SPX Monitoring Purposes: Long SPX 6/28/21 at 4290.61.
Monitoring Purposes GOLD: Long GDX on 10/9/20 at 40.78.
Long Term SPX Monitor Purposes: Neutral
Today, the two-day TRIN closed at 3.09. Two-day TRIN that add up to over 3.00 have been a buy signal for the market. Support now lies near the previous high, which is about 1% lower. The pattern that appears to be forming is a head-and-shoulders bottom where the double head came at the mid-May lows. This potential head-and-shoulders bottom has a measured target near 4425 on the SPX. Also noticed that the pullback to the June 18 was only a 38.2% retracement of the previous rally, showing the market is in a strong position.
It's a bullish sign when the TRIN rises above 1.30 as the market rises. The bottom window is the 3-day TRIN and the next window up is the 2-day TRIN, both of which reached bullish levels today. The top window is the 10-day TRIN which is near the bullish levels. TRIN closed above 1.30 on the close, suggesting there is panic in the market -- and panics are what market bottoms are made of. The higher the TRIN close, the more bullish the sign for the market. When several TRIN closes above 1.30 occur in the market, then the market is about to start another rally phase. Though the market has rallied from last Monday, the TRIN readings suggests the rally should continue. Seasonality-wise (which didn't work last week as it was supposed to be down), things are favorable into the third week of July.
The bottom window is the Advance/Decline percent and the next window up is the Up Down volume percent. A low in GDX can be expected when both indicators reach below -30 (and both have). This chart goes back to late 2014 and the red vertical lines show when both indicators reach below -30. Most rallies lasted several months after both indicators reached below -30. The last time both indicators did so came at the March 2021 low. Most traders are frustrated with gold and gold stocks and that is usually a good sign for an extended rally to start. There was also a "Selling Climax" on June 17, which adds to the bullish setup. The monthly chart remains bullish and this pull back from the May high is near an end. We pointed out yesterday that sentiment is also favorable for a bottom here.