We closed the month to the downside as the Dow fell 620 points on very heavy volume. The advance/declines were around 3 to 1 negative. The summation index is heading lower. This week had the first real selling that we've seen for a while. The S&P 500 closed at its 50 day moving average. On a weekly basis the S&P is right at the up trend line that began with the lows last March. At the rate we're going this line isn't going to hold. The next support in my mind comes in at around 3500 and we are no where near that. The weekly indicators have rolled over and they have plenty of room to go lower. So we may perhaps be in the midst of an actual correction. 3500 on the S&P would be roughly a 10% correction. That's what I'll be looking for going forward. Could things turn around next week and the up trend line hold? Of course that could happen but I'm not thinking that it will. On a short term basis the S&P is oversold but not completely just yet. Volatility is back. GE was off 3/8 on heavy volume. Gold was up a little today but fell back far from its best levels of the session. The US dollar finished slightly higher. The XAU and GDX had slight fractioanl losses after opening up much higher. Both got pushed back from their 50 day moving averages. Volume was light. The price action was negative. With all that is going on at the moment, which includes the stock price manipulation on shorted stocks along with the recent market volatility, I would have expected to see a flight to gold. It hasn't happened. Perhaps trying the GDX February calls here is the wrong idea. My open order is still out there but I'll definately have to reconsider this over the weekend. Mentally I'm feeling OK. The VIX bounced around today and finished higher. We've already reached VIX levels that have ended recent declines in the market. I'm not sure if that is going to happen this time around. I'm looking for more weakness in stocks to come as the summation index is heading lower. 350 would be the target for the SPY but it is probably too late to try the puts there. We'll see what happens in the beginning of next week and go from there. There's still three weeks left in the February option cycle. Plenty of charts to look at over the weekend. Europe and Asia sold off to finish the trading week overseas. It's Friday afternoon and time for a break.

Bouncing back today as the Dow climbed 300 points on very heavy volume. The advance/declines were better than 2 to 1 positive. The summation index is still moving down. We did reach short term oversold on one of our indicators yesterday, so a bounce was due. Where we go from here is the question. I don't think we're heading back to new all time highs soon. I could be wrong but we're seeing some crazy price action in different stocks. Not to mention the TRIN has been getting some out of whack readings in the past two sessions. It all leads to uncertainty and the market never likes that. GDP came in about where expected but the market is marching to its own beat right now. We'll get the end of the month tomorrow and we'll see how things square off. GE was off over 1/4 on good volume. Gold lost a touch after being higher early on. Silver had a good day but it too fell back from the best levels of the day. The US dollar finished little changed. The XAU jumped over 7 points, while GDX added over 3/4. Volume was above average. It was a plus to see the gold shares outperform gold. My open order for the GDX February calls remains out there. The gold shares had an upside gap at the open, so my order didn't have a chance to get filled today. Once again I have to decide whether to chase things here but I think I'll just leave my order out there and see what happens. Mentally I'm feeling tired. The VIX turned lower today and most of the short term technical indicators have rolled back down. After closing above 35 yesterday unless we are about to see a really huge decline, the VIX should settle down. The 35 level is about where recent selling has stopped in the past six months or so. Of course the volatilty will increase the cost of trading the SPY options. I don't have any trades in mind there right now. Asia was lower and Europe mixed overnight. We'll close out the week and the month tomorrow.

The market got clobbered today as the Dow fell 633 points on out of this world heavy volume. The advance/declines were better than 5 to 1 negative. The summation index is now moving lower. It broke to the downside from the sideways channel. We were down from the start and heavy too. So there is something that the market knows that isn't clear to anyone watching. The Fed didn't matter as the decline was robust from the beginning. The indicators for the S&P 500 have now headed south. We're on our way to the 50 day moving average here and almost got there today. There is still a lot of froth in the market, so I don't think the selling is done yet. This could be the start of a long awaited correction. Time will tell on that. We'll see if the GDP report tomorrow means anything. We now know that the price action on Monday for the S&P was a hanging man. GE was up a few cents today on very heavy volume. Gold was off $7 on the futures. The US dollar rose on a flight to safety. The XAU fell almost 6 points, while GDX dropped 1 1/3. Volume was average. My open order for the GDX February calls was almost filled. Another day like today and it most certainly will be. I'll think it over again tonight as it looks like the gold shares are breaking down along with the overall market. But we are in the oversold region on most of the technical indicators for GDX. That said we didn't see any large scale selling in gold itself today either. That could change with margin calls of course. Mentally I'm feeling OK. The VIX soared today and closed above the 35 level. We're already short term overbought on the technical indicators on the VIX. So perhaps today will just turn out to be a one day wonder. But I wouldn't count on it. There were however a lot of stocks that gained today with volume on the most active list for the NYSE. This might just be a short covering situation though, as it has been lately for GME. GME is trading more shares everyday than its float. Crazy times there. I think that has a lot to do with todays decline as the financial stability of the markets could come into question. Just a guess on my part or perhaps there will be a whiff of more regulation. We'll see how things play out going forward. Asia was mixed and Europe lower in last nights trade. We'll see how these markets fare tonight after todays debacle in the US. Tomorrows trading proves to be interesting.

Hnaging around before the Fed as the Dow lost 23 points on heavy volume. The advance/declines were negative. The summation index is still tracking sideways. The technical condition of the S&P 500 hasn't changed. Short term overbought and staying that way. The TRAN has slipped here along with the NYA and that's something to keep an eye on. But the trend remains up for the overall market until proven otherwise. I don't expect any changes from the Fed tomorrow. Once we get that out of the way it'll be back to the economic data and earnings. First look at 4th quarter GDP on Thursday. No SPY trades in mind at the moment. GE was up 1/4 on extremely heavy volume following its earnings report. It did fall back quite a bit from the best levels of the day though. Gold was down five bucks on the futures. The US dollar was lower today. The XAU was off by 1 1/8, while GDX was little changed. Volume was light. We've had two days now with the XAU down over a point and GDX finishing little changed. Not sure what's going on there. These indexes remain short term oversold. My open order for the GDX February calls is still out there. I'm not sure if I want to adjust it to be filled before the Fed or just let it be. My thinking is that the gold shares and gold could rally post Fed since they are already oversold. However there doesn't seem to be a lot of interest in this sector lately. Mentally I'm feeling OK. The VIX was a touch lower today. The short term indicators have turned back up here. I really don't have a strong signal or conviction of what the overall market is going to do here. Therefore I'll have to stay on the sidlines with regards to the SPY for now. I'll ponder what to do with my open order for the GDX calls overnight. Asia was lower but Europe rallied overnight. We'll see how the market reacts to the Fed tomorrow.

Volatility was the rule today as the Dow was off over 400 points early on but finished the day with a loss of 37 points on very heavy volume. The advance/declines were negative. The summation index continues to track sideways. Once again the overall market was stronger than the Dow with the NASDAQ leading the way. We did get a signal on Friday in the McClellan oscillator for a big move within the next two trading sessions. I suppose todays price action qualifies for that. Buyers show up no matter what as long as the easy money is still around. We've got earnings, economic data and the Fed to deal with this week. It's already interesting and it's only Monday. The price action today says that we're most likely going higher. GE was off 1/8 on good volume. Gold was off a couple bucks on the futures as the US dollar was slightly higher. The XAU dropped 1 1/2, while GDX was flat. Volume was light. I did place an open order for the GDX February calls and I'm leaving it out there. May be too late though. The VIX was higher and had a big jump early. It is still short term oversold so perhaps there will be some more selling. However the price action in the stock indices is implying higher values for equities. We're still short term overbought for the majority of the stock indexes. We'll know more in the comong couple of sessions. There's a chance today was a hanging man on the daily candlestick charts. That would be bearish going forward but we won't know until we get some more price action. The Fed on Wednesday could get things going in either direction. I'll stick with the open GDX order for now and keep an eye on the SPY options. Asia was higher and Europe lower in last nights trade. We'll keep an eye on the overnight developments.

A mixed bag to finish off the week as the Dow fell 179 points on heavy volume. The advance/declines were slightly positive. The summation index continues sideways. Once again the overall market did better than the Dow with the NASDAQ ending the day positive. As long as the small stocks continue to show leadership to the upside, you cannot get too bearish on the market. The S&P 500 remains short term overbought. There's no overhead resistance for stocks and there's still plenty of liquidity to go around. The song remains the same. GE was up a few cents and the volume was light. Gold dropped $15 on the February futures but did finish up from the worst levels of the session. The US dollar was slightly higher. The XAU fell about a point, while GDX lost 1/2. Volume was average. The gold shares had a gap lower early and made back up a lot of ground during the session. It was positive price action in my mind considering the loss in gold. I didn't place an overnight option order this time around but perhaps I should have. I am looking at the GDX February calls for the next trade. GDX continues to hold on to its support at the 50 week moving average on a longer term chart. If that breaks I would not consider trading the calls. There is a potential head and shoulders top on the longer term chart that cannot be ignored. For now it remains just a potential outcome. GDX is still short term oversold. Mentally I'm feeling OK. The VIX was up a bit today and remains oversold. It's still below the 50 day moving average and that's a plus for the bulls. One week left in January and it's been a pretty positive month so far. We did have a quick drop during the last ten minutes today in the S&P. We'll see if that means anything when things get started again on Monday. Europe and Asia were lower to close the week. I'll be going over the charts this weekend as usual. It's Friday afternoon and time for a rest.

Today felt like a day of digesting the recent gains or perhaps just running in place. The Dow fell 12 points on good volume. The advance/declines were negative. The summation index is still tracking sideways. The overall market was once again stronger than the Dow with the NASDAQ leading the way. The major stock averages remain short term overbought. As long as the small stocks are leading the way, higher prices can be expected. No market moving news really as the earnings reports are starting to take hold. GE was off 1/3 on light volume. Gold was off a couple bucks on the futures as the US dollar was lower. Given the move lower in the dollar, I would have expected better gains for the price of gold. The XAU fell a couple points, while GDX shed 1/3. Volume was light. I did place another order for the GDX February calls only to cancel it before the close. My thinking now is that I'll wait until next week to begin this trade. However I may also just drop this idea as perhaps my thinking here is off. GDX doesn't look to be putting in a sustained rally anytime soon at this rate. Mentally I'm feeling OK. The VIX was a bit lower today and now is back to oversold. It can stay oversold if the rally continues. With no overhead resistance this is possible. I'd like to see some kind of blow off top that moves pretty far from the 50 day moving average in the S&P. But that's just wishful thinking. The market goes where it wants to and rarely cooperates with the wishes of traders. With option premiums remaining pricey with the extra week in the February cycle, we'll remain on the sidelines for now. Waiting for a good technical signal. Asia was higher and Europe lower overnight. We'll close out the trading week tomorrow.

Powering ahead to new all time closing highs as the Dow gained 257 points on good volume. The advance/declines were shy of 2 to 1 positive. The summation index is trying to turn back up again but remains in a sideways configuration. Once again the overall market was much stronger than the Dow, with the NASDAQ leading the way. There is no overhead resistance as the bulls are in control. It has only been two days of upside but it is beginning to feel like we may be getting to a blow off top if it continues. A new president and promises of easy money for as far as the eyes can see. Combine that with some good earnings reports and the market takes off. We're still short term overbought for the S&P 500 but that hasn't mattered for a while now. I guess we'll just see how far we can go. GE was off a few cents on light volume. Gold moved higher as the futures jumped thirty dollars. The US dollar finished little changed. The XAU was up 4 1/4, while GDX gained 1 1/8. Volume was good. I did place an overnight order for some GDX February calls but it was not filled. We had a gap to the upside at the open for the gold shares, so my order didn't have a chance. Looks like yesterdays signals were valid for the gold shares. I'll have to figure out whether or not to chase this move higher. Timing is so important with trading options and that fact cannot be taken lightly. GDX did close below the 50 day moving average so perhaps there will be a chance to get the calls in the coming days. We'll see. Mentally I'm feeling OK. The VIX was lower and closed below its 50 day moving average. This fits well with todays rally. Thw short term technical indicators have rolled over and point to higher prices going forward. The market is moving in anticipation of a liquidity rush with the policies of the new administration. That's my guess for what we're seeing at the moment. We're right up against the top of the Bollinger bands on some of the major stock indices but that doesn't mean we can't go higher in the short term. Asia was generally higher, with Europe up as well. It's a worldwide push into stocks. We'll see how it goes tomorrow.

Starting the week on a positive note as the Dow gained 116 points on heavy volume. The advance/declines were positive. The summation index is still moving sideways. The overall market was much stronger than the Dow and that is a plus for the bulls. The short term indicators for the S&P 500 are turning back up but we do remain overbought there. Janet Yellen, remember her? She's back, this time as Secretary of the US Treasury. Today she claimed that interest rates will remain low forever basically. We'll see what the bond market has to say about that. Regardless, stocks liked what they heard today. We are entering what is usually a seasonal period of weakness for stocks. We'll see what transpires this year. GE was up a dime on kind of light volume. Gold was up a couple bucks on the futures and the US dollar was lower. The XAU rose 1 1/2, while GDX added 1/3. Volume was what passes for average here these days. The gold shares are oversold and I'm getting a buy signal on multiple timeframes for GDX. The options are pricey but I am probably going to put in an overngiht order for the GDX February calls. This will be a hard trade for me to do because there is no reason that the gold shares simply can't continue lower as well. But the technicals say give it a try here so we'll see what happens. Mentally I'm feeling OK. The VIX was lower today but did close above the 50 day moving average. The market will probably be driven by earnings for the rest of the week since there isn't much on the economic data front due. Of course there's always headline risk out there. Fear of some kind of mass uprising during tomorrows presidential inauguration dominates the news. However like I've already stated, this notion seems like the least likely outcome to me. My guess is that is will be business as usual thanks to an overkill of military and police forces. Whatever it takes. The markets will forget about it by the close tomorrow. Perhaps my bullish stance and look for new all time highs will come this week. Asia was higher with the exception of China, while Europe was lower. We'll keep an eye on the overnight developments.

Volatility returned for expiration Friday as the Dow fell 177 points on heavy volume. The advance/declines were 2 to 1 negative. The summation index is still moving sideways. The overall market was weaker than the Dow. The Dow sold off early and was down almost 400 points in the morning. It made up what it could and then moved sideways for the rest of the day. Retail sales came in weaker than expected and that was an excuse to sell. The short term indicators on the S&P 500 have rolled over but we're still overbought on a weekly basis. We are still above the 50 day moving average short term. GE was off 1/3 on light volume. Gold dropped twenty bucks on a stronger US dollar. The XAU fell over 5 1/2, while GDX slid almost 1 1/8. Volume was average. Perhaps my idea for the GDX February calls is the wrong one. However we are oversold here now. One of the more reliable timing indicators for the gold shares is just about at the point of a buy signal. Another day like today could trigger it. I'll be keeping an eye on it at the beginning of next week. Mentally I'm feeling OK. The VIX jumped early this morning and finished with a gain. It's now above the 50 day moving average. The short term technical indicators are trying to turn back up. The decline in stocks could have been worse today. I'm not sure if the buying was for real or simply option expiration related. My thesis of new all time highs before expiration was wrong. Perhaps my take on things here is more bullish than it should be. We'll see what happens next week. Next week will be light on economic data but heavy on politcal intrigue. The new president will be sworn in with the threat of more violence in Washington. I do not think there will be any more riots there. The trial for impeachment of the former president could begin. We'll have to see how the market digests the news. There should be some earnings out as well. It will be a short week as we approach the holiday weekend now. Plenty of time to come up with a game plan for next week. The caveat here is the option premiums will be pricey due to the extra week in them. I'll be checking the charts as usual. Asia was mixed and Europe lower to close the week. It's Friday afternoon and time for a break.

Lower today as the Dow fell 69 points on heavy volume. The advance/declines were around 2 to 1 positive. The summation index is now moving sideways. I had expected higher prices during expiration week but that just isn't the case. The market seems to be running in place here. We'll see if we get any fireworks ahead of long holiday weekend tomorrow. GE was up a dime on light volume. Gold was up a couple bucks on the futures as the US dollar was a bit lower. The XAU and GDX had slight fractional gains on light volume. Gold and the gold shares have been moving sideways since their big drop last week. I'm not sure if it is a consolidation before heading lower or they're trying to form some type of bottom. We have the luxury of time for now as there's an extra week in the next option cycle. I am looking at the GDX February calls for the next trade unless we get a decent signal in the SPY. Mentally I'm feeling OK. The VIX was higher today and that fits with the decline. Most of the short term techncial signals here remain oversold. We are going to have to be patient for now because there just aren't any compelling techncial reasons to try the SPY options at this time. SPY remains overbought and we did have a bearish engulfing pattern today on the daily candlestick chart. But that's about it with other indicators not showing a sign one way or the other. Rolling into the next option cycle also puts the premiums at high prices. Therefore we'll just remain in focus and wait for an appropriate signal. Having no position is a position in itself. Europe and Asia were generally higher in last nights trading action. We'll see how expiration Friday goes tomorrow.

A mixed bag today as the Dow lost 8 points on good volume. The advance/declines were positive. The summation index remains in a downward channel, still trying to turn back up. Both the NASDAQ and the S&P 500 were positive today. They also both remain short term overbought. Not a lot of fireworks for option expiration week so far. The bacground now remains filled with political rhetoric and the coronavirus. Fear of more riots on January 20th dominate the headlines but the market chugs on. I still would not be surprised by new all time highs in the next couple of days but that's just a guess at this point. On the sidelines for now. GE was off about 1/4 but the volume was very light. Gold was off $5 on the February futures. The US dollar was higher. The XAU dropped almost 2 1/2, while GDX shed 3/8. Volume was light. Gold and the gold shares seem to be just marking time here but we'll have to see how the rest of the week plays out. Not completely short term oversold for GDX yet. I am looking at the GDX February calls but in no rush to purchase. Mentally I'm feeling OK. The VIX was lower today and that's a plus for the bulls. Short term oversold now for the VIX but it can stay that way in uptrends. We are still in an uptrend as far as I can tell with regards to the major averages. Again, I'll be looking for new all time highs before the close on Friday. Where we go after that is up in the air. The February option cycle has an extra week in it so the premiums will be high. We are also on the brink of a long holiday weekend. I'll sit back and watch for now. Europe and Asia were generally higher in last nights trade. We'll keep an eye for any ongoing developments.

It was an up and down session all day with the Dow gaining 60 points on heavy volume. The advance/declines were 2 to 1 positive. The summation index is still trying to make up its mind in a downwards channel. The S&P 500 remains short term overbought. My case for the SPY January puts has ended. Yes they might still prove profitable to try in the remaining days before expiration but it isn't worth the risk to me. With only three days left in the January option cycle the timing would almost have to be perfect. Had the market continued higher here early in the week, I probably would have given it a try. But we've already worked off some of the overbought condition. I can't rule out another run at new all time highs before the week is out. GE was up 1/3 on average volume and is getting short term overbought again. Gold had a bounce as the futures were up a dozen. The US dollar fell back today. The XAU and GDX had fractional gains on pretty light volume. They did finish well above the lows for the day. Getting short term oversold here but not there yet. Patience is the strategy for now before trying the GDX calls again. Mentally I'm feeling OK. The VIX was lower today and remained below its 50 day moving average. This would be beneficial to the bulls if it can continue lower tomorrow. We have yet to see the usual positive option expiration week bias exert itself. Not a big week for economic data. Some inflation numbers and then retail sales on Friday. We do have the beige book tomorrow. Not sure which way things will go here but would not be surprised with higher prices going into Friday. I'm on the sidelines with regards to any trades right now. Asia generally higher and Europe lower overnight. We'll see what tomorrow brings.

Some selling to begin the week as the Dow fell 89 points on good volume. The advance/declines were negative. The summation index remains in a downward channel. The overall market was much weaker than the Dow, with the NASDAQ leading the way lower. I'm looking at the SPY January puts for a short term trade this week but todays action may already be the beginning of a slide. The short term technical indicators for the S&P 500 are overbought and starting to roll over. That said, it is expiration week which usually has a positve bias. I'm watching things closely and will decide if a trade this week is worth the risk as time goes on. GE was up 1/8 on light volume. Gold was up almost $15 on the futures and the US dollar was positive as well. The XAU dropped 3 1/3, while GDX shed 3/4. Volume was on the light side. The gold shares continue to fall and they are not short term oversold yet. The recent bounce in the US dollar is one of the causes for the gold sell off. As long as it is just a bounce, gold will be moving back to the upside in a couple of weeks or so. I'll be looking at the GDX February calls once we've seen a bottom for the gold shares. The February options have an extra week in the cycle so there is no rush. Mentally I'm feeling OK. The VIX jumped up today but closed below its 50 day moving average. Where we go from here will tell us a lot about this market. More strength in the VIX will lead to a decent sell off. Or if we head lower from here perhaps the VIX can finally break through the 20 level. It's soemthing to keep an eye on. I'll be watching the SPY for the rest of the week and see if a potential trade appears. Asia was mixed and Europe lower overnight. We'll see how things go tomorrow.

Momentum rules for now. Weak jobs report? No problem, as the Dow rose 56 points on heavy volume. The advance/declines were slightly positive. The summation index is still in a downwards channel despite trying to turn back up. The overall market was much stronger than the Dow. It's a teflon market as nothing sticks as far as the bad news goes. Liquidity is king and plentiful at the moment. New all time highs on a daily basis. Starting to go straight up in the S&P. It won't end well but trying to call the end is fruitless. Still short term overbought but we'll probably just run things up into the option expiration. GE was up a few cents on lighter volume. Gold got clobbered today. The selling began overnight and simply continued for most of the day. The futures fell over $65 and broke all the recent support levels. The US dollar was up despite the weak employment report. The XAU lost 7 1/4, while GDX dropped 1 7/8. Volume was good. The gold shares did finish off of the worst levels of the day. GDX had a gap down at the open and that did in any stop loss orders. I dumped my GDX January calls for an 80% loss. Monday had a breakout for gold and the gold shares on good volume so I decided to chase the move. But the price action since then has been negative and the breakout proved to be false. I should have realized when gold dropped on Wednesday as the US government was under seige that it wasn't a good sign. Hindsight is always correct. Today we got a weak jobs number that normally would have meant a rally for gold. Instead it sold off even harder when the market in the US opened. I'm not sure what the reasons are but we've got to respect the price action. I'll wait for GDX to get oversold and maybe try the calls again. Mentally I'm feeling OK despite having the first trade of the year be a loss. I certainly didn't expect gold to fall off a cliff today. It is just another reminder that the markets go where they want. Considering the drop in gold itself, the gold shares didn't do too bad. The VIX was lower today and we're heading down to the important level of 20, which has contained the VIX for almost a year now. A drop below there would signal even a stronger rally for stocks. I don't see that happening immediately given the overbought condition for the S&P right now. But who knows? Perhaps the blow off top will climb to the moon. Plenty to ponder over the weekend and I'll be checking the charts as well. Europe and Asia were both higher to finish the week as the stock market party is going around the world. It's Friday afternoon and time for a break.

The rally continues as the Dow gained 211 points on heavy volume. It's as if Monday never happened. The advance/declines were positive. The summation index is still trying to turn back up. The overall market was stronger than the Dow with the NASDAQ leading the way higher. New all time highs in many of the major stock indices. No overhead resistance. Not completely short term overbought for the S&P 500 so there's probably more upside to come. At this rate the employment report won't matter because it will be viewed as a buying opportunity regardless. The bulls are in charge. GE lost a few cents on light volume. Gold fell five bucks on the futures as the US dollar was higher. The XAU and GDX had fractional losses on light volume. My GDX January calls are now showing a loss. Still short term overbought for GDX and we'll need to see some upside soon or this trade will be a loser. Perhaps the jobs numbers will get things going higher again. This trade is also running out of time and the time premium is getting sucked out of it quicker as we head to expiration. We'll see what happens tomorrow and take it from there. Mentally I'm feeling OK. The VIX was lower and closed below its 50 day moving average. Getting short term oversold here but not all the way there yet. The market is getting money thrown at it as it appears that Congress will be in a Democratic spending mood. We are also now seeing selling in the bond market on a large scale. This money is finding its way into stocks as well. Those are a couple of the fundamental reasons, we'll stick with the technicals. Not completely overbought yet but it is beginning to have the feel of a potential blow off top. Hasn't happened yet but it is something to keep an eye on. Price has now moved above the upper Bollinger band for the S&P. This can continue for a while but not indefinitely. It usually doesn't end well. Europe and Asia were both up in last nights trade. We'll close out the first week of 2021 tomorrow. All eyes on the employment report.

It was a stellar day for the Dow as it rallied 437 points on very heavy volume. The advance/declines were about 2 to 1 positive. The summation index is now trying to turn back up. It looks like the democrats will gain control of Congress as the Georgia election results come in. I did not see that happening but what do I know? Evidently traders feel this will help the big caps. The S&P wasn't up as much as the Dow and the NASDAQ posted a loss. We'll see how things play out going forward. The futures last night sold off pretty hard but when the real trading started buying led the way. Volatility has ramped up to begin the new year and I'm not exactly sure what that means going forward. I can say that with the Democrats in charge we'll see the usual tax and spend type of program. The market usually does OK with a blue control of things. Running out of time in the January option cycle and I don't have any SPY trades in mind right now. GE was up over 1/2 on good volume. It is an old style big cap name. Gold got clobbered and lost $35 on the February futures. The US dollar was little changed by the end of the day. The XAU was actually up a point, while GDX shed a nickel. Volume was average. Gold has a big drop and the gold shares don't react? That is the kind of activity that keeps me in the GDX January call trade that I hold. It is about break even after todays price action. Still overbought for the gold shares but todays action has me thinking that the trade could still work. Gold made it all the way back to the breakout point at $1900 and bounced. That could have been the technical snap back that we were looking for before things get going higher again. Or not. Time will tell on this one. Mentally I'm feeling OK. The VIX was all over the place and finished with a slight drop. The short term indicators here are now mid-range. The VIX could go either way from here based on that. The S&P 500 short term technical indicators are still overbought but not extremely so. There's some unrest in the nations capitol today but I think that the market will be more focussed on the jobs report Friday. I'm still looking for higher prices but the price action outside of the Dow today wasn't that constructive in my view. Asia was mixed and Europe higher in last nights trade. We'll keep an eye on the overnight headlines.

A bounce back today as the Dow was up 167 points on good volume. The advance/declines were almost 3 to 1 positive. The summation index is still tracking lower but trying to turn around once again. The overall market was stronger than the Dow. The market is trying to make up its mind on what to do here. The fact that we didn't see any downside follow through to yesterdays decline is a plus. I'm still in the bullish camp for now. Perhaps Fridays employment report will change things but that's just a guess as usual. Election results from Georgia will most likely dominate the headlines. I do not expect a democratic sweep and I expect that the market will like that. I could be wrong. The short term technical indicators for the S&P 500 are now trying to turn back up. GE was up almost 1/3 on average volume. Gold added another six bucks on the futures as the US dollar was lower. The XAU and GDX finished little changed on around average volume. The gold shares are due for a rest after yesterdays stellar gains. Short term overbought for GDX but it would stay that way if this is a rally that has legs. I did place an overnight order for some GDX January calls and it was filled when GDX pulled back early this morning. It is showing a small profit. I am a believer in the breakout that occurred yesterday. We'll see if that belief is justified in the days ahead. Mentally I'm feeling OK. The VIX was lower and that fits an up market. It did close above its 50 day moving average though. Tomorrow could tell us a lot about just where we're going. I think that we are going to take a run at new all time highs before the January option expiration. That's my take on things at the moment. The first trade of the new year is on. Hopefully I'll manage it better than most of last year. It would have been better to see some upside follow through with the gold shares today but I'm still confident that GDX will be higher before the options expire at the end of next week. We'll see. Europe and Asia were mixed overnight. We'll see what tomorrow brings.

2021 begins with a sell off as the Dow fell 382 points on heavy volume. The advance/declines were better than 2 to 1 negative. The summation index is still in a downwards channel. It could have been worse as we were off over 700 points during the session. The beginning of the year buying that I was expecting did not materialize. Instead it was a rush to the exits to begin the new trading year. I'm not sure what it means or how long it lasts. The short term technical indicators for the S&P 500 have now rolled over. They have plenty of room to go lower. The sell off was widespread today with both the NASDAQ and the S&P weaker than the Dow. We did see some buying after lunch in New York, which helped today from becoming a complete debacle. We'll see how it goes tomorrow. GE was off 1/3 on good volume. Gold was the star of the day. The futures there jumped over fifty bucks. The US dollar finished little changed on the session. The XAU climbed almost ten points, while GDX was up 2 1/2. Volume was heavy. I did have an overnight order for some GDX January calls but GDX had a gap at the open. The order never had a chance to be filled. Today gold broke through the downtrend line that has been in effect since August on heavy volume. This implies that the break out is for real. The XAU also broke out of a massive rectangle pattern that has been in effect for the same time. GDX has yet to do so but I expect that it will. I'm going to chase this move higher and placed another order for some more GDX January calls. It may or may not be filled. Obvious in hindsight but last Thursday was the ideal time for this idea. GDX is overbought but in rallies it can stay that way. We may see a snap back to the breakout points for gold and the gold shares. That would be the spot to purchase calls. But we may also just continue to trend higher from here with no return to the breakout. We'll see what happens overnight. Mentally I'm feeling OK. The VIX spiked higher and closed up over 4 points. The indicators here have turned up and have plenty of room to go higher. That implies some more selling to come. Not sure what led to the selling today. We'll get the jobs report on Friday, which should be a market mover. There's also a special election in Georgia that might cause some volatility after the results tomorrow night. For now we'll take note of what happened today and see where it goes tomorrow. Asia was generally higher but Japan was down. Europe opened the year positive. We'll keep an eye on the overnight developments.