SPX Monitoring purposes; Long SPX on 10/22/18 at 2755.88.
Monitoring purposes GOLD: Sold 11/27/18 at 18.88=gain .075%; Long GDX at 18.72 on 8/17/18
Long Term Trend SPX monitor purposes; Long SPX on 10-19-18 at 2767.78
The chart above goes back 5 years, showing the times when Equity Put/Call (CPCE) reached >.95 (current reading .97). CPCE reached > .95 eight times; seven of those times where bottoms and most were major bottoms. A quiet day tomorrow before the FOMC announcement at 2:00 EST, which could be the catalyst for a rally.
We have been posting this statement the last five weeks, “Since 1950 the change from October low through year-end average=10.7% gain (with no losses) during mid term elections years (@theonedave). The 10.7% average from the October low would give a target near 289 on the SPY (2890 SPX).” This could be the first failure. Having said that, turn your attention to the chart above, which is the 3-day average of the Tick/TRIN ratio. Since the mid-October low, the "3-day average of the Tick/TRIN ratio" had not generated a signal until today. The signals in the past have worked out relatively well. The current bullish signal goes well with the bullish Equity Put/Call and Total Put/Call ratios that have been generated in the last couple of days. This is option expiration week and December expiration has a 75% probability of being higher. Also, the month of December is higher 75% of the time. The FOMC announcement is tomorrow, which could be the catalyst for a rally. We did buy SPY “calls” today as it would seem odds are good for a rally from here.
The top window is the Bullish Percent Index for the Gold Miners index, which has been moving higher for several weeks and produced a bullish sign. GDX is running into the trend line connecting the lows going back to early 2017, which is resistance. If GDX can get through this resistance, that would be a game changer and would suggests a bottom is in, but we are not sure that will happen. There is a cycle low due in January or February, but there is now evidence that the cycle low may come in the January 22 timeframe of 2019, which would imply there is a minor high due soon. The last COT report showed that Gold commercials moved to a 77K short position and above the 50K, which is in the neutral to bearish category for them. We are watching carefully what this chart does next - either a bull run is starting or a short-term top is near. Our thinking at the moment is still a pullback first before the real bull run begins. We sold our long GDX position (11/27/18) at 18.88 for a .075% gain; Long GDX at 18.72 on 8/17/18. We will wait for the next bullish setup.
Tim Ord,
Editor
www.ord-oracle.com. New Book release "The Secret Science of Price and Volume" by Timothy Ord, buy at www.Amazon.com.
