The Ord Oracle - 07-22-2008

Above is a price comparison chart of the nine main sectors in the market along with the S&P 500 dating back to early May. The sectors that hold up the best (decline the least) in a market decline will usually outperform on the next rally phase.   The sectors that held up the best going into the mid July low were Gold & Silver (XAU), Biotechs (IBB) and Oil Services (OSX). The sectors that got hit the hardest on the last decline where Brokers (XBD) and Banking (RKH). We all ready own issues in the Gold and Silver index and will keep these issues. For short term there could be a minor consolidation. We checked the ISEE put call ratio index before the close and this ratio stood at 1.52.   The 1.52 ratio shows to much call buying for short term and suggests the market may stall near current level. We like the Biotechs (IBB) on a pull back to support on lighter volume near 80.  We are long the SPX on today’s close at 1260.32.

Above is the NYSE index and with its NYSE stocks above 200 EMA, 50 EMA and 20 EMA. We are interested when NYSE Stocks above 200 EMA fall below 20% as that is where intermediate term lows can form. We have market on the chart above when NYSE stock above 200 EMA fall below 20% and in all cases (going back to 1987) the market pounded out an intermediate term low. The current configuration shows a similar pattern forming that showed up at the 2002 low. We will need a strong rise over the next several weeks in the NYSE stocks above 200 EMA to have the same results that occurred back at the 2002 low.   Either way, the market is attempting to pound out some sort of an intermediate term low here and a bullish sign.   Today’s strong advance/decline line may have pushed the McClellan Oscillator up near +200, which shows energy has switched to the upside and an intermediate term bullish sign. However +200 on the Oscillator is short term overbought and at a level where consolidation can start.   We are long the SPX at 1260.32.

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 GDX in the Ord-Volume format. Ord-Volume shows the average daily volume in a swing so a trader can identify which way the energy is pushing.  Comparing the force in the up legs and down legs from the mid June low, the up legs had more energy and imply at some point the market will break to the upside and keeps the bigger trend bullish. A gap formed near 47.50 range and currently GDX is testing that gap on lighter volume. A test of a gap on lighter volume implies that gap has support and will reverse this short term downtrend. 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/