We usually feature a SPY chart in this space, but Apple (AAPL) has really grabbed my attention recently. I have been watching it for a few weeks as it formed a rounded top, and finally broke down through horizontal support on Thursday. AAPL is important to the broad market because it is so heavily weighted in the major market indexes. If it tanks, it will certainly affect the rest of the market. On the positive side, after three day's of selling, it appears to have made a short-term bottom.
As you can see below, the NDX's steep decline has thrown the Price Momentum Oscillator (PMO) below its signal line. I don't expect to see similar readings from the other indexes as they haven't been hit as hard as techs on the latest declines. It also took the NDX some time to generate the original PMO BUY signal. You'll see on the daily charts for the other three indexes that PMO SELL signals are not likely unless we see a deeper decline.
DecisionPoint tracks not only the sector SPDRS, but we also follow the equal-weight versions. For more information about the benefits of trading equal-weight ETFs, you can read this article written by Carl. Today is a teachable moment with these three IT Trend Model BUY signals arriving on the same day. The lesson? Not all BUY signals are good BUY signals, some may be "good-bye" signals.
It may seem strange that all of the Scoreboards are green except in the area of intermediate-term PMO signals. A look at the weekly charts for all four indexes reveals all but the NDX weekly PMO are rising up toward IT PMO BUY signals. The margin is still rather large so I wouldn't expect to see these signals update until next Friday at the earliest. To see the weekly charts (including daily and monthly charts) of the four Scoreboard indexes, go to the DecisionPoint ChartList. The link is located at the top of the main DecisionPoint blog page.
The last two days have issued SIX new Intermediate-Term Trend Model (ITTM) BUY signals. It shouldn't be a surprise that the Energy SPDR (XLE) and Natural Gas (UNG) triggered given the buzz around that sector last week on MarketWatchers LIVE and headlines on our StockCharts.com Blogs page. Arthur Hill and I noted the push that small and mid-caps were making mid-week and today, the Financial sector was on fire. Take a look at these very bullish charts!
For a few weeks I have been expecting an upside breakout, and on Monday the breakout finally happened. The internal action on that day indicated that a buying climax had taken place, an event that very often leads to some post-climax churning or pullback. Also, this was an options expiration week, a process that tends to keep prices fairly quiet.
A day passed with no signal changes for the DP Scoreboards, but also for the SPDRs and their equal-weight counterparts that DecisionPoint follows. The market is taking a short pause. I suspect with options expiration tomorrow, we will see more flat trading though with higher volume.
DP Bulletin: PMO BUY Signal Finally Triggers on $INDU - New PMO Signals TLT, UUP - ITTM BUY Signals IWM, XLP
Lots of new signals today! Three important PMO signals arrived on the Dow, Bonds (TLT) and Dollar (UUP); not to mention two important Intermediate-Term Trend Model BUY signals on Russell 2000 ETF (IWM) and Consumer Staples SPDR (XLP). Feast your eyes on these charts!
No changes to the DP Scoreboards. We're just waiting on the Dow to log a PMO BUY signal. Reviewing the chart of the Dow we can see that a PMO BUY signal should trigger on the next positive close, if not sooner. Today's breakout to new all-time highs was impressive. I like that it appeared off the positive divergence between the OBV and price.
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.