DecisionPoint

DP Alert: SPY Bounces Off Rising Bottoms Support - IT Indicators Reaching Near-Term Oversold Territory

After a wonderful wedding and honeymoon, I have finally returned! It took some time to review and update my annotations and I see that we've had quite a few signal changes while I was gone. The market has been meandering lower this month since I left and consequently the DP indicators have seen some bearish changes. Let's get started with a fresh review.

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DP Weekly Wrap: Failed Retest

Last week I wrote: "I would like for the correction to continue for a while, but honestly, we may have just hit bottom." Well, the market did make a bottom, but it was just for a short bounce prior to this week's failed retest of last week's low. It was not the enduring intermediate-term bottom I had imagined, and it may be a while before we see that. As I watched decelerating price movement on Tuesday and Wednesday, it became apparent that a retest was more likely than an upside breakout. Similar to last week, this Friday was a day of rest to digest Thursday's collapse and to process options expiration.

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DP Bulletin: S&P 100 and Nasdaq 100 ST Trend Models Switch Back to NEUTRAL

Today both the S&P 100 ($OEX) and Nasdaq 100 ($NDX) Indexes switched from Short-Term Trend Model BUY signals to NEUTRAL, when their 5EMAs crossed back down through their 20EMAs. With only two days since the last signal changes, this is more annoying whipsaw, but I think these signals will hold for a while. I'll be making a full assessment in tomorrow's DP Weekly Wrap.

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Erin's Hits: Another PMO Scan for MarketWatchers

** While Erin is away, we will be posting some of her "greatest hits" educational blogs. Some information may be dated **

During the MarketWatchers LIVE program (airs 12:00p - 1:30p EST M/W/F), Tom Bowley and I have started a segment called "Anatomy of a Trade" where we go through our process for identifying investment prospects. I use Price Momentum Oscillator (PMO) scans to start every mining exercise. One of the scans I have been using regularly identifies stocks that have PMOs rising for three days and have a bullish IT and LT Trend Model set-up (meaning the 20-EMA > 50-EMA > 200-EMA). I did adjust this scan slightly (for the better I think) from the one I ran today by screening for only US stocks that are trading above $10. Today's favorite (you can see it in the MarketWatchers LIVE blog for today) was UMC, but it trades in the $1 - $2 range and really isn't for beginning traders or those with a low risk tolerance due to its volatility.

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Erin's Hits: Bear Market PMO Scan Screens a Few "Dogs"

** While Erin is away, we will be posting some of her "greatest hits" educational blogs. Some information may be dated **

With the market overbought and ready for at least a pullback, I decided to run one of my bear market Price Momentum Oscillator (PMO) scans to see if I could find a few "dogs" out there. The scan produced a handful for review but the two below stood out to me. They are in the Healthcare/Pharm industries which is the last sector on the DecisionPoint Market/Sector Summary with Neutral signals.

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DP Weekly Wrap: NoKo Stumble (Supposedly)

In October 1962 I was a 21-year-old B-47 aircraft mechanic in the Strategic Air Command. One morning that month I reported for duty only to find the aircraft ramp covered with bombers loaded with nuclear weapons. Welcome to the Cuban Missile Crisis. It was pretty tense for a few weeks, and we got to DEFCON 2, just one click below the highest level of readiness, DEFCON 1. In hindsight I don't think most people really believed that the 'balloon had actually gone up', and as evidence of that we can see that the stock market took it all pretty well. There was a decline in October 1962, but it was the second bottom of a double bottom that ended the 1961-62 Bear Market. To compare that time with today's trials seems almost ludicrous -- the Cuban Missile Crisis was on a huge scale by comparison -- however, a significant difference is that back then none of the leaders involved on either side could be described as maniacal. The current situation is more unstable, in my opinion, even though we're still at DEFCON 5, because Kin Jong Un is like a comic book villain come to life.

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DP Bulletin: S&P 100 ($OEX) Generates ST PMO SELL Signal; S&P 500 Generates ST Trend Model NEUTRAL Signal

Today the S&P 100 Index ($OEX) daily PMO crossed down through its signal line and generated a short-term PMO SELL signal. Of the four major indexes on our score board, three have switched to short-term PMO SELL signals. Additionally, the S&P 500 Index 5EMA crossed down through the 20EMA, generating a Short-Term Trend Model NEUTRAL signal.

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