When in early-September SPY took out its August low, I thought that the fall correction was finally getting underway. But no. Instead, a slightly lower level of support was established, and price continued sideways. That support was tested successfully on Thursday, but Friday's attempt to extend the rally failed.
The DecisionPoint Scoreboards have been flipping out. Whipsaw has wreaked havoc on the Short-Term Trend Models (STTMs) and Price Momentum Oscillator (PMO). However, today's signal change is from the Intermediate-Term Trend Model (ITTM). Whipsaw isn't out of the question, but typically it doesn't happen as much with intermediate-term indicators. The STTM is based on 5/20-EMA crossovers, but the ITTM is based on 20/50-EMA crossovers; hence, less whipsaw and more importance.
I recently received a request from a webinar viewer to make a comparison between Natural Gas (UNG) and US Oil Fund (USO). As I pulled up the daily chart for UNG, I noted a very important signal. The 50-EMA just crossed above the 200-EMA! This triggers a Long-Term Trend Model (LTTM) BUY signal. This signal implies that UNG is now in a "bull market". USO has not yet had that important signal.
Gold had a bad week, decisively breaking down through a rising trend line drawn from the December low. Note that the PMO crossed down through its signal line (PMO SELL signal) a few days before the price break, and the 20EMA crossed down through the 50EMA (IT Trend Model NEUTRAL signal) the day after the rising trend line was penetrated. The 50EMA is above the 200EMA, so I consider that gold is still in a bull market, albeit correcting.
In Tuesday's blog, "YOU to Can Create DP Scoreboards - Visually Stunning", I explained to you how to find the signals on the charts to create your own DP Scoreboards like the ones located in the DP Chart Galleries. The questions that followed were how to get the signals on your Scoreboards without having to look at all of the charts everyday. There are two ways to do this, one is to run scans for these crossovers daily or two, set up Technical Alerts that will email you only when crossovers are generated. This is how I update my Scoreboards.
Since the DecisionPoint Scoreboards launched over a year ago, they have been wildly popular. The most current Scoreboards are below. Each of the four Scoreboards headline each index's Chart Gallery. These Scoreboards provide a very quick visual look at what the current trends and momentum readings are in three timeframes. With their newfound popularity, my email box has been filling with, "Can you add the ______ index to your Scoreboards?" Well, I really can't but there is no reason you can't have your own Scoreboards for whatever index, ETF, stock, etc. that you wish. Here's how:
A PMO bottom is one of the first signs we get that a new up trend may be at hand, and action in the very short-term may be considered. It would be convenient if every PMO bottom was a sure thing, but, of course, that is not the case. The series of PMO bottoms formed over the last two weeks is a good example of how some signals are throwaways.
I loved ChartCon 2016 for many reasons, chief among them was education--the education of you and me. Our education is inevitable when you can network with or watch John Murphy, Martin Pring, Greg Morris, Arthur Hill...and so on! Greg Schnell is another "tech titan" who presented at ChartCon 2016. He showed me one very uncomplicated concept. When I began applying this simple technique to my daily charts, I was honestly astounded that I hadn't figured it out myself. (Maybe I should read Greg more often!)
Before we ask if an oversold bounce is possible, we should ask if the market is oversold. Looking at the chart below, the PMO is just above the zero line. While that level proved to be oversold after the Brexit vote at the end of June, a more typical oversold reading is around -2.0, like it was in February. But maybe we can find another indicator that might offer some hope of a short-term bottom.
It happened all in the same day. I was talking to my dad, Carl Swenlin exclaiming how I think I'm "chart pattern crazy". Then, I received a chart via email from one of my "DecisionPoint Report" webinar viewers. He actually sent the chart to someone else and I was copied on it. At the end of his explanation of the chart to his friend, he ended with, "Erin, I know you like charts."