Top Advisors Corner

Tim Ord: The Ord Oracle - May 27, 2015

Tim Ord

Tim Ord


Monitoring purposes SPX: Short SPX on close (4/29/15) at 2106.85.
Monitoring purposes GOLD: Flat
Long Term Trend monitor purposes: Flat 


When there is an abrupt increase in volume to the downside (usually > 30% increase in volume) compared to the days around it, its referred to as a “Selling Climax”.   We have noted with red arrows over the last couple of months the “Selling Climax” days and yesterday fits that category.  All most all “Selling Climax” days are tested (or exceeded in some cases) to form the next low.  If the “test” comes on lighter volume than that is a bullish condition and if the “test” comes on higher volume than the decline may continue.   Today’s rally tested yesterday’s high on lighter volume and suggests resistance and may reverse.  Yesterday TRIN close came in at 2.20 with Ticks readings of -433 and in panic levels.  If the test of yesterday’s low comes in on lighter volume than we may cover our short SPX position for another possible bounce higher.  The larger trend is still weakening so the potential next bounce may also be weak.

The big decline yesterday’s pushed the “stocks above 150 day moving average” and “Stocks above 50 day moving average” to a lower low than in early May where the NYA made a higher low compared to early May.  Even though the NYA is higher now then in early May there are more stocks below their 150 day and 50 day moving average which shows fewer stocks are carry this rally now than in early May and not an ideal situation for a bullish outcome.   The notation in red shows another divergence at the last high where NYA made a new high and Cumulative volume made a lower high as well as the stocks above the 150 day and 50 day moving average.  These conditions shows an increase of weakness in the market.   Short SPX at 2106.85 on 4/29/15. 

We have a cycle low due in July or August and could represent a longer term bullish signal.  The chart above is the monthly HUI with its monthly RSI; Slow Stochastics; MACD and True Strength index.   The monthly HUI broke to a lower in late 2014 where the monthly RSI; Slow Stochastics; MACD and True Strength index all made higher lows producing a bullish divergences.  On the monthly HUI chart we have displayed a 9 and 11 period moving average which helps to find the direction of this market.  Right now the 9 and 11 period moving average is still moving down and HUI is below these moving average and suggests that HUI is still in a downtrend.  A close above these moving average will be a bullish sign and would require a close above 190 range.  Near term the HUI may be trying for a test of the previous low near 145 and with the monthly indicators mention above, it would appear that area ould hold and reverse back up.  HUI is still in a downtrend but is producing positive divergences and suggesting the July; August time frame could be an important time for a bottom. 

Tim Ord,
Editor

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