The following is an excerpt from the May 29, 2012 blog for Decision Point subscribers.
The market opened higher and then fell apparently amid concerns about Spain this time. Prices did recuperate midday so stocks closed near the high for the day.
Stocks: Based upon a 05/15/2012 Thrust/Trend Model neutral signal, our current intermediate-term market posture for the S&P 500 is bullish. The long-term component of the Trend Model is on a buy signal as of 1/5/2012, so our long-term posture is bullish.
Looking at the daily bar chart we see that today's top hit horizontal resistance before turning back down. Today's positive price movement was enough to turn the PMO back up. The PMO bottom is in somewhat oversold territory, but not a place that gives me confidence that we have a solid price bottom. Volume was better than the holiday volume of Friday, but it is still weak.
Short-term indicators are now somewhat or mostly overbought.
The ultra-short-term CVI jumped today into overbought territory, so we could see a small pullback as a result. The STVO is now overbought and rising.
The STO-B and STO-V have both reached overbought but could certainly move higher.
Intermediate-term indicators had mostly bottomed by last Friday. Today they are moving out of oversold. The ITBM and ITVM both had positive crossovers their EMAs.
The McClellan Oscillator is now overbought and the Summation Index just bottomed.
Conclusion: The 10-minute bar chart is probably a microcosm of what we are likely to see for awhile. Short-term indicators are overbought, leaving us expecting lower price moves; but, intermediate-indicators are bottoming and leaving oversold territory. These conditions are conflicting, so they could be cleared by more churning.
Gold: As of 3/15/2012 Gold is on a Trend Model neutral signal.
I keep feeling bullish about gold and then it disappoints. Today prices were lower and now we have a corkscrew or coil. Overall the pattern is still in a declining trend since the January "breakout". I keep saying it is 'now or never' for a gold rebound and the answer seems to always be 'not yet'.
Technical analysis is a windsock, not a crystal ball.
