May 30, 2012

Tim Ord, Editor

16928 Van Dorn Street

Walton, Nebraska 68461
www.ord-oracle.com

(402) 486-0362

tim@ord-oracle.com

For 30 to 90 days horizons SPX: Flat
Monitoring purposes GOLD: Gold ETF GLD long at 173.59 on 9/21/11
Long Term Trend monitor purposes: Flat
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This trading idea was presented on Markettells.com by creator Rennie Yang and has worked well. JNK is the etf for junk bonds and LQD is investment grade bonds. In general the theory is that when JNK/LQD is rising than investors are seeking risk and bullish for market and when falling than avoiding risk is the theme and bearish for market. The chart above is a 30 minute chart of the SPX (top window) and JNK/LQD in bottom window. The recent new high in the SPX yesterday was not confirmed by a recent high in the JNK/LQD and a negative divergence. Today’s decline in the SPX did not break below the 5/23 low but JNK/LQD did and a negative divergence and suggest the market may move lower short term. This condition gives evidence that the SPX could test the May 18 low. On the sidelines for now.

The pattern forming over the last six days appear to be a “Rising Wedge”. “Rising Wedge” patterns have downside target to where the pattern began in this is case would give a target to the May 18 low near 129.50 range. On May 18 a possible “Selling Climax” occurred and most “Selling Climaxes” are tested at some point and if tested on lighter volume would be a bullish sign. Today’s decline produced a Tick close of -649 and TRIN close of 2.11. Ticks close below -500 and Trin closes above 2.00 the same day have appeared near lows in the market and suggests a low in not far off. It appears that the 5/18 Selling Climax low (129.55) and “Rising Wedge” downside target (129.55) could get tested near term. A bullish setup would occur if the McClellan Oscillator produces a positive divergence on the potential test of the May 18 low (likely) and positive divergence on RSI (likely) and volume is lighter and a high TRIN close above 2.00 along with Tick close below -500 would help for a bullish signal.

Above is the monthly XAU/Gold ratio. Bullish signals are triggered when the monthly RSI trades below 35 and the monthly Slow Stochastics turns up from below 20. Last October a bullish signal was triggered and we are in the buy level again. Normally when the monthly RSI turns up (tomorrow is the last trading day of the month and it appears the RSI will be higher) the bottom is in. We did get bullish on the first buy signal setup in October and have remained long. A lot of these previous bullish setups have lead to outstanding gains over the next twelve month. Whether the double buy signal over the last six months will produce a stronger rally than a signal buy signal, will have to wait and see. There is evidence that the rally that is about to begin could lead to over a 100% gain.
Long GDX 58.65 on 12/6/11. Long SLV at 29.48 on 10/20/11. Long GDXJ average 29.75 on 4/27/12. Long GLD at 173.59 on 9/21/11. Long BRD at 1.67 on 8/3/11. Long YNGFF .44 on 7/6/11. Long EGI at 2.16, on 6/30/11. Long GLD at 147.14 on 6/29/11; stop 170 hit = gain 15.5% . Long KBX at 1.13 on 11/9/10. Long LODE at 2.85 on 1/21/11. Long UEXCF at 2.07 on 1/5/11. We will hold as our core position in AUQ, CDE and KGC because in the longer term view these issues will head much higher. Holding CDE (average long at 27.7. Long cryxf at 1.82 on 2/5/08. KGC long at 6.07. Long AUQ average of 8.25. For examples in how "Ord-Volume" works, visit www.ord-oracle.com. New Book release "The Secret Science of Price and Volume" by Timothy Ord, buy on www.Amazon.com