S&P 100 Flips Back to IT PMO SELL Signal - DP Scoreboard Weekly Charts

On the last trading day of the week, the DecisionPoint IT Price Momentum Oscillator (PMO) signals go "final". Today saw a new weekly PMO SELL signal on the OEX. Some may recall that just last Friday the OEX triggered a weekly PMO BUY signal. Don't let the very "green" Scoreboards fool you, there is deterioration in momentum on nearly all daily and weekly charts for these four indexes. To see the daily, weekly and monthly annotated charts for these four indexes, you can go to the DecisionPoint LIVE shared ChartList here or use the link at the top of the blog.



I'd like to say that this particular PMO SELL signal will "stick" on the OEX, but as you can see in the thumbnail, the weekly PMO has been suffering quite a bit of whipsaw. The margin between the PMO and signal line is thin. If the OEX has a terrific week, this signal will whipsaw once again. Historically, flap whipsaw isn't the norm. Typically, the PMO will flatten when acceleration steadies; meaning, you could still see the PMO stay flat even in the midst of a rally. You can see exactly this right now. We've been looking at a rally over the past few months, but the PMO is flat. It's about the acceleration, not necessarily the direction of price. The OEX has been rising at a steady pace with little deceleration or acceleration... that equals a flat PMO. Similarly, a steady decline with little acceleration or deceleration of the trend will also flatten the PMO.

The NDX has been hit especially hard this month so it isn't a surprise to see a declining PMO. We saw a similar dip back in March/April, but bulls righted the ship before a SELL signal. The NDX does have time to improve and avoid a PMO SELL signal. In any case, the PMO is overbought so we should think caution.

The Dow continues to outperform the others as far as the weekly PMO is concerned. It was falling last week, but it is now rising and seems interested in a new PMO BUY signal. As with the NDX, we are looking at a very overbought PMO so I have to wonder how much higher prices can go before it finally unwinds.

The SPX's PMO, like the OEX's, is also stuck in flat whipsaw mode. The PMO has now topped this week. While the margin is thin between the PMO and its signal line, there is probably enough space to avoid a SELL signal next week (barring a serious pullback or correction). As I mention to my DecisionPoint faithful, the SPX can maintain a rising trend channel even with a corrective move to 2310. It appears that it is ready to test the 17-week EMA at a minimum given the downturn in the PMO.


Helpful DecisionPoint Links:

DecisionPoint Shared ChartList and DecisionPoint Chart Gallery

Trend Models

Price Momentum Oscillator (PMO)

On Balance Volume

Swenlin Trading Oscillators (STO-B and STO-V)

ITBM and ITVM

SCTR Ranking


Technical Analysis is a windsock, not a crystal ball.

Happy Charting!
- Erin


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