The All New Market Analysis – 10/10/2019

SPX Monitoring purposes; Flat.

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%.

The second window up from the bottom is the SPY/VIX ratio with a 10 period moving average.  In up-trends the SPY outperforms the VIX and that happens when this ratio is rising and downtrends the VIX outperforms which in turn this ratio is declining. This ratio started its decline in mid September and remains below its moving average (red circle).  Further insight would have come from the 3 MA of the TICK/TRIN ratio (bottom window) but Stockcharts vendor no longer supports that symbol so this ratio is no longer accurate.  Hopefully a new source for the tick will be found.  Tick did close today at -176 and usually not high enough to signal a low.  A target to the 280 SPY level is possible this week or next and then higher.

We updated this chart from yesterdays. Above is the weekly SPY chart.  We previous mentioned on our reports about a quant method that said, “Three weeks down in row on the SPX happen 20 times since 2003, 18 hit new lows within 3 weeks and the other two hit new lows on week 6 and 7.”  Last week was week 7 which failed to hit below the August 5 low of 280 SPY (2800 SPX).  This week is week 8 and also the week before option expiration week which whipsaws are common.  If market is going to test the 280 SPY level it would make since it will do it this week.

Above is the monthly Silver chart going back to 1999.  The bottom window is the monthly Bollinger band Width for Silver. Longer term lows have been found in Silver when the monthly Bollinger Band width traded below .013 (which it did in mid 2018 (the bottom is silver) and again in June July 2019).  The second window down from the top is the monthly Silver/Gold ratio.  In bull markets, silver outperforms Gold and that happens when the Silver/Gold ratio is rising.  When this ratio is very low (below .013) is shows that Silver is cheap compared to Gold and usually a good area to buy silver.  The ratio stands at .012 right now.  The top window is the monthly RSI for Silver.  RSI readings above 50 suggests Silver is in an uptrend (current reading is 56.88).  Though silver has rallied the last couple of months both the Silver/Gold ratio and Bollinger band width suggests this rally has much further to go.  Long GDX on 1/29/19 at 21.97.