VIX At A New Short Term Low

  • SPX Monitoring purposes; Long SPX on 6/25/20 at 3083.76.
  • 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.

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It's common for the VIX to lead the SPX. Today the VIX traded at a new short term low, suggesting that SPX may trade back above its recent high near 3175 range or even higher. The July 4 holiday period has a bullish lean the week before and the week after. The door still open for a test of the June 8 high.

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Above are the times when a “Major Distribution day MADD” occurred identified by blue vertical lines. In downtrends, the decline usually continues but in up-trends it can mark short term lows within a couple of days. A MADD occurred on June 11 (closing low) and market bounced over the next week or so. On June 24 another MADD occurred and the market bottom today’s later. The week before and after July 4 has a bullish lean and it appears to be playing out.

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Above is what may transpire in the coming weeks. It's common for the gold market to form reversal around the July 4 holiday. This trading week ends Thursday, July 2 (Friday is July 4 holiday), and could mark a short term high. As you can see on the chart above, GDX is almost back to its May high and GDX/GLD ratio is still far away, showing that GDX is outperforming GDX/GLD ratio. Ideally one would like to see GDX/GLD ratio outperforming GDX and that is what happens in strong bull moves and that is not what is happening here. In general a cycle high in gold is due around the July 4 holiday and a cycle low is due around July 15. If the market does pull back to the July 15 cycle, that time frame may be the better buy and is the setup we are watching for. Being patience for now.

Disclaimer: Signals are provided as general information only and are not investment recommendations. You are responsible for your own investment decisions. Past performance does not guarantee future ...

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