SPX Monitoring purposes; Long SPX 8/9/23 at 4467.71.

Long SPX on 2/6/23 at 4110.98; Sold 6/16/23 at 4409.59 = gain of 7.26%. Gain since 12/20/22=17.68%

Monitoring purposes GOLD: Long GDX

SPY has two open gaps; one near 444 (formed on 7/12) and one near 454 (formed on 8/2) (shaded in light pink). SPY is testing the 444 gap on relative light volume suggesting support. Last Friday’s (8/4) close produced a 1.79 TRIN and -414 Tick which is a bullish combination that suggests a low in the market is near. On August 9 the TRIN closed at 1.17 and tick at -208 and today the TRIN closed at 1.25, ticks at -294 which are additional bullish combination and adds to the bullish setup. The second window up from the bottom is the VIX which usually trades opposite of the SPY. Over the last week, both SPY and the VIX moved lower which is a bullish divergence short term. Could see a “back and forth” for a couple of days before the 454 SPY gap level may be tested. Option expiration week is this week which has a bullish bias. Long SPX on 8/9/23 at 4467.71.

The bottom window is the SPY and the next higher window is the 3-day average of the SPY/VIX ratio. We boxed in the times when a divergence was present. Currently, we have the SPY making a higher low than early July and the SPY/VIX ratio making a lower low; suggesting if SPY does bounce (we think it will) lower lows in SPY is possible in the coming weeks. This week is option expiration week which normally has a bullish bias and a bounce is possible. However next week could see the pull back to resume because of the negative divergence in the SPY/VIX ratio.       

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