SPX Monitoring purposes; Short SPX 6/19/17 at 2453.44.
Monitoring purposes GOLD: neutral.
Long Term Trend monitor purposes: Neutral.
The pattern that appears to be forming since March 1 is a large “Three Drives to Top”. A clue that a “Three Drives to Top” is forming is the decline off of the second top retraces over 61.8% of the previous rally on increased volume (both condition where met on the current pattern). The market then stumbles to a new third high and where this pattern tops out. The “Three Drives to Top” has a downside target to where pattern began and in the current pattern would have a downside target near 2300 range on the SPX. I might add that the “Three Drives to Top” is not a long term topping pattern but rather a “Time out” in an uptrend. Therefore once the downside target has been met another rally to new highs is possible.
A high volume “Spinning Top” (bearish) formed on 6/9 and most high volume highs are tested and if tested on lighter volume would imply resistance. Today the 6/9 high was tested and closed above on about half the volume and suggests the breakout will fail. Today’s rise also forms a minor “Three Drives to Top” pattern (would need a close below today’s high to complete the pattern). Today’s rise to a minor new high on the SPY produced a higher low in the VIX which is a bearish combination. Another interesting statistics is that the week after June Option expiration week (this week) is down 74% for the time (according to history). Short SPX on 6/19/17 at 2453.44
The bottom window is the Up down Volume percent indicator which is below “0” and has made lower lows and a bearish sign. Next window up is the Advance/Decline percent which is matching it previous low and also below “0” and not showing bullish signs. What is showing a bullish divergence is the GDX/GLD ratio. GDX has made lower lows and the GDX/GLD ratio is matching its previous low showing GDX/GLD ratio is stronger than GDX and normally GDX/GLD ratio leads the way for GDX. To help add to the bullish GDX/GLD development, we would like to see the Up Down Volume Percent to show a positive divergence along with a close above “0” (and ditto for Advance/Decline percent). There is no buy signal here but bullish divergences are present, suggesting a bottom is approaching. Will keep our powder dry for now.