Market Outlook for Stocks, Bonds, Gold, USD and Oil

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The following is an excerpt from the July 24, 2012 blog for Decision Point subscribers.

The market dove down lower this morning and like yesterday managed to turn back up and recover some losses.

Stocks: Based upon a 06/29/2012 Thrust/Trend Model buy 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.

The rising trend channel is still anotated, but with the last price top not reaching overhead resistance, a bearish ascending wedge formed. Price ventured slightly below rising bottoms support before turning back up to close above it.

We are seeing many negative divergences on our indicators, note the charts below.

Conclusion: The market is not acting like it is ready to bottom despite yesterday and today's last minute price saves. The last top didn't quite make it to overhead resistance and caused a bearish ascending wedge. There are numerous indicator negative divergences. We also see recent buy signals beginning to whipsaw back to sell signals on our Decision Point Alert daily report. While the market hasn't completely given up the ghost, support still looks unsteady.

Dollar: As of 5/14/2012 the US Dollar Index ETF (UUP) is on a Trend Model buy signal.

The dollar continues its rise since the recent breakout last week, clearly due to Euro problems.

Gold: As of 3/15/2012 Gold is on a Trend Model neutral signal.

Gold has loosely formed a symmetrical triangle pattern. This is sometimes considered a reversal pattern, but there are no guarantees. If this turns out to be a reversal, we would expect price to go in the opposite direction it was headed before the formation of this short-term triangle; in this case that would be up.

Confidence in this being a reversal is fairly low because the PMO is continuing to free fall lower and the weekly chart still looks bearish with it's PMO falling and the bearish descending triangle dominating the picture.

Crude Oil (USO): As of 5/3/2012 United States Oil Fund (USO) is on a Trend Model neutral signal.

USO bounced off of intermediate-term support and has been making a move back toward the top of the gently sloping descending triangle.

Bonds (TLT): As of 4/19/2012 The 20+ Year T-Bonds ETF (TLT) is on a Trend Model buy signal.

TLT again closed at an all-time high today. PMO is still rising steeply since the positive crossover.

Technical analysis is a windsock, not a crystal ball.