Today the Biotechnology ETF (IBB) 20-day EMA crossed down through the 50-day EMA (Dark Cross) above the 200-day EMA, generating an IT Trend Model NEUTRAL Signal. IBB % Stocks > 20EMA is 25% and IBB % Stocks > 50EMA is 37%, so it is likely that the Silver Cross Index will drop from 51% to 37%, which is quite bearish.
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: SPY remains within a very narrow range, and for two months the rising trend line and the 20-day EMA are virtually identical -- very low volatility.
Note that for the last few months there has been little difference between cap-weighted (SPY) and equal-weighted (RSP) movement.
Here is the latest recording:
S&P 500 New 52-Week Highs/Lows: New Highs contracted slightly, but the trend of New Highs is down. We are too close to all-time highs for New Lows to be in play.
Climax* Analysis: There were no climax readings today. The downside exhaustion climax last Thursday has been followed by a short rally. Now there is the potential for the downside movement to continue.
*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 NEUTRAL and the condition is slightly OVERBOUGHT.
The STO-B has turned up from levels that have been overbought for the last year. The bottom two indicators have turned up as well. This could be the start of a short-term rally.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is NEUTRAL.
The ITBM and ITVM are still trending down, and broad negative divergences exist.
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.
Last week the Silver Cross Index (SCI) dropped below its 10-day EMA, so even though the SCI is at a bullish 80%, its bias has shifted to bearish. Participation implies that the SCI will likely drop to 71%.
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: SPY is only about one percent below all-time highs and in a very tight trading range. Some short-term indicators have turned up, so there is the potential for a rally in that time frame. Intermediate-term indicators are still in a negative configuration, so we'll have to wait and see how that conflict resolves. For now, we wouldn't bet against the bull, but internals are set to where things could turn negative.
Erin is 75% long, 0% short.
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BITCOIN
Bitcoin has broken out of the triangle formation. Overhead resistance just ahead.
BITCOIN ETFs
INTEREST RATES
Yields are rising within the range set during the last 18 months or so. We are currently expecting that range to hold for several months, until the Fed does something.
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 bearish rising wedge implies that $TNX will eventually start down and move out of the wedge.
BONDS (TLT)
IT Trend Model: SELL as of 3/20/2024
LT Trend Model: SELL as of 1/19/2022
TLT Daily Chart: TLT is really testing the support line, touching it four of the last five trading days. Our feeling is that support will fail eventually.
DOLLAR (UUP)
IT Trend Model: BUY as of 1/23/2024
LT Trend Model: BUY as of 5/25/2023
UUP Daily Chart: There is a bearish rising wedge on the right side of the chart.
We usually reserve the weekly charts for the end of the week, but we really need to see where the next resistance line is located -- not too far away.
GOLD
IT Trend Model: BUY as of 10/23/2023
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: GLD has nearly reached the top of its rising trend channel, so it is reasonable to expect some corrective action in the short term. Note that in March the correction was a sideways move.
GOLD Daily Chart: The one-year chart shows how steep the advance has been, going parabolic in the last two months. A correction would be healthy.
GOLD MINERS Golden and Silver Cross Indexes: Participation for Gold Miners is excellent, with all indexes being in the 90s, but like GLD, GDX has reached the top of the rising trend channel, so a trip back to the bottom of the channel is likely. Fortunately, there will be support on the rising trend line and the horizontal support line.
CRUDE OIL (USO)
IT Trend Model: BUY as of 2/12/2024
LT Trend Model: BUY as of 2/27/2024
USO Daily Chart: After seven consecutive up days, USO finally took a break, closing slightly down today.
On Friday USO was stopped by the resistance line drawn across the September top. The upward path is becoming slightly parabolic, so a small correction would serve to make the angle of ascent less severe.
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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