Monitoring purposes SPX: Short SPX on 3/24/16 at 2035.94.
Monitoring purposes GOLD: Short GDX on 2/24/16 at 19.11.
Long Term Trend monitor purposes: Short SPX on 1/13/16 at 1890.28
The chart above is the NYSE volume Momentum Oscillator. Over the nearly eight years past, each time the Volume Momentum Oscillator traded above +175 the market was near a high. The recent high traded above +200. The market jumped after Janet Yellen announcement today, stating no change in policy. When a market turns on a news announcement, its usually short lived. Previously times when the NYSE volume momentum Oscillator reached above +175, it reversed and at a minimum traded back to minus 75 before finding support, and would be our first target to the downside on this potential pull back. It doesn’t appear a large decline will begin here but a target near 2000 on the SPX is possible, especially if Volume momentum Oscillator is near -75 at the same time. For now the short term picture remains bearish.
The bottom window is the Tick/TRIN ratio. Readings above +250 are bullish for the market and below +250 are bearish. This ratio has been in the bearish camp for the last week. Next window up is the TRIN/VIX ratio and readings above .09 have produced short term top in the market and we hit above that level today. The red arrows on the chart show the times over the last 19 months when this ratio reached above .09 and in each case the market has or was topping out. A lot of the time, market tops out on a news announcement and today’s Janet Yellen announcement may have done just that. We are short the SPX on 3/24 close at 2035.94.
The Gold Commercials came in at -199,994 contracts as of 3/25/16; previous week reading was minus 185,531contracts. Above is the daily GDX chart. Here is what may be unfolding for the short term in regards to GDX. On March 23, GDX gap down from the recent highs with a “Sign of Weakness” (SOW) (big volume and wide price move = bearish sign). This gap may be a “Break away” gap suggesting a decline has begun. This “SOW” produced a large gap and the larger the gap the more likely the gap will get filled short term. If a gap is tested on lighter volume than the gap volume day, than the gap area will have resistance (if rally into gap). Today the March 23 gap was tested on lighter volume suggesting resistance. The top window is the RSI which has been making lower highs and lower lows and helps to confirm the topping condition for GDX. There is another open gap near 15.50 that formed on February 4 that could be tested on the potential decline. Again, if the February 4 gap is tested on lighter volume will imply support (if decline into gap). We are short GDX at 19.11 n 2/24/16.
Tim Ord,
Editor
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