Today the Dow Jones Industrial Average ETF (DIA) 50-day EMA crossed down through the 200-day EMA (Death Cross), generating an IT Trend Model SELL Signal. The decline is picking up speed. The PMO has topped beneath the signal line, well below the zero line. Participation is slim and the Silver Cross Index is at a low 17%. We don't see an end to the decline yet.
The long-term rising trend is being challenged right now and with the weekly PMO configured so negatively, we suspect that this rising trend will be broken.
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Also today, the NYSE Composite Index ($NYA) 50-day EMA crossed down through the 200-day EMA (Death Cross), generating an IT Trend Model SELL Signal. Similarly, the decline is picking up speed again as we can see a steep declining trend. The PMO is also trying to top beneath the signal line well below the zero line so momentum is not going its way. As with DIA, participation is very slim and the Silver Cross Index is at a very low 18%. Stochastics have also topped. We would expect to see more decline that could take price down to its previous low.
It is further away from its rising bottoms trendline versus DIA and is positioned slightly better. Price did drop out of a bearish double top and the downside target was reached so a reversal isn't necessarily out of the question, but given the overall problems with a current bear market on the Nasdaq and the SPY, we think that the decline will likely test that rising bottoms trendline. At that time we could see an upside reversal, but given the weekly PMO's decline it will be hard to turn the ship 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
CLICK HERE for Carl's annotated Market Index, Sector, and Industry Group charts.
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: Price fell most of the day but we do note that we got a nice rally to finish the day. The 10-minute PMO is rising again on a Crossover BUY Signal so maybe we'll see some of today's losses reversed tomorrow.
SPY Daily Chart: The declining trend has become accelerated. We could also draw an even steeper declining tops trendline out of the recent top. The PMO has topped for a second time below its signal line, well below the zero line. Overall momentum is very negative and would suggest more downside ahead.
The VIX remains weak below its moving average on the inverted scale and Stochastics have topped bearishly. Notice that the SPY is underperforming equal-weight RSP. This is applying downside pressure on price as we need mega-caps to strengthen the index to keep it elevated. That will be difficult if they are underperforming.
S&P 500 New 52-Week Highs/Lows: New Lows haven't expanded to the degree we would expect, especially on a big decline like we saw today so there does appear to be a little strength out there. We saw only one New High. Interestingly the High-Low Differential is rising strongly which is short-term bullish.
Climax* Analysis: Today there were unanimous, strong climax readings on the four relative indicators, giving us a downside exhaustion climax. Total Volume was on average so we don't see this as a blowout. Nonetheless this could lead to a bounce, but, in any event, we do not think that the decline is over.
*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) reversed. The STO-V declined into negative territory as well. Participation is very thin and we lost more of it today. A large number of rising PMOs flipped to negative today.
Intermediate-Term Market Indicators: The intermediate-term market trend is DOWN and the condition is NEUTRAL.
Also reversing lower were the ITBM and ITVM. They remain in negative territory and are not oversold. %PMO Xover BUY Signals topped today.
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 really being cut down by the decline and it leaves few stocks to get the market to turn around. Participation tells us that most stocks are in corrections or bear markets. The Silver Cross Index topped below its signal line today. The Golden Cross Index continue to pick up speed to the downside. Since both the Silver Cross Index and Golden Cross Index are below their signal lines, 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: There are a few indications that we might see a bounce soon. We didn't see a large number of New Lows, the High-Low Differential is rising and we got a downside exhaustion climax. The 10-minute PMO and late day rally are also promising. However, the bigger picture is a bear market with key indicators (PMO, STOs and ITBM/ITVM) turning down today, we don't think the decline is over yet. Participation is extremely weak. Let's look for a continuation of today's late day rally tomorrow, but we don't think it will get legs and be the end of the decline. More likely it will be a welcome pause in the current bear market environment.
Erin is 10% long, 0% short. (This is intended as information, not a recommendation.)
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CALENDAR
BITCOIN
This looks like the beginning of a decent rally for Bitcoin. It has finally exited its declining trend and had a powerful upside move today taking it out of the consolidation/drift it had been experiencing. That drift out of the declining trend didn't impress us. This rally does.
BITCOIN ETFs
INTEREST RATES
Yields appear ready to move higher again even though we would expect a flight into treasuries given the market's decline. The rising trends do look encouraging for yields to move higher 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 haven't annotated it, but we do see a bull flag out of the April low. Today's rally confirmed the pattern and suggests $TNX is headed much higher from here. The PMO just hit the zero line so we do see some strength in today's move with Stochastics headed higher as well.
BONDS (TLT)
IT Trend Model: SELL as of 4/14/2025
LT Trend Model: SELL as of 12/13/2024
TLT Daily Chart: Bonds sailed lower as yields made their way higher. The PMO is falling below the zero line and Stochastics have topped in negative territory. We would look for the January low to be tested soon. That's a pretty strong rising trend on the 20-year yield.
DOLLAR (UUP)
IT Trend Model: NEUTRAL as of 3/5/2025
LT Trend Model: BUY as of 5/25/2023
UUP Daily Chart: The decline in the Dollar is accelerating lower likely on tariffs so we could see it fall even further from here. The indicators are incredibly negative right now. The best we can say is that the RSI is oversold so it is due for some kind of rally, but oversold conditions can persist so we wouldn't count on it for an upside reversal in price.
It appears as though we will get a test of the 2024 low which isn't that far away. That might be a good area to look for some kind of a bounce given the RSI is oversold.
GOLD
IT Trend Model: BUY as of 1/10/2025
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: We were asked in today's trading room if it is too late to get into Gold. If you're not in, you may want to reconsider. However, the RSI is overbought and the rally is getting vertical so you may have to endure some sort of corrective move. It's hard to imagine it will be destructive given the demise of the Dollar. Basically, you may just have to hold your nose and get in as we do think long-term it will continue to see gains.
The PMO and Stochastics are very bullish and we can see that Gold is really outperforming the weak Dollar. Discounts are high enough to not look for a downside reversal. Interestingly discounts are somewhat elevated implying that investors are still bearish on Gold. Some bearish sentiment is good, if it gets really bullish that would be when we'd look for a more pronounced decline. For now, it looks good.
GOLD MINERS (GDX) Daily Chart: Gold was up over 3% today and Gold Miners were up only 1.45% which isn't how it usually works. GDX should outperform Gold and it's not. This could mean that the Gold Miners are ready to cool. The RSI is overbought so this doesn't make sense. However, if Gold doesn't calm down, GDX should continue to make its way higher. Right now it is too overbought and Stochastics have topped. We are looking for a pause given its underperformance today.
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 Oil is still in a nice rising trend. The PMO has turned up and Stochastics are rising. The problem is it is right up against a strong resistance zone. If it's going to fail, this is the place to look for it. Given the PMO is still very negative, we would be prepared for this resistance zone to hold firm a bit longer.
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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