Back on August 12, I suggested that GLD had hit upper resistance and needed to move back inside its normal envelope, with the potential to return to the 160’s. Terry Laundy referred to this as being similar to a frog jumping from the upper band to the middle or lower band. On August 19, I reiterated that with the suggestion one might buy cheap OTM puts, as the 160’s were support. GLD has clearly broken below the hourly version of this chart and may have trouble bouncing above 178 before continuing to that support, which is now at 166. The next cycle low is early December.

Looking in to the T chart, we still do not have a new T formation although the standard T Volume Oscillator did finally hit the dashed red line. I am thinking that the next T may form in about 10 days. But as there is no steady decline in the VO (rather a weak decline from 40.81 to 35, to 15), I am not sure how strong a T this new one will be, or the length of that period of strength. The easiest T to define has declining tops and lower bottoms, showing cash being depleted into the low center post of a T. That isn’t very clear now.

I’m sure my anxiousness to be invested is coloring my perception. Would you believe that this is a chart of the last month’s asset class performance?

IWM is falling further behind in its ratio correlation to SPY:

But it has finally broken through resistance. I can no longer suggest shorting it vs. SPY:

Stay safe.

The Volume Oscillator closed below zero. Waiting for a better signal.

If you keep your eye on the companion chart in the menu, 3318 is support. Should we stay above that now we will have a new T.

Unfortunately, by the comments I received (which do not get published, but do get read), it seems some readers thought I was saying we were in a Bear T. These are rare, and can only occur if we are in a T. By any reading of the charts, we are no longer in a T. I am looking for the formation of a new T. I am hoping that the Volume Oscillator makes its way to the dashed red line.

We are resting near the middle of the Keltner bands. We are at a support level, around 3310 if you look at the link to the companion chart in the menu. The last 2 Ts ended mid-June and early September, and were caught by T-Theory. The June T slide ended at the middle of the Keltner bands. Could that happen here?This week should tell us if the worst is behind us.

Stay safe.