Major Stock Indexes Are Faltering
At the end of November the Dow Jones Industrial Average ETF (DIA) advanced just above +20% from its October low and officially entered a new bull market; however, technically, an intermediate-term rising trend had not been established. There is a bottom above the September bottom (green arrows), but there is not yet a top above the November top. In fact the last top is lower than the November top, and the next thing we are looking for is for price to fall below the December bottom to establish a new falling trend. The PMO (Price Momentum Oscillator) has topped and crossed down through the signal line (PMO SELL Signal).
Other major indexes have also faltered. The S&P 500 (SPY) never made it to bull market territory. It also failed to establish a new rising trend, and its PMO has topped.
The S&P 400 Mid-Cap (MDY) actually did make a higher top, but it has turned down and formed a bearish rising wedge.
The S&P 600 Small-Cap (IJR) is similar to SPY and DIA.
While the broad market has rallied off the October lows, the Nasdaq Composite (ONEQ) has been dead in the water, rallying only +11%. The best that can be said about at present is that it has formed a bullish falling wedge.
Conclusion: While the Dow managed to advance into bull territory, other major indexes remain in bear markets. The enthusiasm that helped the market rally out of the October lows is fading, and current signs are that the rising trend will be abandoned and a new falling trend established. It is not too late for the bull to be revived, but at this point the market appears to be turning down.
Watch the latest episode of DecisionPoint on StockCharts TV’s YouTube channel here!
Technical Analysis is a windsock, not a crystal ball. –Carl Swenlin
(c) Copyright 2023 DecisionPoint.com
Helpful DecisionPoint Links:
DecisionPoint Alert Chart List
DecisionPoint Golden Cross/Silver Cross Index Chart List
DecisionPoint Sector Chart List
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
Bear Market Rules
DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. DecisionPoint newsletters, blogs or website materials should NOT be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.