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.
Friday the Equity Put/Call ratio (CPCE) closed at .53. CPCE readings .55 and less predict a lower market 88% of the time in the next five days with an average .8% Loss. A pull back of .8% in the current market is near the gap level formed on July 12 near the 243 level on the SPY. Covered SPX short for gain of 1.2%.
The VIX made a higher low as SPY made a higher low suggesting a pull back in SPY is coming. The VIX trades opposite of the SPY and in general the VIX leads the way for the SPY. The most likely downside target is the open gap that formed on July 12 near the 243 ( 2430 on the SPX). The scenario goes along with the Equity Put/Call ratio of .53 reviewed on page one. This is option expiration week which normally has a bullish bias. If the gap is tested, most likely the market will find support and rally into the end of the week if not longer. Expect the up and down in the market to continue through July and possible into August. Buy signal near 243 SPY?
Above is the daily GDX pattern dating back to 2016. The bottom window is the Up down Volume percent with an 18 period moving average. A bearish condition is when this moving average is below “0” which is the case now. Next window up is the Advance/Decline percent with an 18 period moving average and it too is below “0” and also bearish. The red and blue vertical lines represent times when the “0” line was exceeded from below (blue line) by both moving averages which was bullish and bearish (red lines) when fell through “0”. The top window is the RSI for GDX. Readings above “50” are bullish and readings below “50” are bearish and today’s close came in at 49.29. The Commitment of traders report (COT) for gold has been showing bullish signs for two weeks. The report for June 26 showed the Commercials at 150K short (bearish); for July 7, 107K Short (on bullish side of neutral) and last report of July 14 came in at 73K short, which is bullish. The commercials (smart money) think a bottom is close at hand. We are staying neutral for now.