No More All "Green" Scoreboards - OEX Loses PMO BUY Signal


The market in general is pulling back since making all-time highs last week so it isn't surprising to see PMOs now in decline. The OEX couldn't hold on to its PMO BUY signal and I suspect another decline will start flipping the other three indexes' PMOs to SELL signals as well.

The OEX is traveling within an intermediate-term rising trend channel. It tested the top and has been moving lower ever since. Horizontal support at the January top failed to hold. The next logical support is at the February/March tops. However, I think price could find support before that along the less steep and shorter-term blue rising bottoms trend line. The OBV has really tanked which shows that volume is following this decline. In fact, it appears that volume is getting stronger as price declines. 

Conclusion: "Volume leads price" is the saying we hear often in this business and there is a reason, because in most cases it is true. High volume on a decline like we are seeing on the OEX is very bearish. This is combined now with a new PMO SELL signal. Look for a decline to about 1255.

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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