The Ord Oracle - 09/22/2009

October 9, 2007 marked the top in the market.  Taking that high and counting the days to the next low and then taking a 38.2 of those days and adding the days out to the future have found important turns days in the market plus or minus two days.  We have marked on the chart those turn dates.  From the October 2007 high to the March 2009 low took 355 days.  Taking 38.2% of 355 comes in 136 day and add that to the March low projects out to 9/18 (last Friday for a turn date).  From the March low to the July low took 86 days and 61.8% of 86 day is 53 days and add 53 to 86 projects a turn date of 9/24, this coming Thursday.   The SPY is at gap resistance (107 to 109 on SPY) and there are Fibonacci turns dates starting from 9/18 to 9/24 plus or minus two days. This week could be an important week. We are short the SPX at 883.92.

An Elliott Wave five count down to the March low shows the bigger trend is down.  The direction of the true trend goes in an Elliott Wave five count and consolidation goes in a ABC (or three count).  Currently XLF is working on the ABC consolidation up and once completed should start the next impulse wave down.  The ABC count up is taking the form on a bearish “Rising Wedge”.  We have identified two previous “Rising Wedge” pattern, one in 2007 and the other in 2008.  “Rising Wedge” have minimum downside targets to where they began and therefore it appear the March low of 2009 will be visited again.  However, “Rising Wedges” can go much lower then the previous low like the ones in 2007 and 2008.  First support come in near 11 on XLF and next support down is the March low near 6 and beyond that who knows.  The “C” leg should end near current levels.    We are short the XLF today at 14.30.

Below is the Bullish Percent index for The Gold Miners index.  Reliable tops in the Gold Miners have formed when the RSI reaches above 70 and turns down and with the Bullish Percent index has a bearish crossover of it’s 10 Moving average.  This conditions was triggered yesterday.  This potential pull back could push GDX down to the apex of the Triangle (near 40 on GDX) it broke out of in early September. We will look for a buy signal in GDX on the next pull back which could come in near 40 and at 960 on gold.  We are very bullish on the bigger timeframes for Gold stocks and we will keep our core positions. Bought GLD on 4/24/09 Sold 8/14/09 at 93.78 gain 5.4%.