Today the Real Estate Sector (XLRE) 50-day EMA crossed down through the 200-day EMA (Death Cross), generating an IT Trend Model SELL Signal. Price traded above key moving averages but retreated by day's end. This does look like a "V" Bottom which is a bullish pattern that would call for a breakout above 42. The RSI is now positive and the PMO is rising on a Crossover BUY Signal. This looks pretty good but if the bear market gets going again we would expect price to move lower. Participation is healthy right now and Stochastics are rising. We do note that relative strength is beginning to wane.
We see an intermediate-term declining trend channel that does imply we'll see lower prices eventually. The weekly PMO tells us this rally may be limited.
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 opened with a bang but closed with a whimper. A declining trend was established. The 10-minute PMO is still headed lower. Stochastics are encouraging for tomorrow, but...
SPY Daily Chart: ...today saw a bearish filled black candlestick. These one-day patterns do suggest we'll see some decline tomorrow. On the bright side, we have a new PMO Crossover BUY Signal.
Another positive would be the VIX closing above its moving average on the inverted scale. Stochastics are also rising so we do detect some internal strength available for this rally.
S&P 500 New 52-Week Highs/Lows: Not much in the way of New Highs or New Lows which may suggest we are at a period of equilibrium. The High-Low Differential looks very bullish.
Climax* Analysis: Today there were two climax readings on the four relative indicators, giving us a weak upside exhaustion climax. Total Volume was 1195 of the one-year daily average, so this wasn't a blowoff.
*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) did turn up today, it was worrisome yesterday that even with the rally they continued lower. Participation moved above our bullish 50% threshold and we have a high number of rising PMOs. %PMOs Rising is beginning to get overbought though.
Intermediate-Term Market Indicators: The intermediate-term market trend is DOWN and the condition is NEUTRAL.
The ITBM and ITVM both moved higher again today which is confirming the rising STOs. %PMO Xover BUY Signals crossed above our 50% bullish threshold 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.
We're seeing more stocks get above their 20-day EMAs, but the increase is still muted on %Stocks > 50/200EMAs. Still, we do have new rising trends appearing on participation readings, this could be confirming the rising price bottoms. The Silver Cross Index turned back up today and should keep rising since there are so many more stocks above 20/50-day EMAs versus those with Silver Crosses. The Golden Cross Index is still in decline and will stay that way until more stocks are above the 50/200-day EMAs versus Golden Crosses. 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: In the very short term there are problems. We have today's filled black candlestick formed by lack of enthusiasm into the close. There is also a mild upside exhaustion climax to contend with. This suggests to us we will likely see some sort of decline tomorrow. The rally itself may not be finished at this point given STOs and the ITBM/ITVM are rising. The High-Low Differential also looks very bullish. We don't think the bear market is over, but it does seem we will get more rally here. Tomorrow just may be a bump in the road if we get the decline the filled black candlestick and upside exhaustion climax are calling for. We have a jobs report coming tomorrow but we've found that economic reports are taking a back seat to the White House.
Erin is 10% long, 0% short. (This is intended as information, not a recommendation.)
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CALENDAR
BITCOIN
Yesterday's comments still apply:
"Bitcoin is off to the races again. This is an excellent breakout from the intermediate-term declining trend. The PMO is now in positive territory and the RSI is not yet overbought so we would look for more upside."
BITCOIN ETFs
INTEREST RATES
Yields were mixed overall today with long-term rates falling and short-term rates rising. Bond buying seems somewhat muted right now and that will keep yields rising.
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 came off its lows for the day and finished nearly unchanged. The PMO is still rising and the RSI is positive. Stochastics are also rising so for now we expect $TNX to advance.
BONDS (TLT)
IT Trend Model: SELL as of 4/14/2025
LT Trend Model: SELL as of 12/13/2024
TLT Daily Chart: We saw an even larger bearish filled black candlestick today. It tells us to expect a decline. The PMO is in agreement. Stochastics are trying to turn up but remain in negative territory so we do expect an upcoming decline.
DOLLAR (UUP)
IT Trend Model: NEUTRAL as of 3/5/2025
LT Trend Model: BUY as of 5/25/2023
UUP Daily Chart: The Dollar rallied again and made its way out of the declining trend. We still don't fully trust it, but at least the PMO is trying to turn back up. Stochastics have turned up. We think we will see a bit more rally here.
Price is rebounding not far off support so it is possible it will have a more meaningful rally.
GOLD
IT Trend Model: BUY as of 1/10/2025
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Gold was overdue for a pullback and today we saw follow-through on yesterday's decline. This has brought the RSI out of overbought territory. The PMO did top today so it wouldn't surprise us if we saw more decline ahead. We like Gold in the long term for certain, it just seems it is time for it to unwind a bit more.
The Gold Volatility Index ($GVZ) is oscillating below its moving average on the inverted scale so that does indicate some weakness. We also note that Gold is beginning to see some underperformance against the Dollar. Stochastics have also topped.
GOLD MINERS (GDX) Daily Chart: Gold Miners have tipped over and we suspect we will get more decline, probably to 45. The PMO has topped and participation is slowly leaking out of the group. We would look for more weakness.
CRUDE OIL (USO)
IT Trend Model: NEUTRAL as of 2/27/2025
LT Trend Model: SELL as of 3/18/2025
USO Daily Chart: We had a feeling that Crude would run into problems at the resistance zone. We would look for the rally to fail. The Crude Volatility Index ($OVX) is oscillating below its moving average on the inverted scale that could indicate internal weakness. The PMO and Stochastics look bullish, but neither is rocketing higher. This strikes us as diminishing weakness not necessarily new strength.
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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