SPX Monitoring purposes; Neutral.
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
Equity Put/Call ratio closed Friday at .77, which suggests the market could bounce (88% of the time within 5 days) and that bounce is in effect now. There is a confluence of Fibonacci levels of 50% and 61.8% retracement level at the 2620 SPX range, which is where the November and December lows lie, and a resistance zone (today’s close 2607). Watching the TICK and TRIN for bearish clues; nothing showing up for an edge but there could be shortly. The large open gap at the 2450 range most likely will get tested sooner rather than later. The TICKs (near top of chart) have remained above “0” as the December low suggests the momentum is still up. The market could bounce to the Fibonacci Confluence level near 2620 SPX range, where it could turn down to test the January 4 gap near the 2450 range (still bullish longer term).
January option expiration week has odds of 75% being lower, with an average loss of 1% and the second worst week of the year. There can be a pull back here, but the bigger trend is up. There have been “Zweigh Breadth Thrust,” “McClellan Oscillator Breadth Thrust” (above chart) and a “Walter Deemer Breakaway Momentum Thrust,” all of which are bullish and suggest a new high in the market in the next twelve months. These “Thrusts” suggest the December low will not be broken. However there is a good possibility that the January 4 gap near 2450 SPX range could be tested. There is resistance around the current SPX price and we are watching for a setup.
Above is the daily Inflation/Deflation ratio and above that window is the daily XAU. The daily Inflation/Deflation ratio leads the way for the XAU (GDX). The Inflation/Deflation ratio updates later after the close and the price shown above is yesterday’s close, which showed a large move down. Today the XAU followed and closed lower. The bottom window is the XAU/Gold ratio, which also usually leads the XAU; today it closed below its December low, suggesting that, at some point XAU, will close below its December low (62.00 range). In conclusion, the intermediate term for XAU remains bullish, but the short term picture (next several weeks) shows a bearish slant. Ideal time for a gold and gold stock bottom is around January 22 (next Tuesday), but that can change. Not sure if the pullback will test the September low, but it could. This potential pullback could lead to a longer bullish setup. We will wait for the next bullish setup.