Monitoring purposes SPX: long SPX on 11/2/15 at 2104.05
Monitoring purposes GOLD: Long GDX on 11/20/15 at 13.38.
Long Term Trend monitor purposes: Flat
Above is the VIX/VXZ ratio. The VIX is the volatility index and the VXZ is the mid term Futures ETN. A bearish sign is triggered when the SPY makes higher highs and the VIX/VXZ ratio makes higher lows. These divergences can last several days before it takes hold and therefore market could still push higher short term. Previous divergences over the last 6 months lasted about a week before the bearishness set in. If however the VIX/VXZ ratio turns down and breaks new short term lows will negate the current bearish sign. Santa Claus rally last into January 5 and if the VIX/VXZ ratio continues the bearish scenario into that timeframe could generate a sell signal. Since the McClellan Oscillator is above “0” and rising, the trend is still up and we remain bullish for now but a negative divergence hangs over the market. Page two shows the current status of the Santa Claus rally. Contacts us for free 30 day trial.
Santa Claus rally officially started December 24 and last into the first two trading days of January which for this year would be January 5. Above are short term gauges for the market and as long they stay positive the market should move higher. The top window is the McClellan Oscillator which is way above “0” and short term bullish. Next window down is the Advancing issues/Declining issues with a 5 period moving average. Readings above 1.60 are bullish and today’s reading came in at 4.86 and a new short term high. Bottom window is the Advance/Decline with 5 period moving average and readings above 1.45 are bullish and today’s reading came in at 2.73 and also a short term new high. Next window up is the Advancing issues with 5 period moving average and Declining issues with 5 period moving average and this indicator remains on a bullish crossover and the spread is widening showing short term strength. All four indicators are in bullish territory and suggest the short term rally should continue. Follow us on twitter https://twitter.com/ordoracle.
The Gold Commercials came in at -22,251 at the last reported December 22. Commercial COT reading below 50K short is bullish for gold. The chart above is the two hour chart for GDX. The bullish “Declining Megaphone” has formed suggesting a rally is about to start and our first target is near the 16.00 level. Yesterday we showed the daily ADX which in an area where GDX should start to trend and this coming trend should be up according to the bullish “Declining Megaphone” pattern along with the RSI and Bullish Percent index showing a bullish divergence. The bottom window is the two hour ADX which is also near 13 and suggesting a trend is about to begin in GDX. Long GDX on 11/20/15 at 13.38.