The All New Market Analysis – 08/21/19

SPX Monitoring purposes; Sold long SPX on 8/19/19 at 2923.65 = gain 2.67% : long 2847.60 on 8/15/19.
purposes GOLD: Long GDX on 1/29/19 at 21.96.

Long Term Trend SPX monitor purposes; Sold SPX 7/5/19 & 2990.41= gain 2.63%.

Our intermediate term view of the market remains bullish.  Yesterday we presented the “The American Association of Individual Investors bull bear ratio” with a three period moving average which reached bullish levels.   The top window in the chart above is the “Three Period moving average of the Total Put/Call ratio”.   Readings near 1.10 and higher have appeared near intermediate term lows in the SPX.   These levels have been reached starting back at the first low on August 5.  Market can back and fill for a while before the intermediate term rally begins but all in all market is making an intermediate term low is this region.  Sold long SPX on 8/19/19 at 2923.65 = gain 2.67%.

Market coming off a high with bearish tick and trin readings can be a bearish sign.  Today the Trin closed at 1.55 and the ticks at -141 which is a bullish combination after a market has decline a few days but can be a bearish sign right after a high is reached.  July 29 the trin closed at 1.50 and the ticks closed at -228 and the August slide began that climaxed at the August 5 bottom.  Therefore the current trin and tick readings can be a bearish sign here.  Today’s decline went into yesterday’s up gap on equal volume suggesting the gap is not producing support.  Market could possible test the previous high of August 13 before heading lower but is not required. At some point the 8/5 low may be tested before a longer term bullish setup may materialize.   Sold our long SPX position for a 2.67% gain.

We have updated this chart from yesterday.  The bottom window is GDX Advance/Decline with an 18 period moving average and next window up is GDX UP Down Volume with an 18 period moving average.  As long as both indicators remain above “0” the trend is considered up for GDX and in general both are.  Notice that on the surge from the May low, both indicators reached +50 which also occurred back at the major rally of 2016.  We went back 10 years and looked for other times when both indicators reached +50 and found none.  Though the occurrences are rare the current +50 readings on both indicators do suggest a similar period like the early 2016 rally may be in progress.    It common for market reversals to appear around Holiday’s and FOMC meetings.  Next Holiday is Labor Day, September 2 and next FOMC meeting is September 17-18.  Long GDX on 1/29/19 at 21.97.