The Ord Oracle - 07-10-2008
The Bullish Percentage Index (BPI) (bottom window) shows the percentage of point & figure chart buy signals for all the stocks in the sector of XLV. Of the nine main sectors (XLY, XLP,XLE,XLV,XLI,XLB, XLK and XLU) XLV (Healthcare) appears to be the strongest. Notice the decline in to new lows a couple of weeks ago on XLV, BPI was up near 50% and far up from the previous low in March and a very positive divergence. Back at the March low in XLV, only 20% stock in XLV were in up trends. In the June lowers lows in XLV, 50% of stocks in XLV on in up trends. This condition shows that near 50% of stocks in the XLV are on buy signals and in up trends even though XLV is still near the lows. We have pointed out another similar instance on the chart above back in 2004 bottom. From the lows in 2004, XLV when on to rally for another year. Once a low is found in the markets, we will be looking for bullish sectors and it appears XLV may be on top of the list.
Above is the NYSE index with its McClellan Oscillator and Summation index dating back to 1996 (again). We are keeping a close eye on the NYSE McClellan Summation index as it may give an important signal in the next several days. It’s rare to get the NYSE McClellan Summation index below minus 2000 and when it does and turns up, it has lead to worth while rallies in the NYSE (see chart above). Yesterday the Summation index closed at -2126.15 and in the bullish -2000 or lower level. Since 1967, the Summation index has been below -2000 seven times (not counting current reading) and after turning up have lead to intermediate term rallies. Today’s Advance/Decline line was about neutral and keeps the Summation index heading lower which implies the NYSE is still in a downtrend. We don’t know how low the Summation index will go (it went below -3000 in 1998) but the next time it turns should prove to be a good buy 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 12/14/07.
Since mid March, it appears GDX has developed a Head and Shoulders bottom. In late June the Neck Line of this Head and Shoulders bottom was exceeded with a “Sign of Strength” (SOS) (high volume and big price move through Neck line) and confirms the jump through the Neck line. The Neck Line area should now act as support. A gap formed on GDX near the 45 level most wide gaps get filled at some point and act as magnets to a market. The gap at 45 was tested and tested on lighter volume and then closed above the gap which implies the gap has support. PMO has had a bullish crossover in late June and remains on a buy signal. 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
