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DP Bulletin #2: OEX New ST Neutral Signal - QQEW New IT Neutral Signal, NDX Next?

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Another BUY signal is lost on the DP Scoreboard Summary. The OEX joins the SPX and NDX with a new ST Trend Model Neutral Signal. Interestingly, today the equal-weight Nasdaq 100 ETF (QQEW) logged a new IT Trend Model Neutral signal. Does this portend the same for the NDX?



The STTM Neutral signal was generated when the 5-EMA crossed below the 20-EMA while both were above the 50-EMA. Had the crossover occurred below the 50-EMA it would've been a SELL signal. Neutral is the same as being fully hedged or in cash rather than a short position which is implied by a SELL signal. The rising wedge executed on the OEX. Good news is that it is holding support at the January top as well as the 50-EMA. The negative divergence on the PMO may've already played out with this week's decline, but I wouldn't be so sure. If price begin to dip below the red rising bottoms trendline, this could get messy. 

The equal-weight version of the NDX, QQEW, logged a new IT Trend Model Neutral signal. I've added both the QQEW and NDX charts below. Notice that QQEW has been consolidating sideways along the March top. The NDX was in a rising trend and outpaced its sister QQEW. Seeing the NDX perform so much better than the QQEW suggests that the big name, large-cap stocks were responsible for much of the rising trend. Price is testing the 200-EMA on QQEW while the NDX is still very comfortably above it. I believe the NDX is still vulnerable to a test of the March top as well as its 200-EMA given the negative configuration of the PMO and OBV. If price remains below the 50-EMA for much longer, the NDX could see that ITTM Neutral signal sooner rather than later.


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)

ITBM and ITVM

SCTR Ranking


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Erin Swenlin
About the author: helped create and manage the DecisionPoint.com website alongside her father, Carl Swenlin. Together, Erin and Carl launched the DecisionPoint daily blog in 2009. She hosts the MarketWatchers LIVE web show at StockCharts.com, and is also a Member of the CMT Association. Learn More
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