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Is that your Final Answer? A Monthly PMO Negative Crossover?

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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

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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Absolutely true. However, if the April month's close is about the same as today's close (2066), then we will have a negative crossover. Correct
The PMO will take into account the entire month's action, but yes, it should show the crossover at the end of the month if the close is around there.
Very good tip! Thank you Erin!
So we can see the future, but just cannot use it ?? AGGHHHHH!!! The perfect April's Fool joke :) just kidding--good work ------------
Thank you for clarifying...and all the excellent and timely commentary !
Erin: Please explain how the 3/31/2015 $SPX (Monthly) chart can be recreated with the PMO indicator after that date. Thanks.
To recreate an older chart, just use the "custom" date and make sure the last day you select is the day you want the chart to reflect.
Thanks. Good observation. Just wanted to know -- If one should ONLY use the PMO crossover or should one confirm the crossover with 6 mo EMA dropping belwo 10 mo EMA as a SELL?
I recommend you watch the last two DecisionPoint LIVE! webinars, Carl and I discuss this subject. The short answer is that it is always wise to gather as much data as possible before making any decision. You should adjust which indicators you weigh higher based on your investment time frame.
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