DecisionPoint

July 2015

DecisionPoint

What's Up with the Dow? Is it Leading or Lagging?

by Erin Swenlin

If you check out the DP Chart Gallery Scoreboards, you'll see that the picture for the Dow Industrials is bearish while the other indexes (SPX, NDX and OEX) are looking much more bullish. The question becomes, are the Dow Industrials lagging or will they lead the market lower? If you've read my recent DecisionPoint Alert articles, you'll know that while the intermediate term is somewhat bullish for the market, the short term is beginning to suggest a buying exhaustion is around the corner. Here's a chart of all of the DecisionPoint Scoreboards. You can see that the Dow is in a completely Read More 

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Thrust and Parry Revisited

by Erin Swenlin

I recently received an email from one our DecisionPoint veterans who followed us in our early years. He asked about the Thrust/Trend Model (T/TM) which we used to employ instead of the Trend Model to determine our timing signals. Before we moved to StockCharts.com, Carl opted out of using the T/TM in favor of the simpler Trend Model. However, if you want to add an extra dimension to straight trend analysis, you'll want to learn about "Thrust".  While considered a fencing term, "thrust" is an excellent allusion to the same-named component in Read More 

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Longer-Term Indicators Continue to Show Internal Erosion

by Carl Swenlin

The price index on the chart below has continued to edge higher, but we can see that pattern is becoming congested. The lower panel shows the 1% EMA of the Advance-Decline Ratio* and its 50EMA. The daily data is pretty volatile, so the 50EMA is easier to interpret. Also, when the 50EMA passes below the zero line, it is considered to be a bear market signal. The major points of interest on this 16-year chart are the three prominent negative divergences, which is where price is trending upward and the indicator is trending downward. The first two (1999-2000 and 2007) were precursors to two Read More 

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Ambarella (AMBA) Resolves Upward After Parabolic Breakdown

by Erin Swenlin

My obsession with this stock has not abated. It was one of the more "fun" stocks I've owned in a long time, so I keep revisiting it. After having ridden the parabolic move higher, I, like many, was wiping my brow and letting out a long exhale of relief when my stop triggered on the day it crashed. Below is a weekly chart that illustrates the parabolic move and the subsequent breakdown. The expectation of a parabolic pattern is a correction that will take you to the basing pattern or area where price had previously been maintaining. Instead of crashing to the base price Read More 

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$SPX Puts New ITTM BUY Signal on DecisionPoint Scoreboard

by Erin Swenlin

It's nice to be back from vacation (if you call driving your daughter from Auburn, AL to California with a trailer attached to a small compact car in three days, a vacation) and see the market begin to make all-time highs again. Today we had a DecisionPoint Scoreboard update on the S&P 500. An Intermediate-Term Trend Model (ITTM) BUY signal was generated. The last two bearish signals are for the Intermediate-Term Price Momentum Oscillator (PMO) and Long-Term PMO signals. These are generated from the weekly and monthly charts respectively. Read More 

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Google Warps Nasdaq 100 and S&P 500 Indexes

by Carl Swenlin

Friday was a big day for Google (GOOG and GOOGL) with both the class "A" and class "C" stock up over +16% on earnings news. Actually, so far July has been a big month with GOOGL and GOOG being up about +30% since the July 7 low.   As to what specific elements of the earnings announcement caused all the excitement, I must plead ignorance and apathy--I don't know and I don't care. What I did find interesting was the effect of this one company on capitalization-weighted market indexes like the Nasdaq 100 Index. The Nasdaq 100 ETF (QQQ) is up Read More 

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PMO Time Frame Relationships?

by Carl Swenlin

Webinar Question:  Does a reversal in the daily PMO (Price Momentum Oscillator) have any effect on the PMO on weekly and monthly charts? Carl's Answer:  PMOs for the daily, weekly, and monthly time frames, while calculated with the same formula, are essentially different indicators. They are different because different data sets are used to calculate each one. The daily PMO is calculated using daily closing data, the weekly PMO uses weekly data, and the monthly PMO uses monthly data. The PMO in one time frame has no effect on the PMO in another time frame. It is price movement Read More 

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DP Scoreboard Flips Out!! Short-Term Signals Turn Bullish

by Erin Swenlin

I will admit to you that when I get the Technical Alert emails from the StockCharts.com ScanEngine regarding changes for all of the DP Sector ETFs and Indexes we follow in the DP Market/Sector Summary, I cringe a little. I'm excited to know the changes but I know I now need to update all of the charts that have had changes so I can put the links into the DecisionPoint Alert daily blog article. This take some time, but my Alert readers are worth it! Today you'll note a plethora of short-term signal changes in the DecisionPoint Alert. The BIG NEWS: New Short-Term Trend Model Read More 

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Different Moving Averages for Different Time Frames

by Carl Swenlin

QUESTION:  In the StockCharts DecisionPoint documentation, it says that the weekly (17EMA and 43EMA) and monthly charts (6EMA and 10EMA) can be used to show long-term trends, but in the webinar, Erin said that they use only the daily chart. CARL'S ANSWER: While the best way to determine the trend is to put some eyeballs onto the chart, that is still a subjective judgement and can sometimes be open to interpretation. For a more objective method, moving averages can be used in different ways to determine the trend of a price index. The simplest interpretation would be to identify the Read More 

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"Hangers-On" - The Last BUY Signals

by Erin Swenlin

As I perused the DecisionPoint Market/Sector Summary found in the DP Reports blog, I noticed that there are still some very old Intermediate-Term Trend Model (ITTM) BUY signals. I wrote in my last DecisionPoint blog article, "DP Scoreboard, Market/Sector Summary and Participation Suggest Internal Weakness", that the ITTM table from the DP Market/Sector Summary had mostly "flipped" to Neutral or SELL signals. Well, let's take a look at the hangers-on and determine how much longer they have or if they are strong sectors after all. Here is the most recent ITTM table: Read More 

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DP Scoreboard, Market/Sector Summary and Participation Suggest Internal Weakness

by Erin Swenlin

The DecisionPoint Scoreboard, located in the DP Chart Gallery, has been slowly flipping signals. Similarly we have seen a flip of Intermediate-Term Trend Model (ITTM) signals to Neutral or SELL. Typically when we see this type of movement of signals it is a sign of internal weakness in the market as a whole. Below is the current Scoreboard for each of the four indexes available in the Chart Gallery. (You need to be a paying member to see more than just the SPX). You'll note above that the NDX is the only one still on a BUY signal on the Read More 

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SPY: Longer-Term Internals Still Looking Bearish

by Carl Swenlin

On Thursday the DP Trend Model for SPY changed from BUY (long the market) to NEUTRAL (in cash or fully hedged) when the 20EMA crossed down through the 50EMA. Why doesn't the model change from BUY to SELL (short the market)? Because the 50EMA is still above the 200EMA, which, by our definition, means SPY is still in a long-term bull market. In this type situation the Model design assumes the 20/50 crossover is only signalling a correction, not a bear market. If a correction turns into a bear market, the model is safely in cash. Otherwise, once the correction is over, the 20EMA will Read More