Another day of liquidation as the Dow fell 443 points on extremely heavy expiration volume. The advance/declines were better than 5 to 1 negative. The summation index is moving down. A last half hour bounce kept things from being worse. We got a signal last night from the McClellan oscillator for a big move within two days and today satisfies that. The NASDAQ led the way lower and that is not a plus. The S&P 500, which lost 100 points today, is short term oversold and staying there which is never a good sign. The 200 day average did not hold. The next area of support is far away at 6100. As the summation index heads towards the zero line it is possible that things fall apart and the S&P makes it down to that level. But it is not a certainty. Options premiums are already high as we roll into the April option cycle. The puts are still looking like the way to go with regards to the SPY. Gold was off $103. The dollar was up along with interest rates. The XAU fell 13 points, while GDX lost 2 3/4. Volume was good again to the downside. GDX remains short term oversold and staying that way. Support at 82 didn't hold so the next level that we are looking at is 75. I did place an open order for the GDX April calls and I'm leaving it out there. GDX is getting so blown out to the downside it looks like an opportunity for a short term trade. But that doesn't mean that it can't just simply continue lower. We'll be keeping an eye on it. Mentally I'm feeling OK. The VIX jumped back up today and its short term indicators have turned higher. If the VIX keeps moving up stocks will keep moving down. The market is in an interesting place at the moment. Opportunity is out there but the risks are high. I'll be checking all the charts this weekend to try and figure out what to do next. Europe and Asia were down with the exception of India to finish the week. It's Friday afternoon and time for a rest.

Volatility remains the theme as the Dow fell 203 points on heavy volume. The advance/declines were negative. The summation index is moving down. We had a gap down at the open but at least today there was some buying as the market finished up from the lows. Once again the Dow led things lower. The short term indicators for the S&P 500 remain oversold. It is trying to hang on to its 200 day mvoing average here but closed just below it. Option expiration Friday tomorrow so things could get a little crazy. Gold got sold hard again today as the futures lost $255. It did come up from the lows though. Interest rates finished mixed but came down from their highs of the session. The US dollar was lower. The XAU dropped 21 1/8, while GDX lost 5 1/8. They both came back from lower levels early on. Volume was very heavy as players head for the exits. GDX is trying to hang in there at the 82 support level. Not sure that it will. The next support is around 75 at the 200 day moving average. The short term indicators for GDX remain oversold with some of them completely blown out. That is one of the reasons I'm now looking at the GDX April calls as the potential next trade. Not that I think a sustained rally is at hand but because some kind of bounce should occur with the current oversold condition. I may place an open order overnight. It is also true that gold and the gold shares may simply continue to drop here. There is risk in every idea and trade. Mentally I'm feeling a bit tired. The VIX was lower today which doesn't fit with a down market. Sometimes the VIX precedes the next days price action so we'll see if stocks are higher tomorrow. The short term indicators here are still trending lower. It has been quite a week already. Expiration Friday should be interesting. Both Europe and Asia were down sharply. We'll close out the week tomorrow.

Sellers returned as the Dow fell 768 points on heavy volume. The advance/declines were 4 to 1 negative. The summation index continues lower. The inflation data came in hotter than expected. The Fed left rates alone which was expected. The Dow led the way lower which isn't the worst case scenario. The S&P 500 is now testing the low set on Friday and is just about at its 200 day moving average. So if things don't hold up here it could get ugly. The short term indicators on the S&P are oversold and staying there. Not sure what would bring buyers back with the exception of an end to the Iran conflict. But no one knows when that will be. Gold got clobbered with the futures down $163. The US dollar was higher along with interest rates. The XAU dropped 23 3/4 and GDX lost 5 2/3. Volume was heavy to the downside. The short term indicators on GDX are oversold and staying that way. Even though we never got filled trying to buy the GDX March puts here the analysis was still correct. We will get other opportunities down the road. Once again, gold and the gold shares had a parabolic advance. That cannot not last forever. It always ends badly as the excesses have to be driven out. The precious metals complex is in that phase now. It will probably take a while. Rallies can be sold and puts can be purchased on advances. When the Iran war ends gold will most likely move up and that will be the chance to try the puts again. In theory at least. Support for GDX here comes in at the 82 level. Mentally I'm feeling OK. The VIX was up today and the daily candlestick chart looks like it wants to go higher now. Some of the short term indicators have turned up and have plenty of room to run. This could potentially spell big trouble for stocks as the summation index is heading towards the zero line. The index is still over 1000 points away but it can drop sharply at times. Things will unravel if the summation index makes it through that line. It doesn't happen very often but we have to be aware of the condition the market is in at the moment. Asia up and Europe down overnight. We'll keep watch on the overnight developments.

Today was a repeat of yesterday but on a smaller scale as we had a gap higher at the open only to be followed by sideways price action. The Dow gained 46 points on heavy volume. The advance/declines were 2 to 1 positive. The summation index is still moving down. The NASDAQ was the leader and that's a plus. However we are still just bouncing up from oversold levels for now. With inflation data and the Fed tomorrow my guess would be that we head back down but the market can be full of surprises. The short term indicators for the S&P 500 are still on the oversold side of things. No SPY option trades for now. Gold was up a couple bucks. The US dollar was a bit lower as were interest rates. The XAU was off 1 2/3, while GDX shed 1/2. Volume was light. GDX remains short term oversold. The only way we'd take on a trade here is if there was some kind of bounce tomorrow in GDX for us to try the puts before Friday. I doubt that is going to happen. Mentally I'm feeling OK. The VIX was lower today and is still above the 20 level. The short term indicators here are trying to move down. The longer term up trend line on the VIX comes in at 20. I'd certainly like to take on a trade here before Fridays option expiration but it doesn't look like it. With only three days left in the March option cycle the risk pretty much speaks for itself. Asia was mixed and Europe higher again. We'll see what the Fed has to say tomorrow.

The expected bounce showed up today as the Dow gained 387 points on heavy volume. The advance/declines were 2 to 1 positive. The summation index continues lower. We did get a signal on Friday from the McClellan oscillator for a big move with in the next two sessions and today takes care of that. It could have been better though as stocks markets closed off of their highs for the session. The short term indicators for the S&P have turned up but remain oversold. Now we have to figure out if today is the beginning of something sustained to the upside or just another oversold bounce. I certainly do not know for sure. You can still make a case for either way. With only four days left in the March option cycle, it appears that we'll remain on the sidelines with regards to the SPY options. Inflation data on Wednesday along with the Fed no doubt increases the risk. Plus the inevitable Iran war headlines make for a tougher than usual trading environment. Gold dropped forty bucks on the futures. The US dollar was lower along with interest rates. The XAU rose 3 7/8 and GDX added a point. Volume was average. Gold lower and the gold shares higher is something that we haven't seen in a while. GDX is still short term oversold. I did want to own some GDX March puts ahead of the data and Fed on Wednesday but it looks like that trade isn't going to be worth the risk. Unless the war ends tonight and we see a big rise in gold and the gold shares tomorrow we'll have to remain on the sidelines here too. Perhaps a trading opportunity will present itself this week but it would have to be very short term in nature. Mentally I'm feeling OK. The VIX was lower today which fits an up market. The short term indicators that we follow on the VIX are still hanging around the mid-range level. Still above the 20 level here. The shorter term up trend line here has been broken. We are going to have to see how this week plays out going forward and take it from there. Asia was mixed and Europe higher to begin the week. I'll keep an eye on the overnight headlines.

A one day downside reversal today as stocks opened higher and closed lower. The Dow lost 119 points today on heavy volume. The advance/declines were negative. The summation index continues lower. The NASDAQ is leading the way down and that's negative. We are expecting some kind of bounce here due to the fact that one of our indicators is in an extreme oversold spot. But like we said yesterday, who wants to own stocks going into the weekend? The S&P 500 posted a modest loss and its short term indicators are oversold. Approaching the 200 day moving average on the S&P daily chart at 6600. Perhaps we'll see a bounce there. Unless we see some type of a cease-fire for the war in Iran stocks will continue to be sold. One week left in the March option cycle. Taking on any trade next week will be fraught with risk. Gold dropped over 100 bucks on the futures. The US dollar was higher and interest rates finished flat. The XAU fell almost 22 points, while GDX shed 5 7/8. Volume was good to the downside. GDX is now short term oversold. If we see some kind of bounce here next week, I may try the GDX March puts again for a very short term trade. My thinking is that gold is still unwinding the parabolic rise that it had and that takes time. However since the gold shares are short term oversold already, chasing the puts now is not the most solid plan. The longer term up trend line for GDX comes in at 85, with the 200 day moving average at 75. Not sure it will make it back to either of those levels here. Mentally I'm feeling OK. The VIX was only down slightly today and the short term indicators are starting to trend sideways despite todays decline for stocks. Not sure what's going on there. Some of the VIX indicators are mid-range which means it could go either way. Some of the weekly indicators for the S&P 500 are not yet oversold so I would expect some more downside in the days to come. However the McClellan oscillator readings are very negative right now and that's a condition that usually doesn't last that long. I'd be surprised if we didn't see some type of bounce on Monday or Tuesday of expiration week. I'll be checking the charts as usual this weekend. Asia and Europe were lower as buyers have stepped away around the world. It's Friday afternoon and time for a break.

Heading down as the Dow fell 739 points on pretty heavy volume. The advance/declines were around 4 to 1 negative. The summation index continues lower. Buyers were nowhere to be found today as we again had a gap lower at the open. This time the selling simply continued thoughout the day and we practially closed at the low for the session. The NASDAQ was the leader and that is not a plus. The S&P 500 lost over 100 points. The short term indicators here are moving down and are not yet oversold. Economic data out tomorrow including inflation numbers but it seems all that will take a back seat to whatever is happening with the war in Iran. Any positive news there will send stocks into a sharp rally but we don't know when that will occur. For now the war is a negative for the market and that fact makes you wonder who would want to hold stocks over the weekend? It now appears that the bounce on Monday or follow through on Tuesday was the opportunity to purchase some SPY puts. Gold was off $82 on the futures. The US dollar was up again along with interest rates. The XAU dropped 9 1/2 and GDX lost 2. Volume was average. The short term indicators for GDX are drifting lower and are not yet completely oversold. I canceled my open order for the GDX March puts. I might move to a lower strike price but will have to see some upside first to take on this trade. I also do not want to hold anything over the weekend due to the volatility and headline risk. I still like this idea at some point ahead of the Fed but will most likely now wait until next week to attempt it. However you do not want to own any puts at the hint of a cease-fire in Iran. The trading is never easy. Mentally I'm feeling OK. The VIX was up today which fits a down market. The short term indicators here are beginning to turn back up. There is now a short term up trend line in place on the VIX daily chart. Volatility is the rule for now. We are getting very close to a bounce point on one of the indicators we follow on the overall market and I suspect that we will see this happen relatively soon. Not sure that it will last though. It is another reason to be very careful trying the puts here. Europe and Asia were lower as players continue to head for the exits. We'll close out the week tomorrow.