The Ord Oracle - 05-27-2008
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EmailSP 500 and Gold Market Analysis for 05/27/2008
by Tim Ord
For 30 to 90 days horizons: Flat.
Monitoring purposes XAU: LONG XAU on 12/18/07 at 162.05.
Long Term Trend monitor purposes: Flat
On Friday the SPY closed below the previous low of 4/30 on lighter volume and implied a false break to the downside. Today the SPY closed above the previous low and triggered a short term bullish sign. A gap is left open near the 142 range (5/20/08) and the market may attempt to fill that gap in the near term. If the gap is tested on lighter volume then a bearish signal could get triggered. Notice that the “Price Momentum Oscillator” (PMO) has rolled over and has triggered a bearish intermediate term signal. The rally towards the gap level near 142 area may form the “Right Shoulder” of a potential “Head and Shoulders Top”. Staying flat for now.
On Friday we sent out a brief report that showed that a possible bounce may materialize near term for the S&P. For short term we expect the bounce to follow through a bit longer to the upside and possibly test the gap near the 142 range on the spy. It appears a worthwhile high was made on the SPY on 5/19 and a downtrend has begun. But for very short term a bounce could last into early next week before heading lower again. Last Friday’s McClellan Oscillator reached below -50 and in an area where short term bounce can form. Also month end “Window Dressing” can begin at anytime and last into the first week of June. Volume on this next potential rally will be important in that if it becomes above average it will imply strength in the market and a bullish sign. However we are expecting a below average volume and that would be a bearish sign and is our view of the market until July. The gap at the 142 range on SPY is a possible target for the next high. Still staying flat for now.
Sold 5/27/08 IVAN at 2.70=6% gain. Bought Ivan (Invanhoe Energy) 4/13/06 at 2.55,Energy stock. On 4/2, we Bought ASTM at 1.92, Biotech group. Long POWR at 13.70 on 12/14/07.
Above is the daily Market Vectors Gold Miners (GDX). Seasonality is neutral to bearish form now into Early July and therefore we are not looking for anything significant to the upside right now. On 5/21, GDX tested the gap level of 4/18 on modest increased volume and a bullish sign. If the gap was tested on lighter volume, it would have been a bearish sign. Since then the market has pulled back and tested another gap that formed on 5/16 and test that gap level on lighter volume and a bullish sign and implies the pull back may be over. What may be forming for near term is a “Right Shoulder” of a “Head and Shoulders Bottom”. The “Right Shoulder” may find support near 46 and Resistance at 50 and may take about a month to complete which would take us to late June. The bigger picture remains very bullish but the next several weeks may develop a trading range between 46 to 50 and therefore have patience. We remain bullish on the XAU on the bigger time frames and we are long the XAU from 12/18/07 at 162.05.
Tim Ord is president, editor and publisher of "The Ord Oracle" established in 1990. His newsletter is a Monday through Thursday email report that trades the S&P, Nasdaq and gold issues. He is frequently listed in the top 10 market timers in the country. If you purchase his book "The Secret Science of Price and Volume" through
