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The Ord Oracle - 09/02/2009
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Big divergences between Baltic Dry Index and SPX have lead to intermediate term trend changes. The current divergence is a negative divergence where the SPX made higher highs and Baltic Dry index made lower highs and suggests that the SPX is heading to an intermediate term decline.
We are short the SPX at 883.92.
We have updated this chart from Monday. The top window is the “Percent Volume” indicator, which measures the up volume to total volume on the NYSE in a 30 day moving average. We have marked with blue arrows where this indicator triggered sell signals. This indicator triggered a sell signal yesterday. The bottom window is Percent Down Volume indicator that measures the down volume to total volume on the NYSE and is a mirror image of the “Percent Volume” indicator. These two indicators check one another. Last Friday the Percent down Volume indicator gave a sell signal for the SPY and yesterday the Percent Volume indicator triggered a sell signal. We have been short the market for awhile (should have covered and re-shorted) and with the evidence of the divergence of the Baltic Dry index and the SPY suggests an intermediate term decline is in the making. The top may be in at the 8/28 high at 104.35 on the SPY. Since there was a “Sign of Weakness” through the lows of 8/24, 25 and 26 then those lows should act as resistance which is near 102.50 and may be a good place to add to short SPY positions. The next downside target is the July low near 87 on the SPY. Also the Financials sector (XLF) looks toppy here and may decline with the SPX.
Gold and GDX rallied strongly today and broke out of its Triangle pattern. Of all pattern the Triangle patterns are the least reliable in that there are more false breakouts then any other pattern. However today’s pattern breakout may be legitimate but we are not chasing it, at least not right now. Above is the Silver/Gold ratio. When the RSI of the Silver/Gold ratio reaches above 70 then Gold is usually near a high. When the RSI reaches below 30 then Gold is usually near a low (see chart above). Today the RSI of this ratio closed at 65.72 an nearing the area where Gold could form a high. However, The RSI of this ratio has not reached that level and gold for near term can move higher. For now we are going to set on our hands. Today’s volume did show a huge spike and could be an exhaustion type move, but we are not sure. We will wait gather more evidence and will not add any new position for now and keep our core positins.
Long GLD at 89 on 4/24/09, Sold 8/14/09 at 93.78 gain 5.4%.Long KRY at 1.82 on 2/5/08. We are long PLM at 2.77 on 1/22/08. Holding CDE (average long at 2.77 (doubled our position on 9/12/08 at 1.46, Sold 5/13/09 at 1.55=6% gain). Bought NXG at 3.26 on 6/4/07. We doubled our positions in KGC on (7/30/04) at 5.26 and we now have average price at 6.07. Long NXG average of 2.26. For examples in how "Ord-Volume" works, visit www.ord-oracle.com.
We are short the SPX at 883.92.
We have updated this chart from Monday. The top window is the “Percent Volume” indicator, which measures the up volume to total volume on the NYSE in a 30 day moving average. We have marked with blue arrows where this indicator triggered sell signals. This indicator triggered a sell signal yesterday. The bottom window is Percent Down Volume indicator that measures the down volume to total volume on the NYSE and is a mirror image of the “Percent Volume” indicator. These two indicators check one another. Last Friday the Percent down Volume indicator gave a sell signal for the SPY and yesterday the Percent Volume indicator triggered a sell signal. We have been short the market for awhile (should have covered and re-shorted) and with the evidence of the divergence of the Baltic Dry index and the SPY suggests an intermediate term decline is in the making. The top may be in at the 8/28 high at 104.35 on the SPY. Since there was a “Sign of Weakness” through the lows of 8/24, 25 and 26 then those lows should act as resistance which is near 102.50 and may be a good place to add to short SPY positions. The next downside target is the July low near 87 on the SPY. Also the Financials sector (XLF) looks toppy here and may decline with the SPX.
Gold and GDX rallied strongly today and broke out of its Triangle pattern. Of all pattern the Triangle patterns are the least reliable in that there are more false breakouts then any other pattern. However today’s pattern breakout may be legitimate but we are not chasing it, at least not right now. Above is the Silver/Gold ratio. When the RSI of the Silver/Gold ratio reaches above 70 then Gold is usually near a high. When the RSI reaches below 30 then Gold is usually near a low (see chart above). Today the RSI of this ratio closed at 65.72 an nearing the area where Gold could form a high. However, The RSI of this ratio has not reached that level and gold for near term can move higher. For now we are going to set on our hands. Today’s volume did show a huge spike and could be an exhaustion type move, but we are not sure. We will wait gather more evidence and will not add any new position for now and keep our core positins.
Long GLD at 89 on 4/24/09, Sold 8/14/09 at 93.78 gain 5.4%.Long KRY at 1.82 on 2/5/08. We are long PLM at 2.77 on 1/22/08. Holding CDE (average long at 2.77 (doubled our position on 9/12/08 at 1.46, Sold 5/13/09 at 1.55=6% gain). Bought NXG at 3.26 on 6/4/07. We doubled our positions in KGC on (7/30/04) at 5.26 and we now have average price at 6.07. Long NXG average of 2.26. For examples in how "Ord-Volume" works, visit www.ord-oracle.com.
