The All New Market Analysis – October 10, 2018

SPX Monitoring purposes; Neutral.

Monitoring purposes GOLD: Long GDX at 18.72 on 8/17/18

Long Term Trend SPX monitor purposes; Short SPX on 10/5/18 at 2885.57

The top window is the NYSE McClellan Oscillator.  The bottom window is the percent of stocks that are above the 150 day moving average.  Bearish declines can occur when the McClellan Oscillator falls below +500 (current reading is -44.60) and the stocks above 150 day moving average falls below 70% (current reading is 51.19).  The trin closed today at 1.25 and the ticks at -159 which can produce a bounce and could bounce enough to get gap filled near 2925 on the SPX. But the bigger picture will remain bearish. A possible downside target is the 200 day moving average near the 2760 range.

The equity put/call ratio closed Friday and .84 which is bullish short term and the McClellan Oscillator is near -200 and very over sold suggesting a bounce is possible short term. Today the Trin closed at 1.25 and the Tick at -159 which is a modest bullish combination. If market does bounce it should find stiff resistance near Last Thursday high and gap level near 2925 range.  The higher volume a gap has the more resistance it has and last Thursday gap volume came in at 111M and for the market to get through that gap, volume would need to be 111M or higher which is unlikely.  Next significant low should produce panic extremes in the Tick and Trin which might come in near the 200 day moving average near 2760 SPX. Could add short term SPX short position near 2925 if evidence is present.  Short long term on 10/5/18 at 2885.57.

Little change from yesterday and the short term picture remains bullish. Did check the COT Gold commercials and at last report came in at 8875 contracts long and that’s the highest bullish reading going back to 2015. The bottom window is the Advance/Decline with an 18 period moving average and above that is the Up Down Volume with 18 period moving average.  Readings below “0” are bearish and above bullish. These indicators closed above “0” last Monday and remain above “0” and suggest the rally should continue for GDX.  The pattern that appeared to have formed on GDX is a Head and Shoulders bottom which has a measured target near the 21.25 level.  When the Head and Shoulders bottom is symmetric their reliability increases and this one looks symmetric.   The larger pattern that GDX broke down from is a “Triangle Pattern” and the “Apex” lies near 22.00 and could also be an upside target.  Long GDX at 18.72 on 8/17/18.