DP Bulletin: Whipsaw ST Trend Model BUY Signal on Dow Industrials ($INDU)


The Dow's 5/20-EMAs have been braiding and unfortunately that causes whipsaw signals. Today saw the recent 9/6 ST Trend Model Neutral signal fall away in favor of a new BUY signal. With the market hitting new all-time highs, this wasn't a surprise to anyone to see this signal appear. 

The signal was generated when the 5-EMA crossed above the 20-EMA. You can see the margin, while not that thin between the two, should keep this signal intact. Any drop below the 20-EMA, however, and this signal will be canceled out. This is admittedly the trouble with the STTM, a 5-EMA is extraordinarily volatile. The positive divergence with the OBV is still in play and the PMO has turned up, so based on those technicals, I wouldn't expect to see this signal whipsaw away.

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)


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 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 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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