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Wednesday, October 08, 2014

Another crazy day in the neighborhood as the Dow turned things around on the Fed minutes and blasted off to the upside.  It gained 274 points on very heavy volume.  The advance/declines were 4 to 1 positive.  We are back to a bullish pattern on the daily S&P 500 candlestick chart.  Although the summation index is heading lower, after today it appears that this indicator will turn up in the next few sessions.  The volatility is pretty rampant right now.  Today was a combination of actual buying combined with a lot of short covering.  My October OEX puts are still in the black even with todays powerful upside.  They have lost the bulk of their profit though.  Only seven days left for this trade.  GE was up 3/8 and the volume was good.  A lot of stocks are showing a bullish turnaround after today.  GE is one of them.  No trades in mind here for now.  The gold futures were down in the regular session but took off in the aftermarket for an $8 gain.  The US dollar was lower on the Fed minutes.  The real story here was the one day reversal in the XAU as it soared 5 1/3.  ABX up 3/4, GG climbed two points and NEM rose a buck.  Volume was good.  Any pullback can be bought here in my opinion.  It appears that the roughly $1200 level on gold will hold.  This morning was the perfect time to purchase the gold share calls.  Mentally I'm in trouble.  My computer and its back-up crashed today midway through the trading session.  I was able to temporarily restore the connection to my accounts but usual procedures were not available.  I now have to purchase and install new trading equipment.  This is certainly not the ideal time to deal with that.  The major stock indices appear that they will be able to hold on after todays price action.  Once again unless there is a dramatic turnaround tomorrow, prices should move higher from here.  It is a crazy game sometimes.  But we have to go with what the market tells us.  Keep a close eye on the McClellan oscillator and summation index.  The summation index should turn around by the end of the week.  The move in the gold shares today was incredible.  There still might be a chance to try the calls there but we will have to be patient.  Sometimes, things can turn on a dime.  We saw that today for the gold shares.  The reality is that really nothing has changed from yesterday.  But money moves around regardless.  We should see more follow through upside for the stock market tomorrow.  I would also expect the overseas markets to rally overnight.  We'll see what tomorrow brings.

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