SPX Monitoring Purposes: Sold long SPX 8/18/20 at 3389.78=gain .49%; long 3373.43.
Monitoring Purposes GOLD: Long GDX on 7/8/20 at 38.62.
Long Term Trend SPX Monitor Purposes: Short SPX 5/13/20 at 2820.
We were looking for a stronger move than what we got as we where expecting a thrust through the February high. What we got was a modest close up on reduced volume and the VIX making a higher close. Added to that, the NYSE McClellan Oscillator closed below "0" (-45). SPY also has been drawing narrow days with reduced volume, which represents a quiet market and weak upside momentum (momentum rules all indicators). A quiet market precedes a volatile market. Back on the sidelines for now and we'll see what the quiet brings short-term. Sold long SPX 8/18/20 at 3389.78=gain .49%; long 3373.43.
Top window is the VIX and the second window up from the bottom is the SPY. SPY (along with the SPX) has broken to a high above the February high, while the VIX is making a much higher low and is a significant divergence. Since markets are testing the February high, it would make since for a reaction to form around this level. For now, an intermediate-term divergence is present.
Above is one of our intermediate-term indicators, which are the weekly Inflation/Deflation ratio. When the weekly RSI for the Inflation/Deflation ratio reaches above 70, higher highs in XAU (GDX) is expected. The weekly RSI of this ratio reached >70 back in April. A high can be expected in XAU (GDX) when the weekly Inflation/Deflation ratio at least matches it previous high, which was .29 (the time when the RSI reached 70); the current price is .27. Higher highs are expected in the coming weeks. We remain intermediate-term bullish. Long GDX on 7/8/20 at 38.62.
Tim Ord,
Editor
www.ord-oracle.com. New Book release "The Secret Science of Price and Volume" by Timothy Ord, buy at www.Amazon.com.
