The Ord Oracle 1-13-2009

Friday and Monday the ARMS index close at 2.41 and 2.68 respectively. ARMS index close over 2.00, two day’s in a roll can produce a short term bounce in the market. This potential bounce could last a couple of days however, we don’t believe it would produce a last rally but a bounce is 90 range on SPY is possible. This week is Option expiration week and Max Pain for the SPY would be a close at 90 on Friday. Max Pain is the price where the put and call traders would loose the most money and for the SPY it’s 90. The bigger pattern still appears that a "Bearish Rising Wedge" pattern formed which has a downside target to where the pattern began an in this case it’s the December 1 low near 82 on the SPY. The December 1 low is also where an ARMS index closed at 9.84 which also should act as support. We sold our SPX long position for a 2.4% gain. We will look for a buy signal near the 820 range on the SPX and still have an intermediate term target to the 1050 range. Back to flat for now.

On 4/2, we Bought ASTM at 1.92, Biotech group. Long POWR at 13.70 on 12/14/07.

We put this on last Thursday’s report and is worth keeping in mind, "Below is one of the oldest gold funds "US Global Investors Funds US Gold (Userx). This chart above is a weekly chart that dates back to 1990. Our view is that this index is drawing a huge Head and Shoulders bottom (See labeling above). We have counted an Elliott wave five (numbered in blue) up from the 2000 low where wave 5 ended at the March 2008 high and ended wave 1 of larger degree. Wave 2 of larger degree went down in an ABC and bottom at the October 2008 low. Wave 3 of larger degree has started from the October 2008 low and is in progress now and should hit new highs. Wave 3 bottom of larger degree has formed the Right Shoulder of this huge Head and Shoulders bottom. This Head and Shoulder bottom has an upside projection to 38 which is near 400% higher from here. The weekly momentum has turned up and is on an intermediate term buy signal. Next chart will show the shorter term timeframe."

Below is the Gold Miners (GDX) in the Ord-Volume format. The Ord Volume format measures the average daily volume (force) in the up and down legs of a market so a trader can see which way force is pushing. Notice that the leg up in early December was much higher then the up leg in late December and showed the upside force was weakening and a bearish sign. Also notice the leg down from early January to present has higher force then the up leg going into late December high and this condition implies that energy had switched from up to down for the short term. There is good support near 25 on GDX and that may be where the next low may form. We would like to see the RSI reach near the 30 range if and when GDX approaches 25. We like AZK, RGLD, EGO and HMY.

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 (average long at 2.77 (doubled our position on 9/12/08 at 1.46). 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/