DecisionPoint July 13, 2018 at 05:33 PM
On Friday the Long-Term Trend Model (LTTM) for long bonds (TLT) generated a long-term BUY signal. How that happens is that the 50EMA crosses up through the 200EMA, an event more commonly known as the "Golden Cross," because big money is sure to follow (just kidding). When we say long-term, we mean months to years, but in the broader picture TLT appears to be moving sideways -- the LTTM SELL signal we just closed only lasted about five months, and with interest rates on the rise, the upside for bonds would seem to be limited. Remember, the new BUY signal does not call for immediate buying Read More
DecisionPoint July 12, 2018 at 07:11 PM
The NDX killed it today with a 1.69% move higher and logging a new all-time high. The other major Scoreboard indexes managed good numbers, but none above 1% or logging all-time highs. At issue with all of the Scoreboard indexes are extremely overbought short-term indicators. These conditions need to be relieved and this rally pop did nothing to help that cause. The good news is that overbought conditions in a bull market can be eased through consolidation. Additionally, oscillators must oscillate; so, even if we continue higher, these indicators could eventually pullback in mean reversion Read More
DecisionPoint July 11, 2018 at 05:45 PM
I mentioned in yesterday's blog that I was expecting the PMO BUY signals to come in on the Dow and NDX. Well, NDX missed the positive crossover by less than a tenth of a point, but I suspect it'll come in tomorrow barring a particularly bad day of selling. The Swenlin Trading Oscillators (STOs) remain extremely overbought, but appear to be topping. I'm expecting some sideways consolidation or perhaps a pullback. Looking at the Dow chart, we can see that the BUY signal did trigger, but the margin is very thin between the PMO and its signal line. Should we Read More
DecisionPoint July 10, 2018 at 08:07 PM
We've had a few signal changes arrive the past few trading days that you should be aware of. While these new green arrows look promising, the DecisionPoint Swenlin Trading Oscillators (STOs) suggest we may experience some short-term weakness before pushing past overhead resistance at June price tops. The NDX and Dow pulled back quite a bit and therefore are the slowest to recapture short-term PMO BUY signals. However, expect a DP Bulletin soon announcing those signals. The two strongest charts are the SPX and OEX as both have managed Read More
DecisionPoint July 06, 2018 at 06:14 PM
Wedges are a favorite of mine because they are so reliable. For example, there is a high probability that rising wedge formations will resolve downward, so it is usually best to wait for this resolution and the aftermath before going long. Two weeks ago SPY broke down from a rising wedge formation, and from there it moved sideways for almost two weeks. This could have been the prelude for a more serious decline, but on Friday SPY broke out of the two-week trading range, causing the daily PMO to turn up, which is a very short-term BUY signal. I say very short-term, because, as you can see Read More
DecisionPoint July 05, 2018 at 07:15 PM
Although we haven't quite seen any changes on the DP Scoreboards in the "momentum" category, detailed analysis of the PMO in all three timeframes shows signs that components of these indexes are gaining positive momentum. The PMO Analysis charts below are in the DecisionPoint Market Indicator ChartPack. It's free to download for Extra members and above. On these charts, the pane below the PMO, is the short-term component. This tells us the percentage of SPX stocks that have the PMO rising. It hit oversold territory around 25% and is now turning back up, already to nearly 50%. The Read More
DecisionPoint June 29, 2018 at 06:52 PM
Monthly charts were finalized on Friday, so we can get an up-to-date assessment of the very long-term. On the SPY monthly chart below, note that the cyclical bull market up trend has taken price on a very wide departure from the secular bull market rising trend line. The monthly PMO topped earlier this year, creating a negative divergence against price, and this could be a precursor to more of a correction than we have already experienced. While a further correction is not inevitable, it could be accomplished by price simply moving sideways until it gets back to the secular trend line, as Read More
DecisionPoint June 27, 2018 at 07:29 PM
Another day of decline after a head fake at the open when prices gapped up and rallied. The Nasdaq and Russell 2000 never caught a break as they began their decline right out of the gate. These two indexes have shown great relative strength, but are now taking it on the chin. Remember when the Dow was leader of the pack? Well apparently it still is as more Scoreboards lose BUY signals. Looking at the other three indexes, ITTM Neutral signals are not out of the question. The IT Trend Model Neutral signal was activated when the 20-EMA Read More
DecisionPoint June 26, 2018 at 07:21 PM
Today and yesterday saw four new signal changes on the DecisionPoint Scoreboards. The NDX has now joined in on short-term weakness in price trend and condition. Our short-term market indicators are starting to get oversold, but they continue in their downward trend. I came into this week expecting the SPX to close lower and I stand by it. Today we got a nice bounce, but it seems reactionary, not foretelling. These signal changes suggest there might be more decline ahead. But how low could they go? The Swenlin Trading Oscillators have been Read More
DecisionPoint June 22, 2018 at 06:33 PM
The market has been turned back from the horizontal resistance drawn across the March top, but it has managed to stay above the support drawn across the May tops. However, there is still the mechanism of the bearish rising wedge pattern, which is reinforced by an OBV negative divergence, and the PMO SELL signal. This setup is not immutable, but, as it stands right now, the evidence is saying to look for more downside. Let's see how that might get. The DecisionPoint Weekly Wrap presents a succinct end-of-week assessment of the trend and condition Read More
