The DecisionPoint LIVE webinars on Wednesday and Fridays at 7:00pm EST are news programs. In just 30 minutes, I go over the current DecisionPoint Scoreboards, cover daily/weekly/monthly charts of major large- and small-cap indexes, review indicators and finish with analysis of the "Big Four" -- Dollar, Gold, Oil and Bonds. I've found through communicating with my viewers and readers that they wanted hands-on advice or instruction on how to analyze a chart using the DecisionPoint Analysis Process. I've begun taking symbol requests so I can do a "Chart Spotlight" at the end of the program to give viewers just that...a real-time review of a symbol.
Just before Christmas I wrote an article saying I was expecting a correction or consolidation because our primary intermediate-term indicators had all topped. On the chart below we can see the annotations (down arrows) I made at the time, and we can see what actually happened. There was a small correction into the end of the year, then price rebounded and consolidated for about three weeks -- not really what I had in mind. There was an internal correction, wherein the indicators moved back toward their zero lines, even as price continued higher. Again, not really what I was expecting.
Both the Energy SPDR (XLE) and its counterpart, the equally-weighted Energy ETF (RYE) triggered new Intermediate-Term Trend Model Neutral signals when the 20-EMAs crossed below the 50-EMAs while the 50-EMA was below the 200-EMA. We consider a stock, index, ETF, etc. to be in a "bull market" as long as the 50-EMA is above the 200-EMA. This is why we don't move to a SELL signal unless the 50-EMA is below the 200-EMA.
With some broad market indexes making record highs, one would think that total mutual fund assets would be following suit. But no. As of the end of December Total Stock Mutual Fund Assets were still below the record highs set in 2015, and are failing to confirm record price highs. (These data are collected by the Investment Company Institute and are published a month in arrears. January's totals won't be available until the end of this month.)
Yale Hirsch was the first to propose, "As the Standard & Poor's goes in January, so goes the year". Simply meaning, if the S&P 500 closes higher in January, the end of the year should finish higher OR if it closes lower, it will close lower on the year. There are mixed reviews regarding the January Barometer. In fact, The Wall Street Journal published an article on January 8, 2017 titled, "Sorry, the 'January Barometer' Is a Market Myth".
After correcting nearly -20% from the July 2016 top, gold rallied off the December low, hitting a rally high on Monday. Then it spent the rest of the week correcting, dropping below horizontal support set last year. It also dropped below the 20EMA and 50EMA, which action turned those EMAs down and caused the PMO (Price Momentum Oscillator) to top. A very short-term positive on this chart is that Friday's price closed near the top of the day's range, hinting at a short-term bottom.
I've begun taking symbol requests prior to my Wednesday and Friday webinars. Viewers are treated to a DecisionPoint viewpoint on their favorite symbols. This is an excellent opportunity to understand how to look at a chart and find what you need to in order to make an educated investment decision. While DP analysis and indicators aren't always right, but like Blackjack, you improve your odds considerably simply by knowing and applying the basic rules.
As I can attest to, California has been hit with a deluge of rain. We have needed it for a very long time to alleviate almost non-stop drought conditions. I found it interesting when I did a Short-Term Trend Model (STTM) technical scan, California Water Services Group (CWT) had just had a new Short-Term Trend Model BUY signal, a new Intermediate-Term Trend Model (ITTM) BUY signal AND a pending Price Momentum Oscillator (PMO) BUY signal! It may or may not be related to the rainy weather, but the chart is interesting none-the-less.
The Dow Jones Industrial Average is clearly in a bull market, having made a strong move in November and December to new, all-time highs and coming within less than a half point of reaching 20,000; however, as I perused the charts of the 30 Dow components I found three stocks that are actually in bear markets. That is only 10% of the the component stocks, so it isn't a big deal, but I thought it was worth looking at them. But before I get to those bear market stocks, let's quickly evaluate the Dow chart.
Yesterday during my webinar, I added a "chart spotlight" at the end of the program. It's a new feature that viewers had asked for since I generally go through a review of the major indexes (small and large), DP indicators and the "Big Four" as I call them, Dollar, Gold, Oil and Bonds, so this addition adds a new chart or two each time. I typically will run a scan to find possible candidates; however, this time it was presented to me through a technical alert. I reviewed the Consumer Staples SPDR (XLP) because I was alerted that it had just triggered a Long-Term Trend Model (LTTM) BUY signal.