Free Day Trading Guide

Day Trading GuideLearn Secret Day Trading Strategies

Name:
Email:
  

The Ord Oracle - 07-01-2008

tim_ord's picture
July 1, 2008 by tim_ord

Rydex Cash Flows still not bullish

Sentiment plays an important roll in picking bottoms in the market. The above chart is the Rydex Cash Flow ratio. This ratio measures inflow and outflows of money going in and out of Rydex bullish and bearish funds. When the Rydex Cash Flow Ratio reaches 1.10 range then the Rydex investor is taking a bearish stance and a bullish sentiment is signaled and the market is near an important low. If the Rydex Cash Flow ratio reached near 1.05 (March low) then evidence would be present to indicate a bounce.   Right now a reading of .95 on Rydex Cash Flow ratio shows that the public investor is too complacent and a bearish sign. However this ratio can change in a short period of time and we will keep a close eye on it. Another fact worth noting is that the market has a history of rallying into a Presidential election which is this November so there could be a bullish signal developing shortly. The year after the election is normally the worst performing year for the “Four year Presidential Cycle”.   Therefore next year could be troubling. 

McClellan Oscillator nearing bullish levels

Above is the NYSE index with its McClellan Oscillator and Summation index. Since today’s Advance/Decline Line was still negative and keeps the NYSE Summation index heading lower, which in turn implies the NYSE (And SPX AND Nasdaq) is still in a downtrend.  Ideally we would like to see the Rydex Cash Flow Ratio and VIX to get into bullish areas when the Summation index is about to turn up as this would trigger an idea bullish signal. 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 12/14/2007.
 
GDX Market Vectors Breaks out
 
Above is Market Vectors Gold Miners (GDX).  PMO (Price Momentum Oscillator) has produced a bullish crossover and generate a bullish signal. Price Relative to Gold has jumped above the eight month Red downtrend line and has triggered a buy signal on a larger timeframe by this method a couple of days ago. The rally over the last several days appears to have produced a “Sign of Strength” through the “Neck Line” of a Head and Shoulders bottom and confirms the breakout for GDX. Support now comes in at the 47 range. It appears the rally phase has started. We remain bullish on the XAU on the bigger time frames and we are long the XAU from 12/18/07 at 162.05. 
 
Sold PMU on 2/29/08 at 1.20, bought at .81 for gain of 48%. Long KRY at 1.82 on 2/5/08. We are long PLM at 2.77 on 1/22/08. We are holding NXG, purchased at 3.26, has support near 2.80 range. We are also holding CDE (long at 4.08, support near 3.90). We are holding a long term position in KGC at 6.07 and NXG at 2.26. We are long the XAU at 162.05 on 12/18/07.

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 you will receive a copy signed by Tim.  Visit his website at:  http://www.ord-oracle.com/