The All New Market Analysis – June 6th, 2018

SPX Monitoring purposes; Neutral.
Monitoring purposes GOLD: neutral
Long Term Trend SPX monitor purposes: Long SPX 3/14/18 at 2749.48.

We have updated this chart from yesterday. The middle window is the VXST/VIX (Short term VIX/Volatility index).  It has been a bearish short term sign when the VXST outperforms the VIX (rising ratio).  The SPY traded above its previous high and the VXST/VIX ratio made a higher low suggesting a short term pull back is possible.  Also this is the week before option expiration week which can produce whipsaws.  Next Wednesday (June 13) is the FOMC announcement and  a cycle low is due June 13. The SPX 2800 higher target is still insight but a pause short term is possible.  The last three highs in the SPY topped at its upper Bollinger band and its back at that level again. There is an unfilled gap in the 2700 range which is a possible pullback target.  Neutral for now.

Above is the QQQ, Where ever QQQ goes so should the SPY.  An interesting note over the last several months is that a pullback materialized when the QQQ hits its upper Bollinger Band and the VXN (Nasdaq VIX) hit its lower Bollinger band.  As you can see the last three days produced this setup.  A pullback into Option Expiration week is possible with an ideal low due around 6/13 which is next Wednesday and the FOMC meeting time. On the sidelines for now.

Yesterday we looked at the short term picture with the Cumulative Up down volume and Advance/Decline indicators which where below their mid Bollinger bands and suggest short term weakness in the Gold stock indexes.  On the bright side the longer term picture looks bullish.  Above is the weekly chart for GDX, GDM/Gold ratio, GLD and the top window is the 10 week moving average of the Bullish percent index.  Bullish intermediate term rallies have started when the 10 week MA of the Bullish percent index closed above 40% (current close 48.21%) suggesting a larger rally is about to begin.  Next window down is the weekly Bollinger band Width which is at the lowest point in the last 12 years suggesting also a large move is coming.  Might add that the weekly Bollinger bands for GDX, GDM/GLD ratio and GLD are pinching, which also suggests a large move is just around the corner.  We mention the likely scenario the next time the short term picture turns back to positive that it could lead to a large rally and the chart above suggests that ideal.  Being patience for now.