We opened up with a gap higher and spent the rest of the day in a sideways channel. However the Dow fell 95 points on expiration heavy volume. The advance/declines were 2 to 1 negative. The summation index continues lower. Both the NASDAQ and S&P 500 posted light gains with the NASDAQ leading the way. The short term indicators for the S&P are at mid-range with some beginning to stall. Todays breadth was not good but I still think that the market goes higher from here. But getting this close to the zero line in the summation index could really spell trouble so we'll remain on the sidelines for now. Gold was off $16 on the futures. The US dollar was a touch lower and interest rates rose. The XAU and GDX had fractional losses on below average volume. The short term indicators for GDX are still trending higher. Considering the GDX October calls as the next trade. Mentally I'm feeling OK. The VIX was lower and the short term indicators here continue to move down. Another reason not to get too bearish here. The market is still at risk from the next Iran conflict headline but at least we've got the Fed and inflation data behind us for the time being. I'll be going over all the charts this weekend as we roll into the October option cycle. Asia was generally higher and Europe lower to close out the week. It's Friday afternoon and time for a break.

Bouncing back today as the Dow gained 316 points on good volume. The advance/declines were around 2 to 1 positive. The summation index is still moving down. We got a signal last night from the McClellan oscillator for a big move within the next two trading sessions and today fulfills that. Both the NASDAQ and S&P 500 were up over 1%. The NASDAQ led the way and that's a plus for the bulls. The short term indicators for the S&P have turned up from oversold territory. Out next task is to figure out if this is just another bounce out of nowhere as we work our way lower or the start of something more sustained to the upside. I'm inclined to think that it's the latter as most of the medium term indicators are now oversold and in areas that previously denoted more than just a short term bottom. However with the summation index in close proximity to the zero line, we can't rule out a further decline at the moment. We also do not know how much of the price action today was option expiration related. The game is never easy and we will be rolling over to the October option cycle so premiums will be high. Gold finished flat on the futures but its recent decline has subsided. The US dollar was barely lower and interest rates dipped. The gold shares followed the market higher. The XAU gained 13 points and GDX was up 3 1/8. Volume was average. The short term indicators for GDX are now pointing up. I'm still considering the GDX October calls. Mentally I'm feeling OK. The VIX was lower today and its short term indicators are moving down with room to go. The daily chart here appears that it wants to go lower which would support more gains in stocks. The fact that the VIX couldn't make it above its 200 day moving average is another sign that the bulls could be on the verge of taking charge here. We'll see. Europe was up and Asia mixed overnight. Expiration Friday on tap tomorrow.

Volatility returned as the Fed raised rates as most expected. The Dow fell another 631 points on heavy volume. The advance/declines were negative. The summation index continues to drop. The Dow led the way lower as it has recently. A final hour rally kept things from being worse. The NASDAQ was barely lower and that is a plus for the bulls. The S&P 500 had a modest loss and finished off of its lows as well. The short term indicators there remain oversold. Two days left in the September option cycle and if I was a short term trader I'd consider the SPY calls. But the short term trades are not my best efforts. I also thought that there was a chance that the Fed would leave rates unchanged but that didn't happen. Gold was off $23 on the futures after being positive for much of the session. The US dollar was higher and most interest rates ticked up. The XAU lost 5 1/2, while GDX shed 1 1/3. The gold shares came up from their lows on the day as well. Volume was good to the downside. GDX opened with a gap higher and sold off for the rest of the day. I did adjust my order for the GDX September calls a couple of times in the morning. However gold itself was remaining pretty positive and the gold shares weren't doing anything. I canceled my order for the GDX calls and did not think it was worth the risk. Preservation of capital took over. I am looking out to the GDX October calls as it is now oversold on a short term basis. But the fundamental backdrop for gold isn't positive here with higher rates and a stronger US dollar. Mentally I'm feeling OK. The VIX was up today but remains below its 200 day moving average. The short term indicators here are overbought but not completely. I'm not sure where the VIX is heading next. Stocks had a chance to fall apart at the end of the day but did not. The zero line on the summation index remains in sight. So it is a tough call as to what happens next here. The reason that I would favor the SPY calls with two days to go for the September options is the fact that we didn't see a negative close today when the market had every reason to seek one. Markets don't wait around to go down. The next two days should be interesting. Asia and Europe finished higher overnight. We'll see what tomorrow brings.

Another day of selling ahead of the Fed as the Dow dropped 328 points on average volume. The advance/declines were 2 to 1 negative. The summation index is moving down. I would be remiss here if I didn't mention the summation index is getting closer to the zero line. That means there is an increased risk that the market simply starts to fall apart here. The summation index usually isn't anywhere near the zero line so the fact that we are getting close should not be ignored. It doesn't mean that the market will crash but the odds of it happening go up. The short term indicators for the S&P are trending sideways in oversold territory. Any bounces for the S&P that we've seen lately haven't gone anywhere. We also haven't seen any huge declines or panic selling yet. I am not looking to trade any SPY options the rest of this week. Gold dipped $13 on the futures. The US dollar was higher and interest rates continue to move up. The XAU and GDX finished little changed on light volume. They did come up from the lows of the session. My open order for the GDX September calls wasn't filled. I adjusted it but it still did not get hit. I'm leaving it out there to see what happens tomorrow morning. If GDX dips early on I will most likely buy some calls ahead of the Fed. If not I'll cancel the order and see what happens after the Fed announcement. The short term indicators for GDX are oversold so this is where I'd like to try the calls. That doesn't mean GDX will rise from here as it can stay oversold during down trends. But this is where we think it could be worth the risk with only three days left in the September option cycle so we will try and take on this idea. Mentally I'm feeling OK. The VIX was slightly higher today as the 200 day moving average continues to provide resistance. The short term indicators on the VIX are starting to move sideways. This indicator should get going one way or the other tomorrow after the Fed. Asia and Europe closed lower overnight. Wednesday should be an interesting session and I should be up for the challenge. We'll keep an eye out for any overnight news.

Players returned from the weekend in a selling mode as the Dow fell 152 points on average volume. The advance/declines were negative. The summation index continues lower. The NASDAQ led the way down but not by much. There was a huge gap lower at the open but stocks recovered during the session. However they didn't make it back to positive territory. Finished up off the lows though. The short term indicators on the S&P 500 are now trending lower or sideways with most in oversold territory. No clear signal here and with only four days left in the September option cycle anything could happen. Retail sales due Wednesday morning but the Fed that afternoon is the main story. Not sure what to expect there with the majority of players expecting a hike. I'm not considering the SPY puts here anymore. Gold was off $84 on the futures. The US dollar was higher and interest rates ticked up. The XAU fell 11 3/4, while GDX lost almost 3. Volume was just above average. I did place an overnight order for the GDX September calls but it wasn't filled. GDX also opened with a big gap down and never recoverd. GDX is now short term oversold on some of its daily indicators. This too is a risky trade but it is the idea that I decided on trying over the weekend. It will depend on the market reaction to whatever the Fed does but getting to short term oversold on GDX was what we were looking for. I'm leaving the order out there so we'll see if it gets filled or not. If it doesn't get filled ahead of the Fed announcement on Wednesday, I'll cancel it. Or perhaps I'll adjust it tomorrow. Mentally I'm feeling OK. The VIX was up today which fits a down market. The short term indicators here are turning back up but the 200 day average proved to be resistance again. If the VIX breaks above there we could be looking at a bigger decline. Hasn't happened yet. Europe and Asia were generally lower. I'll keep an eye on the overnight headlines.

Some buying for a change today as the Dow climbed 509 points on lighter volume. The advance/declines were positive. The summation index continues lower. The inflation data came in where expected and the market had a big gap higher at the open. The rest of the day was spent in a sideways pattern that limped home to the close. Now we have to figure out if this is the start of something to the upside or another bounce out of the blue that turns around and heads for lower lows. Once again the Dow, NASDAQ and S&P 500 had about the same percentage move on the session. The S&P closed back above the 7600 level and some of the short term indicators have turned back up. We've got the Fed to deal with next week and a rate hike is now expected. I would not be too sure of that. Gold dipped $14 on the futures. The US dollar was barely higher and interest rates ticked up. The XAU was up 2 1/3, while GDX gained a point. Volume was light. I did place an order overnight for the GDX September calls in case we got some selling today but that did not happen and I canceled the order. Some of the short term indicators for GDX are almost oversold. If rates do get raised in the US next week, owning the gold share calls is probably not the best idea. Mentally I'm feeling OK. The VIX dropped which fits the positive day for stocks. Most of its short term indicators have now turned back down from overbought territory. That could mean that the decline is over. However the breadth today wasn't all that great considering the move up that we had. I will have to go over everything this weekend and determine which trading idea to take next week. Either the SPY September puts or the GDX September calls with only a week to go in the option cycle. Risky indeed. However we should definitely see some market movement post Fed. I would like to be positioned in something before that event. Or perhaps I'll remain on the sidelines. We'll see. Europe higher and Asia lower to close the week. It's Friday afternoon and time for a break.

Sellers remain in control as the Dow fell 316 points on average volume. The advance/declines were around 3 to 1 negative again. The summation index is moving down and we will take our cues from that. It has been an orderly decline thus far as panic has yet to arrive. The inflation data for producer prices came in about where expected. The Dow, NASDAQ and S&P 500 all dropped the same percentage. The short term indicators for the S&P continue to fall and are short term oversold now but not completely. The S&P has broken its up trend line along with closing below 7600 and its 50 day moving average. I suppose tomorrow will tell the story if we are headed for a steeper decline or perhaps if the inflation data is OK, some kind of bounce. We have missed the SPY September put trade it appears. Gold was down $96 on the futures. The US dollar was higher and interest rates jumped. The XAU lost 14 2/3, while GDX dropped around 3 1/3. Volume was average. The short term indicators for GDX are still heading lower with room to go. I still like the idea of the GDX calls at some point before option expiration. I might even place an order for them overnight in case the inflation number comes out hot and stocks tank early in the morning. But next week might be a better time to purchase. There is also the possibility that things fall apart for the market here and gold goes along for the ride. Which would make purchasing any calls the wrong strategy. There will be a lot of risk in taking on any trade now as we are running out of time in the September option cycle. Mentally I'm feeling OK. The VIX was up again but stopped at its 200 day moving average. The short term indicators here are now overbought. Still below the 20 level. If the VIX stays overbought there will be more downside in the markets to go. That usually doesn't happen though. Interesting times but caution is advised. Asia was mixed and Europe lower overnight. We'll see how the inflation data reads and go from there.