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PMO Buy Signal Lacks Confirmation

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After breaking out from a short-term declining trend channel, the market seems to be losing steam. But, is it? The PMO has just had a positive crossover its 10-EMA triggering a PMO Buy signal. 

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We may be looking at a fake-out PMO Buy signal like we saw in early April. Before getting too excited by a positive PMO crossover, let's consult some of our indicator charts from the DP Chart Gallery. The ultra-short-term CVI and Participation- UP are falling after topping in overbought territory, not a promising set-up for a rally.

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Short-term indicators look even less favorable with the STVO, STO-B and STO-V all topping in overbought territory.

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Intermediate-term indicators look somewhat positive having just had positive crossovers like the PMO, but the indecisive movement since the beginning of April, makes their positive crossovers suspect.

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In conclusion, I think the PMO Buy signal is shaky right now given there isn't substantial confirmation coming from our other indicators, especially in the short term. If we see a pullback, horizontal support around 1815 seems reasonable.

Happy Charting!
Erin 

Erin Swenlin
About the author: is a co-founder of the DecisionPoint.com website along with her father, Carl Swenlin. She launched the DecisionPoint daily blog in 2009 alongside Carl and now serves as a consulting technical analyst and blog contributor at StockCharts.com. Erin is an active Member of the CMT Association. She holds a Master's degree in Information Resource Management from the Air Force Institute of Technology as well as a Bachelor's degree in Mathematics from the University of Southern California. Learn More
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