Monday, August 10, 2015
A rally appeared today out of nowhere as the Dow soared 241 points on average volume. The advance/declines were 3 to 1 positive. This should move the summation index back to the upside. No reasons for todays ascent but we were very oversold on the short term and a bounce was due. There was no weakness today so I did not have the opportunity to purchase the SPY August calls. We will have to see if we get any upside follow through to todays action. Maybe we are finally on our way to new highs in the S&P 500. GE was up almost 1/2 on light volume. The 200 day moving average has provided support for now. Gold saw some buyers as the futures rose around $10. The US dollar was weaker today. The gold shares found some interest as well with the XAU gained 3 1/3, while GDX added 7/8. Volume was good here. There was a positive article on commodities in Barrons over the weekend and perhaps that sparked some buying interest. Otherwise it can be viewed as an oversold bounce with some short covering. ABX was up 1/2 but it will take more than that to help cut the loss on my October call trade there. Mentally I'm feeling OK. Buying across the board today and we haven't seen that for a while. I'm not exactly sure what to make of it. We're still stuck in a trading range for the S&P 500. August isn't the most positive month for the stock averages, so if we continue to simply churn after today it wouldn't be a surprise. So we'll see what happens. Today was a good day for gold and we haven't said that in months. Perhaps the favorable seasonal effect is going to kick in this year. One day doesn't make a trend but at least it's start in the right direction for the bulls. We'll keep an eye on the overnight action and go from there.