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

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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 extraordinarily volatile. The positive divergence with the OBV is still in play and the PMO has turned up, so based on those technicals, I wouldn't expect to see this signal whipsaw away.


Helpful DecisionPoint Links:

DecisionPoint Shared ChartList and DecisionPoint Chart Gallery

Trend Models

Price Momentum Oscillator (PMO)

On Balance Volume

Swenlin Trading Oscillators (STO-B and STO-V)

ITBM and ITVM

SCTR Ranking


 

Technical Analysis is a windsock, not a crystal ball.

Happy Charting!
- Erin


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Erin Swenlin
About the author: helped create and manage the DecisionPoint.com website alongside her father, Carl Swenlin. Together, Erin and Carl launched the DecisionPoint daily blog in 2009. She hosts the MarketWatchers LIVE web show at StockCharts.com, and is also a Member of the CMT Association. Learn More
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