The market is presently topping as a result of the Silver Cross Index (SCI), which expresses intermediate-term participation, is overbought and topping. A Silver Cross is when the 20EMA of a worth index crosses up by the 50EMA. The Silver Cross Index exhibits the proportion of shares in a market or sector index which have a made a Silver Cross. The SCI presently has a studying of 75 p.c, having fallen from a high of about 80.
On the chart beneath we even have the supply indicators for the Silver Cross Index. The % Shares Above 20EMA reads 50 p.c, and the % Shares Above 50EMA reads 66 p.c. If this configuration is maintained, the SCI will essentially fall to about 66. Such a drop in participation will seemingly have a damaging impact on worth.
The Golden Cross Index (GCI) tracks the proportion of shares within the index with a Golden Cross, which is when the 50EMA crosses up by the 200EMA. That is an expression of long-term participation. At the moment the supply indicators present the % Shares Above 50EMA at 66 p.c, and the % Shares Above 200EMA at 66 p.c. If this configuration is maintained, the GCI has no upside potential.
DecisionPoint tracks the Silver Cross and Golden Cross Indexes for 25 market indexes, sectors and trade teams, and we publish this desk within the DecisionPoint ALERT weekly.
CONCLUSION: Deterioration of participation (the SCI) is more likely to trigger additional worth decay within the intermediate-term, which can seemingly see stalled long-term participation (the GCI) start to say no as effectively.
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Value Momentum Oscillator (PMO)
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Carl Swenlin is a veteran technical analyst who has been actively engaged in market evaluation since 1981. A pioneer within the creation of on-line technical sources, he was president and founding father of DecisionPoint.com, one of many premier market timing and technical evaluation web sites on the internet. DecisionPoint focuses on inventory market indicators and charting. Since DecisionPoint merged with StockCharts.com in 2013, Carl has served a consulting technical analyst and weblog contributor.
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