DecisionPoint

September 2017

DecisionPoint

DP Weekly/Monthly Wrap: Market Still Overbought

by Carl Swenlin

Last week I thought that a market correction was beginning, but all we got was a one-day, downside blip that ended at the low on Monday. From there the market edged higher, closing at new, all-time highs on Thursday and Friday. Nevertheless, the gain for the week was less than one percent, the market is overbought, and my outlook has not changed. That is to say, I think a small correction is likely. The DecisionPoint Weekly Wrap presents an end-of-week assessment of the trend and condition of the stock market (S&P 500), the U.S. Dollar Read More 

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Nasdaq 100 vs. Equal-Weight NDX ETF (QQEW) - ETF Much Healthier

by Erin Swenlin

Within the past week, we've seen the $NDX beaten up. However, it really has been the result of a few large-cap stocks that have taken the NDX so low. I think this can be most clearly seen when you compare the equal-weight NDX ETF (QQEW) with the $NDX. Here is a chart of each the NDX and QQEW. The chart patterns and support are somewhat similar, but the major differences are the ST Trend Model BUY signal and PMO BUY signal. Notice on the NDX chart below that the ST Trend Model is on a Neutral signal and the PMO is on a SELL signal, a SELL signal that should stay intact for Read More 

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DP Alert: "Missed it By 'That' Much"

by Erin Swenlin

It's clear looking at the NDX Scoreboard that technology has been taking it on the chin. Today, tech titans like Micron (MU), Apple (AAPL) and Advanced Micro Devices (AMD) had a great day and consequently pushed the NDX upward. It wasn't enough to clear the ST Trend Model Neutral signal nor the PMO SELL signal. A look at the chart shows us that the ST Trend Model signal isn't likely to hang on if the tech rally continues as the 5-EMA is leaping skyward toward the 20-EMA. The PMO SELL signal, on the other hand, looks fairly intact with enough margin between it and its signal line to Read More 

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Another BUY Signal Bites the Dust for the NDX - New ITTM SELL Signal for UNG

by Erin Swenlin

The Nasdaq 100 lost its PMO BUY signal on Friday and today it loses its ST Trend Model BUY signal (along with important support!). Natural Gas (UNG) had just picked up an IT Trend Model BUY signal, but it has whipsawed away into an ITTM SELL signal. Today's over 1% drop on the NDX busted two areas of support that I had expected to hold. My thought was that after the pullback to earlier lows in September, the index would bounce back. Unfortunately, Apple (AAPL) has been dragging the index lower and it appears many of the other tech companies have been caught in the tide. The 5-EMA Read More 

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DP Weekly Wrap: AAPL Leads Market Top

by Carl Swenlin

We usually feature a SPY chart in this space, but Apple (AAPL) has really grabbed my attention recently. I have been watching it for a few weeks as it formed a rounded top, and finally broke down through horizontal support on Thursday. AAPL is important to the broad market because it is so heavily weighted in the major market indexes. If it tanks, it will certainly affect the rest of the market. On the positive side, after three day's of selling, it appears to have made a short-term bottom. I know it is blasphemy to speak ill of AAPL, but a healthy Read More 

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Technology Hit Hard, Results in PMO SELL Signal on Nasdaq 100

by Erin Swenlin

As you can see below, the NDX's steep decline has thrown the Price Momentum Oscillator (PMO) below its signal line. I don't expect to see similar readings from the other indexes as they haven't been hit as hard as techs on the latest declines. It also took the NDX some time to generate the original PMO BUY signal. You'll see on the daily charts for the other three indexes that PMO SELL signals are not likely unless we see a deeper decline. I'm not that worried about this PMO crossover SELL signal. Notice that there is "dual" support available at the 5900 level Read More 

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Equal-Weight ETFs Log New ITTM BUY Signals

by Erin Swenlin

DecisionPoint tracks not only the sector SPDRS, but we also follow the equal-weight versions. For more information about the benefits of trading equal-weight ETFs, you can read this article written by Carl. Today is a teachable moment with these three IT Trend Model BUY signals arriving on the same day. The lesson? Not all BUY signals are good BUY signals, some may be "good-bye" signals. I'm going to start with the equal-weight Energy ETF (RYE). It shouldn't surprise anyone who follows the DecisionPoint blog (or MarketWatchers LIVE program) that the equal-weight Read More 

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DP Alert: Short-Term Overbought Conditions Suggest Upcoming Pause/Pullback

by Erin Swenlin

It may seem strange that all of the Scoreboards are green except in the area of intermediate-term PMO signals. A look at the weekly charts for all four indexes reveals all but the NDX weekly PMO are rising up toward IT PMO BUY signals. The margin is still rather large so I wouldn't expect to see these signals update until next Friday at the earliest. To see the weekly charts (including daily and monthly charts) of the four Scoreboard indexes, go to the DecisionPoint ChartList. The link is located at the top of the main DecisionPoint blog page. Read More 

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On Fire! Energy, Small- and Mid-Caps, Financials All Trigger ITTM BUY Signals

by Erin Swenlin

The last two days have issued SIX new Intermediate-Term Trend Model (ITTM) BUY signals. It shouldn't be a surprise that the Energy SPDR (XLE) and Natural Gas (UNG) triggered given the buzz around that sector last week on MarketWatchers LIVE and headlines on our StockCharts.com Blogs page. Arthur Hill and I noted the push that small and mid-caps were making mid-week and today, the Financial sector was on fire. Take a look at these very bullish charts! Last week on MarketWatchers LIVE in our "Agree or Disagree" segment, Tom and I were asked if we Read More 

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DP Weekly Wrap: Climax and Options Expiration Slow Advance

by Carl Swenlin

For a few weeks I have been expecting an upside breakout, and on Monday the breakout finally happened. The internal action on that day indicated that a buying climax had taken place, an event that very often leads to some post-climax churning or pullback. Also, this was an options expiration week, a process that tends to keep prices fairly quiet. Regarding climaxes, the chart above illustrates the phenomenon. To identify upside climaxes I use new highs, as well as net breadth and volume. There are no specific levels that these indicators need to reach, rather we look for a Read More 

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DP Alert: Market Takes a Pause

by Erin Swenlin

A day passed with no signal changes for the DP Scoreboards, but also for the SPDRs and their equal-weight counterparts that DecisionPoint follows. The market is taking a short pause. I suspect with options expiration tomorrow, we will see more flat trading though with higher volume. The purpose of the DecisionPoint Alert 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 Read More 

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DP Bulletin: PMO BUY Signal Finally Triggers on $INDU - New PMO Signals TLT, UUP - ITTM BUY Signals IWM, XLP

by Erin Swenlin

Lots of new signals today! Three important PMO signals arrived on the Dow, Bonds (TLT) and Dollar (UUP); not to mention two important Intermediate-Term Trend Model BUY signals on Russell 2000 ETF (IWM) and Consumer Staples SPDR (XLP). Feast your eyes on these charts! First and foremost, I must talk about the new PMO BUY signal on the Dow. For those of you reading the DecisionPoint blog religiously (hopefully you all do!), you'll know that we have been expecting this crossover buy signal for some time. I've updated the DP Scoreboard Summary below. Read More 

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DP Alert: IT Trend Model BUY Signal for equal-weight Industrials ETF (RGI) - Gold & Bonds Pullback

by Erin Swenlin

No changes to the DP Scoreboards. We're just waiting on the Dow to log a PMO BUY signal. Reviewing the chart of the Dow we can see that a PMO BUY signal should trigger on the next positive close, if not sooner. Today's breakout to new all-time highs was impressive. I like that it appeared off the positive divergence between the OBV and price. The purpose of the DecisionPoint Alert 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 Read More 

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DP Bulletin: Whipsaw ST Trend Model BUY Signal on Dow Industrials ($INDU)

by Erin Swenlin

The Dow's 5/20-EMAs have been braiding and unfortunately that causes whipsaw signals. Today saw the recent 9/6 ST Trend Model Neutral signal fall away in favor of a new BUY signal. With the market hitting new all-time highs, this wasn't a surprise to anyone to see this signal appear.  The signal was generated when the 5-EMA crossed above the 20-EMA. You can see the margin, while not that thin between the two, should keep this signal intact. Any drop below the 20-EMA, however, and this signal will be canceled out. This is admittedly the trouble with the STTM, a 5-EMA is Read More 

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DP Weekly Wrap: Dollar Weak, Gold Strong

by Carl Swenlin

Last week there was a high-volume breakout above a declining tops line. This week price pulled back to the line, bounced somewhat higher, then moved sideways the rest of the week. S&P 500 total volume was fairly robust compared to the weaker SPY trading volume, so there was more going on than we might have expected during a short week. The daily PMO lost its starch and went flat. Most interesting, a new price pattern, a triangle, has emerged. Since the top of the triangle is not as steep as the bottom line, I believe the bias is bullish. The Read More 

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DP Bulletin: USO PMO BUY Signal - UUP PMO SELL Signal - XLF ITTM Neutral Signal

by Erin Swenlin

Signal changes keep coming in with three important new ones today. USO had already logged a new IT Trend Model BUY signal this week and today gets to add a PMO positive crossover BUY signal to the chart. The Dollar has struggled mightily and continues to fall so it was no surprise to see the PMO finally drop below its signal line. XLF, the Financial SPDR, not only logged an IT Trend Model Neutral signal, it dropped below important support. Let's look at USO first. I've been skeptical of this latest rally, but the added PMO BUY signal does buoy my optimism on USO. I don't like that Oil Read More 

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DecisionPoint BULLETIN: New! IT Trend Model BUY for Oil and ST Trend Model Neutral for Dow

by Erin Swenlin

My email inbox presented two new important signals. First is the Intermediate-Term Trend Model (ITTM) BUY signal for USO. We've been watching it as it managed to find support and rallied strongly. Second is the Short-Term Trend Model (STTM) Neutral signal on the Dow Industrials. I've updated the DecisionPoint Scoreboard Summary below: A STTM Neutral signal is generated when the 5-EMA crosses below the 20-EMA while the 20-EMA is above the 50-EMA (if the 20-EMA is below the 50-EMA at the time of the crossover, then it is a STTM SELL signal). The Dow chart Read More 

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DP Alert: PMO BUY Signals on Scoreboards and SPY - Bonds Break Out, Holding Support

by Erin Swenlin

A few new Price Momentum Oscillator (PMO) BUY signals appeared on the DP Scoreboards Thursday and Friday. Friday, the SPY generated a PMO BUY signal as well. You'll note on the charts below the Scoreboards, that these three major indexes had difficult days, but price managed to stay above declining tops line or horizontal support. The purpose of the DecisionPoint Alert Daily Update is to quickly review the day's action, internal condition, and Trend Model status of the broad market (S&P Read More 

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DP Weekly Wrap: Water, Water, Everywhere . . .

by Carl Swenlin

Greg Morris gave us an article on "Fake News!" this week, and it prompted me to reflect on how much "Flood News" we have gotten: Reporters standing in water, reporters standing in front of water, reporters standing in the rain in front of water and in the water. And all the while the stock market paid no attention. The week before last, SPY officially entered a falling trend, and this week on Tuesday we saw a successful retest of the correction low set last week. Then on Wednesday price broke out and left the declining trend channel behind, and Thursday volume expanded as the breakout was Read More