DecisionPoint tracks 26 market, sector, and industry group indexes, and we monitor moving average crossovers for those indexes as a way to assess the bullish or bearish condition of those indexes. A Silver Cross BUY Signal is generated when the 20-day EMA a price index crosses up through the 50-day EMA, giving us a strong indication that the price index is in a bullish configuration. The left column of following table shows the IT signal status of the indexes we track. The right column is for the longer-term Golden Cross signals (50/200-day EMA crossovers), which are not an issue at this time. This is how the table looked on July 31, 2024:
The next table shows the signal status as of today, and we can see that there is considerable deterioration in the market status. Nine of the indexes have changed from a BUY Signal to NEUTRAL, which is when the 20-day EMA crosses down through the 50-day EMA (Dark Cross) above the 200-day EMA. (It would be a SELL Signal if the 20/50 EMA downside crossover took place below the 200-day EMA.) Of the remaining IT BUY Signals, all but three are liable to switch to NEUTRAL within the next few weeks. The three that look safe (for now) are Consumer Discretionary, Real Estate, and Utilities.
Conclusion: There is broad-based intermediate-term deterioration taking place in the stock market. Not only have nine indexes lost BUY Signals, most of the rest are likely to lose their BUY Signals in a week or so, unless the current rally continues and broadens out.
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Carl Swenlin is a veteran technical analyst who has been actively engaged in market analysis since 1981. A pioneer in the creation of online technical resources, he was president and founder of DecisionPoint.com, one of the premier market timing and technical analysis websites on the web. DecisionPoint specializes in stock market indicators and charting. Since DecisionPoint merged with StockCharts.com in 2013, Carl has served a consulting technical analyst and blog contributor.
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