SPX monitoring purposes: Sold on 8/8/21 at 4486.23 = 1.83% gain; SPX long on 21/08/21 at 4405.80.
GOLD tracking purposes: GDX long on 9/10/20 at 40.78.
Purposes of the SPX monitor in the long term: Neutral.
Today is four days in a row that the SPY is up and running; can you reach five? If so, this points to this conclusion: the market will be higher in five days, 85% of the time to make an average profit is .8%. Let’s see what tomorrow brings. The volume was relatively low today, along with yesterday’s light volume, suggesting the market is close to a stopping area. The Nasdaq Composite closed above 15,000 for the first time and the approximate numbers may stop the market. We are not bearers here, but the market could consolidate around this level. Today we sold our long SPX position at the close with a gain of 1.83%. As for SPX, according to our records, we have not had any losing trades since mid-March, with six winning trades in a row with a gain of 12.75%.
The graph above in the top window is the NYSE McClellan Summation index. We have shown this graph below and it is useful to identify the times when a significant decline can occur. Large falls can occur in the market when the NYSE sum index falls below “0”. The red arrows point to times when the NYSE Summation index fell below 0. Yesterday’s close was -18.48 and below 0. Today’s strong advance / decline may have pushed the Summation index is above 0, but over the past two months, the summation index has shown weakness. The third quarters of the year are also the weakest quarters of the year we are in. We are favoring a more lateral market than a declining market in October, but that may change.
There is evidence that industry leadership may change in the coming months and that gold could be one of the new sectors taking the lead. The top center window is the monthly gold / NDX ratio. This ratio is almost equal to the low of 2000, where gold began to surpass NDX. This ratio has not yet reached gold where it outperforms NDX, but it may be in the coming months. When and if this relationship appears (at some point it will), it does not mean that NDX will go down, but that gold will rise faster than NDX. There are other sectors that may outperform SPX in the coming months, which are XLB, XLI, XLF and XOP.
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