DecisionPoint

April 2015

DecisionPoint

Bonds (TLT) Generate Trend Model Neutral Signal on Breakaway Gap

by Erin Swenlin

Yesterday an Intermediate-Term Trend Model Neutral signal was generated on TLT, the ETF we use to calculate our official Trend Model signal. This combined with a breakdown from the congestion zone and a what appears to be a breakaway gap tells us there is likely more downside to come for bonds. Let's look at the six-month bar chart for TLT. We can see that the Trend Model Neutral signal generated because the 20-EMA crossed below the 50-EMA (seen best in the thumbnail). It was a Neutral signal and not a SELL signal because technically we consider TLT to be a Read More 

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DP Market Update: Tiny Breakout from Bullish Ascending Triangle - April 28, 2015

by Erin Swenlin

It was a volatile morning but price consolidated in the afternoon, resting as investors contemplate upcoming news from the Fed on Wednesday. Yesterday, price disintegrated. It appeared this morning as if the market planned on continuing into a strong correction; however, upon reaching support near Wednesday's low, it turned back around and spent the day forming a bullish flag formation. If it executes, the minimum upside target would be around 213.50.  The purpose of the DecisionPoint Daily Update is to quickly review Read More 

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SPY Monthly PMO: Long-Term SELL Signal Lurking

by Carl Swenlin

For most of this month we have been watching the monthly PMO (Price Momentum Oscillator) because it topped in December, and in April it crossed below its trigger line, potentially generating a long-term SELL signal. This hasn't happened for over seven years, so it really is kind of a big deal. However, we must remember that monthly charts (and any signals they generate) are not final until the end of the month, which in this case will be Thursday, April 30.  Before we draw any conclusions about this, let's take a look at a very long-term chart of the S&P 500 Index and its monthly Read More 

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What's the Difference Between an Ascending Wedge and an Ascending Triangle?

by Erin Swenlin

I recently received a question from one of the attendees of yesterday's webinar (recording available here). I was reviewing the charts in our DP Chart Gallery as well as symbol requests and often referred to ascending triangle patterns and ascending wedge patterns. Here is the question: "Erin.. Paradoxical situation: I can't count the times over the years that I have seen first, Carl, and now you, identify a "rising wedge" pattern and then say the odds are that the expected outcome is a break DOWN from this pattern. Tonight, you show a "bullish rising Read More 

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DP Market Update: Trend Model BUY Signal on USO - April 21, 2015

by Erin Swenlin

The market has been in a continuation pattern as price consolidates. Of possible interest is the ultra-short-term declining trend channel, I'm curious how it will resolve. The purpose of the DecisionPoint Daily Update is to quickly review the day's action, internal condition, and Trend Model status of the broad market (S&P 500), the nine SPDR Sectors, the U.S. Dollar, Gold, Crude Oil, and Bonds. To ensure that using this daily reference will be quick and painless, we are as brief as possible, and often we let a chart speak for itself. SIGNALS: Read More 

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U.S. Dollar: Evidence of Important Top

by Carl Swenlin

The U.S. Dollar has been chopping around its recent high for over a month, and we think it is probably topping out after a major advance. While the current EMA structure is still strongly bullish (50EMA above the 200EMA, and 20EMA above the 50EMA), we can see some technical deterioration in our indicators. (We use UUP as a surrogate for the dollar.) (1) Price has broken to the right of the parabolic arc that supported the recent advance, giving an initial warning. It is primarily a sideways move and could be interpreted as a consolidation, but some other things undermine that idea Read More 

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Now is it a Triple-Top?

by Erin Swenlin

Carl always told me that usually when bloggers state a question as the title of their blog, they never end up answering it. I plan on answering the question. We know that technical analysis is not a science, it is an art. Meaning that two people can look at the same chart and many times see different things. I'll show you what I'm seeing and what the DecisionPoint indicators are saying.  First let's look at the daily chart for the SPY. There are two major chart pattern possibilities here in my opinion. First, is a bullish double (triple)-bottom represented by the purple arrows. The Read More 

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DP Market Update: Triple-Top? Deja Vu All Over Again - April 13, 2015

by Erin Swenlin

Prices continued to fall, carrying yesterday's decline slightly further. However, losses were recouped early as price bounced right off of the slow moving EMA. This price movement formed an ultra-short-term bull flag that if executed would bring price above yesterday's high. The purpose of the DecisionPoint Daily Update is to quickly review the day's action, internal condition, and Trend Model status of the broad market (S&P 500), the nine SPDR Sectors, the U.S. Dollar, Gold, Crude Oil, and Bonds. To ensure that using this daily reference will be quick and Read More 

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$GOLD Head and Shoulders? -- Earnings Improvement? -- Last SELL Signal? -- Flat PMO?

by Carl Swenlin

During our last webinar we received questions and comments to which we were unable to respond due to time constraints, so we will take this opportunity to address some of them. Q: On $GOLD you see a double bottom.  I see a potential head and shoulders top, implying further declines. A: In the ChartSchool article on head and shoulders patterns there is the following emphasis: It is important to remember that [the head and shoulders] occurs after an uptrend and usually marks a major trend reversal when complete. Here is the example chart given. Note the advance that precedes the Read More 

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UUP Executes Short-Term Double-Bottom

by Erin Swenlin

I've been watching the dollar, UUP (PowerShares US Dollar Index ETF) in particular. A short-term double-bottom has been forming and today price penetrated the neckline, executing this bullish chart pattern.  Looking at a six-month daily chart the pattern is easy to see. When a double-bottom pattern executes, the minimum upside target is the length of the pattern added to the neckline. Using the percentage tool in the charting workbench, I annotated the length of the pattern and then added it to the neckline. This puts the minimum upside target at about 26.63. Notice also that the Read More 

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DP Market Update: Double-Top Aborted - April 7, 2015

by Erin Swenlin

The market was mostly in a holding pattern today until the final 20 minutes when price broke down to close in the red. Ultra-short-term support is lurking, while a second area of support is waiting at the March 26th low. The purpose of the DecisionPoint Daily Update is to quickly review the day's action, internal condition, and Trend Model status of the broad market (S&P 500), the nine SPDR Sectors, the U.S. Dollar, Gold, Crude Oil, and Bonds. To ensure that using this daily reference will be quick and painless, we are as brief as possible, and often we let a chart speak for Read More 

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2014 Q4 Earnings Finalized

by Carl Swenlin

Standard & Poors finalized 2014 Q4 earnings on Thursday, and I like to review the numbers and the earnings chart. (Note that earnings are reported during the three months following the end of each quarter.) First we have an excerpt from the DP Overview of Market Fundamentals Report which we publish daily. Based upon the estimates we can see that there is some improvement expected in earnings by the end of this year. *************************** S&P 500 FUNDAMENTALS **************************** The real P/E for the S&P 500 is based on "as reported" or GAAP earnings Read More 

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Is that your Final Answer? A Monthly PMO Negative Crossover?

by Erin Swenlin

Since about mid-March I've gotten quite a few questions from subscribers asking me to look at the $SPX monthly chart because it shows a monthly Price Momentum Oscillator (PMO) negative crossover. We haven't seen a monthly PMO crossover since the positive crossover occurred at the end of 2009, signaling the beginning of a bull market. So does this negative monthly PMO signify the beginning of a new bear market? The answer is "No". But wait! Looking at the last two negative monthly PMO crossovers, they signaled the beginning of a new bear market. That is true. And, had Read More