The All New Market Analysis – Apr 18th, 2018

SPX Monitoring purposes; neutral
Monitoring purposes GOLD: Neutral.
Long Term Trend SPX monitor purposes: Long SPX 3/14/18 at 2749.48

Yesterday we said, “The American Association of Individual invertors (AAII) ratio has reached bullish levels where lasting bottoms have formed in the past.  There can be pull backs in the market but lasting declines are now unlikely.  Though last week was an up week in the market, the AAII ratio still declined (last Monday’s close was .79), suggesting investors are not believing in the rally; in a contrarian since a bullish sign.”  Today’s reading stays in the bullish level. Though market is in gap level on light volume (see page two) and suggests resistance, the potential pull back may be shallow.

The open gap on March 22 near 270 on the SPY was tested today.  The test came on lighter volume and suggests the gap has resistance.  McClellan Oscillator closed at +148 and a new short term high and above “0” and bullish sign and this week is option expiration week which usually has a bullish bias.  The market has reached the gap target and volume was light suggesting resistance.  Most likely upside will be minimal but market may hold up into Friday as Expiration week has a bullish bias.  There is still high volume lows that will be tested at some point and there is an open gap on April 10 near 264 that will be tested at some point.  Will remain neutral for now.

The top window is the Bullish Percent index for the Gold miners index.  The bullish percent index measure the percent of stocks in the Gold Miners index that are on point and figure buy signals. Right now there are 42.86% of the stocks in the Gold Miners index that are on point and figure buy signals. Since September of last year the Bullish Percent index has been making higher highs and higher lows showing this index is getting stronger, though GDX has made lower lows and lower highs since last September and we take this condition as a bullish divergence.   The bottom window is the GDX/GLD ratio which usually leads GDX in price.  This index has closed below its previous lows and GDX so far has held above its previous lows and a bearish divergence.   This bullish and bearish divergence will work out to a bullish resolution at some point as the bigger picture is bullish.  We will give the market a little more time to see if a pull back does materialize.  Staying neutral for now.