEUTRAL as of 11/7/2023
LT Trend Model: SELL as of 12/18/2023
USO Daily Chart: Crude Oil formed a bearish engulfing candlestick today that suggests we will see lower prices tomorrow. Indicators are very little help right now. The RSI is negative and the PMO is flat. Stochastics did tip upward. We foresee more choppy sideways movement on Crude.
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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