Today the Technology Sector (XLK) 50-day EMA crossed up through the 200-day EMA (Golden Cross), generating an LT Trend Model BUY Signal. The problem here is that this bullish crossover took a lot of work, and now XLK is intermediate-term overbought. It is probably a good idea the wait for that condition to be corrected before considering a buy. We also note that participation is sliding lower not improving.
We do have a bullish "V" Bottom on the weekly chart. These would imply that you'll see a breakout above the left side of the "V" or a move to all-time highs. The weekly PMO is on a new Crossover BUY Signal that should go final tomorrow. Price is definitely overbought on the weekly chart.
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: SELL as of 4/16/2025
SPY 10-Minute Chart: Price is basically consolidating sideways and making very little progress toward all-time highs. The 10-minute PMO is rising again, so are Stochastics which would imply we'll see a gain on the open.
SPY Daily Chart: Price did form a bearish filled black candlestick. Basically price closed higher than yesterday, but finished below today's open. It was a rather weak rally. The PMO is still rising and the RSI is positive and not yet overbought. Total Volume was on par with its moving average.
The VIX held above its moving average on the inverted scale and Stochastics are now above 80 so there still is some internal strength visible.
S&P 500 New 52-Week Highs/Lows: New Highs slipped on today's rally which we see as a negative divergence. Yet there still are no New Lows. The High-Low Differential is still rising.
Climax* Analysis: There was only one climax reading today, so we do not have a climax day.
*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 SOMEWHAT OVERSOLD.
Swenlin Trading Oscillators (STOs) are having trouble making up their minds which way to go. Today they turned back up in oversold territory which is short-term bullish. Participation did inch a bit higher. We didn't see much improvement to rising momentum. %PMOs Rising is below our bullish 50% threshold.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is OVERBOUGHT.
The ITBM and ITVM continued their march downward out of overbought territory. They do have us concerned about the status of the intermediate term. We continued to lose more PMO BUY Signals.
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 BULLISH in the intermediate and long terms.
Participation readings did move up today, but barely. Today's rally didn't do much to improve them. They are still reading above our bullish 50% threshold, but they are trending down. The Silver Cross Index continues to decline toward its signal line. The Golden Cross Index is still on the rise. That condition is likely to continue given we have far more stocks above their 50/200-day EMAs versus Golden Crosses. Both the Silver Cross Index and the Golden Cross Index are above their signal lines so the IT and LT Biases are BULLISH.
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: Yesterday's unconfirmed downside initiation climax did not fulfill which is bullish. However, price is basically consolidating sideways now and is acting toppy. There were some signs of life today as the PMO and Stochastics still look bullish and the STOs turned back up. Yet we had a negative divergence with New Highs and the ITBM/ITVM continue to make their way lower. The bearish filled black candlestick does imply we'll see a decline tomorrow. With so many mixed signals and participation holding above our bullish 50% threshold, we are going to look for consolidation as the market pauses the strong rally we saw out of the May lows. It is probably a good idea to keep your stops in play while the market decides which way it wants to go.
Erin is 65% long, 0% short. (This is intended as information, not a recommendation.)
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CALENDAR
BITCOIN
Bitcoin did as expected and broke down from the bearish rising wedge. The PMO looks very bearish and Stochastics don't look much better. It probably has more downside to absorb.
BITCOIN ETFs
INTEREST RATES
Yields are back to declining. They have tested their 2025 highs as far as long-term yields go so it may be time for them to retreat a bit more. The Bond market seems to be picking up again.
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 formed a bearish engulfing candlestick today that implies we'll see it drop further tomorrow. The PMO is in decline and could see a Crossover SELL Signal very soon. Stochastics are tumbling lower.
BONDS (TLT)
IT Trend Model: SELL as of 4/14/2025
LT Trend Model: SELL as of 12/13/2024
TLT Daily Chart: Yields are beginning to retreat and that is offering Bond funds the opportunity to rally. We didn't think much of the breakout from the declining trend channel, but with today's strong rally, we think they are ready to rally further. The PMO has turned up and is nearing a Crossover BUY Signal. Stochastics just moved into positive territory. We should see some follow-through here.
This is a strong area of support so we should get more follow-through on this bounce.
DOLLAR (UUP)
IT Trend Model: NEUTRAL as of 3/5/2025
LT Trend Model: SELL as of 4/25/2025
UUP Daily Chart: The past week has shown UUP in a consolidation range. We think this could continue as our indicators are mixed right now. The RSI is positive and Stochastics are negative. The PMO is flat. Definitely a recipe for consolidation.
GOLD
IT Trend Model: BUY as of 1/10/2025
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Indicators on Gold are mixed, just as with the Dollar. This could mean sideways action for both Gold and the Dollar. The flag is getting extended. Price doesn't seem interested in testing the bottom of the flag, but it still could. Overall we like Gold better than the Dollar, but both seem in holding patterns.
We'd like to see the PMO turn back up, that would tell us to look for a breakout. Unfortunately it isn't. Look for Gold to consolidate along with the Dollar.
GOLD MINERS (GDX) Daily Chart: Gold was up but Gold Miners were down. That is unusual, but we still see more strength on GDX than on Gold, mainly because the PMO just gave us a Crossover BUY Signal. Participation is still incredibly strong across the board. Stochastics are above 80 and the RSI is not overbought. We expect more good things from Gold Miners.
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 has failed to execute the bullish double bottom, but now we do see a possible bull flag (it's very visible in the thumbnail). However, we aren't looking for a breakout. The PMO may be rising, but it is below zero. Stochastics are the real problem. They suggest we'll see more downside.
Yesterday's comments still apply:
"The bull flag is pretty obvious on the 1-year daily chart. It certainly could prevail, but the PMO has been rising awhile and we haven't seen any positive price movement out of it."
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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