NYSE, NASDAQ and Gold
Tim Ord
NYSE Market:
Below is the McClellan Oscillator for the NYSE.
When the McClellan Oscillator gets below -200 a bounce is likely to materialize for the short term. The Summation index touched the -300 level on the current decline. We have labeled in the past where readings below -300 have produced rallies. Resistance lies near the 9300 which equates to the 1442 range on the SPX and may be the area where the next top forms. Next week is option expiration week which usually has a bullish bias and the SPX could rally into late next week. The bigger trend is down and we are expecting an intermediate term decline to take the SPX down to near the 1140 range. Also notice on the chart above as the NYSE made higher highs the Summation Index made lower highs and this negative divergence help pick out the top of March 2005 top, September 2005 top, May 2006 top and the February 2007 top. We are short the SPX at 1381.95.
Nasdaq 100 Market:
Below is the daily Nasdaq 100, ($NDX) chart.
The NDX McClellan Oscillator has hit into an area where short term lows have occurred in the past (check the NDX chart above). Therefore there is a good possibility the NDX may bounce during option expiration week which is next week. Resistance lies at the gap level that formed near the 1810 range last week. Gaps are like magnets, drawing the market to them. Therefore a possible bounce to the gap level during option expiration week is possible. If the gap at the 1810 range on the NDX is tested on lighter volume then that will create a bearish signal. If a bearish signal is triggered at the 1810 level on the NDX then that would be a good place to add to short positions. We hold an average short position on the Nasdaq at 2378.59. Our downside target on the Nasdaq is near the 1900 level.
Gold Market:
On the recent decline that started from the late February high the energy has increased over 30% compared to the previous up leg going into the late February high and shows there is more force to the downside and implies the trend has turned down. For short term a bounce may materialize.
On Market Vectors Gold Miners ETF (GDX), Resistance now lies at the gap level near the 41.30 range and our downside target is the 32 range. The anniversary of last years high comes in May. A lot of the time previous important highs and lows in the past mark important turn in the future. Therefore there is a possibility the market may hold down until the May time frame. The next major impulse wave up may start near the 32 on GDX and 115 range on the XAU. We are neutral on the XAU for now.
On the recent decline that started from the late February high the energy has increased over 30% compared to the previous up leg going into the late February high and shows there is more force to the downside and implies the trend has turned down. For short term a bounce may materialize.
On Market Vectors Gold Miners ETF (GDX), Resistance now lies at the gap level near the 41.30 range and our downside target is the 32 range. The anniversary of last years high comes in May. A lot of the time previous important highs and lows in the past mark important turn in the future. Therefore there is a possibility the market may hold down until the May time frame. The next major impulse wave up may start near the 32 on GDX and 115 range on the XAU. We are neutral on the XAU for now.
