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Wednesday, October 09, 2019

We had a gap back to the upside today as the Dow gained 182 points on very light volume.  The advance/declines were 2 to 1 positive.  The summation index is still heading lower.  The market is trying to make up its mind here and so am I.  The light volume today is troublesome for the bulls as there is no conviction behind the rise.  We're still in an area that could make or break things going forward.  All eyes and ears will be on the US/China trade talks taking place for the next two days.  That is a tough way to trade because nobody knows what will come out of that.  The technical indicators could go either way from the levels they're at right now.  I'd like to make a trade at some point but without a clear signal I'm probably going to wait.  GE was up a few cents on lighter volume.  Gold and the US dollar finished the day little changed.  The XAU and GDX had fractional losses on light volume.  Gold and the gold shares could be affected by the trade talks as well.  Bad news will probably be gold for the yellow metal, while good news just the opposite.  But that's just a guess on my part.  The technical indicators for the gold shares are also in a zone where they could break either way.  I'm leaving my longer term GDX January call option trade out there.  Mentally I'm feeling a bit tired and need some more rest.  The VIX was lower today and remains overbought.  This indicator has been going back and forth for the past few weeks with an upwards bias.  Until we get back below the 16 level, I'm thinking we're still in an environment that could lead to sell offs.  We are running out of time in the October option cycle but I'm still looking for a trade there.  Being nimble still remains the key in my humble opinion as well.  It's no time to fall in love with ideas as the trading has been choppy.  Asia was lower and Europe generally higher overnight.  We'll see how things go tomorrow.

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