For very short term the SPY is not giving clear clues what next move will be. It’s common for a pull back the week before option expiration week. Option expiration week is next week. The top window is the RSI for the SPY. In up trends the RSI stays above 50 and in down trends stays below 50 and current the RSI is neutral with a closing reading of 51.85. The bottom window is the McClellan Oscillator and readings above “0” suggest market is in an uptrend; today’s close came in at +82.55. RSI is neutral and McClellan Oscillator is modestly bullish. Ideally would like to see a pull back start and panic form in the TRIN and Ticks but don’t know that will happen. A Buy Climax formed on March 1 near 2400 on the SPX and most Buying Climaxes are tested. If panic does form on the TRIN and Tick the March 1 high will be the target. However, if the March 1 high is tested first, most likely that will be resistance, in that high volume is present and could turn into a sell signal. 

The chart above is the VXO/VIX ratio with a 5 period moving average that goes back 7 years. Problems for the market has appeared when this ratio reached .88 and below. Current reading is .88. Readings below .88 on this ratio starting occurring in mid March and market has made little progress or regress since then. This is the week for option expiration week which can lead to whipsaws and a week to be careful. Next week is option expiration week which normally has a bullish bias. If market does pull back this week and panic readings form in the TRIN and Tick a bullish setup could develop for a rally during option expiration week. Neutral for now. Sold Long SPX on 4/5/17 = gain .4%.

On previous reports we where conjecturing that tax time (April 15) could be a low: our thought now it could be a high. The pattern forming on GDX appears to be drawing a “Rising Wedge”. This pattern works modestly higher as volume decreases and that pattern appears to be forming here. Last Friday’s pattern appears to have been “Upthrust” (a breakout that failed). To have an effective breakout above previous highs the market should produce a “Sign of Strength” (SOS). An SOS is a strong price move accompanied with high volume and as you can see on the price chart above, there is not strong price move or high volume. A “Rising Wedge” pattern has a downside target where the pattern began and in the current case would give a target near 21.00 range. The top window is the Bullish percent index for the Gold Miners index. The bullish Percent jumped form 32% in mid March on point and figure buy signals to 39% recently and not a strong showing on this index. If the index jumped to over 50%, could have suggested something big on the upside may be beginning, but that did not happen here. Still looking for buy signal that could develop near the 21.00 range. Sold GDX at 24.33 on 2/22/17 = gain 20.15%; Long GDX on 12/28/16 at 20.25.