SPX Monitoring purposes: Long SPX on 6/25/20 at 3083.76.
Monitoring Purposes GOLD: Sold GDX on 6/11/20 at 32.83=gain; long GDX on 6/8/20 at 32.79.
Long Term Trend SPX Monitor Purposes: Short SPX 5/13/20 at 2820.
It’s common for the VIX to lead the SPX. Today, the VIX traded at a new short-term low, suggesting that SPX may trade back above its recent high near the 3175 range or even higher. The July 4 holiday period has a bullish lean the week before and the week after. Door still open for a test of the June 8 high.
Above are the times when a “Major Distribution Day” (MADD) occurred identified by blue vertical lines. In downtrends, the decline usually continues, but, in uptrends, it can mark short-term lows within a couple of days. A MADD occurred on June 11 (closing low) and the market bounced over the next week or so. On June 24, another MADD occurred and the market bottomed two days later. The week before and after July 4 has a bullish lean and it appears to be playing out.
Above is what may transpire in the coming weeks. It’s common for the gold market to form a reversal around the July 4 holiday. This trading week ends Thursday, July 2 (Friday is July 4 holiday) and could mark a short-term high. As you can see on the chart above, GDX is almost back to its May high and the GDX/GLD ratio is still far away, showing that GDX is outperforming the GDX/GLD ratio. Ideally, one would like to see GDX/GLD ratio outperforming GDX, and that is what happens in strong bull moves and is not what is happening here. In general, a cycle high in gold is due around the July 4 holiday and a cycle low is due around July 15. If the market does pull back to the July 15 cycle, that timeframe may be the better buy and is the setup we are watching for. Being patient for now.