SPX, Gold, GDX Technicals: June 26, 2017
Tim Ord | Jul 26, 2017 11:10AM ET
- SPX Monitoring purposes; Covered short on 7/6 at 2409.75=gain 1.2%; Short SPX 6/26/17 at 2439.07.
- Monitoring purposes Gold: Neutral
- Long-Term Trend monitor purposes: Neutral.
Yesterday we said, “Five of the last six instances since January 2017, when the three period moving average of the Equity Put/Call ratio reached .56 and below, produced a sideways to down market that lasted a week or longer.” The bottom window is the 21 day average of the Equity Put/Call ratio. Readings .62 and below on this moving average suggests a larger consolidation (or decline) is about to begin that usually last several week. The FOMC meeting starts today and runs into Wednesday. With the 3 and 21 period moving average of the Equity Put/Call ratio running at bearish levels, the FOMC meeting may represent a topping period. Covered SPX short for gain of 1.2%.
The FOMC meeting is today and tomorrow and can produce reversals in the market. The second window up from the bottom is the SPY/VIX ratio. A bearish sign is created when the SPY/VIX ratio makes lower highs as the SPY makes higher highs (Pointed out in blue). Today the SPY made a higher high and the SPY/VIX made a lower high (but not by much which can lead to a weak signal). The bottom window is the NYSE McClellan Oscillator which closed near +40 and above “0” and still in bullish territory. We do have bearish signs here but are looking for more clarity.
Its common for the GDX/GLD ratio to lead GDX. Above is the daily chart for GDX/GLD ratio with its Bollinger® Band. The Bollinger bands are pinching suggesting a large move up or down is nearing. The Bollinger band pinched back in December 2015 and the first move was down before reversing higher and rallied all the way into August 2016. The eventually outcome will be up (because the COT bullish gold reports) but there could be a head fake first. GDX/GLD ratio has been consolidating since August 2016 and the next move should be an impulse wave that could mirror the wave that started back in January 2016. The bottom two windows are momentum type indicators and both are dead neutral. A cycle low is due in late July though early August so we are in that time zone now. Things should start to happen within the next couple of weeks The COT report for June 26 showed the Commercials at 150K short (bearish); for July 7, 107K Short (on bullish side of neutral), July 14 came in at 73K short; July 21 at 74K short; both of which are bullish. The commercials (smart money) think a bottom is close at hand for Gold. We are staying neutral for now.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.