SPX Monitoring purposes; Long SPX on 10/22/18 at 2755.88.
Monitoring purposes GOLD: sold 11/27/18 at 18.88=gain .075%; Long GDX at 18.72 on 8/17/18
Long Term Trend SPX monitor purposes; Long SPX on 10-19-18 at 2767.78
The American Association of Individual Investors' bull bear ratio (AAII) has reached levels where intermediate term lows have formed. The .75 level of the 3-period moving average (AAII) has been hit, suggesting markets are at an intermediate term low. The TRIN closed at 2.76 and Ticks at -357, producing panic readings that suggest a bottom will form from today to as late as two days later, which is Friday. With the McClellan Oscillator rallying +500 points to early November, suggesting an initiation of an up-move after the current pull back, we expect another rally higher.
On yesterday’s report we said, “If market does pull back in the coming days, it could form a “Right Shoulder” of a “Double Head” Head and Shoulders bottom. This potential Head and Shoulders bottom would have an upside target near 299 on the SPY (gain near the 300 SPY) (3000 on the SPX). Today’s rally tested the gap on November 9 on higher volume and suggests at some point the gap of November 9 will be exceeded.” Today the TRIN closed at 2.76 and Ticks at -357, suggesting a bottom will form from today to as late as two days later (Friday). Today’s volume jumped 30% for the day before suggesting a “Selling Climax.” The 3-day average of the TRIN reached above 1.40 (bottom window) and is where the bottom has formed. Market needs panic to form to get a strong rally to materialize and that panic is present. It's possible to see 3000 on the SPX before the year is out. From three weeks ago Monday’s report, “Since 1950 the change from October low through year-end average=10.7% gain (with no losses) during mid term elections years (@theonedave). The 10.7% average from the October low would give a target near 289 on the SPY (2890 SPX).”
The above is the weekly charts for “Bullish Percent Index for Gold Miners,” GDX, GDX/GLD ratio and GLD (EFT for Gold, bottom window). Again this is the weekly charts. What these charts have in common is the weekly Bollinger bands are pinching in all cases, suggesting a large move is coming. Since these charts are on the weekly timeframe, several more weeks of “pinching” is possible before the large move is realized. The last time that the weekly Bollinger Band pinched to this degree on GDX, the GDX/GLD ratio came back at the 2015 bottom. Both indexes had a “Head fake’ to the downside before reversing higher. We don’t have a signal here, but one could develop in the coming weeks. Last Friday’s Gold COT report reported that commercials are 16K short and remain on the bullish side for gold. We sold our long GDX position (11/27/18) at 18.88 for a .075% gain; Long GDX at 18.72 on 8/17/18. We will wait for the next bullish setup.