The Ord Oracle - 08-26-2008
The Rydex Cash flow Ratio Measures the flow of cash into and out of the bullish and bearish Rydex funds. Over the last 12 months, short term highs have formed in the SPX when the Rydex Cash Flow ratio reached near .90 or lower. Yesterday’s close came in at .90 and this reading is a short term bearish sign. This week is one of the most light volume weeks of the year and the volume in the market right now doesn’t have enough energy to push it up or down. We are staying neutral for now. We sold our SPX position on 8/7 close at 1266.07 for a 1/2% gain and are now flat.
The Energy sector (XLE) is showing the same bullish signs as the gold issue market. On 8/21 close the XLE McClellan summation index turned up and triggered a buy signal by this method. We sent out an intraday report and purchased XLE at 75.90. The chart above is the XLE in the Ord-Volume format. The Ord-Volume format measures the average volume between the swings highs and lows so a trader can identify which way energy is pushing. The rally on the XLE from the 8/18 low produced a “Sign of Strength” (high volume and wide price spread) through the previous highs and now the previous highs (74 range) should hold as support. The XLE tested the 74 level yesterday on lighter volume (a bullish sign) and today XLE bounced higher on increased volume and another bullish sign. The XLE McClellan Summation index is in an uptrend and implies XLE is in an uptrend and the XLE should work higher. We are long XLE at 75.90.
Long XLE (energy sector) at 75.90 on 8/21/08. On 4/2, we Bought ASTM at 1.92, Biotech group. Long POWR at 13.70 on 12/14/07.
Above is the CMX Gold 100 (Composite) Commit of traders report (COT) (courtesy of www.sentimentrader.com). Intermediate term buying opportunities occur when the Gold Small Speculators net positions fall below 20000. The Small Speculators positions have not been this low since November 2005 which was around the $500 level in gold and on the way to $700 reached in May 2006, a 40% rise in six months. A similar rise may be starting near current levels. 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. We are also holding CDE (long at 4.08. 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
