SPX Monitoring Purposes: Covered 1/24/22 open 4356.32=7.57%; Short SPX 1/11/22 at 4713.07.
Monitoring Purposes GOLD: Long GDX on 10/9/20 at 40.78.
Long Term SPX Monitor Purposes: Neutral.
We updated this chart from yesterday. The second window up from the bottom is the VVIX/VIX ratio with a 3-period moving average. This ratio helps to define the short-term trend for the SPX. At the moment, it's still trending higher, suggesting the short-term trend is up. This ratio can change quickly, but the message right now is still up. One possibility is that we test the down gap from last Wednesday high to Thursday's open, which comes in near 451 on the SPY. If that potential gap test comes on lighter volume, that would suggest the gap has resistance; if tests comes on higher volume, that will suggest the market can move past the gap. Staying neutral for now.
The top window is the 10-day average of the TRIN; readings above 1.30 are bullish and those below .85 lean bearish. Yesterday's close came in at .84. The horizontal lines shows the times when 10-day TRIN reached below .85. The blue horizontal lines show times the market has stalled or declined; the red lines show when it seemed not to matter. This indicator suggests upside may be limited for the short-term on the SPX. This week is the week before option expiration week, where whipssaws are common. The conclusion is that the VVIX/VIX ratio on page one suggests the market can still push modestly higher, but with 10 day TRIN <.84, that suggests upside is limited, giving the possibility that a gap test near 451 on SPY is probably the best the market can do short-term.
Back in January, GLD was looking like it was about to break above the neckline of a head-and-shoulders bottom (top window). It did not and backed away from it, but, as you can see, it is now rising back to the neckline. The neckline lies near 172 on GLD and the place where a "Sign of Strength" is needed for a breaking of the neckline to be successful. The next window down is the GDX/GLD ratio. Its also rising to a trend line (near .190) and it, too, would need a "Sign of Strength" to confirm a breakout above that level. The bottom window is GDX and it is also near a breakout trend line near 32.50 range; it would need a "Sign of Strength" through that level to confirm the breakout. We are watching closely to see what develops in the coming weeks. All indexes above have moved sideways since the October low and this could be the "calm" before the "Storm" (meaning markets finally break above their trend lines).
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.
