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Thursday, July 05, 2018

A rally today ahead of tomorrows jobs numbers as the Dow climbed 181 points on light volume.  The advance/declines were almost 3 to 1 positive.  This should turn the summation index back to the upside.  Todays price action seems to say there will be a positive market resolution to tomorrows employment report.  We'll see.  The short term technical indicators for the major stock indices have now turned back up with room to roam higher.  The VIX closed just below 15 so tomorrow will be a key.  If we drop below 15 on the VIX and stay there then the summer rally is on.  If not it will more of sideways to down.  To me it looks like the market is poised to go higher.  GE was up a few cents on lighter volume.  It did finish well above its lows for the session.  Gold was flat on the futures as the US dollar was slightly lower.  The XAU and GDX had fractional gains on a bit better than average volume.  Getting overbought for the short term here but there's room on the indicators to go higher.  My hope is that I haven't missed the longer term gold share call trade here.  I'm going to wait and see if we drop back a little here before placing an order.  I'm considering the GDX September calls but the option premiums have already moved up.  Mentally I'm feeling OK.  The volume is lighter this week as many players are off to the beaches.  However the market goes on regardless of vacation plans.  My thinking now is that we are going to move higher.  The fact that we were able to completely turn around the negative action of Tuesday cannot be ignored.  The market goes where it wants to.  I'm hoping for some weakness in the gold shares because it looks like the seasonal strength for that group has begun.  I do not want to chase it and I may be wrong about it as well.  But the volume and price action in the past week seems to be saying it's time to get on board.  We should get some movement in gold and the US dollar off of the jobs report.  I'll be up early in the morning to take a look at that.  Asia was lower and Europe higher in last nights trade.  We'll finish out the shortened trading week tomorrow.  All eyes will be on the employment numbers.

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