Top Advisors Corner

Tim Ord: The Ord Oracle - February 25, 2015

Tim Ord

Tim Ord


Monitoring purposes SPX: Long SPX on 2/3/15 at 2050.03.
Monitoring purposes GOLD: Gold ETF GLD long at 173.59 on 9/21/11
Long Term Trend monitor purposes: Flat 


This chart looks at the short term picture for the SPY.  Normally these indicators on this chart will show bullish or bearish signs before a top or bottom is completed.   The top window is the McClellan Oscillator and reading above “0” is a bullish sign for the market and today’s reading came in at 68.85.  Next window down NYSE up volume with 5 period moving average and NYSE down volume with 5 period moving average.  March 23 this indicator had a bearish crossover and remains on a bearish crossover. The bottom window is the NYSE advance with 5 period moving average and NYSE Decline with a 5 period moving average.  The advance decline moving averages is holding on to a bullish crossover signal.  Two of the three indicators are on bullish signals, which implies the short term trend remains up.  When all three indicators are in bearish territory, than one can expect a pull back in the market.  On a previous report we had an upside target to the December 18 high  near 212 on the SPY and the last two days have been testing that level.  The short term indicators still suggest the market can push higher and may nullify this resistance area.   Long SPX on 2/3/15 at 2050.03.

The above chart looks at the bigger picture.  The top window is the McClellan price Oscillator.  Tops normally form when the McClellan Oscillator is below “0” and today’s reading came in at 72.60.  Next window down is the VXZ/VXX ratio. VXZ is S&P VIX mid term Futures ETN and VXX is the S&P VIX short term ETN.  This ratio some times show divergence at tops where this ratio will make lower highs as the SPY will make higher highs (See chart for previous divergences). Right now no divergence is present.  The bottom window is the SPYVIX ratio.  This ratio will so show divergence at tops where the SPY will make higher highs and SPY/VIX ratio will make lower highs.  So far the SPY/VIX ratio is not showing a divergence.   Since the bigger picture so far remains free of divergence we conclude the trend is up.

The pattern that has been forming since the November low appears to have been and “ABC” of which is more of a consolidation pattern and not a bullish Elliott wave five count up. There could still be a bottom forming here and a bounce up but likely the best GDX could do is a test of the January high near 23 range.  GDX/GLD ratio is still showing a positive divergence and a bullish sign.  We put a dark blue line 7 period moving average on the GDX chart and when its above this line, rallies formed and today GDX closed above this line suggests a bounce is likely.  Seasonality charts turn back to bullish in the June to July period.  We are back on the sidelines and what may transpire over the next several weeks is a trading range.

Tim Od,
Editor 
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