The All New Market Analysis – May 2nd, 2018

SPX Monitoring purposes; Short SPX o 4/25/18 at 2639.40.
Monitoring purposes GOLD: Long GDX on 4/18/18 at 22.98.
Long Term Trend SPX monitor purposes: Long SPX 3/14/18 at 2749.48.

Tomorrow is the FOMC announcement 2:00 Eastern.  “Quantifiable edges” shows if market rallies FOMC meeting day it usually declines the next day and if market decline into FOMC meeting day it rallies the day after. Today the SPY tested and filled the gap level of April 26 on higher volume and a bearish short term sign suggesting the gap will not act as support and today’s low will be at least tested if not broken. Today’s McClellan Oscillator closed below “0’ at -25 and keeps the McClellan Summation index heading lower and a bearish sign for the market.  Short SPX on 4/25/18 at 2639.40.

This chart was updated form yesterday.  The McClellan Summation index reading yesterday was +205.09 and today’s is 192.82 showing market is getting weaker.  Yesterday we said, “Large declines can occur when McClellan Summation index turns down before reaching above +500 (second window down from top) and Stocks above 150 day moving average turns down before reaching 70% (second window up from bottom).   The chart above goes back to 2008 and shows the times when the McClellan Summation index turns down before reaching +500 (blue vertical arrows) and the stock above 150 day average turns down before reaching 70% (blue vertical arrows).  The current close on the McClellan Summation index +205.09 (less than +500) and the Stocks above 150 day average sets at 50.26% (less than 70%).”  Seasonality is bearish into Mid May and the McClellan Summation index as well as the Stocks above 150 day average are in bearish levels where a large decline can materialize.

Gold stocks are showing a positive development over the last several weeks.  The top window is the Bullish Percent index for the Gold Miners index.  The bullish Percent index measures the percent of stocks that are on point and figure buy signals. Right now the holdings for the Gold Miners index stands at 53.57% that are on point and figure buy signals and has been rising since September of last year.  It is said that “It’s a bullish condition for gold and gold stocks when GDX is outperforming GLD; For that to happen, the GDX/GLD ratio is rising”.  The middle window GDX and below that is the GDX/GLD ratio.  Notice that the last couple of weeks GDX has moved to new short term low where GDX/GLD ratio has made higher lows; showing GDX/GLD ratio is outperforming GDX and a bullish condition for both GDX and Gold.  The short term picture is looking more positive.  Long GDX on 4/18/18 at 22.98.