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Monday, August 27, 2018

Powering higher to begin the week as a supposed trade deal with Mexico spurred buying interest.  The Dow soared 259 points on light volume.  The advance/declines were positive.  The summation index is moving higher.  There is no overhead resistance and sellers have disappeared for now.  The usual seasonal weakness is not here.  I dumped the SPY September puts that I bought on Friday for a 33% loss.  Even though there is plenty of time for this trade I decided to sell out of that and repurchase the puts at a higher strike price which I did.  That trade is showing a slight loss and this trade I will hold on to for a while unless we simply get a parabolic rise from here.  That is a possibility despite that fact that we're overbought and staying that way.  GE was up 1/4 on light volume.  It look like a bottom has been put in here.  Gold rose a few bucks as the US dollar is dropping.  The XAU added 1 1/8, while GDX gained 1/3.  Volume was average.  This look like an oversold bounce as the gold shares got crushed in the preceding weeks.  I did sell the GDX September calls that I held but it was mostly symbolic.  The loss here was 99.9%.  I basically just got this trade on the books to register the loss and move on.  The mistake of not putting on a stop loss was evident here.  Mentally I'm feeling OK.  The market is acting like it wants to take off to the moon here so we'll have to see how the month finishes out.  Perhaps trying the puts again is the wrong strategy but some of the technical indicators are saying that we've reached at least a short term top.  Not a lot of economic data out this week and it is still summer vacation for most.  So I think I'll hold on to this position and let this week pass from here.  We'll see if we get the expected follow through upside tomorrow.  Asia and Europe were higher overnight.  We'll keep an eye on any overnight developments.

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