February 3, 2009

www.ord-oracle.com

For 30 to 90 days horizons: Short SPX on 5/13/09 at 883.92.
Monitoring purposes GOLD: Gold ETF - Long GLD at 110.24 on 12-14-09
Long Term Trend monitor purposes: Flat
We have "800" phone update that cost $2.00 a min. and billed to a credit card. Call (1-970-224-3981) for sign up. We update Eastern time at 9:45 and 3:15. Question? Call me (402) 486-0362.

There are several intermediate term signs that suggest an intermediate term decline is being. The intermediate term “Rising Wedge” form the March lows suggests at some point the March low will be seen again. Our Percent Volume indicator is showing a major negative divergence similar but opposite just like at the March low (positive divergence) which now is forecasting a major decline. The NYSE McClellan Summation index has drawn a Bearish “Triple Top” which foretells an intermediate term decline is beginning. The Bullish Percent index has had a bearish crossover. Also the Volume increase on the current decline suggests energy has switched to pushing down. We were anticipating a bounce in the market near term and with today’s high ARMS index close at 3.42 that appears to be still the case. ARMS index close near 3.00 and higher have appeared near short term bottoms. The last time ARMS index closed near 3.00 came on 10/30 the day before the strong rally began and 10/1 the day before another strong rally began. We can point out other instances but these are two of the most recent. Therefore tomorrow most likely will be a nothing day, possibly down very modestly but should start to see a rally starting next week from current levels that may last into Option Expiration the week after. Possible upside targets are near the 111.50 range on the SPY which is where a gap lies and is nears the 50% retracement level. This potential bounce should also pull the gold indexes up as well. Once the bounce is completed the next leg down should pick up energy. We remain bearish.

The top in XLF most likely came in 10/09 at 15.76 which appears to be the consolidation “C” leg high. The rally from the March 09 low to the 10/09 high retraced about 35% of the bear market decline that started back in 10/07. If a market is unable to retrace at least 50% of the previous decline then the next decline normally breaks to new lows below the previous lows. The low in 3/09 came in around 6.00 and therefore the next decline most likely will break below 6.00. Tomorrow marks the end of the week and if XLF close near today’s price then the weekly Mid Bollinger band will turn down which is a reliable sign that XLF has started down. The weekly MACD and weekly Bullish Percent index have already turned down. We are short XLF at 14.30.

The bullish combination of RSI near 30; Chaikin Oscillator near -10m; Money Flow near 20 and plunges on On Balance Volume suggests a bottom is in the process of being completed. Today’s decline on GDX could be a re-test of the January 29 low. Even in the most sever decline of 2008 the bullish combination of these indicator at least put a multi week bounce in GDX and we would expect a bounce here also. Resistance lies at the previous highs but there is a gap left open near 47 and would be the first resistance point which would equate to 27 on GDXJ. We are long GDXJ (gold junior index) instead of GDX because junior should outperform the seniors. The next rally in GDXJ will be telling in that if it finds resistance at 27 then a more complex consolidation could be forming. In general Seasonality for gold doesn’t turn bullish until July and the market could form a trading range until then. We will watch the 27 level on GDXJ closely. Gold has strong support near 1050 range which equates to 103 on GLD. Long GDXJ at 24.08 on 1/22/10. We will hold GLD as our core position as well as NXG, CDE and KGC because in the longer term view these issues will head much higher. Long GLD on 12/14/09 at 110.24. Holding CDE (average long at 27.7. Long KRY at 1.82 on 2/5/08. We doubled our positions in KGC on (7/30/04) at 5.26 and we now have average price at 6.07. Long NXG average of 2.26. For examples in how "Ord-Volume" works, visit www.ord-oracle.com.