Wednesday, August 19, 2015
It has been one crazy summer. The Dow was all over the place today and finished with a loss of 162 points on average volume. The advance/declines were almost 3 to 1 negative. This should put the summation index back to the downside but it has been essentially moving sideways. We sold off over 200 in the morning, came all the way back to be slightly positive and then rolled over again. It hasn't been a quiet summer. The Fed minutes came out and they can be interpreted any way you like. The short term technical indicators are starting to roll over for the major averages. GE was off 1/3 and volume picked up. Still holding the 200 day moving average but keep an eye on it. Gold found buyers as the US dollar declined. The precious metal futures rose over $10. The XAU added 1 3/8, while GDX gained 3/8. Volume was average. Gold is advancing on cue with the seasonal bias so far. ABX was up 1/4 but my October calls are still in the red. Mentally I'm feeling OK. My theory of a rising expiration week seems to be shot down after today. We must stick with the technicals. We are back at support in some of the major averages. Things do need to hold up here because if they don't, things could get ugly. We are still in close proximity to the zero line in the summation index. Things will turn bearish fast if we drop through there. There was weakness around the globe last night although the Shanghai market did make a comeback. The continuing drop in the price of oil has players concerned as well. I do not know the story behind these events but with the indicators rolling over I have to move to a cautious stance. Perhaps gold and the US dollar will see a flight to safety here if things really get dicey. Hasn't happened yet. Gold is finding some buyers now, for whatever reason. But the metal is slightly ahead of the gold shares and we'll need to see that reverse to be really bullish. At any rate the summer doldrums are short lived when they do show up this year. It hasn't been the normal routine. We'll watch what happens overnight and see if we get some downside follow through in the US tomorrow.