The Ord Oracle

August 20, 2007

And The All New Market Analysis

Tim Ord, Editor 16928 Van Dorn Street Walton, Nebraska 68461
www.ord-oracle.com (402) 486-0362
"Timer Digest" Tim Ord ranked #5 for 6 months ending 10/6/06 and #1 in Gold for one year ending 1/13/06.
For 30 to 90 days horizons: Long SPX on 8/2/07 at 1472.20.
Monitoring purposes XAU: Long XAU on 6/1/07 at 142.42.
Longer Term Trend monitoring purposes: Long SPX on 7/12/07 at 1547.70.
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SPX market:

Above is the On-Balance volume (OBV) indicator set: The Climactic Volume Indicator (CVI) measures extreme OBV movement within the context of a short-term OBV envelope for each stock in the index. The Short-Term Volume Oscillator (STVO) is a 5-day moving average of the CVI. The Volume Trend Oscillator (VTO) summarizes rising and falling OBV trends. These charts tell us if the index is overbought or oversold based upon volume in three different time frames. Since we are dealing with the bottom window which is VTO we are dealing in the longer term timeframe and VTO suggest the SPX is making an intermediate term low. If you study the chart of VTO (bottoms window) you will see it has a good track record of picking bottoms both in bear markets (picking two significant lows between 2000 top to 2002 bottom) and bull markets (picking out significant bottoms from 2002 low to 2006). We have circle an area in October 2001 where SPX made a one day spike low and rallied with out a test of that low. In all other cases when the SPX made a low it was later tested. Our point is not all “Selling Climax lows” (Like last Thursday) are tested but most cases the “Selling Climax Days” are tested. When VTO is pushed to such oversold extremes (like now), it appears the rally after is much stronger. Therefore, we may be in for a very strong rally.

The next chart is the short term timeframe for the On-Balance volume (OBV) indicator set: On the recent decline VTO made a higher low as SPX made a lower low and suggest the market is stronger last Thursday then the previous week even though the market was lower. This bullish divergence on the VTO also occurred at the June July Bottom in 2006 (in red). The current bullish VTO divergence appears mush bigger and more extreme and we interpret that to be a bigger degree bottom. Therefore the signs for a bottom are present, and the question is whether a re-test of the low at some point will occur. For now we will stay long. We are long the SPX on 8/2/07 at 1472.20.

Nasdaq market:

Above the Nasdaq with its Summation index. The Summation index is in area where previous bottoms have occurred. So far the Summation index has not turned up. When the Summation index turns up from below minus 750 it would imply the bottom has been seen. We are staying neutral for the Nasdaq for now. We are watching some stocks that appear to about start an up leg. Two we are looking closely at are EGHT and LTS. LTS is a bank stock and there have been inside buying going on a couple of months ago. It may have hit bottom near 1.50 range. EGHT we have traded before and looks like it’s at the end of a triangle pattern. We will keep you posted.

Bought Ivan (Invanhoe Energy) 4/13/06 at 2.55,Energy stock. Could go to Gap area (November 2003) near 5.40. On 4/2, we Bought ASTM at 1.92, Biotech group.

Gold Market:

Thursday the GDX created a “Selling Climax Day”. A “Selling Climax Day” is where volume expands to a degree that stands out from the days around it. The explosion in volume stops the decline. What happens next is usually a light volume rally that can last couple of days up to a couple of weeks before another decline takes hold and re-test the “Selling Climax” low. If the test is on lighter volume and close above the low of the “Selling Climax Day” low then the bottom process will be completed. In more rare cases a market can have a “Selling Climax” low and keep on rallying with out a test. We don’t know which one will happen here but it does appear the gold market is at a low and not just a minor low but a major low.

Above is the daily chart of the Global Gold Index ($SPTGD) dating back to 2000, with its Price Relative to Gold ratio (PRTG). The PRTG ratio shows when gold stocks are cheap or expensive compared to the yellow gold itself. When this ratio is low (below 4.50) it implies gold stocks are cheap and at a good buy area. At major lows PRTG falls very low near the 4.00 range and below. This cheapness of gold stocks shows up when gold stocks are out of favor and selling at a very low discount which in turn is a very good buying opportunity. The cheaper PRTG the stronger the next impulse wave to the upside. PRTG is below 4.00 and at a five year low. The only time cheaper for PRTG is back at the 2000 bottom where the major gold rally began. We have also displayed the CCI (Commodity Channel Index). When CCI trades below -100 on the weekly timeframe and closes above -100 a bullish intermediate term signal is triggered. Late June 2007 the CCI turned up from below -100 and has triggered a bullish signal. CCI is again below -100 and a close above -100 will triggered another bullish signal. Notice that Global Gold Index has made a lower low as CCI has made a higher low and a bullish divergence. At minor lows in the gold market, minor bullish reading appear to get the market going in a rally phase. When major lows appear in the gold market (actually any market) major extreme divergence appear. PRTG is making a major bullish divergence that is approaching the 2000 lows. To get through the major resistance of 160 on the XAU which dates back to 1987, PRTG should show a major bullish reading where “Dumb Money” sells there shares and drives down PRTG to a historic low level. The recent decline surprised us but has not changed the bullish outlook for the next year or so. The decline has actually drive PRTG to a more bullish level on the weekly timeframe. We are long the XAU at 142.42.

"Timer Digest" has ranked Tim Ord as the #1 gold timer for one year ending 1/13/06.
Bought TRE at 4.93 on 8/1/07. Bought CDE at 4.08 on 7/10/07. Bought UXG at 5.17 on 6/25/07. Bought NXG at 3.26 on 6/4/07. Bought PLM at 3.73 on 6/1/07. We bought PMU (5/27/05) at .50 and bring our average price to .81. We doubled our positions in KGC on (7/30/04) at 5.26 and we now have an average price at 6.07.
Long NXG average of 2.26. For examples in how "Ord-Volume" works, visit www.ord-oracle.com.

All the Best,
Tim Ord

email: tim@ord-oracle.com

visit my website at www.marketweb.com/ord

Tim Ord, The Ord Oracle
17300 Van Dorn Street
Walton, NE 68461
(402) 486- 0362

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