The Ord Oracle - 07-15-2008
Above is the 9 month (40 week) Cycle dating back to 1996. This recurring cycle is next due for a bottom in the market on 9/22/08 which is a about two months from now. We are not suggesting the market is going down for another two month, however, this bottom cycle on 9/22 could mean that the market could produce the second bottom of a double bottom (similar to the bottoms that where produced in 2003). We thing the first bottom in the NYSE may show up in the next week or so (Bullish Trigger will be when NYSE McClellan Summation index turns up). Market may rally off first low for several weeks then when 9 month cycle (9/22/08) approaches the second bottom may form where the market pulls back into the that timeframe. Therefore next couple of months could both from an uptrend and another downtrend. Staying flat for now.
Above is the NYSE index with its McClellan Oscillator and Summation index dating back to 1996. The current McClellan Summation index reading of -2570.70 is the second lowest reading dating back to 1967. The Lowest Summation index reading since 1967 came in 1998 with a reading near -3800. From the 1998 low on the Summation index after it turned up, the NYSE went on to rally near 40% over the next 9 months. Today’s Advance/Decline line remains negative and that condition keeps the Summation index heading down and into new recent lows. When the Summation index is heading down, it implies the NYSE is still in a downtrend. Normally before the bottom forms in the NYSE the McClellan Oscillator will produce a positive divergence where the NYSE hits new lows as the Oscillator makes higher lows. That condition is starting to happen now. However, no bullish signal is triggered until the Summation index turns up. The most bullish signals seem to appear when the Summation index turns up from below minus 2000 and the Summation index is well below -2000 now. 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.
It appears GDX has developed a Head and Shoulders bottom that began back in March. 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 (which it did in the pull back in early July). A gap formed on GDX near the 45 level. The gap at 45 was tested and tested on lighter volume and then closed above the gap which implies the gap had support and from there another rally started. From the early July rally, volume has expanded and is a bullish sign. Today’s rally tested the high of 4/16 on higher volume and keeps the uptrend in tact. There is a gap left open near 47.50 on GDX and may pull back to that level before heading higher. For a bullish sign, the 47.50 gap level should be tested on lighter volume. The 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
