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Market Analysis: TRIN In Bear Hold; Gold Starting An Impulse Wave

By Tim OrdStock MarketsApr 21, 2021 09:24AM ET
www.investing.com/analysis/market-analysis-trin-in-bear-hold-gold-starting-an-impulse-wave-200574402
Market Analysis: TRIN In Bear Hold; Gold Starting An Impulse Wave
By Tim Ord   |  Apr 21, 2021 09:24AM ET
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  • SPX Monitoring purposes; Sold long SPX 4/9/21 at 4128.80= gain 6.16%; Long SPX on 3/24/21 at 3889.14.
  • Monitoring purposes GOLD: Long GDX on 10/9/20 at 40.78.
  • Long Term SPX monitor purposes; Sold long SPX on 1/15/21 at 3768.25= gain 10.80%; Long SPX on
    10/26/20 at 3400.97.

ARMS Index Chart
ARMS Index Chart

The bottom window is the closing TRIN readings and the next window up is the 2 day TRIN close. The two day TRIN close above 1.50 shows panic (dotted blue lines) in the market and a short term bullish sign; below .65 (red lines) show a complacent market and a bearish sign.

Yesterday the 2 day TRIN closed at .65.  To get back to a bullish picture the TRIN would need to show panic with readings above 1.50 for a couple of days. Today’s TRIN close came in at 1.14 and not at panic levels suggests short term consolidation is not done. There is an open gap near 400 on the SPY which is a possible target. Staying neural for now.

SPY Daily Chart
SPY Daily Chart

We've updated this chart from yesterday, when we said:

“Last Tuesday the 5 period RSI for the SPY hit 92. Previous readings on an RSI (5) above 90 have lead to short term consolidation and that could be happening here. Bigger trend remains bullish but a sideways consolidation is possible short term. Watching the TRIN and Tick for panic readings to suggest market is near the next low.” The consolidation appears to have started. Staying patient for now."  

NDX-Gold Bugs Index Daily Chart
NDX-Gold Bugs Index Daily Chart

The above chart is of the daily HUI/NDX ratio going back to 2011. When this ratio rises, it's an indication that HUI is outperforming NDX. When it's falling, then the opposite is true—NDX is outperforming HUI. 

Right now this ratio has returned to an area previously visited. There is a lot of evidence that the gold index is starting an impulse wave. As far as investments go, this may indicate that the coming weeks and/or maybe months, could have the HUI index outperforming the NDX index.

We also noticed that several of our gold stock positions have the weekly Bollinger Bands® (BB) pinching.  When the BB starts to spread, the energy will be released, and as such, the impulse rally may have started. We are long GDX (10/9/20 at 40.78).

 

Market Analysis: TRIN In Bear Hold; Gold Starting An Impulse Wave
 

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Market Analysis: TRIN In Bear Hold; Gold Starting An Impulse Wave

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