DecisionPoint

DP Alert: New PMO BUY Signal on NDX - Dollar Pulls Back a Little More

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The DecisionPoint Scoreboards are nearly all "green" with BUY signals. Today the NDX completed its green Scoreboard with a PMO BUY signal on the daily chart. The Technology Sector (XLK) and the NDX ETF (QQQ) also logged new Short-Term PMO BUY signals. It appears the tech sector is coming back with a roar.


I see a bullish confirmation between PMO bottoms and price bottoms as well as OBV and price bottoms. We have a healthy rising trend channel and new all-time highs could be challenged over the next few days.


The DecisionPoint Alert presents an mid-week assessment of the trend and condition of the stock market (S&P 500), the U.S. Dollar, Gold, Crude Oil, and Bonds.


SECTORS

The Sector Scoreboard shows that technology isn't the only bullish sector with momentum. The only SELL signal left is the Long-Term Trend Model signal for Consumer Staples. A peak at the chart shows 

Each S&P 500 Index component stock is assigned to one, and only one, of 10 major sectors. This is a snapshot of the Intermediate-Term and Long-Term Trend Model signal status for those sectors.


STOCKS

IT Trend Model: BUY as of 5/11/2018

LT Trend Model: BUY as of 4/1/2016

SPY Daily Chart: The SPY remains in a nice rising trend channel and made a new all-time high yesterday. Price remains above support at the July top. The PMO bottomed above its signal line which I find especially bullish.

Climactic Market Indicators: I'm not worried much about the upper Bollinger Band penetration mainly because we aren't seeing any climactic breadth readings. We saw the same reading yesterday and today saw a halt to the rally. My thought is that today was the 'bearish conclusion' of the upper band breakout. Although, I wouldn't be looking for a big breakout. I think there is some churning left to do.

Short-Term Market Indicators: They are rising nicely and aren't really overbought yet. Very bullish short-term picture.

Intermediate-Term Market Indicators: Although moving very slowly, both ITBM and ITVM are rising off positive crossovers of their signal lines and are sitting in neutral to somewhat overbought territory. They look great to me.

Conclusion: There don't seem to be any weak sectors in the intermediate term as the markets seem to be firing on all cylinders. A resurgence of the technology sector is very encouraging given it is one of the most aggressive sectors out there.


DOLLAR (UUP)

IT Trend Model: BUY as of 4/24/2018

LT Trend Model: BUY as of 5/25/2018

UUP Daily Chart: I wrote about the Dollar in yesterday's blog article and given today's action, I still believe it is valid. Here is the link.


GOLD

IT Trend Model: Neutral as of 5/2/2018

LT Trend Model: SELL as of 6/22/2018

GOLD Daily Chart: The discounts on $PHYS suggests highly bearish sentiment which is generally a good thing for bulls but Gold is really stuck in a trading zone that doesn't look vulnerable to a breakout or breakdown right now. With the recent PMO BUY signal, I suspect we will see a swing back toward resistance. I'm not expecting a breakout, partly because I like the Dollar chart and as noted in the bottom frame, there is a strong reverse correlation between the Dollar and Gold.


CRUDE OIL (USO)

IT Trend Model: BUY as of 6/26/2018

LT Trend Model: BUY as of 11/2/2017

USO Daily Chart: Oil and USO took a huge hit today but you'll note that it narrowly avoided a breakdown below the July low. The PMO is ugly. I would look for a test at the horizontal support line drawn from the January and March tops.


BONDS (TLT)

IT Trend Model: SELL as of 8/3/2018

LT Trend Model: SELL as of 8/1/2018

TLT Daily Chart: Bonds are in a trading range between $119.75 and $118. The PMO is declining and recent Trend Model SELL signals suggest that $118 will at the very least be tested, but likely broken. I'm looking for yields to continue to rise, putting pressure on Bonds and likely leading TLT down toward the February and May lows.



Technical Analysis is a windsock, not a crystal ball.

Happy Charting!
- Erin


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NOTE: The signal status reported herein is based upon mechanical trading model signals, specifically, the DecisionPoint Trend Model. They define the implied bias of the price index based upon moving average relationships, but they do not necessarily call for a specific action. They are information flags that should prompt chart review. Further, they do not call for continuous buying or selling during the life of the signal. For example, a BUY signal will probably (but not necessarily) return the best results if action is taken soon after the signal is generated. Additional opportunities for buying may be found as price zigzags higher, but the trader must look for optimum entry points. Conversely, exit points to preserve gains (or minimize losses) may be evident before the model mechanically closes the signal.


Helpful DecisionPoint Links:


Erin's PMO Scan

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


 

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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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