Gold And S&P 500 Technicals
Tim Ord | Sep 17, 2014 02:03PM ET
- Monitoring purposes S&P 500: Sold long SPX on 8/14/14 at 1955.18 = gain 2.39%. Long SPY on 8/7/14 at 1909.57.
- Monitoring purposes Gold: Gold ETF GLD long at 173.59 on 9/21/11
- Long-Term Trend monitor purposes: Flat
Timers Digest reported the Ord Oracle number 10 in performance for one year updated August 27.
The above chart looks at the bigger picture. The Mainstay High yield corporate Bond (MHCAX) helps to define the trend for the SPX as both track similar projections. The blue arrows show when MHCAX turned down it was a warning that the SPX may also turn down. MHCAX turned down in August and is still trending down and a warning for the SPX. The second window down form the top is the McClellan Summation index. When the Summation index coming from below +500 and turns down near +500 it a warning for the SPX. We have labeled those instances with blue arrows. Notice that it has recent turned down near the +500 level and a red flag for the market. The next chart looks at the shorter-term picture for the S&P.
To get a decent bottom in the market, panic is a key ingredient and when panic is not present, than bottoms are suspect. The way we measure panic is through the tick and TRIN closes. On the chart above when have labeled with blue arrows the time when the TRIN closed above 1.50. In all case the market was near a low at least a short term low. Over the last week there where no TRIN readings near 1.50 and puts the market bottom is question. Also the Tick readings are not showing signs of panic and another sign today’s rally could be just a short term “Short squeeze”. The two orange squares show the periods where the McClellan Oscillator was below the “0” line. The market is considered in a downtrend when the McClellan Oscillator is below “0”. We don’t have evidence for a bottom in the market. This is option expiration week which normally has a bullish bias and market may hold up the rest of the week but we are not taking the bet. FOMC meeting results come tomorrow and could have a short term affect on the market. We are staying neutral for now.
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There are positive divergences. The top window is the Bullish percent index for the Gold Miner’s index. The Bullish Percent index measures the percent of buy signals for the stocks contained in the Gold Miners using the Point and Figure method. The Bullish percent index showed more percent buy signals at the September highs compared to the March high even though Gold made a lower high in September compared to March high. The bottom window is the XAU/Gld ratio which is also showing a bullish divergence. The XAU/GLD ratio made a higher high in September compared to March high and again Gold made a lower high. It is said that Gold in Euro’s leads the way and notice that Gold in Euro’s has produced higher low recently going back to June where gold in Dollars has made lower lows and another positive divergence. A bullish sign for a continued rally in Gold $ would be for the gold in Euro’s to break above its previous high near 9.80. Setting on my hands for now.
Signals are provided as general information only and are not investment recommendations. You are responsible for your own investment decisions. Past performance does not guarantee future performance. Opinions are based on historical research and data believed reliable, there is no guarantee results will be profitable. Not responsible for errors or omissions. I may invest in the vehicles mentioned above. Copyright 1996-2014. To unsubscribe email to tim@ord-oracle.com.
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