The Short Bounce

SPX Monitoring purposes; Neutral
Monitoring purposes GOLD: Sold GDX on 6/11/20 at 32.83=gain; long GDX on 6/8/20 at 32.79.

Long Term Trend SPX monitor purposes; Short SPX 5/13/20 at 2820.

Wednesday the SPY ran into the gap level of June 11 on much lighter volume and suggests the gap has resistance. Looking at the March decline, we labeled tick readings on rally days that turned out to be tops and most where in the upper +700 range. On today’s rally on testing the June 11 gap, we where expecting the tick to close above the +700 range which would be evidence that market has reached a topping area. Instead the tick closed at -480; which is short term minor bullish. Market may try to push to a minor higher high short term and the tick may still reach +700 range to signal the next high. Picking the trades carefully. Being patient for now. 

Yesterday we posted the following and is still valid, “Market is not setup to have a long lasting bottom here. Market can bounce short term but should find resistance near the gap level at 312 on the SPY. The chart above goes back to mid 2013. The bottom window is the Equity Put/Call ratio with a 21 period moving average. Readings below .55 have been a bearish intermediate term sign. The next window up is the 10 day average of this ratio which stands at .49; readings below .50 have been an intermediate term bearish sign. Both times frames are in bearish levels and an intermediate term bearish sign. That is why most likely last Thursday’s down gap will hold as resistance.”  

The big sell off on the SPX  on June 11 affected most market and it appears the Gold Market also. The middle window above is the GDX/GLD ratio with a moving averages of 30 and 15. The moving average create bullish and bearish crossovers. Recent it has had a bearish crossover. The top window is the RSI for the GDX/GLD ratio. Readings above 50 are bullish and below bearish; current reading is 43.65. Support comes in near 31.00 on GDX and not far from current levels, so downside seems limited here. Not seeing a good setup short term and therefore we will remains patience for now. Sold GDX on 6/11/20 at 32.83=gain; long GDX on 6/8/20 at 32.79.