S&P 500: Panic Everywhere
Tim Ord | Jun 15, 2022 10:17AM ET
- SPX Monitoring purposes; Long SPX on 5/31/22 at 4151.09.
- Monitoring purposes GOLD: Long GDX (NYSE:GDX) on 10/9/20 at 40.78.
- Long Term SPX monitor purposes; Neutral
Yesterday we said:
“There is panic everywhere, The TRIN, TICK, VVIX, VIX and McClellan Oscillator. We like TRIN in that it uses up down Volume and Advance/Decline statistic and probably one of the best panic indicators. There are different levels of panic, the larger degree of panic the higher degree of a bottom. Current levels of panic suggest an intermediate term low is nearing and that would suggests the 460 SPY target is still a possibility. The bottom window is the 3 day average of the TRIN; readings above 2.10 have formed at intermediate term lows. FOMC meeting is Wednesday and market could wait tell then for the potential rebound. Markets that have “rip your face off declines” (which this is one) have rebounds that “Put your face back on.”
The second window up from the bottom is the 10-day average of the TRIN, and the top window is the one-day TRIN. It's rare for the 10-day TRIN to reach >1.50 (currently 1.54) and the one day to close near 3.40. We marked with red vertical lines the times when both reached current readings. One marked short-term low, and the rest marked intermediate-term lows. Yesterday the TRIN closed at 3.39 and tick at -748, the most bullish combination in the last five years.
Yesterday we also said:
“FOMC meeting announcement is Wednesday of this week and market may hold off on the up part after the announcement on Wednesday.”
Volume decreased on today’s new low. Both VIX and VVIX where down today turning up the VVIX/VIX ratio. The VVIX/VIX ratio help to define the trend for the S&P 500 and it turning up today is a bullish short term sign.
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Today the VanEck Gold Miners ETF (NYSE:GDX) tested the previous low of May 20 on lighter volume suggesting support. Yesterday we added that:
“FOMC meeting announcement is this Wednesday and market could wait for the reversal until then. Market bottoms form on panic and we have panic in the TRIN, TICK, VVIX and VIX. It would be a worrisome sign if panic was not present. Its important to remember the higher degree of panic the stronger the degree of the next rally.”
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