Today the Russell 2000 ETF (IWM) 20-day EMA crossed up through the 50-day EMA (Silver Cross) generating an IT Trend Model BUY Signal. Price has formed an island and that does leave it vulnerable to a bearish reverse island formation. Still, with participation as strong as it is and both the Silver and Golden Cross Indexes rising, we should see upside versus a gap down.
We have a bullish "V" Bottom pattern on the weekly chart that does imply we'll see upside follow-through. The weekly PMO is rising in confirmation.
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Also today, the Consumer Discretionary Sector ETF (XLY) 50-day EMA crossed up through the 200-day EMA (Golden Cross), generating an LT Trend Model BUY Signal. We have another island formation, but price is angling upward. Participation is at 100% for stocks above their 20-day EMAs. Stochastics are firmly planted above 80 and both the Silver and Golden Cross Indexes are rising above their signal lines. We expect more rally.
Price ultimately bounced off the rising bottoms trendline and support at about 180. The weekly PMO is rising bullishly so we wouldn't be surprised if we get more upside from here.
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: SELL as of 4/16/2025
SPY 10-Minute Chart: Price gapped down on the open and after some choppy trading, did managed to make its way back into positive territory. Stochastics are above 80 and the 10-minute PMO appears ready to reverse higher so the technicals on the 10-minute chart suggest we'll see more upside.
SPY Daily Chart: We've now identified a bearish rising wedge pattern. These patterns are often execute as expected so we should look for a breakdown soon. The RSI is nearly overbought and that also suggests we need price to pull back somewhat.
Internal strength is very visible. The VIX is holding above its moving average on the inverted scale and Stochastics are very bullish above 80, they are reading close to 100. We have a rising trend on relative strength against equal-weight RSP so essentially the mega-caps are steering the ship as usual.
S&P 500 New 52-Week Highs/Lows: New Highs did back off today which isn't a complete surprise given price was in negative territory for much of the day. No New Lows is positive. The High-Low Differential is rising.
Climax* Analysis: There were no climax readings today. Total Volume was very low on today's rally.
*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 OVERBOUGHT.
The Swenlin Trading Oscillators (STOs) have topped in overbought territory which does seem to imply the market is ready to exhale. Participation is still very strong, albeit getting overbought. We have 93% of stocks with rising momentum. That should keep the market away from any deep declines.
Intermediate-Term Market Indicators: The intermediate-term market trend is UP and the condition is OVERBOUGHT.
One concern we have right now is that both the ITBM and ITVM are very overbought right now. They can get further overbought as we've seen in the last few years, but ultimately when they hit this level, we should be very cautious. %PMO Xover BUY Signals is overbought, but rising.
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 of stocks above their 20-day EMA is overbought and %Stocks > 50EMA is also getting overbought. We've seen higher readings and admittedly in a bull market move like we're seeing now, overbought conditions could persist. The Silver Cross Index looks very bullish on its near vertical rise. It is above its signal line so the IT Bias is BULLISH. The Golden Cross Index also looks very bullish but is still reading below our bullish 50% threshold. It is above its signal line so the LT Bias is 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: The rally is clicking but did see some choppy trading today before finishing in positive territory. The rally wasn't accompanied by much volume so not a lot of conviction there. The STOs have topped and we don't want to forget about our recent upside exhaustion climax. The rising wedge is also implying an exhale in the near term. We also have overbought indicators popping up. We think we are likely to hit a bump in the road. It isn't likely to be painful as we still have strong participation and plenty of PMO BUY Signals and rising PMOs. The Bias Table is also very green. There is quite a bit of internal strength right now, but this rally is getting long in the tooth.
Erin is 70% long, 0% short. (This is intended as information, not a recommendation.)
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CALENDAR
BITCOIN
Bitcoin is holding its rising trend and looks due for another upswing. The RSI is not overbought anymore, but just barely so. The PMO has topped, but Stochastics are still very strong. At worst we expect more consolidation, but Bitcoin has a habit of surprising.
BITCOIN ETFs
INTEREST RATES
Yields fell today, but most continue to hold rising trends. For now we expect them to rise 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
We've got a rising trend channel on the daily chart that does suggest $TNX will rise further from here. The PMO is still on the rise. Stochastics don't look encouraging so maybe we will see a dip to test the bottom of this trend channel.
BONDS (TLT)
IT Trend Model: SELL as of 4/14/2025
LT Trend Model: SELL as of 12/13/2024
TLT Daily Chart: Bonds tested support successfully today. It touched down but ultimately closed higher than the open forming a bullish hollow red candlestick. We are still bullish on yields. The indicators are still murky. The RSI is negative and the PMO is still falling. Stochastics are promising. We will look for some consolidation along this support zone. We do think support is very vulnerable.
This wasn't the strongest level of support. The strongest level lies closer to 83.
DOLLAR (UUP)
IT Trend Model: NEUTRAL as of 3/5/2025
LT Trend Model: SELL as of 4/25/2025
UUP Daily Chart: The Dollar hasn't been able to shake off the longer-term declining tops trendline. At this point in the short term, we do have a rising trend. We don't like that the RSI just moved negative and the PMO looks toppy. Stochastics are falling. This does seem to suggest the rising trend is in jeopardy.
Price failed at the 200-day EMA and retreated. For now we will look for the short-term rising trend to hold up.
GOLD
IT Trend Model: BUY as of 1/10/2025
LT Trend Model: BUY as of 10/20/2023
GLD Daily Chart: Gold is holding above a strong support zone, but ultimately it did confirm the bearish double top. The PMO is in decline and the RSI is negative. We still see weakness here, but given it is refusing to lose support, we have to look at the possibility that Gold is ready to reverse. Until indicators start to improve more, we will consider Gold weak.
Price seems to be showing high level consolidation after we got the vertical rally in May. Price has had a habit of reversing higher off the 50-day EMA. Discounts are at extremes, meaning investors are extremely bearish. These extremes are often followed by nice rallies.
GOLD MINERS (GDX) Daily Chart: Gold Miners reversed on today's rally in Gold. Gold may be at an inflection point, but it still seems a little early to dive back into this industry group. Participation is starting to heal, but we're still a bit worried about Gold right now. The PMO is still in decline for now. We are now monitoring a bullish falling wedge.
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 is making another run at overhead resistance. The RSI and PMO are positive and Stochastics are turning up already. Fundamentally with production levels staying high, price should stay beneath resistance. If we do get a breakout, it will confirm the bullish double bottom. For now we think it will continue to struggle beneath resistance.
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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