The following is an excerpt from the July 2, 2013 blog for Decision Point subscribers.
Price movement was choppy and indecisive in advance of the holiday. Egypt unrest was on the radar, but more likely many investors are closing positions before leaving town.
U.S. markets will close early tomorrow (1:00 pm et) and will be closed Thursday for Independence Day.
Stocks: Based upon a 12/10/2012 Thrust/Trend Model buy signal, our current intermediate-term market posture for the S&P 500 is bullish. The LT Trend Model, which informs our long-term outlook, is on a buy signal as of 12/13/2012, so our long-term posture is bullish.
Price has turned back down after it hit overhead resistance yesterday. The PMO is rising slightly. Volume expanded slightly but is still below average.
The CVI and % PMO Rising are neutral and falling.
Short-term indicators have all topped but only ticked down, leaving them in very overbought territory--a bearish configuration.
Intermediate term, indicators are bullish. All of them have bottomed and all are rising.
Conclusion: We can't read too much into this week's trading action, but in the short term the market looks weak and short-term indicators have topped and are overbought. No point in making any serious investment decisions until trading gets back to 'normal' next week.
Dollar: As of 6/11/2013 the US Dollar Index ETF (UUP) is on a Trend Model neutral signal. The LT Trend Model, which informs our long-term outlook, is on a buy signal as of 3/13/2013, so our long-term posture is bullish.
UUP has made some wild swings the last few months, and the Trend Model is just about ready to switch to a buy as the 20-EMA nears a positive crossover the 50-EMA.
Gold: As of 12/6/2012 Gold is on a Trend Model neutral signal. The LT Trend Model, which informs our long-term outlook, is on a sell signal as of 2/15/2013, so our long-term posture is bearish.
Gold broke out from a very accelerated declining tops line. Intraday price traded higher, but closed lower, possibly signalling that the very short rally is over.
Crude Oil (USO): As of 6/7/2013 United States Oil Fund (USO) is on a Trend Model buy signal. The LT Trend Model, which informs our long-term outlook, is on a sell signal as of 5/22/2012, so our long-term posture is bearish.
With political unrest in Egypt and a chance that our foreign oil supply may be disrupted, price broke out on USO. A long-term Trend Model signal change is imminent, as the 50-EMA is only one one-hundreth of a point away from crossover above the 200-EMA.
Technical analysis is a windsock, not a crystal ball.
