The middle window is the SPY/VIX ratio. When this ratio is rising, it's usually a bullish condition for the SPY. SPY has retraced 38.2% of the crash decline and has stalled at this level the last four days, building "Cause" for the next move. The ratio is moving higher, suggesting that the next move could be up. The McClellan Oscillator is above "0", another bullish sign. We thought at one point that a pull back down to the gap near 230 range was a possibility, but given the momentum that is off the table. Will remain neutral for now. Sold SPX 3/26/20 for gain of 17.55%.
The middle window in the chart above is the NYSE McClellan Oscillator, which goes back to 1998. We pointed out the times when the McClellan Oscillator reached below -400, which is four times not counting the current time. The previous four times, the SPX at least tested the lows (two broke to new lows). Therefore, the March 23 low on the SPX at 2191.86 may be tested, if not broken. As mentioned yesterday in our report, the 10-day average of the TRIN has not reached above 1.50, where previous major market bottoms have formed. Could be backing and filling for the next month and a final bottom should form by no later than August. Sold SPX position today for a 17.55% gain.
This is an interesting chart. Above is the Gold Miners index (GDM) going back to mid 2007, and the top window is the Bullish Percent index for the Gold Miners index. Notice that, in the crash of 2008, the Gold Miners index crashed with everything else (circle in Red). GDM bullish percent index did bounce above 40% for a short while on a relief rally, then continued to crash with everything else later. Currently the Bullish Percent index has jumped above 40% (current reading is 51.54%) and may be part of the relief rally, just like back in 2008. We are expecting a bullish outcome in the coming weeks for Gold and Gold Stocks, but the bottom process could take to July to complete and the March 15 low on GDM (500 range) (GDX 16 range) could be tested again before the bottom process is complete. Being patient for now.