SPX, Gold, GDX Technicals: 02-21-18

The above is a 60 minute chart of the SPY (NYSE:SPY). A consolidation pattern appears to have formed from Friday’s high to today’s low. A gap formed on February 2 near the 280 range on the SPY and could be a magnet where market is heading. A bullish combination of the TRIN and Tick but can come early a day or two before a low, but does suggests the rally is not done. Entered long SPX on 2/20/18 at 2716.26. Sold long SPX on 2/15/18 at 2731.20 = gain 5.82%; Long SPX on 2/8/18 at 2581.00.

Friday’s volume was higher than the three day’s before and high volume highs are usually tested and suggest Friday’s high will be tested. If the test comes on lighter volume than that condition will imply Friday’s high will have resistance. If volume is higher than Friday’s volume, than market may go to next higher resistance, which is the gap area near 280 range. ($SPX up 6 days in a row. Last 5 yrs, 10 of 12 (83%) closed higher w/in next 5 days; R/R 3:1. 12 of 12 (100%) higher w/in 7 days; R/R 4:1; Urban Carmel).

The top window is the weekly GDX (NYSE:GDX) chart and below that is the weekly GDX/GLD ratio. It is said that the GDX/GLD ratio leads the way for GDX. Since last July, GDX/GLD ratio has been weaker than GDX. In January GDX matched its previous high and GDX/GLD ratio made a lower high and a bearish divergence. At the recent low for GDX in February, it matched its previous low and again GDX broke its previous low showing GDX/GLD ratio is much weaker than GDX. The Weekly Bollinger® Band for GDX is starting to “pinch” and suggests a larger move is coming and with the weekly GDX/GLD ratio weaker than GDX, it suggests the move will be down. A possible downside target for GDX is the low that formed in December 2016 near 18.50 range. For very short term there is a minor positive divergence in the GDX/GLD ratio which suggests a bounce. Neutral for now. New Book release "The Secret Science of Price and Volume" by Timothy Ord.