Top Advisors Corner

Tim Ord: The Ord Oracle - November 12, 2014

Tim Ord

Tim Ord


Monitoring purposes SPX: Sold 9/30/14 at 1972.29= gain .003%;  Long SPX on 9/25/14 at 1965.99.
Monitoring purposes GOLD: Gold ETF GLD long at 173.59 on 9/21/11
Long Term Trend monitor purposes: Flat 


The above chart looks at the internals statistics of the market which is the up and down volumes as well as the advance and declining issues.   The top window is the McClellan Oscillator which is above “0” and still in bullish territory but has been dropping for the last couple of weeks and a weakening position.  Next window down is the 9 period moving average of the up volume (blue line) and 9 period moving average of the down volume (red line).  Right now up volume is above down volume and still in bullish mode.  When up volume is below down volume than that would produce a bearish crossover and a bearish sign for the market.  The bottom window is the 7 period moving average of the advancing issues (blue line) and 7 period moving average of the declining issues (red line).  Right now the advancing issues is on top and declining issues and shows that there are more issues advancing than declining and bullish.  When the Red line is on top than that will show there are more issues declining than advancing and a bearish sign. Both the Up volume; down volume and advance; decline moving averages are narrowing but have not crossed which shows a weakening up trend that is trending towards a bearish resolution.    We are staying neutral for now.

The chart above goes back about a year. The VXZ is the mid term VIX and the VXX is the short term VIX.  This ratio helps to find the trend for the SPY.  The blue vertical lines show a bullish crossover for the VXZ/VXX moving average ratio which anticipates a bullish condition for the market.  The red verticals lines show a bearish crossover for the VXZ/VXX moving average ratio which implies a bearish condition for the market.  A bullish crossover occurred in mid October and maintains on that signal.  The bottom window is the SPY/VIX ratio which also produces bullish and bearish crossovers than come close to mirroring the VXZ/VXX signals and help to confirm one another.  The SPY/VIX ratio has bended down but has not crossed its moving average and is producing a warning sign but has not triggered a bearish sign.  

Above is the monthly Dollar index (USD) going back to 1995.  The pattern that has been forming since 2006 appears to be a large “Triangle” patten.  Normally a “Triangle” breaks in the direction that proceeded it and in this case the expect break will be down.  Of all the technical patterns the “Triangle” pattern is one that produces false breaks consistently.  The break above the upper boundary line could be a false break in the current “Triangle” pattern for the USD.   Notice that so far form the 2001 high down to the 2008 low, the USD has not be able retrace back to the 61.8% level near 90.50 and shows the bigger trend is still weak.  The USD may have a tough going form here with the monthly RSI up near 70%.  Jury is still out if the USD has made a major low or that the current break above the boundary line is a false break and the true break will come with a break below the lower boundary line which the “Triangle” pattern predicts.  

Tim Ord,
Editor
www.ord-oracle.com