• SPX Monitoring purposes;  Covered 12/30/16 at 2238.83= gain .46%; Short on 12/29/16 at 2249.26.
• Monitoring purposes Gold: Long GDX on 12/28/16 at 20.25.
• Long Term Trend monitor purposes:  Short SPX on 1/13/16 at 1890.28 

Last Thursday’s report we showed tick readings which was showing a negative divergence. Above is the VIX/VXZ ratio. This ratio can show a divergence when the SPY makes higher highs and the VIX/VXZ ratio makes higher lows. This type of divergence has been going on since late December. However the McClellan Oscillator is staying above “0” (close today 19.96) and in bullish territory. Market appears to be waiting for something and its not clear what that “something is” as analysis are not giving clear signs. The inauguration is Friday which is an important event and markets usually pivot around events. We are looking for clues to complete the picture. We will remain neutral. Covered 12/30/16 at 2238.83 = gain .46%; Short on 12/29/16 at 2249.26. 

We said on a previous report that large declines can occur when the NYSE Summation index turns down before reaching +500 and the stocks above 150 day average turn down before reaching above 70%. The NYSE McClellan Summation index stands at +655.17 and far above the +500 level suggesting the market internals are strong enough to prevent a large decline here. Also the NYSE Volume McClellan Summation index (top window) is also strong reinforcing that the idea the market has strong internals. The NYSE stocks above 150 day average stands at 68.75 and still below the 70% level but with both McClellan Summation index remaining relative strong suggests market is not setup to take a large decline. There still can be the garden variety decline of more or less 5% but probably not declines near 10%. 

The chart above is the daily Bullish percent index for the Gold Miners index. The Bullish Percent index measures the percent of stocks in the Gold Miners index that are on Point and Figure buy signals. As of last Friday’s close the percent of stocks in the Gold Miners index that are on Point and Figure buy signals stood at 46.43 up from Thursday’s reading of 42.86%, showing this index is getting stronger. At the end of December (just two weeks ago) that percentage stood near 10%. This condition shows that buyers are reentering this market and a change of character from the August high where sellers where the dominate force going into the November low. In general GDX should continue to move higher, possible for the next several months. Long GDX on 12/28/16 at 20.25.