Sign intimord's Commentaries
The Ord Oracle Daily Commentary
We wrote this commentary before the close today and estimated the volume on the SPX on the chart above. Today’s decline did break below the previous lows and tested the gap area on lighter volume. We would have rather seen the lows and the gap broke on at least the volume that occurred on 6/1 which was near 4.8 B but came in near 4 B today. Normally previous lows and gaps tested on lighter volume suggest the lows and gap has support and opens the door for a bounce which is a possibility here. This possible bounce is only for the short term as the intermediate term trend is turning down. Some have asked that this would be a good place to add to short positions here and the answers is, that because the volume is very light this is not an ideal place to add to shorts. Notice on the chart above that the SPX made higher highs as the Summation index made lower highs. We have pointed this out in past reports, the jump on 6/1 above the previous highs came on 28% lighter volume and suggested a false breakout and implies at some point the market should turn back down. Also the Summation index has been moving down for a week and a bearish sign. Also this is triple witching this week and could provide extra volatility. We are short the SPX at 883.92.
The SPX has been running into the 200 day moving average and Trend down from highs in May and August of 2008 and has been providing resistance. Our %volume indicator gave a sell signal in May and has since showed a divergence (four window from bottom). RSI has showed divergence and has turned down and is a bearish sign (third window from bottom). McClellan Summation index has showed a divergence and has turned down which implies the market has turned down (bottom window). Top window is the MACD which has turned down and also is showing a divergence. This week is Triple witching an may show extra volatility. Intermediate term trend is turning down and next decline could last into August.
Above is the Gold index GDX. Currently GDX is on a sell signal by the indicators of “20 day MA of RSI” and the MACD (see chart above). At the highs in GDX in late February end of March and late May the On Balance volume had surges and these surges in On balance volume suggested that GDX was near a high. This caution sign by On Balance volume corresponded well with the Signals from the RSI crossovers and the MACD. Currently GDX is still in the down mode that could last several more weeks. Once RSI reaches near 30 and the MACD begins to show support then we will look for a buy signal to go long again. 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 average price at 6.07. Long NXG average of 2.26. For examples in how "Ord-Volume" works, visit www.ord-oracle.com.
Tags:stocks, tim-ord, ord-oracle
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