• SPX: Neutral.
• Gold: Long GDX on October 9 at 40.78.
• Long-Term SPX: Neutral.

The second window down from the top is the 5 RSI, which is a momentum indicator and momentum rules everything, and the 5 period RSI is below “0," thus suggesting momentum is weak. The bottom window is the VIX, which closed at a new short term low, therefore suggesting that SPY may hit a new short-term low soon as the VIX leads the SPY in the opposite direction.

There is an open gap near the 337 SPY range and could serve as a downside target. The next couple of weeks could be challenging, as the market does not like the mystery regarding who will win the Presidential Election. Unless there are extreme readings in the tick and trin to show high degree of panic (where the market has determined who will be the next president), the market may swing both up and down. Staying neutral for now.

This is another chart which shows that a large decline in the SPX is unlikely. The second window down from the top is the NYSE McClellan summation index. A large decline may occur when this indicator falls below “0” (as noted with blue vertical lines. The current reading is +363 as of Tuesday's close. With the bullish “ten-day 2/1 breadth Thrust” recently, the market needs to weaken first before a larger decline can form.

Above is the weekly GDX/GLD ratio with its RSI in the top window. Intermediate term bullish signals are triggered when the weekly RSI for the GDX/GLD ratio falls below 30. The blue vertical lines on the chart show these signals were triggered. Another useful part of this chart is that when the weekly RSI of the GDX/GLD ratio stays above the 50 level, the market is considered in an uptrend; the recent reading is around the 55.73 area.

The pink shaded areas are when the weekly RSI was below 50. So far, the weekly RSI has remained above 50 since the March low. Over the next two weeks the gold market may become quiet. The daily signals are about split between buy and sell on the recent close, which is neutral. Markets that decline into elections usually rally after five or so days.