The Ord Oracle - 12-16-2008

Over the last month the McClellan Oscillator has been showing excellent strength and very bullish sign for the intermediate term. Also the McClellan Summation index has been trending higher since late November and implies the SPY is in an uptrend. The consolidation over the last several days has ended and now the SPY should start and impulse wave up. Our intermediate term target to upside is gap level at the 110 range on SPY. Long SPX on 12/2/08 at 848.81. On 4/2, we Bought ASTM at 1.92, Biotech group. Long POWR at 13.70 on 12/14/07.

The above chart is courtesy of www.etfinvestmentoutlook.com. We are very bullish for the intermediate term but short term the chart above illustrates the possibility that a pull back in GDX can appear here. Readings above +10 on advance/decline 20 day SMA have provided pull backs in GDX in the past. We have pointed out past examples in the chart above when Advance/Decline 20 day SMA was near +10. Currently the Advance/Decline 20 day SMA is well above +10 and gives reason to expect a pull back here.

The Commitment of Traders report (COT) remains very bullish for the intermediate term and GDX McClellan Summation index is moving higher and is also bullish. Therefore, if there is a pull back here it should be relative mild. Above is the Canadian Gold index ($sptgd). This index is stronger then the XAU American gold index. Today $SPTGD tested what we believe is the Neck Line of a potential Head and Shoulders bottom where the Head formed in late October. There is Symmetry is Head and Shoulders pattern. If there is a double left shoulder then the right shoulder should also be a double and that is what we are expecting here. For the current pattern to have a Double Right Shoulder there should be one more pull back down near 225. To negate this Head and Shoulders pattern this index should show an increase in volume (Strength) and Jump the trend line we have drawn on the chart above near the 300 level. This Sign of Strength through resistance (300 on $Sptgd) would imply no pull back is coming. However, normally Sign of Strength don’t develop when and index is extended and currently $SPTGD is extended. Therefore, we are still expecting a pull back (to 225 range) to develop that would create a Second Right Shoulder before this index breaks much above 300. If this patterns turns out to be a Head and Shoulders bottom it has an upside target to 450 range which breaks this index to all time highs. We like RGOLD 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.