The All New Market Analysis – June 13th, 2018

SPX Monitoring purposes; Neutral.
Monitoring purposes GOLD: neutral

Long Term Trend SPX monitor purposes: Sold 6/7/18 at 2770.37=gain .76%; Long SPX 3/14/18 at 2749.48.


We have updated this chart form yesterday. The 3 day, 10 day and 21 day moving average of the Equity Put/Call ratio are in bearish levels at the same time and increases the chance the market can stall in this price range.  In each case the market stalled (except the big run up in January).  This study suggests upside is limited.  There is evidence that a pull back could materialize near the 2700 level on the SPX before the month is out but don’t have a bearish setup.  If volatility remains low (VIX stays near current levels) after the FOMC announcement, than market may float into Friday.  Signal could material Friday or next Monday. On the sidelines for now.


FOMC meeting is tomorrow and market could hold steady into that timeframe. We do have bearish signs for short term.  The bottom window is the 3 day average of the TRIN. When the 3 day average of the TRIN reaches below .90 market can stall or even reverse (current reading is .75).  What is holding up is the McClellan Oscillator closing today at +68.19 and above “0” and bullish. Also the SPY is running into the March highs and a resistance area.  FOMC meeting may not produce volatility as most are expecting.  Don’t see an advantage here and will remain flat.  Best signal have come when market is trading down into a Fed day and we don’t have that here. Next week according to Seasonality is bearish.  Market could float into Friday and a signal generated Friday or Monday.

The short term picture is still on a sell signal according to the daily cumulative Up Down Volume and the Cumulative Advance/Decline indicators (see yesterday’s report).  Above is the weekly Silver/Gold ratio (ETF SLV/GLD) going back to 2006.  In March the SLV/GLD ratio hit into the area where the last two marked major lows in the XAU.  The SLV/GLD ratio has been moving up since the March low in the XAU suggests the bottom may have been seen then as the market has moved up modestly.  From the December 2015 low the XAU has only retraced 50% suggesting a bullish outcome. Notice that the weekly Bollinger bands on the XAU are narrowing as the XAU trading range has tighten. This extreme low volatility leads to high volatility at some point in the near future (quiet before the storm). The FOMC meeting announcement is tomorrow (2:00 Eastern) and could be the news to get things going. Being patience for now.