SPX Monitoring Purposes: Neutral
Monitoring Purposes GOLD: Long GDX on 4/9/20 at 28.96; Sold 5/18/20 at 35.92 = 24% gain.
Long-Term Trend SPX monitor purposes: Short SPX 5/13/20 at 2820.
SPY is up against resistance, and a three-day holiday this weekend has the potential for a setup later this week. One possible setup is that, on Friday, the market closes at a new short-term high and the TICK close >+800, along with the VIX closing at a higher low and the McClellan Oscillator closing below “0”. There could be other ways, but this setup would be one of them. If you remember the March 23 buy signal, the market closed at a new short term low (it was a Friday) and the VIX was making lower lows, while the TICK closed at -294 and the TRIN closed at 1.39 the day before. This week could be an important time as it is the week before a long weekend (Memorial Day on Monday) and periods around holidays can mark reversals in the market.
Last Thursday, we said “Yesterday the Summation index turned down. This downturn came before the McClellan Summation Index reached above +600 and suggests a large decline can form here. The 3000 SPX have significant resistance (pointed on in page one) and is possible where this bounce could go.” Above is the Summation Index up to yesterday’s close. Today the McClellan Oscillator closed near +5 (still above “0”) down from yesterday’s close of +56. This McClellan Oscillator reading will keep “SAR (stop and reverse)” indicator on a sell reading. If a short-term signal is going to generate, it most likely would come late in the week.
Above is the weekly Inflation/Deflation ratio going back to mid-2000. The top window is the weekly RSI for this ratio. When the weekly RSI of this ratio reaches above 70 (current reading is 73.92) the market is near a consolidation period that can last several weeks. Once the consolidation runs its course, the market goes and makes a higher high. Trend is up, but it’s to a point where a consolidation is likely to start in the coming days. GDX has strong support near 31.00 and resistance near 38.00; today’s high was 37.49. Added to the above is that if the SPX does produce a short term sell signal, all stocks may have a pullback, including the gold stocks. Sold long GDX on 5/18/20 at 35.92 = 24% gain. Long GDX on 4/9/20 at 28.96.