The Ord Oracle - 12-30-08

The last day of bullish Seasonality is tomorrow and there is a good chance tomorrow may be up but probably now much. On the chart above we have listed the ISEE put/call ratios over the last month that has exceeded 1.50. Readings above 1.50 has marked short term tops in the SPY. Yesterday the ISEE put/call ratio came in at 2.06 and which means that over twice as many calls where bought then puts and shows to much optimisms for the short term and is a condition that appears near short term tops. Today’s reading came in at 1.80 and still bearish. We are anticipating 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 yesterday for a 2.4% gain. We will look for a buy signal near the 820 range on the SPX. 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. Above 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. RSI and MACD are now showing a negative divergence where $SPTGD has made a higher high and RSI and MACD has made a lower high which implies upside momentum is weak. For a market to break resistance, it should show a “Sign of Strength” (SOS). An SOS is a strong price move with big volume through the resistance zone. Yesterday’s break above the Neck Line (300 level) came on very weak volume and suggests a false breakout and implies this market should start to pull back. We have identified a possibility that the pattern forming on the $SPTGD is a Head and Shoulders bottom. H&D normally are symmetric in that if the Left Shoulder has two humps (the current pattern has two left humps) then the Right Shoulder should also. The first hump on the Right Shoulder came in early December and we are looking for a pull back to from the second hump in the near term. Support comes in near 225 and would be the ideal area for the second hump to be completed and complete the Right Shoulder of this Head and Shoulders bottom. The 225 level would be a good area to add to or add new gold stock positions. If and when the $SPTGD gets to 225, the rally following should be very strong to show (SOS) and rally through the 300 Neck Line area. This potential H&D has an upside target to 450 and is an all time new high which will mean this market is in a bull market. 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.

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