The Ord Oracle 1-6-2009

The pattern from the December 1 low appears still to be a “Bearish Rising Wedge” pattern.   A “Bearish Rising Wedge” has up sloping boundary lines that meet out into an apex and as the market rallies towards the apex, volume gradually decreases.  “Bearish Rising Wedge” pattern have downs side target to where the pattern began and in the current case the target would be near the 82 range on the SPY and 820 range on the SPX.   Normally “Bearish Rising Wedge” patterns are not long term topping pattern but a “Time out in an uptrend”.  Once the retracement starts, it’s usually fast.  Also the notation in red shows that SPY jumped through the previous high with out a “Sign of Strength” and implies a false breakout after which two bearish candlestick pattern formed called Doji. A pull back to support near the December 1 low (where the ARMS index closed at 9.84 and predicts an intermediate term bottom) at the 82 range where we think another buy signal could get triggered.  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.

Below is the Canadian Gold index ($sptgd).  We where looking for resistance near the 300 level on $SPTGD as that is where a trend lines lies going back to August.  $SPTD jumped through that resistance recently but volume was lacking and showed that there was not a “Sign of Strength” (SOS) through the 300 level. An SOS is a strong price move with big volume through the resistance zone and confirms the breakout.   The break above 300 level came on weak volume and suggests a false breakout and implies this market should start to pull back.   We have identified a smaller “Head and Shoulders” pattern labeled with blue notations.  The Head comes in late October and the Neckline connects the top of early October near 275 and late November near 260.  An SOS pushed through that Neckline in mid December near the 250 and confirmed the breakout.  That Neckline should now become support (Near 250) on any pull back, where previously we where thinking that $SPTGD would pull back to 225 range.  Addition confirmation for a bottom would be if 250 range is tested on light volume and the RSI approaches the 30 range. 



We like AZK, RGLD 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.

For examples in how "Ord-Volume" works, visit www.ord-oracle.com