SPX Monitoring purposes; Short SPX on 8/30/17 at 2457.59.
Monitoring purposes GOLD: Neutral
Long Term Trend monitor purposes: Neutral.
The November December 2015 top pattern is off the table and the “Three Drives to Top” is the favored pattern. Because the SPY touches a new high today the favored pattern is the “Three Drives to Top”. This pattern has a minimum downside target to where the pattern began which is near the 240 range on the SPY on the current setup. To help identify the “There Drives to Top” pattern the decline off of the second top must retrace at least 61.8% and on increased volume and both requirement are present. The third top (which appears forming now) has less volume and can become quiet. With a new high in the SPY today the VIX made a higher low and a bearish divergence. We have a minimum downside target near 2400 on the SPX. Short SPX on 8/30/17 at 2457.59.
The above chart goes back 1 ½ years and shows the times when the McClellan Oscillator reached -200 or less. When the McClellan Oscillator reaches below -200 a corrective process has begun. After a -200 Oscillator reading the market usually rallies and some times touches a new high before the bulk of the decline begins. Back in May 2016 and today the market hit a new high after a -200 Oscillator reading. The May 2016 timeframe went on to hit new short term low and we expect that will happen on the current timeframe. Short SPX on 8/30/17 at 2457.59. follow us are twitter. @OrdOracle.
There are divergences present. The second window down from top is the Bullish Percent index for the Gold miner’s index. The bullish percent index measures the percent of stocks that are on Point and Figure buy signals. As of today there are 39.29% of the stocks in the Gold Miners index that are on Point and Figure buy signals. At the April GDX high the bullish percent index stood at 47%, and GDX is higher now then the April high. The GDX/GLD ratio is also showing a divergence where it’s below the April high as GDX is above its April high. The pattern formed on GDX is a Head and Shoulders bottom where the Head is the July low. A “Sign of Strength” (SOS) was performed through the Neckline and confirmed the Head and Shoulder bottom and suggests support now comes in near the Neckline near 23.25 range and an area where a bullish signal could develop. The longer term patterns are bullish but the shorter term patterns suggest a pull back. Still neutral for now.