SPX Monitoring purposes: Flat.
Monitoring purposes GOLD: Long GDX on 1/29/19 at 21.96.
Long Term Trend SPX monitor purposes: Long SPX on 10/14/19 at 2966.15.
Above is the chart of the VIX of the VIX (VVIX). The VVIX trades opposite of the SPY. Today, the SPY was nearly up 1% and the VVIX was almost unchanged, a short term divergence. SPY gapped up Friday and this divergence may mean Friday's gap may be tested before heading higher. Intermediate-term trend appears up, but a short term pullback is possible.
Today's rally tested last Friday's high on less than half the volume. A test of a previous high on light volume is a bearish sign and suggests the previous high has resistance. To go a step further, in a test of a previous high on 50% lighter volume compared to a test 10% lighter volume, the 50% lighter volume test showed much more weakness, as volume is energy and less energy means less force to push through the previous high. SPY appears to be stalling here for a test of Friday's gap.
In an October 10 report, we said, "Going into the early September high a pattern called "Three Drive to Top" formed. This pattern can be identified when the second decline off the second top retraces at least 61.8%, which this one did. Market then rallies to a third top. Form there third top market usually retraces back to where pattern began. In this case a pull back to 26.00 level was its target." Since the beginning of September, GDX is now drawing a "Three Drives to Bottom pattern," which is the same setup but in reverse. This pattern can be identified when the second rally off the second bottom retraces at least 61.8%, which this one did. The market then declines to a third bottom. From the third bottom, the market usually retraces back to where pattern began (in this case, a rally to the 30.00 range). Since the weekly and monthly charts remain bullish, we would expect GDX to continue its rally higher and possibly to break to new highs. Long GDX on 1/29/19 at 21.97.
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.
