DecisionPoint

January 2017

DecisionPoint

Gold Rally Stumbles

by Carl Swenlin

After correcting nearly -20% from the July 2016 top, gold rallied off the December low, hitting a rally high on Monday. Then it spent the rest of the week correcting, dropping below horizontal support set last year. It also dropped below the 20EMA and 50EMA, which action turned those EMAs down and caused the PMO (Price Momentum Oscillator) to top. A very short-term positive on this chart is that Friday's price closed near the top of the day's range, hinting at a short-term bottom. In November a long-term SELL signal was generated when the 50EMA Read More 

DecisionPoint

Natural Gas (UNG) Analysis Request - Heating Up?

by Erin Swenlin

I've begun taking symbol requests prior to my Wednesday and Friday webinars. Viewers are treated to a DecisionPoint viewpoint on their favorite symbols. This is an excellent opportunity to understand how to look at a chart and find what you need to in order to make an educated investment decision. While DP analysis and indicators aren't always right, but like Blackjack, you improve your odds considerably simply by knowing and applying the basic rules.  My viewer wrote to me: "UNG is looking interesting at least Read More 

DecisionPoint

Rainy Weather is Sunny for California Water Services Group (CWT)

by Erin Swenlin

As I can attest to, California has been hit with a deluge of rain. We have needed it for a very long time to alleviate almost non-stop drought conditions. I found it interesting when I did a Short-Term Trend Model (STTM) technical scan, California Water Services Group (CWT) had just had a new Short-Term Trend Model BUY signal, a new Intermediate-Term Trend Model (ITTM) BUY signal AND a pending Price Momentum Oscillator (PMO) BUY signal! It may or may not be related to the rainy weather, but the chart is interesting none-the-less. I will give Read More 

DecisionPoint

Dow Stocks in Bear Markets

by Carl Swenlin

The Dow Jones Industrial Average is clearly in a bull market, having made a strong move in November and December  to new, all-time highs and coming within less than a half point of reaching 20,000; however, as I perused the charts of the 30 Dow components I found three stocks that are actually in bear markets. That is only 10% of the the component stocks, so it isn't a big deal, but I thought it was worth looking at them. But before I get to those bear market stocks, let's quickly evaluate the Dow chart. The separation between Read More 

DecisionPoint

Webinar Review of Consumer Staples SPDR (XLP)

by Erin Swenlin

Yesterday during my webinar, I added a "chart spotlight" at the end of the program. It's a new feature that viewers had asked for since I generally go through a review of the major indexes (small and large), DP indicators and the "Big Four" as I call them, Dollar, Gold, Oil and Bonds, so this addition adds a new chart or two each time. I typically will run a scan to find possible candidates; however, this time it was presented to me through a technical alert. I reviewed the Consumer Staples SPDR (XLP) because I was alerted that it had just triggered a Long-Term Trend Model (LTTM) BUY Read More 

DecisionPoint

Market Action Changes Our Focus

by Carl Swenlin

At the close of the prior week, a breakout from a flag formation had us questioning if the market was too overbought for the breakout to lead to higher prices. My conclusion was that there was plenty of room to the upside before our indicators got uncomfortably overbought. Brilliant! Unfortunately, there was no followthrough on the breakout at all, and the market just dribbled sideways for a week. Our indicators still allow for more upside price movement, but that is no longer of immediate concern. The prior week our intermediate-term indicators Read More 

DecisionPoint

Rydex Cashflow Ratio Sentiment: Putting Money Where the Mouth Is

by Erin Swenlin

Carl Swenlin wrote back in a July 2014 an in-depth article about the Rydex Cashflow and Asset Ratios. His explanation of sentiment in relation to the Rydex Ratios is simple and well-stated so I won't rewrite it: "Sentiment has traditionally been measured by taking polls of selected groups of investors, advisors, investing professionals, etc. There have been and still are problems associated with this methodology: (1) The polls are normally taken over a period of several days, during which time market movement and investor outlook can change radically; (2) The responses are strictly Read More 

DecisionPoint

Does New Rally Have Good Technicals?

by Carl Swenlin

Two weeks ago I was looking for a price top. Strictly speaking, we got one, but the decline was short-lived (three days), and the low was the last low in a four-week flag formation. The new rally off that low was strong enough to fuel a breakout to new, all-time highs on Friday. My immediate concern is whether this breakout has good technicals behind it. On Friday the PMO turned up, but it is near the top of its normal range. A PMO bottom at that level does not hold the promise of one near the low end of the range, but there is still plenty of room for the PMO Read More 

DecisionPoint

Nasdaq 100 PMO Decouples from Major Indexes

by Erin Swenlin

Today, the Nasdaq 100 rallied while the other indexes experienced declines. You'll note in the DecisionPoint Scoreboard Summary below that all of the major indexes are on short-term Price Momentum Oscillator (PMO) SELL signals that arrived in December. Meanwhile, the NDX received a new PMO BUY signal. Here is a performance chart I put together showing percentage gains over the past month. Today's move put the NDX on top while other indexes are fading. The Dow has clearly been leading the market, but the recent side steps can't compete with the NDX's steady Read More 

DecisionPoint

2016 Q3 Earnings: Market Overvalued but Earnings Trend Favorable

by Carl Swenlin

Last week S&P 500 preliminary earnings results for 2016 Q3 were in, and the market is still grossly overvalued. On the plus side, however, earnings turned up and are projected to move higher over the next year. The chart above shows the S&P 500 Index (black line) in relation to where it would be if it were undervalued (green line), fair value (blue line), or overvalued (red line). We can clearly see that at 2239 price is far above overvalue side of the range. It has a P/E of 25 and reminds me of the days of 'irrational exuberance' back in the 1990s; although, the Read More