The ORD Oracle, July 3, 2017

SPX Monitoring purposes;  Short SPX 6/26/17 at 2439.07.
Monitoring purposes GOLD: Long GDX on 6/22/17 at 22.36
Long Term Trend monitor purposes: Neutral.

A possible Head and Shoulders pattern may be forming where the Head is the June 19 high and the Right Shoulder is forming now.  Volume has been picking up on the down days showing energy is to the downside.   Topping formation is still in play.  Short SPX on 6/26/17 at 2439.07.

It has been a bearish sign for the market when the SPY/VIX is falling.  In general this ratio has been moving lower since early June. The pull back in the SPY appears incomplete.  Though the market was modestly higher today this ratio was lower and a bearish sign.  It still appears the “Three Drives to Top” that started back in early March that has been discussed in our reports is still in play which has a target near 2300 on the SPX.

The current setup is similar to the bullish setup that occurred at the early May low (see chart above).  Today GDX and GLD broke to minor new lows (just like early May) and the GDX/GLD ratio made a higher low. In general the GDX/GLD ratio leads the way for GDX. When the GDX/GLD ratio is making higher lows as GDX is making lower lows a bullish divergence is present, which is what occurring now.  The May setup produced a bottom that day and it would not surprise us if today’s setup produces a bottom today.  A lot of the time, the timeframes around holidays produces reversals in the market.  Long GDX on 6/22/17 at 22.36.