SPX Monitoring Purposes: Long SPX on 12/20/22 at 3821.62.
Monitoring Purposes GOLD: Long GDX on 10/9/20 at 40.78.
Long Term SPX Monitor Purposes: Neutral.
Yesterday we said, “Market bottoms form on panic, and the TRIN is one way to identify panic is present. One-day TRIN readings above 1.30 suggest panic is present in the market. The more days of panic readings in a row, the larger the bottom that is forming.” The bottom window is the 5-day average of the TRIN, and the next window up is the 10-day average. The chart goes back to mid-2019. We marked with blue lines the times when the 10-day TRIN closed above 1.25 and the 5-day TRIN closed above 1.50. When these two average TRIN readings are paired up, the market was at least near a basing period, suggesting a rally was about to start or had already started. The 410 on the SPY is still possible short-term. For a confirmed uptrend, would also like to see the Summation index reach +1000.
Again we updated this chart from yesterday. The current NYSE Summation index reading is +683 and moving higher, shy of the +1000 target by +317. There is a good chance that the +1000 Summation index will be reached. Bullish intermediate term rallies form when the NYSE McClellan Summation index falls below -700 (capitulation) and than rallies to +1000 (Sign of Strength). The Summation index reached below -1000 in early October, and now we are looking for a +1000 to confirm an intermediate-term low. The bottom window is the NYSE McClellan Oscillator. We circled in red the times when the Oscillator reached a cluster of +300. The current cluster of +300 readings is the largest bunch, circled in red, which suggests a high degree of accumulation.
We updated this chart from yesterday. Both indicators are well above -10, suggesting the rally can continue. We said yesterday, “The bottom window is the 18-day average for the Advance/Decline percent for GDX and the next window up is the 18-day average for the Up Down Volume percent for GDX. It turns out that, when both indicators are above -10 (noted in light blue), then GDX is in an uptrend. In general, both indicators have been above -10 since September. Both indicators’ current readings are coming in at +19, suggesting the current rally will continue. We may see a continued march right back to the old highs near 41.00. A fall below -10 on both indicators will be a short term bearish sign.”
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