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Thursday, August 29, 2019

Continuing higher with a gap at the open as the Dow added 326 points on light volume.  The advance/declines were almost 3 to 1 positive.  The summation index still has a sideways range but another plus day should turn things back to positive.  Lack of trade war negative headlines would be the most likely reason for todays advance.  But we all know that can change in a flash.  The S&P 500 is still locked in the congestion zone that began at the beginning of the month but appears to be ready to break through to the upside.  There is room on the short term technical indicators to go higher.  That doesn't mean that they will but the odds are getting better.  First we'll have to see if the S&P can get through its 50 day moving average.  GE was up over 1/8 on OK volume.  Gold was down a dozen as the US dollar was higher.  The XAU fell 2 3/4, while GDX shed 3/4.  Volume was good.  GDX almost hit the 31 target that we had in mind.  However I don't want to say that the rally here is over.  But it may stall on an overall market rally if the US and China tone down the rhetoric.  The gold shares are overextended and haven't gotten oversold in three months.  Mentally I'm feeling OK.  The VIX has rolled over along with its indicators.  The 50 day moving average there comes in at the important 16 level.  If it gets there we'll be watching closely to what happens.  A break below 16 and then I'll be believing that whatever rally is taking place is for real.  However that may also be the spot to take up new short positions instead.  That's what we'll be looking at if we get there.  Let's see if the S&P can break out of its congestion zone and take it from there.  Tomorrow will be the last trading day of the month before a long weekend.  A positive session would be quite a plus for it would suggest that traders are not afraid of being long over an extended weekend.  So we'll see what happens and go from there.  Asia was mixed and Europe higher overnight.  We'll close out the week and the month tomorrow. 

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