ETF Watch: Bullish on SPY & GLD, Bearish USO
By
Luke Miller
The Bayesian probability (BP) support cluster around 290 mentioned in yesterday’s daily thoughts have thus far buoyed the SPDR S&P 500 ETF (SPY). Continue to keep an eye on the range between the 290 area and around 292.50. Above that could lead to an acceleration that would initially target around 295, and then above 296 would likely see a 300 handle. Ultimately, the target resides at SPY 303-305. Further, I would like to remind everyone this timing cluster still looks tricky and a significant change in trend is near; and if and when it gets started will do so with a bang. However, the pull of the 300s still has the signals long at the moment.
In Oil, the signal is short, and the vibration high from early July is still important as United States Oil (USO) closed right at its high. Assuming a binary in and out based off the signal and over the next 10 trading days, the BP of USO getting below 10.20 = 1%, the BP of getting below 11.75 but above 10.20 = 7%, the BP of staying between 11.75 and 13.30 = 43%, and BP of this staying above 13.30 = 49%.
In Metals, the signals for the Gold Miners ETF (GDX), SPDR Gold Shares (GLD), and iShares Silver Trust (SLV) are long. As noted, "IF a turn happens any time now and GLD gets above 115.35, then the BPs start to shift to a minimum multi-week move up (i.e. a 3rd order price movement). As of now, the 113 level still provides that launch pad potential to get above 115 and beyond. And getting above the BP resistance level at 114.30-114.50 is important to that mission. Bottom line: Above 114.50 should finally get that run to 115 and higher that the Bayesian timing system has been looking for. Inability to climb back above 114.40 could lead to at a minimum a test of the 8/15 low.” So far the metals still present as bullish leaning, and higher is still expected before having to make a signal decision. On the downside there is a BP support for GLD in the 112.25-112.75 that would most likely provide a floor for a bounce into the 115-117. BP support in GDX is low 18s and SLV BP support could stretch to the high 12s. It doesn’t mean we will see these BP support clusters, but if we did the RR on a long become very favorable. Bottom line: The BTS still sees GLD above 115 over the next week or two – the question is the path to get there – directly higher from here or OML low as deep as the BP supports discussed herein.
Other other ETFs:
UNG: Signal long. As discussed over the last several weeks, the 22.50ish level provided an impulsive move off and UNG finally closed over 25… this does help confirm a path to 28 or higher once more tree shaking ensues.
UUP: Signal short. UUP continues to meander beneath the signal trigger price of 25.05 and staying below 25.10 will ultimately lead to the low 24s on a surge lower.
XME: Signal long. XME has started to perform of late and consolidating back above 34.50 is very constructive for a launch to 36.75.. and even as high as 38.
TLT: Signal long. Micro BP support near 117ish remains in play and the timing window for a low is still upon us in BP terms.
XBI: Signal long. XBI continues to grind higher and the next time over 97.50 should get that launch to 100s. On the downside, watch 94ish.
EEM: Signal long. Still in a nice RR basing area for higher prices. Got above the expected 42.50 level on this bounce; should get to 44 for starters.
DBA: Signal long. DBA has a nice RR off of the 16.80-16.90 level. Back above 17.10 could see some fireworks.
