Strong Rally To Start This Week? That Is The Question

SPX Monitoring purposes; Long SPX 10/22/20 at 3453.49.

Monitoring purposes GOLD: Long GDX on 10/9/20 at 40.78. 

Long Term SPX monitor purposes; Long SPX on 10/26/20 at 3400.97.

Monday we said, “The circle red area is where the Tick and Trin reached extreme panic levels which are where bottoms form. We labeled these areas with the blue tick close reading first and blue Trin close readings second.The panic readings both in tick and trin occurred around the 335-340 ranges suggesting this area has strong support.Three panic days in the same area within three weeks is a build up for strong rally that may start this week. Tuesday’s decline did produce high volume and most high volume lows are tested.” Tuesday the Tick closed at -411 and the trin at 1.32 which is another bullish combination.There is still a possibility that Monday’s high volume low could be tested before market heads higher.Still looks bullish.

The middle window is the NYSE Down volume/NYSE up volume; when this ratio reaches > 9/1, its considered a Major Distribution day “MADD”.Going back to April, MADD marked short term lows.Its also worth noting that most MADD lows where tested before market headed higher.Not sure Monday’s low will be tested or not tested, but either way a low in the market appears to be form here. We also had the tick and trin reach panic levels Monday and Tuesday, which is a condition that appears near lows.

Above is the weekly GDX chart with its RSI in the top window. This indicator looks at the intermediate term for GDX.Bullish Intermediate term trends occur when the weekly RSI for GDX is above 50 (current reading is 53.50).GDX has been consolidating since early August. The consolidation has been choppy with decreasing volume which is the norm on consolidation patterns.The next impulse wave is not far off; the Bollinger bands for the GDX/GLD ratio are narrowing suggests a large move is not far off.Another rise is GDX should start soon that should last into the new year. Long GDX on 10/9/20 at 40.78.

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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