The All New Market Analysis – May 16th, 2018

SPX Monitoring purposes; Covered  SPX on 5/2/18 at 2635.67=gain .15 gain; Short 2639.40 on 4/19/18.
Monitoring purposes GOLD: Sold GDX 5/15/18 at 22.26 =3% loss; Long  4/18/18 at 22.98.
Long Term Trend SPX monitor purposes: Long SPX 3/14/18 at 2749.48.

On yesterday’s report we said the following which remain important on today’s market. “The above chart is from “Almanac Trader” dated May 8 on his Blog.  The 12 trading day of the month of May is May 16 (this Wednesday). This chart looks at the last 21 years for the performance of May.  We are looking for an edge and this seasonality chart could help in the coming days.  So far momentum is still up on the markets and the McClellan Oscillator closed at +90 and still above “0” (which is bullish) but has weakened the last couple of days.  We also monitor the QQQ/SPY ratio (not shown). In bullish trends, this ratio rises and bearish trends declines and over the last three days this ratio has declined.

There are cycles for a high due on May 14 through 16 (Monday through Wednesday).  The chart above is the QQQ (ETF for NDX) which usually leads SPY.  Today’s decline produced over a 30% increase in volume compared to the previous days trading.  We have marked with red arrows the times when volume jumped 30% or more from the previous days volume.  When that happens notice that the next day is usually an update.  This jump in volume suggests exhaustion for the short term.  Market could bounce short term and test yesterday’s high and if the test comes on lighter volume a short term sell signal could develop for the QQQ and the SPY.  Page one shows that Seasonality is bearish tell next Friday.  Also the McClellan Oscillator is approaching “0” closing today at +30.  Staying neutral for now.

We showed this chart yesterday and pointed out the bullish divergences.  Another technical point this chart shows is when the cumulative Up Down Volume and cumulative Advance/Decline fall below their mid Bollinger bands, GDX retraces.  The bullish divergences are still in place but a pull back for GDX in the coming days is possible. Sold Long GDX 5/15/18 at 22.26; lonf on 4/18/18 at 22.98.