GDX Made A Higher Low

  • SPX Monitoring purposes; Sold long SPX 5/23/17 at 2398.42 = +1.76%; Long SPX 5/17/17 at 2357.03.
  • Monitoring purposes Gold: neutral.
  • Long Term Trend monitor purposes: Neutral.
  • Above is a two hour chart of the SPY. To bottom window is the 10 period moving average of the TRIN. When the 10 period moving average of the TRIN gets below 1.00 the market is usually (not always) near a short term high, Today’s close came in at .87. FOMC meeting is tomorrow and we will be watching closely how the market reacts. 

    FOMC meeting is tomorrow and could have a short term affect on the market. A high volume “Spinning Top” (bearish) formed last Friday and most high volume highs are tested and if tested on lighter volume would imply resistance. It appears the market is attempt to test Friday’s high. If the test comes on lighter volume (bearish), it could complete a small “Three Drives to Top” that started in early June and complete a larger “Three Drives to Top” that started back in early March. A bearish setup could be for the SPY to hit a higher high and the VIX to make a higher low. The FOMC meeting Tomorrow, could produce the validity to help set this trade up. Still watching the developing “Three Drives to Top” to completed and a pull back to 2300 SPX range is possible. 

    The Advance/Decline percent and Up down volume percent indictors broke to new recent lows as GDX made a higher low, suggesting at some point GDX will break its previous low (which comes in near 22.00 range) (in blue). There is also another divergence where GDX made a higher high in early June and both Advance/Decline percent and Up down Volume Percent made lower highs (in red on chart). These divergences suggest at best GDX will work sideways and at worst work lower. The top window is the RSI for GDX. Readings above 50 are bullish for GDX and below 50 bearish. The RSI has be hovering near 50 since mid May and at the moment not give a direction for GDX. The RSI is giving a neutral reading. Will keep our powder dry for now. 

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    Author: Travis Esquivel

    Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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