Consumption Still Up And Down

30 to 90 days horizons SPX; flat.
Monitoring purposes Gold: Gold ETF GLD long at 173.59 on 9/21/11. Long Term Trend monitor purposes: Flat

Most short term lows in the SPY are defined by a combination of ticks closes below -300 and TRIN closes above 1.30. Over the last several days the market produced TRIN closes above 1.30 but so far the Ticks have not even closed below the “0” line. We have identified the times going back to May when the Ticks closed below -300 and the TRIN closed above 1.30. We would like to see such a setup on the current market to help define the low. There is a possibility that this setup may still develop in the next several days.

The bottom window is the NYSE New highs/NYSE New Low ratio. This ratio is trending higher and a bullish sign for the market. Next window up is the NYSE up volume/NYSE Down Volume ratio. It had a bearish crossover a few days ago and remains on a sell signal. Next window up is the McClellan Summation index. When this index is rising than that is a bullish sign for the market and it is has been rising. To keep the Summation index rising the McClellan Oscillator needs to stay above the “0” line which it has since the late August low. Today the McClellan Oscillator turned up back. It worth remembering that if the McClellan Summation index turns down below +500, than that condition can lead to nasty declines. There is a mix here but in general the market looks OK. I might add that today’s rally in the SPY came on reduced volume of about 25% from the day before. Normally you would like to see the Volume expand on rallies and decline on pull backs. Yesterday’s decline came on increased volume from the day before. Our thinking is the market may attempt to test the last high of mid September. We would like to see a clearer signal from the TRIN and Ticks. Staying flat for now.

Above is a shorter term view of GDX. The possible Head and Shoulders bottom where the late June low is the Head, is still in play. The August rally broke the highs of the April and May highs on higher volume and suggests at some point the August high will be exceeded and keeps the bigger picture bullish. The bottom window is the GDX/GLD ratio. When this ratio is rising than that is a bullish condition for both gold and Gold stocks. This ratio had a bearish crossover after the FOMC meeting of September 18 and remains on a sell signal. For the Head and Shoulders pattern to keep in play, GDX should not go below the Head which is the June 26 low of 22.21. We are Still watching.

Long NG at 5.14 on 10/8/12. Long GDX at 58.65 on 12/6/11. Long GLD at 173.59 on 9/21/11. Long GDXJ average 29.75 on 4/27/12 Long BRD at 1.67 on 8/3/11. Long YNGFF .44 on 7/6/11. Long EGI at 2.16, on 6/30/11. Long KBX at 1.13 on 11/9/10. Long LODE at 2.85 on 1/21/11. Long UEXCF at 2.07 on 1/5/11. We will hold as our core position in AUQ, CDE and KGC because in the longer term view these issues will head much higher. Holding CDE (average long at 27.7. Long cryxf at 1.82 on 2/5/08. KGC long at 6.07. Long AUQ average of 8.25.