We saw on Tuesday four new Price Momentum Oscillator (PMO) SELL signals on the DecisionPoint Scoreboards which I wrote about in Tuesday's article. It isn't surprising to see Small Caps share a similar fate.
I've annotated the new PMO SELL signal on the daily chart below. Take note that a Short-Term Trend Model Neutral signal is preparing to execute with a negative crossover of the 5-EMA below the 20-EMA. When the 5/20-EMA negative crossover occurs above the 50-EMA it is a Neutral signal because the Intermediate-Term Trend Model is on a BUY signal. If the occurs below the 50-EMA it is a STTM SELL signal because the 20-EMA below the 50-EMA, is NOT on an ITTM BUY signal. Price did find support along the 50-EMA and a rising bottoms trendline could also lend support. However, the PMO SELL signal and declining OBV line suggest a drop to the May low.
Long term is also bearish for $SML. The monthly chart below illustrates the success of the monthly PMO crossovers. Currently the long-term PMO is on a SELL signal and dropping. Granted it is decelerating and the 6-month EMA is above the 10-month EMA but the inability of price to successfully break above all time highs overshadows any bullish indications on the long-term chart. (*Remember the monthly chart doesn't go final until June 30th).
Come check out the DecisionPoint Report with Erin Heim on Wednesdays and Fridays at 7:00p EST, a fast-paced 30-minute review of the current markets mid-week and week-end. The archives and registration links are on the Homepage under “What’s New”.
Technical Analysis is a windsock, not a crystal ball.