The bottom window is the three day average of the Equity Put/Call ratio. Readings near .58 and lower usually stalled the market short-term. The previous instances when CPCE reached .58 and lower, the market traded sideways for a week or longer.

The market may stall near the current levels and another buy signal could develop later, next week probably. This coming Monday, the market will be up only 40% of the time and the next Thursday it will be up only 37% of the time. However, the next Friday has an 86% chance of being up (Schacffers’ Investment).Therefore, we will be looking for a bullish setup next week before Friday. There could be backing and filling on short-term, but the trend is up into year-end. 

Yesterday’s rally did break above the recent highs and the volume did confirm the breakout suggesting that the 259 area on SPY is a support.

With the three day average of the Equity Put/Call ratio near .58 (suggesting consolidation over the next week or so) and Monday and Thursday of the next week showing bearish tendencies a pullback to support the zone near 259 on the SPY is possible. Ideally, we would like to see panic and the “Tick and Trin” the next week will help us to find the next low. In any case, the rally is expected to continue into year-end with an average gain of 4%, according to statistics.

Sold SPX on 11/17/17 at 2578.85 = gain of .55%; long 11/15/17 at 2564.62.

Both the GDX and GDX/GLD ratio Bollinger Bands are pinching and a large move in both is not far away. Today’s rally in GDX matched its previous high of early November. Showing that GDX is stronger than GDX/GLD ratio, means that we have a bearish sign on the short-term. Both Up-Down Volume and Advance/Decline indicators are below “0” (second and third window up from bottom) and  are not confirming the short-term bounce in GDX. A possible pull back in GDX is still in the cards. The next low in GDX could develop into a longer-term buy-signal. To help identify the next low, GDX/GLD ratio should lead GDX in performance and that is something I will be watching for. Short GDX on 11/13/17 at 22.56.