Volume Appears To Have Been Climatic

Last Wednesday volume appears to have been climatic and may put a stop to the rally that started in February. The up gap that was produced last Wednesday has support if tested on lighter volume and the last couple of days where tested on lighter volume. If the gap than holds a rally should ensue to test the previous high. The previous high (which is the gap day) which has the high volume and a test of the previous high on lighter volume will imply resistance. We don’t have the final numbers yet but the McClellan Oscillator will close some where near minus 130 and below “0” and a new short term low which is a bearish sign. 

The top window is the 2 hour RSI for the SPY. Readings below 50 shows the momentum is down for the SPY. The current reading is 51.32 and still above 50 but has shown weakness the last several days. Next window down is the moving average of the Tick. Readings above “0” are bullish and readings below bearish. Over the last couple of days the moving average of the ticks has fallen but still above “0” and still bullish for now. Notice that last Wednesday gap is being tested which is a support area where a bounce is possible short term. Looking for a test of last Wednesday high near 240 on SPY and a possible sell setup. 

The top window is the daily RSI. Sell signals occur when the RSI is above 50 and than falls below 50. The drop below 50 and sell signal on April 24 remains in effect. The bottom window is the Money Flow indicator which is below 20 and overdone to the downside suggesting GDX is nearing downside exhaustion. Also GDX is running into the November, December consolidation highs near 21.50 range and a support area. We don’t know yet this support area will hold but if market is going to bounce it may bounce in this area. If the bounce does occur, the makings of a bottom may start to develop. We will be watching for a bullish setup in the 20.85 to 22.50 range in the coming days. The Timer Digest has us ranked #2 in performance for gold over the last 12 months. Sold GDX at 24.33 on 2/22/17 = gain 20.15%; Long GDX on 12/28/16 at 20.25.