- Monitoring purposes SPX: Long SPX on 3/26/14 at 1852.56.
- Monitoring purposes Gold: Gold ETF SPDR Gold Trust (ARCA:GLD) long at 173.59 on 9/21/11
- Long-Term Trend monitor purposes: Flat
On Monday’s report we said, “Panic shows up in the TRIN and Tick readings to form a bottom in the market, panic needs to be present and we are starting already to see panic.” On the chart above we have labeled the Tick and Trin closes where panic in the market was present. We have found when the TRIN closes above 1.50 and the Ticks close below -300 the same day, a bottom in the market forms on the day of the readings to as late as two days later. Under that assumption than today close to as late as Friday’s close should mark a low in the SPX. The short term picture has turned bullish. Sometimes market hits a minor new low before reversing and some times not. Since we had a -627 on Monday’s close, the downside should be minimal. Long SPX on 3/26/14 at 1852.56.
The chart above is the VXZ/VIX ratio. The S&P 500 VIX Mid-Term Futures ETN (VXZ) is the mid term Volatility S&P 500 and the VIX is the Volatility index. This ratio has bullish crossovers (identified with blue verticals lines) and bearish crossovers (identified with red verticals lines) which are displayed on the chart above. You can follow the red and blue lines down to the Spy to identify where the bullish and bearish signals where generated on the SPDR S&P 500 (ARCA:SPY). Over the last couple of days a bullish crossover (buy signal) was triggered by this method. The second window up from the bottom is the VIX. It’s a bearish divergence for the SPY when the VIX makes higher lows as the SPY makes higher highs and that is what happening now. The last time this divergence showed up was back in the August September period which signaled a short term top for the SPY in mid September. Not all indicators work all the time. We have two indicators on this chart that show one is bullish and the other bearish and both are Volatility indexes. We are thinking the SPY may test last Friday’s high near 189 area and could mark a resistance area. We covered our short yesterday for a modest gain.
An area of support on Market Vectors Gold Miners (ARCA:GDX) is near 24 to 23.50 range, which is where the Neckline of the Head and shoulders bottom resides and the first gap of a “Three Gap Play” and the 50% to 61.8% retracement level from the bottom in December to the recent top in March. If the 24 to 23.50 range is going to find support than the “True Strength index” and GDX/GLD ratio should show signs of positive divergence. So far both of those indicators are pointing down and no sign so far of a positive divergence. It does look like an Elliott wave five count up form the December low was completed on March 14 and an “abc” is in force now and currently “c” leg down is in progress. If this is an “abc” down and currently in the “c” leg than target to near 23.50 would make the “c” leg near equal to “a” leg. We will wait and see what other information is put forth over the next couple of days. Staying flat for now. Long GDX at 23.65 on 2/7/14; sold 2/13/14 at 25.44 = 7.6%. Long GDX at 21.83 (1/7/14) sold 1/24/14 at 23.90, gain 9.5%. Long NG at 5.14 on 10/8/12. Long GDX 58.65 on 12/6/11. Long GDXJ average 29.75 on 4/27/12. Long GLD at 173.59 on 9/21/11. Long BRD at 1.67 on 8/3/11. Long Veris Gold (YNGFF.PK) .44 on 7/6/11. Long Entree Gold Inc. (AMEX:EGI) at 2.16, on 6/30/11. Long GLD at 147.14 on 6/29/11; stop 170 hit = gain 15.5%. Long Comstock Mining Inc (AMEX:LODE) at 2.85 on 1/21/11. Long UEXCF at 2.07 on 1/5/11. We will hold as our core position in AuRico Gold Inc. (AUQ), Coeur Mining Inc (CDE) and Kinross Gold Corporation (NYSE:KGC) because in the longer-term view these issues will head much higher. Holding CDE (average long at 27.7.Long cryxf at 1.82 on 2/5/08.KGC long at 6.07. Long AUQ average of 8.25.
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