SPX Monitoring purposes; Neutral. Monitoring purposes GOLD: neutral
Long Term Trend SPX monitor purposes: Long SPX 3/14/18 at 2749.48.
We have updated this chart from yesterday. The middle window is the VXST/VIX (Short term VIX/Volatility index). It has been a bearish short term sign when the VXST outperforms the VIX (rising ratio). The SPY traded above its previous high and the VXST/VIX ratio made a higher low suggesting a short term pull back is possible. Also this is the week before option expiration week which can produce whipsaws. Next Wednesday (June 13) is the FOMC announcement and a cycle low is due June 13. The SPX 2800 higher target is still insight but a pause short term is possible. The last three highs in the SPY topped at its upper Bollinger band and its back at that level again. There is an unfilled gap in the 2700 range which is a possible pullback target. Neutral for now.
Above is the QQQ, Where ever QQQ goes so should the SPY. An interesting note over the last several months is that a pullback materialized when the QQQ hits its upper Bollinger Band and the VXN (Nasdaq VIX) hit its lower Bollinger band. As you can see the last three days produced this setup. A pullback into Option Expiration week is possible with an ideal low due around 6/13 which is next Wednesday and the FOMC meeting time. On the sidelines for now.
The short term picture remains bearish, with the Cumulative Up down volume and Advance/Decline indicators below their mid Bollinger bands which suggest short term weakness in the Gold stock indexes. The chart above is another longer term view (along with yesterday’s view) that remains bullish which is the monthly Silver/Gold ratio. This chart goes back to 1999 and shows the times when the monthly Silver/Gold ratio closed below .013. When this ratio closed below .013 and turned up, a multi month (or longer) rally ensued that at least produced 80% gain. Might add that the monthly Bollinger bands for GDX, XAU, GDX/GLD ratio and GLD are pinching, which also suggests a large move is just around the corner. We mention the likely scenario the next time the short term picture turns back to positive that it could lead to a large rally and the chart above supports that scenario. The FOMC meeting is next Wednesday and could be the news to get things going. Being patience for now.