Today's Scoreboard shows a few changes, but I'm afraid these new BUY signals are arriving late. The NDX finally caught up with short-term BUY signals, and today we saw the SPX click a new IT Trend Model BUY signal when the 20-EMA crossed above the 50-EMA.
The DecisionPoint Alert presents a mid-week assessment of the trend and condition of the stock market (S&P 500), the U.S. Dollar, Gold, Crude Oil and Bonds.
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SECTORS
Each S&P 500 Index component stock is assigned to one, and only one, of eleven major sectors. This is a snapshot of the Intermediate-Term and Long-Term Trend Model signal status for those sectors.
STOCKS
IT Trend Model: BUY as of 6/11/2019
LT Trend Model: BUY (SPY) as of 2/26/2019
SPY Daily Chart: I'm beginning to see what could end up being a more complex or loose head-and-shoulders forming. Carl has pointed out the possibility of a bearish double-top using the October top and recent all-time highs. Interestingly, and likely late, an Intermediate-Term BUY signal triggered when the 20-EMA crossed above the 50-EMA. I'm looking for a pullback toward the mid-May low.
Climactic Market Indicators: The buying exhaustion seems complete with the declining breadth numbers. The VIX isn't giving us much as it remains near the middle of the Bollinger Bands.
Short-Term Market Indicators: Overbought and turning down. Short-term bearish.
Intermediate-Term Market Indicators: These are continuing to rise after positive crossovers. The ITVM isn't in positive territory, but these indicators aren't generally quick to react to a price reversal in the shorter-term.
Conclusion: I feel like I've been calling for a buying exhaustion for days, but it is finally here! I'm looking for lower prices in spite of the IT Trend Model BUY signal.
DOLLAR (UUP)
IT Trend Model: BUY as of 2/7/2019
LT Trend Model: BUY as of 5/25/2018
UUP Daily Chart: The Dollar managed to hold onto the rising bottoms trend line and we are seeing a deceleration of the PMO. However, the PMO is still moving lower. I'm looking for a breakdown of this rising trend.
GOLD
IT Trend Model: Neutral as of 4/16/2019
LT Trend Model: BUY as of 1/8/2019
GOLD Daily Chart: Gold took a pause and has now formed a possible bull flag. Discounts remain fairly high. The PMO is still rising and isn't quite overbought yet. I would look for a bit more consolidation or blowoff of the previous rally. The flag does give me more confidence in a breakout finally above 1350.
CRUDE OIL (USO)
IT Trend Model: BUY as of 2/19/2019
LT Trend Model: SELL as of 11/23/2018
USO Daily Chart: Price has reversed and, so far, is holding support. PMO is falling and the SCTR is in the tank (no pun intended). I wouldn't hold out hope for a rebound here.
BONDS (TLT)
IT Trend Model: BUY as of 12/6/2018
LT Trend Model: BUY as of 1/2/2019
TLT Daily Chart: Like Gold, I see a flag forming. Here's the caveat: it also looks like a very short-term descending triangle, which would imply a breakdown below 130. The PMO is topping in overbought territory. It might be time for the bond craze to cool off, as a pullback or correction could follow.
Technical Analysis is a windsock, not a crystal ball.
Happy Charting!
- Erin
Email: erinh@stockcharts.com
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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.
Helpful DecisionPoint Links:
DecisionPoint Shared ChartList and DecisionPoint Chart Gallery
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
