DecisionPoint

January 2016

DecisionPoint

Interesting Mutual Fund Stats

by Carl Swenlin

 Really? Something interesting about mutual funds? Well, I had to put some kind of hook in the title, because the subject matter doesn't normally induce a rapid pulse rate, but there are some interesting things to be known. For example, total assets in bond funds is showing a negative divergence against bond prices. Prices are moving higher, while total assets has remained flat. The bottom panel shows that there have been substantial net outflows over the last three years, so the chart paints a bearish long-term picture for bonds. Read More 

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NDX Thrust/Trend Model Chart from 1-27-2016 Webinar

by Erin Swenlin

During yesterday's webinar, I stirred up some renewed interest in the DecisionPoint Thrust/Trend Model with a reader request for the model analyzed on the Nasdaq 100. I explained that using a "thrust" component with the DP Trend Model will often times get you an early entry on rallies and can prevent you from staying in on a bad BUY signal. We'll get to the NDX chart in a moment. First, I'll give you a quick refresher on how the Thrust/Trend Model works. You are already familiar with the DecisionPoint Trend Models (if not, here's link for the article in ChartSchool) Read More 

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Reader Question on RSP (SPX Equal-Weight ETF)

by Erin Swenlin

  I received a comment on one of my blog articles from a long-time follower, John Latta. Here's what he asked: "Did you read Arthur's Monday blog? It would be very interesting if you would do an analysis of RSP, especially in view of the divergence from the SPY or SPX which he pointed out." In answer to his first question, "yes". I've learned so much from reading Arthur's material as well as all of the other fine bloggers we have on StockCharts.com.  So by request, I'm going to give RSP a "DecisionPoint" style review. To Read More 

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Gold: Sentiment Indicator Lost; Current Outlook

by Carl Swenlin

One of the best sentiment indicators we had for gold was the premium/discount for Central Gold Trust (GTU), a closed-end fund which owned only gold bullion. (Closed-end funds trade like stocks, and the pressures of bid/ask can cause them to trade at a premium or discount to net asset value--NAV.) We have always believed that the amount of premium/discount was an excellent indication of bullish or bearish excess. Unfortunately, last week that indicator was lost to us when Sprott Physical Gold Trust (PHYS) acquired GTU. While PHYS is also a closed-end fund similar to GTU, there is quite a Read More 

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What Does a Neutral Signal Really Mean?

by Erin Swenlin

I'm asked frequently, especially now that we use the DecisionPoint Scoreboards, "What is a Neutral signal?" You'll see on the DecisionPoint Scoreboard for the S&P 500 (found in the DP Chart Gallery) that all sections are red except for the Intermediate-Term Trend Model (ITTM) which is showing a gray minus sign. That indicates that the current ITTM signal is "Neutral", neither red nor green. What does that mean though? There are two primary points that I want to make in today's blog. First, how a Neutral signal is created and second, how to invest using a Neutral signal Read More 

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Put/Call Ratio 10-DMA Bullish

by Erin Swenlin

DecisionPoint with StockCharts.com offer numerous ready-to-go indicators and charts. The easiest way to observe them is by downloading the DecisionPoint Market Indicators ChartPack. One of the ChartLists that I hadn't visited in some time was the DPMI - 1300 Put/Call Ratio, particularly the 10-DMA of the Put/Call ratios. I found that chart to be very interesting given the likelihood of a bounce or at a minimum a pause.  Our intermediate-term indicators are becoming very oversold (see Carl's previous blog article). A rally or bounce is needed to Read More 

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Is the Market Oversold Enough Yet?

by Carl Swenlin

It was an unbelievably choppy week, with Friday delivering a stunning reversal from the strong advance of the previous day. Intraday SPY was down -12% from its all-time high last July, and with Friday's intraday low, SPY may have found support at the September low. The market is oversold in all time frames, but is it oversold enough to end the selloff? The quick answer is "yes" with reservations. To answer this question in more depth let's skip over the shorter-term indicators and go right to the longer-term ones, because that is where we will find signs Read More 

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Evaluating Bullish Scan Results in a Bear Market

by Erin Swenlin

First, I am not encouraging anyone to buy stocks in a bear market. If you are evaluating investments in a bear market, you do need to keep a few things in mind. In a bear market the majority of stocks are in decline (hence it being a bear market). Check out the Price Momentum Oscillator (PMO) Analysis chart below. Of all of the 500 stocks that make up the S&P 500, only 19% have rising PMOs and only 11% are on PMO BUY signals. Our chances of finding a good PMO BUY signal in the S&P 500 are very very slim. This chart is probably one of the best examples of why it is so hard to Read More 

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Oversold Indicators in a Bear Market

by Erin Swenlin

The S&P 500 entered a Long-Term Trend Model SELL signal last Friday. This occurred when the 50-EMA crossed below the 200-EMA. One issue that I noticed while preparing for one of my webinars is that not only are short-term indicators very oversold, but intermediate-term indicators are very oversold as well. This is somewhat counter-intuitive given that the S&P 500 and other markets, like the Dow Industrials are in official bear markets (50-EMA below the 200-EMA). Bear market rules imply that we shouldn't expect positive bullish outcomes when we normally would. Oversold indicators Read More 

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Are We There Yet?

by Carl Swenlin

After a particularly brutal week, a lot of people are wondering if the correction is about over. The first place I look is the daily chart to see if there are any obvious support levels coming into play. We can see where price fell through support this week, and the next obvious level of support is still a lot farther down. So, no, there is no nearby price support to possibly get things bouncing next week. The next area to look would be market internals. Is the market oversold? For this let's look at a set of medium-term indicators. Except for the PMO Read More 

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Nasdaq 100 and Techs Capitulate

by Erin Swenlin

The Nasdaq 100 (NDX) and technology stocks in general have avoided serious damage through the past year. The corrective move on the NDX in August never caused a 50/200-EMA negative crossover, meaning it avoided the DecisionPoint "bear market" label. This last corrective move, however, was very damaging. I've annotated a complex triple-top on the NDX daily chart. This week the neckline was broken and today the minimum downside target, calculated by using the height of the pattern subtracted from the neckline, was also broken. Note that the target doesn't line up with any Read More 

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Weekly PMO Question on Netflix (NFLX)

by Erin Swenlin

My favorite part of my webinars is the "Question of the Day". I welcome emails and comments from my readers as you challenge me to think outside of the box or clarify my analysis. So here is today's question from Bryant regarding the weekly Price Momentum Oscillator (PMO) movement on Netflix (NFLX): "I finally recalled and found the chart I was most interested in asking you about, it is a weekly chart of NFLX over 3 years. Once the weekly PMO line crossed below the signal line in 2013, despite the move from 35 to 70 from 2013 to 2014, the weekly PMO did not cross over the weekly signal Read More 

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Gold Versus the Dollar Long Term

by Carl Swenlin

There is an inverse relationship between gold and the dollar, but it is far from exact. A weak or strong dollar will influence the price of gold in the opposite direction, but gold can also have internal strength or weakness that is a reflection of the fluctuating demand for gold. On the chart above we can see that the relative strength line in the bottom panel was relatively flat between 1981 and 2001. Then between 2001 and 2008, in spite of the declining dollar, the relative strength line made a steady rise that reflected the increasing demand for gold Read More