We are going into year end where the monthly charts carry more importance. A bullish run in November and or December will imply a bullish 2026. Above is the monthly . October came in with a new high and volume expanded from the previous month suggesting the rally should continue. If the SPY hits a new high this month (expected) and volume drops 10% or more from the previous month (like last February) a bearish scenario will be setup. It’s still early in November but it’s a head up for what may transpire in the coming weeks.
If November manages to work higher with higher volume than December, we will be looking for the potential bearish signal. Most likely 2026 could be a difficult year and the bearish setup could come in November or December and maybe not at all. On Friday’s the TRIN closed at 1.21 and the tick at -350 which is a bullish combination and suggests a low will form as early as the day of the readings to as late as two day’s later which is today. A strong rally into Thanksgiving is possible.
There is a bull market somewhere. There is evidence that suggests SPX may have trouble next year (which may change back to bullish; depends on what happens over the next couple of months). There may be an asset change in the coming months, and the gold market appears to have started a multi-year rally along with the above chart which is the Commodity index (monthly chart). The commodity index invests in things like grains, oil, metals and so on. The pattern forming appears to be a “Cup and Handle”. There was a “Sign of Strength” (SOS) of the low in 2000 and has traded sideways since 2022 creating the “Handle” and has only retraced 38.2% of the rally from the 2002 low. The monthly Bollinger bands are pinching suggests a large move up is about to begin. Our point is that there appears a new bull market is beginning in the commodity markets, and the equity market may suffer in the coming months and maybe longer.
Above is the monthly going back to 2007 (top window) next window down is the monthly cumulative GDX advance/decline with it’s Bollinger band and bottom window is the cumulative GDX up down volume with its Bollinger band. This chart looks at the bigger picture. Buy signals are triggered when both indicators close above their mid Bollinger band (shaded in green) and sell signals are triggered when both indicators close below their mid Bollinger band (shaded in pink). A bullish signal was triggered back in early 2024 and remains on a buy signal. Signals of this type last from one year to four years. Current signal is nearing the two-year mark. We don’t see any weakness in both indicators developing at this time.