SPX Monitoring purposes: Long SPX on 6/25/19 at 2917.38.
Monitoring purposes GOLD: Long GDX on 1/29/19 at 21.96.
Long Term Trend SPX monitor purposes: Long Term long SPX on 6-26-19 at 2913.78.
What we said yesterday is still valid. “The above chart is the VIX. In general, the VIX moves opposite to the SPY and, when it does move opposite, the prevailing trends remain intact. Today, the VIX closed at a new short-term low and the SPY closed at a new short-term high, keeping the uptrend in the SPY intact. The second window up from the bottom is the SPY/VIX ratio. When this ratio is rising (like it is now), it shows that SPY is outperforming the VIX, a bullish sign, and when this ratio is declining, it shows a bearish sign. During the July 4 holiday, seasonality comes into play. The Fourth of July timeframe has a bullish bias going into this holiday and bearish when leaving.” Today also marks the fourth up day in a row, suggesting the market will be higher within 5 days, with an average gain over 1%.
The top window is the 5-minute moving average TICK. Readings above “0” are bullish and those below are bearish. Yesterday, this TICK indicator closed below “0” and was a bearish sign. However, the 5-minute TICK indicator can remain negative for a while as the market is rallying, but does suggest a top is not far off. Since it has now closed back above “0”, the bearish sign is negated. The bottom window is the Cumulative TICK, which also rises and falls with the SPY. Yesterday, it was declining, a bearish sign. It has now turned back up and is back to being bullish. The short-term picture is in bullish mode for the SPY (SPX). Long SPX on 6/25/19 at 2917.38.
We have shown the above chart in the past. This is the monthly chart of the XAU/Gold ratio. Intermediate-term tops have formed in the XAU when the Slow Stochastic for the monthly XAU/Gold ratio reached above 80 (noted with blue circles). Why this chart is important is that every major consolidation in the XAU that lasted six months or longer produced a monthly Slow Stochastic near 80 or higher on the XAU/Gold ratio. The XAU has consolidated since the beginning of 2016; two and a half years ago. With this reasoning, one would expect an intermediate-term rally in the XAU to continue until the monthly Slow Stochastic for the XAU/Gold ratio reaches above 80. Going back to the chart above, it took about one year of time (on average) for the monthly Slow Stochastic on the XAU/Gold ratio to reach 80. The rally in 2016 took 7 months. In that regard, the current rally in the XAU is in the beginning stages. In all but one case (going back to 1984) the Slow Stochastic reaching +80 marked an important high. The one exception came in 1994, where the market wiggled higher for a few more weeks. Long GDX on 1/29/19 at 21.97.