Above is an interesting chart. The blue chart inside the SPX chart is the ratio of the Nasdaq volume compared to the NYSE volume. When Nasdaq volume surges compared to NYSE volume then a pull back is anticipated in the S&P. Over the last couple of days the Nasdaq Volume compared to NYSE Volume surged to a new three year high. Previously when this ratio reached this extreme the S&P had significant pull backs. This condition also suggests that upside progress on the SPX is most likely limited. In the bottom window is the 20 day EMA of the tick index. This indicator has been moving down since mid April and shows buy pressure is becoming lighter. We are short the SPX at 883.92.


Sometimes we look at other index in the same family to see if the picture is the same. Above is SSO which is an ETF and is the ProShares for double long the SPX. On 6/1 SSO broke above the 5/8 high on reduced volume and implied a false breakout which implies at some point the market will fall back. A close below the 5/8 high will imply the top is in. On the rally above the 5/8 high on the SPY, MACD is making a lower high and showing a negative divergence. At the bottom window is the RSI and it is also making a lower high and is also showing a negative divergence. The NYSE Summation index turned down on June 8 and with today’s negative advance/Decline line, the trend remains down, which implies the SSO is in a downtrend. With negative divergence in RSI and MACD and a low volume break above the 5/8 high, a bearish outcome is expected. I might add that the SPX is running into the 200 day moving average, which is resistance.


Above is the Gold Buy Index (HUI). HUI has been trading in a rising channel since late December 2008. The bottom of this channel may act as support which comes in near 320. Currently the HUI is on a sell signal by the indicators of “10 day MA of RSI”, MACD and “Trend line break of Price Relative to Gold”. We will watch how the 320 level is tested and to see if the MACD, RSI or Price Relative to Gold indicators give bullish signs. Physical gold may pull back to near 900 range and may be a good place to add 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 average price at 6.07. Long NXG average of 2.26. For examples in how “Ord-Volume” works, visit http://ord-oracle.com.