July 1, 2008

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"Timer Digest" Tim Ord ranked #5 for 6 months ending 10/6/06 and #1 in Gold for one year ending 1/13/06.
For 30 to 90 days horizons: Flat.
Monitoring purposes XAU: LONG XAU on 12/18/07 at 162.05.
Long Term Trend monitor purposes: Flat
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Sentiment plays an important roll in picking bottoms in the market. The above chart is the Rydex Cash Flow ratio. This ratio measures inflow and outflows of money going in and out of Rydex bullish and bearish funds. When the Rydex Cash Flow Ratio reaches 1.10 range then the Rydex investor is taking a bearish stance and a bullish sentiment and the market is near an important low. Over the last couple of weeks the Rydex investor has been buying the SPX decline anticipating a bottom (see chart above). This is not the condition you want to see if one is looking for a bottom in the market. This condition could resolve itself in a shakeout in the market. The next chart of the Summation index on page two helps to explain the larger picture. Another fact worth noting is that market has a history of rallying into a Presidential election which is this November so there could be a bullish signal developing shortly. The year after the election is normally the worst performing year for the “Four year Presidential Cycle”. Therefore next year could be troubling.

Above is the NYSE index with its McClellan Oscillator and Summation index dating back to 1996. When the Summation index gets below -1000 then usually a bottom of intermediate term is not far off. We have labeled on this chart with arrows when the Summation index below -1000. The signal for an intermediate term bottom is triggered when the Summation index turns up from below -1000. Yesterday’s close on the NYSE McClellan Summation index was -1081.71. However no bullish signal by this method has been triggered yet as the Summation index has not turned up. We have labeled with blue arrows when the Summation index turned up from below -1000 in a bear market and it did a good job of catching the next up move. Since today’s Advance/Decline Line was still weak and keeps the Summation index heading lower and therefore no signal for a reversal to the upside has been indicated yet. Ideally we would like to see the Rydex Cash Flow Ratio and VIX to get into bullish areas when the Summation index is about to turn up as this would trigger an idea bullish signal. Right now the VIX and Cash flow ratio shows complacence and is not bullish. For the last several days the McClellan Oscillator has been hovering below -200 and in an area where a bounce can start and therefore there appears to be little down side for short term. Market may start a trading range for near term. Staying flat for now.

Sold 5/27/08 IVAN at 2.70=6% gain. Bought Ivan (Invanhoe Energy) 4/13/06 at 2.55,Energy stock. On 4/2, we Bought ASTM at 1.92, Biotech group. Long POWR at 13.70 on 12/14/07.

Gold Market:

Over the last week the GDX McClellan Oscillator has expanded and shows that there are more issues carry the GDX rally and a bullish development. Also last week the Summation index has turned back up and implies the GDX rally phase has started. We remain bullish on the XAU on the bigger time frames and we are long the XAU from 12/18/07 at 162.05.
Sold PMU on 2/29/08 at 1.20, bought at .81 for gain of 48%. Long KRY at 1.82 on 2/5/08. We are long PLM at 2.77 on 1/22/08. Bought CDE at 4.08 on 7/10/07. Bought NXG at 3.26 on 6/4/07. We doubled our positions in KGC on (7/30/04) at 5.26 and we now have an average price at 6.07. Long NXG average of 2.26. For examples in how "Ord-Volume" works, visit www.ord-oracle.com.

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