Friday, September 11, 2015
A one day reversal to the upside as we opened lower and closed higher. Late buying pushed the Dow up 102 points. The advance/declines were slightly positive and the volume was light. The summation index is moving higher but without a lot of conviction. Not sure what that implies. Expiration week coming up but all the players are waiting on the Fed. The market reaction there will be the telling story. But the announcement is on Thursday, so trading off of that will be extremely risky. If I feel like there is a signal to trade , I'll give it a shot. But we have data to get through before that as well. GE was up 1/4 on OK volume. GE has held up pretty good here and we are now short term overbought. Perhaps the November calls on a pullback is the proper choice. Gold was off a couple bucks on the futures and a bit more in the aftermarket. This, despite a drop in the US dollar. Both the XAU and GDX had slight fractional gains coming off of their lows for the session. Volume remains light as does the interest in gold. Mentally I'm feeling OK. The VIX has come back down and I am really asking myself if perhaps the decline is over. We never did retest the low, so perhaps a V bottom is in place. The medium term technical indicators for the major averages have turned back up. The small stock indices never had the bearish 50 day moving average crossover with the 200 day. The amount of put buying is through the roof. So there is a lot of evidence that we are probably going to go higher. But the market does go where it wants. I think if we continue higher into the Fed meeting I will probably go the other way in an extremely short term trade. But a lot can happen between now and then. Gold remains a lost cause along with the gold shares. I do believe though, if you have a longer term time horizon the gold shares can be bought here. They are even cheaper than the last time I said that. And the large cap companies in that industry are not going to zero. So I will check the charts over the weekend and try and get a feel for what is going on here. My ideas have been wrong as of late but that will not last forever either. For now it's Friday afternoon and time for a break.