Riding The Rally, Awaiting Bayesian Signal Change
By
Luke Miller
We continue to sit on a bunch of stock-based ETF profits across numerous sector ETFs with the SPDR S&P 500 (SPY) still chipping away at the resistance band of 322-326s. Above that should see the low 330s.
But be aware that we are into a vibration window this week, so a sudden shift to a bearish move can’t be ruled out. As a reminder, a Bayesian vibration window is a moment in time that serves as resistance or support in price, usually manifesting as a relative high or low in price.
For now, we just await a signal change and manage risk appropriately.
In metals, with the gold miners ETF (GDX) still grinding higher into the resistance band of 39-41s, the paths discussed below still apply and not much more can be offered in the way of outlook.
The Bayesian Timing System (BTS) did very well with metals earlier this year by keeping members out of the March 50% decline and then then booking nearly 40% profits in GDX immediately after.
Bayesian Probabilities (BP)'s still support at least a multi-month high on the horizon (and possibly worse). So we sit and watch the most likely bearish multi-week decline on the horizon and probably into month-end where a vibration window resides. Then we can re-assess and get this ship righted one way or the other.
Updating price paths: (1) [P=70%] GDX stalls in the 39-41s region and pulls back to at least the low 30s, and at least 26-28 (23-25 can’t be ruled out), and (2) [P=30%] GDX continues its bullish advance that targets greater than 42.
In oil, USO is basing near the signal trigger price at 39ish as it awaits what is expected to be at least one more noticeably higher high. The BTS is looking up to at least 33 on a break above 30. Upside targets are 33-35 on a break higher above 30. Downside near 27.50-28 should be watched.
In the dollar, with UUP continuing to drift aimlessly near 26, it does seem like a decision will be made sooner than later. For now targets are back to a test of the 26.50 region before an actual path emerges. Still watching keenly for price movement. Below 25.50-26 and the BTS is wrong.
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