Wednesday, September 30, 2015
The bounce appeared on schedule as the Dow rose 235 points on heavy volume. The advance/declines were 3 to 1 positive. The summation index is still heading lower. There is a potential bullish candlestick pattern on the daily S&P 500 chart. We have reached the short term downtrend line for the S&P 500. I'd expect things to stall tomorrow ahead of the jobs report on Friday. I didn't sell my SPY October calls. I suppose that I'll wait for Friday and see what that brings. If the potential bullish RSI divergences are real, then this trade has a chance to actually turn a profit. It is still showing a loss. GE was up 2/3 and the volume was good. Hopefully GE is leading the way here. Might be too late for the November calls though. Gold fell another $7 today as the US dollar was higher. The XAU and GDX were both higher today. That's the first time in a while that we have seen the gold shares out perform the metal itself. But that doesn't mean that it will continue. Volume was average there. Mentally I'm feeling OK. So can the market move higher more than 2 days in a row? That hasn't happened in over a month. Like I said before, tomorrow should be a wait and see session. With the summation index still moving down, caution is probably the best advice. The potential for a bottom to be in place is there but it is potential and not fact. If we can get through the short term downtrend line for the S&P, the next resistance is at 1945. But things could head back down tomorrow and negate any positive action that we've seen. That is the environment that we are in. The trend is still down until proven otherwise. I'm still holding the SPY October calls but I am trying not to let that affect my view of the market. Not an easy thing for me to do. We'll begin the 4th quarter and the month of October tomorrow. The foreign markets were positive yesterday and we'll see if we get any upside follow through tonight.