Finally a bounce as the Dow gained 498 points on expiration heavy volume. The advance/declines were around 3 to 1 positive. The summation index is still heading down and approaching the zero line. We got a signal from the McClellan oscillator last night for a big move within the next two sessions and we got that move today. The inflation data came in lighter than expected and traders breathed a sigh of relief. The question now is this just a snap back to the up trend line just violated in the S&P 500 before we move lower or not? I'm inclined to believe that we've seen the worst for this move down as some of our technical indicators are at levels associated with bottoms. That doesn't mean we won't get some backing and filling or even a retest of the recent lows. However the close proximity to the zero line on the summation index is a concern. I do think that it will hold up this time around and an unraveling of the market is not going to happen. I could be wrong. We've got a holiday week on tap and things should settle down. The Santa Claus rally will also be due. The market will have a say in whether our projections are correct as time moves on. Gold was up $35 on the futures. The US dollar was lower along with interest rates. The XAU was up 1 3/4, while GDX rose 1/3. Volume here was good. No GDX trades in mind right now. Mentally I'm feeling OK. The VIX sank today and is now back below the 20 level. The short term indicators here have rolled over with plenty of room to go lower. The VIX is another indicator that is pointing to the decline being over as it doesn't stay overbought for long. My guess is that we will see higher prices or at least sideways price action for stock prices in the near term. Plenty of things to look at over the weekend but I'll probably wait until next year for the next trade. Holiday mode approaching. It has been quite a volatile week. Europe and Asia were slightly lower to close out the week overseas. It's Friday afternoon and time for a break.

Stabilization was the best we could do today as the Dow finally broke its losing streak by finishing ahead 15 points on heavy volume again. The advance/declines were negative. The summation index is heading down with conviction and is now approaching the zero line. This could spell even more trouble as the market simply falls apart when crossing the zero line on the summation index. It is a rare event. We can say that the market already fell apart yesterday. We've got option expiration tomorrow as well so things will be volatile. Throw in the inflation data before the market opens and you see what kind of day it could be. We are still long overdue for some kind of bounce but I've been saying that for days. The NASDAQ and S&P 500 had slight losses ahead of tomorrows fireworks. The short term indicators for the S&P are still pointing down with room to go before hitting oversold. I'm not sure what will happen next but we certainly can't rule anything out. I'm on the sidelines probably for the rest of the year when it comes to the option trading. Too many mistakes in the second half of the year has cut into my profits. Gold dropped $40 on the futures. The US dollar was up and interest rates were generally higher. The XAU was off a point and GDX slipped over 1/8. Volume was average. Short term oversold for GDX and staying that way for now. The fundamental picture for gold has turned negative at this point. If and when it gets to the 30 level is where we'll take a look at the GDX calls again. Mentally I'm doing OK considering yesterdays trading debacle. The VIX was lower today as the the market didn't collapse again. Still short term overbought here. Not sure what to expect next with the VIX but it usually doesn't stay overbought for an extended period of time. However we are in a crazy moment for the markets so anything goes here as well. If we can get through tomorrow we have a holiday week coming up when things usually settle down. Europe and Asia were down as traders are heading for the exits. We'll close out the trading week tomorrow.

The Fed cut rates as expected but the market didn't care and got clobbered. The Dow fell over a thousand points on heavy volume. 1123 points was the final total. The advance/declines were 13 to 1 negative. The summation index is falling lower. We knew that there was something fishy going on but we didn't know how much it would stink. Ten days in a row now negative on the Dow and I cannot remember that happening in my trading life. The S&P 500 has broken its up trend line from August and closed below its 50 day moving average. The short term indicators here are moving down with room to go. Not yet short term oversold but it appears that's where it is headed. I was still looking for an oversold bounce that never came. When the S&P reached its up trend line, I purchased some of the December calls. That was another mistake as the market was in free fall which I did not acknowledge even though it was staring me right in the face. Realizing that this trade was a mistake, I got out but not before incurring yet another loss. A negative 75% on the trade but thankfully there wasn't a lot of money involved. The S&P 500 shed over 175 points. The NASDAQ dropped 3 1/2%. They are catching up with the other falling indices that are already oversold and staying that way. The original idea of the SPY puts was a valid one. Gold lost over fifty bucks. The US dollar jumped up along with interest rates. The XAU fell 6 3/4, while GDX lost 1 2/3. Volume was good to the downside. GDX is short term oversold and staying that way. The longer term up trend line here comes in at 30 and that's much lower from here. Mentally I'm feeling frustrated once again as I could not perform properly when it came to todays trade. Sitting on the sidelines or going with the puts was the correct path. The short term trades seem to be my downfall so maybe I will have to eliminate them in the coming new year. The warning signs that something different was going on in the market was there but I failed to heed the signals. The continued negative breadth finally came to fruition. The VIX had a huge move higher and closed above 27. Short term overbought on the VIX now. Above the 20 level and that will lead to more volatility. I certainly did not see that coming. Two days left in the December option cycle and inflation data out on Friday. I'll just sit back and observe at this point. Asia was mixed and Europe flat overnight. I'd expect some selling to occur overseas tonight. Interesting times.

Once again sellers had the upper hand as the Dow fell 267 points on good volume. The advance/declines were around 3 to 1 negative. The summation index is moving lower. A last half hour bounce kept things from being worse. Something weird is going on here for sure as the Dow has lost ground for nine days in a row while the S&P 500 has traded sideways. The Russell 2000 has been in a steady decline along with the New York Composite. But the NASDAQ has had a slight rise. Oversold on some indices without a bounce and that can be dangerous as in even steeper falling prices. But I am favoring the SPY December calls for a short term trade and might purchase some tomorrow ahead of the Fed. Today in fact may have been the time to get them. The short term indicators for the S&P have rolled over with plenty of room to move lower. But I do believe that some kind of upside bounce is long overdue and we should see one before option expiration on Friday. I could be wrong. I might just stay on the sidelines as well because my track record with the short term trades is pretty poor. Gold was off $9 on the futures. The US dollar was a bit higher and interest rates finished flat again. The XAU lost 1 1/8 and GDX fell 1/4. Volume was light. GDX finished below its 200 day moving average. Mentally I'm feeling OK. The VIX was higher today and that fits a down market. The short term indicators are rising but are not yet short term overbought. So there could be a bit more selling before we see some upside according to the VIX. Which would make it hard to purchase the SPY calls with only three days left in the December option cycle. So you can see the predicament here. However I can always wait for the market to settle down as well. I'll ponder what to do overnight. Needless to say the Fed tomorrow will get things moving one way or the other. Asia and Europe were lower as perhaps we're seeing a worldwide retreat at the moment. We'll see if we have a wild Wednesday on the agenda.

Still a mixed picture for stocks as the Dow fell yet again to the tune of 110 points on good volume. The advance/declines were negative. The summation index is heading down. The overall market did better than the Dow with both the NASDAQ and S&P 500 sporting gains on the day. The gains would of been better but we had a last half hour drop. Eight days in a row lower for the Dow and it is very oversold on a short term basis. There will be a decent bounce here and soon. But we don't know if it will be just an oversold bounce or an actual bottom. The market behavior is even more puzzling that usual right now. Plus we have options expiration week, the Fed on Wednesday and inflation data on expiration Friday to deal with. The trading will have to be nimble if attempted. I'm not sure what to do at this point so I might have to remain on the sidelines. I did favor the SPY puts but now I'm thinking perhaps to try and catch the bounce that is overdue. The trading is never easy. Gold was off $5 on the futures. The US dollar was a bit lower and interest rates finished flat. The XAU dropped 1 1/2, while GDX shed 1/4. Volume was pretty light. GDX has made it back to its 200 day moving average. It is also on the lower Bollinger band. Not all of its short term indicators are oversold. This would be the spot to try the GDX calls but I'm not going to do it. Perhaps going out to the January option cycle would be a better idea. Mentally I'm feeling OK. The VIX was up today which doesn't fit with an overall higher market. The short term indicators have ramped up with room to go. Not sure what's going on with the VIX. So here we are with 4 days left in the December option cycle. Retail sales out tomorrow which should get things going in the morning. Waiting on the Fed and the expected 1/4 point rate reduction Wednesday. The market reaction to that will be the key for the rest of that session and perhaps longer. I'll reconsider what to do tonight. Asia and Europe were lower to begin the week. We'll keep an eye on the overnight developments.

We had a gap higher at the open but sellers continue to be in charge as the Dow fell 86 points on light volume. The advance/declines were 2 to 1 negative. The summation index is moving down. The NASDAQ had a slight gain and the S&P 500 finished flat. Looks like it is too late for the SPY December puts but we'll see. It has been a mixed picture for stocks lately. Over the past week or so the Dow, New York Composite and the Russell 2000 have dropped back toward their 50 day moving averages. They are short term oversold. Seven days in a row lower for the Dow. However the S&P 500 and NASDAQ have just moved sideways. They remains short term overbought. Something has to give soon. Not sure if it will be a rally to even more overbought levels for the NASDAQ and S&P. Or perhaps they will actively join in on the decline that we've seen elsewhere. The fact that the Dow can't even get a bounce from oversold levels is a concern. Gold dropped over forty dollars today. The US dollar finished flat and interest rates continue to rise. The XAU fell 3 2/3 and GDX dropped a point. Volume was about average. The short term indicators for GDX are pointing down and it is almost back to the 200 day moving average again. Recent volatility in this index makes it hard to trade right now. Mentally I'm feeling OK. The VIX finished a bit lower today with a mixed market. The short term indicators here are trending higher but not with conviction. Not sure what to expect with the VIX next. We've got the Fed coming in next week along with options expiration so it should be interesting. Short term trades will be the only choice with little time to go in the December option cycle. I'll be going over the charts this weekend to try and come up with a game plan for the SPY options next week. Europe and Asia wre both lower on Friday with the exception of India. It's Friday afternoon and time for a break.

Now it appears that sellers have the upper hand as the Dow fell for the sixth day in a row. The most watched index dropped 234 points on light volume. The advance/declines were shy of 3 to 1 negative. The summation index is moving down. The NASDAQ led the way lower. Although it wasn't deep sell off by any means the inability to have more than a one day rally is concerning for the bulls. A bounce at the least is due for the Dow. The S&P 500 was off over thirty points. The short term indicators here have rolled over. It now looks like the SPY put trade has been missed. Unless we see some upside heading into the Fed meeting next week I may have to just continue to be on the sidelines. Gold slumped over fifty bucks today as the price movement here lately has been big both ways. The US dollar was higher along with interest rates again. The XAU lost 5 3/4, while GDX shed 1 3/8. Volume was average. Staying away from GDX has probably been a good thing with the recent volatility there being short and sweet both ways. Mentally I'm feeling OK. The VIX was up today but we didn't see the short term indicators move that much. Not sure what that means. Stocks closed on their lows today and that isn't a positive sign. Running out of time in the December option cycle. The most we can hope for now is a short term trade and that isn't usually where my best efforts occur. Europe finished relatively unchanged and Asia was higher with the exception of India. We'll close out the trading week tomorrow.