Since about mid-March I've gotten quite a few questions from subscribers asking me to look at the $SPX monthly chart because it shows a monthly Price Momentum Oscillator (PMO) negative crossover. We haven't seen a monthly PMO crossover since the positive crossover occurred at the end of 2009, signaling the beginning of a bull market. So does this negative monthly PMO signify the beginning of a new bear market? The answer is "No".
But wait! Looking at the last two negative monthly PMO crossovers, they signaled the beginning of a new bear market. That is true. And, had this been a negative monthly PMO crossover, it would. This is not a true PMO negative crossover. Remember that our weekly charts go "final" on Fridays or the last trading day of the week. Monthly charts do not go final until the last trading day of the month. So the chart above may show a negative monthly PMO crossover, but it isn't final. The chart below is the correct chart. It is dated the last day of trading on March 31st. Surprise! The monthly PMO narrowly avoided a negative crossover. So technically we are still on a monthly PMO BUY signal.
So, be careful when you are looking at new signals generated on weekly and monthly charts.
Happy Charting!
Erin
