Today the Spy traded above the recent highs set over the last couple of weeks but failed to hold these highs and volume also shrank. The bulls had the stage to run the market higher but failed. If a market can’t hold the previous highs, it will reverse and attempt to take out the previous lows. The Previous lows come in near 93.22 which is also a very important support zone and is also the high recorded on 5/8. A close below the 5/8 high would imply the top is in by the same reasoning “If a market can’t hold the previous highs, it will reverse and attempt to take out the previous lows” and give a short term target to 88. Tomorrow is Friday and end of the week and if the SPY close below 93.22 tomorrow then the weekly charts would turn bearish which carry more weight then the daily charts. We are short the SPX at 883.92.

We Bought ASTM at 1.92, Biotech group. Long POWR at 13.70 on 12/14/07.

We showed this chart yesterday and have updated it to tonight’s close which is the ratio between the Nasdaq Volume to the NYSE volume. When this ratio reaches this high intermediate term tops have formed in the past and we think it may be telling the same story now. The second window from the bottom is the RSI. We have drawn blue trend lines on this chart. When the RSI falls below 50 it implies a top was seen. So far that has not happen but any short term weakness in the SPY may generate a sell signal in this indicator and will give an intermediate term signal and is something we are watching. Bottom window is the 20 EMA of the Tick index. Normally the Spy follows the direction of the ticks. The ticks have been moving lower for the last month as the SPY moved modestly higher and did show the buying interests were leaving the market. Over the last few days this indicator hit new recent lows and suggests the buying interest is turning into selling interests and a bearish sign. Today’s push to new recent highs and volume did not expand and then close below the previous highs is a bearish sign. We will see if the market closes lower tomorrow.

Above is the Rydex Precious metals fund. Surges in Cumulative Net Cash Flow and Total Assets have lead to pull back in this precious metals fund. On a longer term note this is very bullish in that is shows investors interest in this type of investments. However, near term these surges help to support the idea of a pull back in the gold stocks. Also notice that “Price Momentum Oscillator” (PMO) has turned down and implies short term momentum also has turned down. This potential pull back could last in July. Physical Gold and the Gold ETF (GLD) may find support near 900 and 90 respectively and we will be holding our GLD positions. If and when GLD get to 90 it would a good place to add to long positions. Long GLD at 89 on 4/24/09. Long KRY at 1.82 on 2/5/08. We are long PLM at 2.77 on 1/22/08. Holding CDE (average long at 2.77 (doubled our position on 9/12/08 at 1.46, Sold 5/13/09 at 1.55=6% gain). Bought NXG at 3.26 on 6/4/07. We doubled our positions in KGC on (7/30/04) at 5.26 and we now have an average price at 6.07. Long NXG average of 2.26. For examples in how "Ord-Volume" works, visit www.ord-oracle.com.