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Short-Term Price Trend Turning Up? Equal-Weight Consumer Staples ETF (RHS) ITTM Neutral Signal

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It happened so fast that I missed it on Monday. Both the SPX and OEX generated ST Trend Model Neutral signals Friday and Monday, but today those signals have already bitten the dust as new ST Trend Model BUY signals came back to roost on the DecisionPoint Scoreboards. Those aren't the only two signals that appeared today, the equal-weight Consumer Staples ETF (RHS) triggered a new IT Trend Model Neutral signal.



Let's start with the OEX and SPX. My concern with both of these charts is the rounded top formation. This would suggest lower prices, not higher prices. The PMO may be decelerating somewhat so this could be a support level that will continue to hold at about 1065 for the OEX and 2400 for the SPX. In both cases, we will likely see more whipsaw. The STTM initiates a BUY signal when the 5-EMA crosses above the 20-EMA. The 5-EMA is bouncy for obvious reasons, so there is certainly the possibility of seeing more whipsaw signals, especially if the market consolidates sideways. I do want to point out the OBV on both charts. The OEX is showing a bearish confirmation with the OBV, while the SPX reveals a positive divergence. Honestly, this tells me that we have more sideways movement ahead.

Let's look at Consumer Staples RHS. The ITTM Neutral signal was generated when the 20-EMA crossed below the 50-EMA. Since the 50-EMA is above the 200-EMA, that suggests RHS is in a bull market configuration. That being said, we prefer to go on a "Neutral" signal not a "SELL" signal when the LTTM is on a BUY (50-EMA > 200-EMA). Support has nearly been reached at horizontal support and the 200-EMA. The PMO is in a death spiral and will take some pretty nice up days to turn it around. I'm not writing this ETF off just yet. If the market starts to falter more, Consumer Staples is where money generally will rotate into. With support near, this could be a turning point, but we will need more patience.


Helpful DecisionPoint Links:

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


 

Technical Analysis is a windsock, not a crystal ball.

Happy Charting!
- Erin


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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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