DecisionPoint

February 2016

DecisionPoint

STOCKS: Looking Long-Term

by Carl Swenlin

The day to day stock market jitterbug can undermine out conclusions and resolve in the short term, so it is always good to pull back and evaluate longer-term charts for a look at the big picture. At DecisionPoint our primary indicator for objectively defining a bull or bear market is the relationship of the daily 50EMA and 200EMA. When the daily 50EMA is below the 200EMA, as it has been since January 13, we consider the market to be long-term bearish. We use the daily chart (not shown) because we get faster feedback from that time frame; however, the monthly chart gives us a more stable Read More 

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Are Indicators Lining Up for the Perfect Storm?

by Erin Swenlin

Indicators in all timeframes don't always coordinate with each other, but I believe they are beginning to meld right now. In the member's only DecisionPoint Alert blog, I cover all of these oscillators on separate charts based on the timeframe (i.e. short-term chart, intermediate-term chart, etc). I noticed each timeframe was becoming extremely overbought. It was time to review charts that included all timeframes. You'll find those in the DecisionPoint Trend and Condition ChartPack or you can click on those I've created below and save them to your own Read More 

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Pain, No Gain

by Erin Swenlin

I recently was reading John Murphy's book, Technical Analysis of the Financial Markets (A MUST read and available in the StockCharts.com Store) and I found a VERY timely quote that I'd like to share: Until 2000, we had a lot of people who were day-trading. They were making a fortune. I remember giving a lot of seminars to these people. Then we went into a big downtrend in stocks, and they all went broke. I remember a lot of them saying to me, "Mr. Murphy, these signals did not work anymore." Of course, they didn't work. All they were doing was buying. The short-term buy signals Read More 

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GOLD: So Far, So Good

by Carl Swenlin

I don't want to become a Johnny One-Note by reporting on gold two weeks in a row, but gold continues to attract my attention. Last week $GOLD capped off a strong rally when it broke decisively above a long-term declining tops line. Since it was very overbought, we had to wonder if the breakout would hold. This week the picture continued to improve as price pulled back to successfully retest the support line, then bounced higher again. It looked as if the PMO might be topping, but it continued to move higher. A particularly positive development is that the Read More 

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DecisionPoint Scoreboards are Turning Green--What Does it Mean?

by Erin Swenlin

Green means "go", right? Well in terms of the DecisionPoint Scoreboards, not necessarily. The DecisionPoint Scoreboards act as a "finger in the wind" or as we like to say, "windsock", to see which direction and speed markets are moving in right now. It's a temperature gauge.  Today, there were three bullish signal changes on our DecisionPoint Scoreboards. New Short-Term Trend Model BUY "signals" appeared for the S&P 100, S&P 500 and the Dow Industrials. The Nasdaq 100 which has been outperformed by all three of these indexes in the last three Read More 

DecisionPoint

GOLD: Time for Pullback/Consolidation?

by Carl Swenlin

Since the December lows, $GOLD has moved up +20%, and the advance this month has been nearly vertical (as in parabolic). At this point there are some signs that price needs to consolidate or pull back. Looking at the last three year's price pattern, we can see it has been moving more or less in a slightly declining trend channel, but this week price broke above that channel, indicating that it is possible that the medium-term trend may be shifting from falling to rising. However, the technical expectation after a breakout is for price to pull back toward the point of breakout. If a Read More 

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Bear Market Oscillator Ranges - Oversold Territory Expands

by Erin Swenlin

I think we can all agree that we are currently consumed in a bear market. If you remember the Bear Market Rules article I wrote last year, I discussed how our bullish expectations need to be tempered. Part of that is realizing that "oversold" in a bear market doesn't mean the same thing as in a bull market. In a bull market it is a reasonable expectation to see a nice rally. In a bear market, oversold conditions are dangerous and while they can pick up small rallies (though not always), they generally will finish with another larger sell-off. One thing I noticed is that the regular Read More 

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NDX Price Performance Comparisons - S&P 500 New PMO SELL Signal

by Erin Swenlin

The first hint that the bear market rally was exhausted was when the Nasdaq 100, which had been strongest during the bear market, switched before the other indexes to a PMO SELL signal. Today, the SPX lost its BUY signal and joined the NDX with a new Price Momentum Oscillator (PMO) SELL signal. We will look at all of the indexes in the DecisionPoint Chart Gallery. (For a more detailed look and live analysis, catch The DecisionPoint Report FREE webinars on Wednesday/Friday at 7:00pm EST or you'll find them in the webinar archive.) Read More 

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Breadth Anomalies

by Carl Swenlin

Some time ago I wrote an article featuring the 1% EMA (200EMA) of the S&P 500 Advance-Decline Ratio. My purpose was to point out the negative divergences (red lines) that occurred at major market tops in 2000 and 2007, as well as to show the current developing negative divergence. A sharp-eyed reader asked about the positive divergence (blue lines) that occurred between 2000 and 2002. I had observed that divergence for many years, and had concluded that it simply didn't offer any useful information. For the entire period it implied that internals were Read More 

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Kohls and Ralph Lauren Take Out Support

by Erin Swenlin

I generally do not review stocks in the DecisionPoint blog, but the Consumer Discretionary sector took a hit today, most notably Kohls Department Stores (KSS) and Ralph Lauren Polo brand (RL). These two stocks had the misfortune to miss their revenues by a great deal today. However, even had this not been the case, as Arthur Hill discussed today in the Market Message, this sector is struggling in this bear market environment. This is a sector that is strong in bull markets, but generally suffers in bear markets. This sector is made up of retailers and if consumers are defensive and Read More 

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PMO BUY Signals Arrive on All Four Scoreboards

by Erin Swenlin

If you haven't reviewed the DecisionPoint Chart Gallery Scoreboards, you may want to. Yesterday, the short-term Price Momentum Oscillator (PMO) signals on all four Scoreboards for OEX, SPX, INDU and NDX switched to BUY signals.  These signals trigger on the daily chart when the PMO crosses above its signal line. You'll note in the charts below that the PMO on all of these indexes had been rising awhile before the crossovers.  They may have arrived late to the bear market rally party given that the market Read More