Today the Consumer Discretionary ETF (XLP) 50-day EMA crossed down through the 200-day EMA (Death Cross), generating an IT Trend Model SELL Signal. We're seeing somewhat of a rebound, but ultimately it remains in a declining trend. We have slim participation and the Silver Cross Index is at a very low 16%. The PMO looks encouraging but it is in deeply negative territory and thus can't be considered that bullish.
Price originally broke up and out of a bearish rising wedge which was especially bullish, but tariff talk really took this sector down and we believe it will continue to struggle as tariffs are negotiated. It is very susceptible to China. The weekly PMO is diving lower and the rising trend was broken last week.
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Today the Consumer Staples ETF (XLY) 20-day EMA crossed up through the 50-day EMA (Silver Cross) generating an IT Trend Model BUY Signal. Price is essentially traveling sideways so we could very easily see more signal changes arrive so we don't want to put too much emphasis on today's signal. The sector has good participation and its PMO BUY Signal arrived close to the zero line. Stochastics are rising strongly, but we think it will be difficult to get a breakout.
The sideways trading range is visible on the weekly chart. The weekly PMO did turn up so maybe it will get a breakout this time around.
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: BUY as of 3/29/2023
SPY 10-Minute Chart: We had positive movement in the morning, but by afternoon price had slipped into negative territory. Overall it was a sideways trading yielding very little information. Stochastics have turned down so the chart is leaning bearish.
SPY Daily Chart: The bearish filled black candlestick fulfilled with today's decline. Price has yet to challenge the declining trend. The RSI is still negative and weak. The PMO is getting close to a Crossover BUY Signal so maybe this time around we'll see a breakout.
The VIX looks healthier, but it remains below its moving average on the inverted scale so we do detect some weakness still. Stochastics are now rising again which is encouraging.
S&P 500 New 52-Week Highs/Lows: Only one New High and one New Low so there isn't much to say about this chart except that the High-Low Differential is still in decline.
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 DOWN and the condition is NEUTRAL.
The Swenlin Trading Oscillators (STOs) are bullish right now as they rise strongly toward overbought territory. The STO-V has now reached positive territory. Participation of stocks above their 20-day EMAs ticked lower on the decline as we would expect. We also lost some rising PMOs. We do have 2/3 of the index holding rising PMOs which is promising, but we can see the indicator is in near-term overbought territory.
Intermediate-Term Market Indicators: The intermediate-term market trend is DOWN and the condition is NEUTRAL.
We like seeing the ITBM and ITVM rising but they are still in negative territory. %PMO Xover BUY Signals had a positive crossover its signal line.
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 BEARISH in the intermediate and long terms.
Participation is still low enough that we could run into problems on this rally. All participation readings including the Silver Cross Index and Golden Cross Index are below our bullish 50% threshold so it will be hard to keep this rally going. We do like that the Silver Cross Index bottomed yesterday. Both the Silver Cross Index and Golden Cross Index are below their signal lines so the IT and LT Biases are BEARISH.
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 think we are still working off the upside exhaustion climax from yesterday so the market is still vulnerable to decline in the very short term. Participation is somewhat weak and bearish biases fill our Bias Table. On the flip side we have STOs/ITBM/ITVM rising in concert and a PMO BUY Signal on tap. This is reassuring and could mean that any upcoming decline may be short lived. The overall economic environment hasn't really changed so we think we'll still get some weakness. The market is headline driven at this point and that can put the technicals in the back seat but we'll go with what we have. At this point we are looking for more decline in the very short term with a possible upside reversal after that if STOs are still rising.
Erin is 10% long, 0% short. (This is intended as information, not a recommendation.)
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CALENDAR
BITCOIN
Bitcoin is flirting with its declining tops trendline. It appears ready to break out, but we've seen plenty of failures at this resistance. We don't expect a thrust upward, but more likely some sideways movement that will push it out of the declining trend. We need to get the PMO over the zero line. Stochastics did top today so we wouldn't be surprised if this most recent rally fails soon.
BITCOIN ETFs
INTEREST RATES
Yields were mixed on the day. As we've noted before declining trends have mostly been broken so we should see them rise a bit further.
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
$TNX has pulled back to the 200-day EMA and is reentering its prior declining trend. It was due for a pullback after its roaring rise. Given the PMO is still rising, we could see a rebound here. Although Stochastics don't inspire confidence. If we get a drop below the 200-day EMA, we'll look for more downside.
BONDS (TLT)
IT Trend Model: SELL as of 4/14/2025
LT Trend Model: SELL as of 12/13/2024
TLT Daily Chart: The bullish cup with handle pattern has essentially run its course. However, we do like the bounce off support. Yields are looking weaker so maybe it is time for a resurgence in Bond funds. The PMO is still falling and it is below the zero line so we don't think there is that much upside potential here.
DOLLAR (UUP)
IT Trend Model: NEUTRAL as of 3/5/2025
LT Trend Model: BUY as of 5/25/2023
UUP Daily Chart: The Dollar inched higher on prior support. We aren't that bullish here as the PMO hasn't really decelerated its decline. Stochastics turned back up but are still showing weakness as they are below 20.
The next level of support that we are watching is 26.75.
GOLD
IT Trend Model: BUY as of 1/10/2025
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Gold rallied today even though the Dollar was higher so we had extra buyers come in to push it higher in spite of the Dollar. The RSI isn't overbought yet so it could certainly see more rally, but it does seem ready to at least consolidate at this level. Stochastics are topping so that implies we could see some consolidation at a minimum.
The Gold Volatility Index ($GVZ) did rise on our inverted scale. It is below its moving average and that does imply weakness. We'll be watching for it to get back above its moving average. Gold is still showing excellent relative strength. We are overall very bullish on Gold, we just think it needs to cool off a bit more.
GOLD MINERS (GDX) Daily Chart: Gold Miners enjoyed a nice rally with Gold being higher on the day but we noted yesterday that they were up even though Gold was down. The interest level remains high in this group and with 100% participation of stocks above key moving averages we have to believe we will continue to see them move even higher from here. The RSI is overbought now so they definitely could use a cooling off period, but they really don't seem interested. Overbought conditions are likely to persist.
CRUDE OIL (USO)
IT Trend Model: NEUTRAL as of 2/27/2025
LT Trend Model: SELL as of 3/18/2025
USO Daily Chart: Not much out of Crude Oil today. The rally does appear vulnerable already, but we're not surprised. The PMO continues to make its way lower and Stochastics are in negative territory. The upcoming resistance zone is likely to keep price down.
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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