NDX Erases ST Neutral Signal - Insult to Injury...TLT Adds Another SELL Signal


The ST Trend Model Neutral signal that the NDX carried for a few days gave way to a new BUY signal as the 5-EMA launched above the 20-EMA on today's strong rally. I've annotated the change on the DecisionPoint Scoreboards below. TLT triggered a Long-Term Trend Model SELL signal yesterday and today it is now being followed up with a Intermediate-Term Trend Model SELL signal.

I noted two days ago when the PMO and STTM generated bearish signals that the NDX was at a critical point of support where the June top and rising bottoms trendlines intersected. If the NDX couldn't hold that support area, the next likely area of support was down to 7000. If we see some follow-through on this rally, the PMO will shed the SELL signal.

Interestingly, the $VXN popped skyward but hasn't quite punctured the upper Bollinger Band on the inverted scale. I invert the scale because I use it as a very very short-term indicator to project the next few days. When the market gets very complacent and bullish with a low VIX or in this case, VXN reading and you see a reading above the upper band, typically it will be followed by some downside price activity over the next few days. We didn't see it punch through the band despite a huge decrease in the reading, so I would look for some more follow-through to upside. Just keep watch for that upper band penetration.

A new Intermediate-Term Trend Model SELL signal was triggered when the 20-EMA crossed below the 50-EMA while they were below the 200-EMA. Had the crossover occurred above the 200-EMA, it would have been a neutral signal. The rapid decline has been fueled by higher yields, but we did get warning with the overbought PMO SELL signal last month. The recent LT and IT Trend Model SELL signals are confirmation that a continuation of the correction on Bonds should be expected.

Technical Analysis is a windsock, not a crystal ball.

Happy Charting!
- Erin

Helpful DecisionPoint Links:

Erin's PMO Scan

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

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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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