SPX, Gold And GDX Technicals: 11-15-18

SPY Daily

The SXP is down four days in a row, last five years 17 of 18 (94%) closed higher by 1.4% within 5 days (Ukarlewitz). The McClellan Oscillator hit a new short term high last week of +212 suggesting an initiation of an intermediate up move. For very short term, the SPY (NYSE:SPY) may be drawing a Head and Shoulders bottom where a “Right Shoulder” is forming now. There is symmetry both in time and price. The Left Shoulder took four days to complete and therefore the Right Shoulder could complete in that timeframe and today will mark the fourth day. This potential Head and Shoulders bottom have a measured target to the old high. The third window up from the bottom is the “three day average of the TRIN” and readings near 1.30 and higher have marked recent lows and the reading came in yesterday at 1.41. To add to the potential bullish setup is the Trin closed yesterday at 1.68 and the ticks closed at -134 which a bullish combination and suggests a low may form as early as today to as late as two days later which would be Thursday.

CPCE

From yesterday, “Since 1950 the change from October low through year-end average=10.7% gain (with no losses) during mid term elections years (@theonedave)….. This pull back, is expected to be short lived as the McClellan Oscillator reached over +200 last Friday, showing imitation of an up move.” Above are the equity put/call ratios for the 3, 10 and 21 period moving averages. At the lows in October all three equity moving averages for the put/call ratios reached sentiment extremes suggesting an intermediate term rally is near. Yesterday’s 3 day average of the Equity Put/Call closed at .72 and back in bullish levels. The 10 and 21 moving period averages for the equity Put/Call ratio have remained in bullish levels thus far and so all three time periods are back at bullish levels. These sentiment indicators bode well for the market both short and intermediate term.

PRll Weekly

We are looking for signs for a rally that began back in September may continue as a longer term weekly divergence is present between the Inflation/Deflation ratio and XAU. The XAU is testing it September low now and the inflation/Deflation ratio is also and so far there is no positive or negative divergence and not giving a clue what may come nest. We are looking for a low shortly in the SPX and if the XAU (GDX) bottoms along with the SPX and both rally together will be a bullish sign for the XAU (GDX). However, if the XAU (GDX) fail to rally with the SPX , will be a bearish sign and we may sell our long GDX position. Long GDX at 18.72 on 8/17/18.