SPX Monitoring purposes; Sold SPX 5/5/17 at 2399.29 = gain 1.06%; Long SPX on 4/24/17 & 2374.15.
Monitoring purposes GOLD: Neutral
Long Term Trend monitor purposes: Neutral.
This week is option expiration week which normally has a bullish bias. The pattern that may be forming on the SPX is a “Three Drives to Top” and SPX is attempting the Third top now which may not be completed until Friday or early next week. An upside target near 2415 is possible. If indeed this is a “Three Drive to Top” the next decline will tell a lot of what to expect next. If market finds support near 2375, than market is on stable ground and will continue to work higher. However if market falls back to 2360 or lower (61.8% retracement of rally from Mid April), than a larger “Three Drives to Top” may be forming and opens the door to 2300 range later this summer. Lets not get ahead of our self and concentrate on the current potential “Three Drives to Top”. Sold Long SPX on 5/5/17 = gain 1.06%.
The third window up from the bottom is the 50 period moving average of the NYSE tick. In general the market rises and falls with the tick. The middle window is the SPX. Since the March 1 high the 50 period MA of the tick has been moving lower, suggests the upside on the SPX is limited. Last Thursday’s trading the SPX low, retraced over a 61.8% of the previous minor rally on increased volume. This type of behavior in the past produced a “Three Drives to Top” pattern. Therefore there may be a minor rally to a new short term high (possible to the 2415 range) to produce the “Third top” of the “Three Drives to Top” pattern. The bottom window is the NYSE McClellan Summation index (a breath indicator) which as been showing weakness since early May and helps build confidence that a “Three Drives to Top” is forming. “Three Drives to Top” pattern have a minimum target to where the pattern began and in this case a pull back to 2375 is possible (may be less). There is a possibility a sell signal could develop near the 2415 range on the SPX. Staying neutral for now.
GDX/GLD ratio leads GDX for a bullish outcome. GDX/GLD ratio rallied over its 61.8% retracement of its previous decline where GDX rallied less than 61.8% of it previous declining showing GDX/GLD ratio is still stronger than GDX and a bullish sign. The top window is the RSI for GDX. Decision points for the direction of GDX comes near the RSI of 50. If the RSI pushes above 50 than market should move higher short term and if RSI falls back below 50, the market may fall back. The RSI sets at 53.75 and at a point where market can go in either direction. GDX hit the April 25 gap near 23.00 today on lighter volume and suggests the gap has resistance. Market could back and fill short term and complete a topping process. We will wait and see what develops from here.