Monitoring purposes SPX: Neutral
Monitoring purposes GOLD: Gold ETF GLD long at 173.59 on 9/21/11
Long Term Trend monitor purposes: Flat
Market is stuck in neutral. The Above chart is the Bullish percent index for the SPX/ CBOE put/call ratio. Going back near four and half years when this ratio reached above 105 (current reading is 107.85) the market at least stalled and in most cases produced a pull back. There was on failure (market failed to stall) back in late 2010 and early 2011 but in the other eight cases (89% of the time) the market stalled or pull back. We are still expecting the market not to make headway here and a pull back to 191 on the SPY is still possible.
There are not a lot to go on here. Yesterday’s TRIN close of 2.18 was a bullish short term sign and could push the SPY to yesterday’s high. With the bearish readings of the put/call studies from page one of this report, that should be about it for the market and another push lower is possible. Next Friday is July 4 and market is closed. A decline into July 4 would be bullish sign in that going into a holiday the volume drops off and a declining market on light volume is bullish. With the Option studies showing a negative slat for the market, a pull back to support near 191 range on the SPY is still possible. Staying neutral for now.
There is symmetry in Head and Shoulders both in time and Price. On the GDX chart above is Cycle line tools, one in red and one in blue. The red one shows the time of when the Left Shoulder bottom to the “Head” and than to the Right Shoulder bottom and shows both timeframes where equal in time. The larger blue Cycle Line Tool shows when the Head and Shoulders began to the “Head” and extends out to where the Head and Shoulders pattern may end which comes in late July or early August. Between now and then market may establish a trading range to build “Cause” for the next move. Head and Shoulders pattern has a measured target near 35 on GDX. We will be looking for a bullish setup over the next 30 days. Noted with blue arrows is for now our forecast, which may change as we move forward.
Tim Ord
