September ended with a thud as the Dow fell 500 points on end of the month heavy volume. The advance/declines were negative. The summation index is moving down. The inflation data was a little worse than expected but after an initial small sell off the market had a morning rally. That didn't last either as sellers took over. The S&P 500 remains short term oversold and closed below the 3600 support level. The Dow led the way down today. We are long overdue for more than just the bounce that we saw on Wednesday but the market seems to have other plans. We have yet to see any sustained buying or a major bout of short covering. Getting even further away from the 50 day moving average for most of the major stock indices. That will not last forever. Gold was flat again on todays session, this time after being higher early on. The US dollar was little changed and interest rates rose a bit. The XAU gained 1 1/2, while GDX was up 3/8. Volume was good here again. Perhaps today was the day to dump the GDX October calls as GDX closed off of its highs for the day. Some of the very short term indicators got overbought. The GDX October calls that I have are still in the black though and the price and volume lately have been constructive to the bullish side. There's also 3 weeks left in the October option cycle so plenty of time remains. The weekly candlestick chart on GDX now has a bullish engulfing pattern on it. So I'm giving the gold shares the benefit of the doubt for now. Mentally I'm feeling OK. The VIX finished the day a bit lower and that does not fit with a down market. I'm not sure what's going on here with the VIX except that volatility is the rule for now. The S&P 500 closed on its 200 week moving average which should provide some support. However some of the other major stock indexes have already closed below this average on their weekly charts, including the NASDAQ and the Russell 2000. Next weeks price action will be perhaps more important than usual. Plenty of work to do over the weekend to get ready. Europe was up and Asia mixed again to finish out the trading week overseas. It's Friday afternoon and time for a break.

Back to the downside today but a last hour bounce kept things from being worse. The Dow fell 458 points on good volume. The advance/declines were 5 to 1 negative. The summation index is still moving down. The NASDAQ led the way lower. The S&P 500 is holding the 3600 for now and remains short term overbought. Still far away from the 50 day moving average here so I think that 3600 will hold for now. But that's just a guess on my part. We'll get inflation data tomorrow morning and see what happens after that. What we really need to experience is some kind of wash out to the downside event to know for sure that the decline is over. When everybody just throws in the towel on heavy volume. Hasn't happened yet. Gold was flat on the day after being lower early. The US dollar was lower for a second day in a row, while interest rates ticked up. The XAU was up 1 1/8 and GDX added a dime. Volume was good here again. The gold shares are starting to be out performers and we haven't seen that in a while. I'm still holding on to the GDX October calls and they somehow are still showing a small profit. What I've noticed here for the GDX call options is that the premiums are pretty high compared to where the underlying index is. That usually means that the market makers know something and are making you pay up to participate. We'll see how it plays out going forward. Mentally I'm feeling OK. The VIX was higher today but came off of its best levels. Yesterday I thought the VIX was implying higher stock prices. Lately I just can't figure this indicator out. Above the 30 level and still short term overbought. We'll get the Feds preferred inflation gauge tomorrow and that should provide for an interesting market open. My thought is that it could go either way. We also have the end of the month and the quarter on tap. Asia was mixed and Europe lower overnight. We'll close out the trading week tomorrow.

Today we got the inevitable bounce that we were looking for as the Dow soared 548 points on good volume. The advance/declines were better than 6 to 1 positive. The summation index is still moving down. Today we got some relief from the extreme oversold conditions that have stuck around longer than usual. Now we have to ask ourselves if the decline is over. It very well could be as the S&P 500 along with other major indexes managed to hang on at the June lows. However the same negative market fundamentals are in place. The only case for a rally would be technical in nature. The truth is nobody knows where we are going from here. Things could turn back down Friday with the inflation data. However with the both the short and medium term technical indicators for the market extremely oversold, the odds favor at least some kind of stabalization. Even if it's just sideways movement for a while. The S&P 500 is still pretty far away from its 50 day moving average. Gold rallied $33 on the futures. The US dollar finally had a down day and interest rates dropped. The XAU gained 6 1/8, while GDX rose 1 1/2. Volume was heavy to the upside. The gold shares as well were overdue for some kind of bounce after being beaten down for months. The same question can be asked of whether this is the end of their decline or just a one day wonder. The underlying fundamentals for gold haven't changed and they're negative. On the plus side the GDX October calls that I have are now shwoing a small profit. Yesterday I thought that I would just exit on a bounce. Today I'm considering holding them a bit longer. There is plenty of time in the October option cycle for this trade. I did place another order for the gold share calls overnight at a closer to the money strike price but it wasn't filled. At least the ideas are moving in the right direction. Mentally I'm feeling OK. The VIX dropped and implies higher stock prices to come. The short term indicators here have rolled over and have plenty of room to go lower. However I haven't been able to really figure out what's going on with the VIX lately. Todays rally out of nowhere also is classic bear market action. But I do think that we are in for some kind of pause at least for the recent decline. I could be wrong. Asia was lower and Europe slightly higher overnight. We'll keep an eye on tonights headlines.

It was a one day downside reversal for the Dow but that probably doesn't mean much in this extremely oversold market condition. The most watched index fell 125 points on good volume. The advance/declines were slightly negative. Opened higher, closed lower as the malaise continues. The NASDAQ managed a gain though. I still say that a bounce is coming this week as the S&P 500 is pretty far away from its 50 day moving average. I'm not saying the bounce will mean anything but the oversold condition must be relieved at some point. As I have already said we are at extremes for some of our indicators. Some of that pressure has to be worked off and then we will probably head even lower. A big rally out of nowhere is the hallmark of a bear market decline and I am fairly sure we'll get it this week before the end of the month. Gold was up a few bucks on the futures. The US dollar was a bit higher and interest rates were up. The XAU and GDX had fractional gains on light volume. My GDX October calls are solidly in the red. I did place an order for some more at a closer to the money strike price but the order was not filled. I'm still considering purchasing some more calls here but it would have to be before the overall stock market bounce that I'm looking for. I also am hoping to get out of the current GDX trade on that bounce because the entry was ill timed and I would like to either cut the loss or get out even. Could just be wishful thinking. Mentally I'm feeling OK. The VIX was up again today and is just about at 35 which has been close to the top of the range since the decline began in January. The VIX remains short term overbought on its technical indicators and has been for an extended period. That is unusual but we are in unusual times at the moment. Asia was slightly higher and Europe slightly lower overnight. We'll keep an eye on tonights developments.

We remain very oversold as the market is at least trying to halt the decline but the Dow lost 329 points on good volume. The advance/declines were around 5 to 1 negative. The summation index is still moving lower. The McClellan oscillator is now about as negative as it gets but that doesn't mean that we can't go lower. We are at extremes here for oversold market behavior. We will see a pretty good bounce at some point this week in my opinion. The NASDAQ is holding up better than the other major averages so we are probably at some kind of low even if it is just temporary. That said it remains to be seen when we'll see some kind of sustained rally in the near term. We did see an attempt at a bounce into the close again. Perhaps we can build off of that tomorrow. If not it will probably be just more of the same. Maybe the sidelines is the place to be for now. Gold fell again as the futures dropped around $25. Heading for the $1600 level or so it seems. The US dollar is moving straight up and interest rates continued to climb. The XAU lost 2 1/3,while GDX fell a little over 1/2. Volume was good to the downside again. My GDX October calls are solid losers but I am expecting a bounce for the gold shares soon as well. Very oversold here as well. I am considering getting some more of the GDX October calls at a closer to the money strike price tomorrow. What we are witnessing in the markets right now is an oversold extreme. It is the opposite of the overbought extreme that is occurring at this moment in the US dollar. Things that start to go straight up tend to always end with a move straight back down. We have a month to see a drop in the dollar and a rise for gold. That is why I'm considering getting some more of the gold share calls even though I'm currently in a losing position with them. I'll think about it some more tonight. Mentally I'm feeling OK. The VIX was higher, is short term overbought and above the 30 level. Volatility is the watch word. If the VIX gets above the 35 level, that could be about it for the decline in the near term. At the rate we're going we'll get there tomorrow. Summation index moving with big gaps to the downside and through the zero line. The McClellan oscillator approaching the -400 level extreme. Markets oversold and staying that way. These are things that don't happen very often. Opportunities are there if you can take advantage of them but be careful. Asia and Europe were down. We'll see how things go tomorrow.

The selling continues but buyers did appear in the final hour to keep things from getting worse. The Dow fell 486 points on heavy volume. The advance/declines were 7 to 1 negative. The summation index is in freefall. The McClellan oscillator is below -300 which doesn't happen very often. So we are in very interesting times. Short term oversold still for the major averages and staying that way. I'm expecting some kind of bounce that is way overdue but when remains the question. Most of the major stock indexes have made it to their June lows and now we will see if thay hold. The S&P 500 is pretty far from its 50 day moving average and should at least try to get back towards it soon. Things are overdone to the downside but there still are not a lot of reasons to be investing at the moment. However in the longer term the time to be buying is when everyone else is selling. Gold fell about $30 on the futures. The US dollar soared while interest rates were mixed. Rates did come back from their highs of the session, probably in a flight to safety. The XAU fell 5 1/4, while GDX dropped 1 1/4. Volume was heavy to the downside and prices set new yearly lows for the gold share indices. My open order for the GDX October calls got filled and it's already a loser. I'll probably be getting rid of this trade sooner rather than later. However it does have plenty of time left in the October option cycle. Mentally I'm feeling OK. The VIX climbed above 30 today before falling back. Overbought on the short term here but we've seen the VIX get higher in the current down trend that began in January. I'm not sure where the VIX goes from here as I haven't had a good feel for this indicator lately. Overall it was a rough week for stocks. September still has a week to go. We are quite oversold though and a big bounce out of nowhere is entirely possible. However the longer term outlook is not looking positive for stocks despite todays depressed levels. Plenty to ponder over the weekend. As long as the summation index is moving lower that will be the path for the stock market. Europe and Asia were down as it's a worldwide exit from equities. It's Friday afternoon and time for a break.

Attempting to stabalize as the Dow fell 107 points on average volume. The advance/declines were better than 4 to 1 negative. The summation index continues lower. The NASDAQ led the way down and that is not a plus. Short term oversold on all the major stock indices. The market is holding up rather well considering we are crossing the zero line on the summation index. Perhaps things will hold in here and we won't see the collapse that we are in the zone for. We'll know in the coming days. Blown out on the downside to be sure and maybe we'll get a near term bounce. But there are no good reasons to be an investor at the moment and there is more bad news to come as rates continue to climb. Gold rose $5 after being down more early on. The US dollar was higher along with interest rates. The XAU and GDX had fractional moves lower on average volume. Mentally I'm feeling OK. The VIX was lower today which doesn't fit with a down market. Lately the VIX has been leading the market on a short term bais. If that is the case again expect to see higher prices tomorrow. We'll see. On the sidelines with regards to any trades for now. The GDX October call order remains open. Europe and Asia were lower overnight. We'll close out the trading week tomorrow.

Volatility was the name of the game today as the Dow fell 522 points on average volume. The advance/declines were better than 2 to 1 negative. The summation index continues lower. The Fed came and went with the expected rise in interest rates. Stocks then bounced back and forth in a huge trading range before deciding to head lower and staying there. The S&P 500 remains short term oversold. Combine that with the summation index on the doorstep of the zero line and we could be looking at quite a drop in the very near future. Like tomorrow. Some of what we work with is telling us that we could see some strength in the near term as well. However it doesn't look like that means more than just a bounce in the ongoing down trend. Seasonality doesn't favor stocks right now as well. We closed on the low for the day. We'll stick with the summation index direction and look for lower prices going forward. A test of the June lows perhaps? Gold was up ten bucks on the futures in a flight to safety I'm guessing. The US dollar hit a new yearly high while interest rates were mixed. The XAU and GDX had slight fractional moves one way or the other on good volume. It appears that the gold shares can't make up their mind which way to go here. My open order for the GDX calls is still out there. I've decided to not chase anything here and if the gold shares drop perhaps the order will get filled. Mentally I'm feeling OK. The VIX was all over the map today as well. It did finish higher which fits a down market. It broke through the 28 level only to fall back, drop to 25 1/2 and then close at 28. Not sure exactly what to expect next from this indicator. More overbought than oversold on the short term indicators here. We've got the Fed out of the way and we'll have to see what the next catalyst is for stock prices. It appears that we are falling through the zero line on the summation index and that is a rare event. Look out below is the general rule when it happens. Tomorrow could be even more interesting than today. Asia was lower and Europe higher overnight. We'll keep an eye on tonights developments.

Bouncing around today as the Dow fell 313 points on light volume. The advance/declines were better than 4 to 1 negative. The summation index is moving down. We opened with a gap lower and were negative for the whole session. There were a couple of attempted rallies. The NASDAQ did hold up better than the other major averages. The S&P 500 remains short term oversold. Waiting on the market reaction to the Fed but what about after that? The summation index is close to the zero line, so the possibility of the market tanking is possible. There also aren't any compelling reasons to be buying stocks at this juncture. But the market goes where it wants. Option premiums are inflated for the SPY with the recent volatility combined with an extra week in the October cycle. So we will have to wait for the next trade there. Gold was off $4 on the futures. The US dollar was higher along with interest rates. The XAU fell 2 3/4, while GDX lost 2/3. Volume was light. Today the gold shares under performed. My open order for the GDX October calls remains out there. Mentally I'm feeling OK. The VIX rose today as the market dropped. Once again the 28 level contained the rise there. Getting short term overbought for the VIX but not all the way there yet. Not sure what to expect next here with the VIX but if it gets past 28 we'll see a big drop in stocks. The Fed will raise rates tomorrow, Jerome Powell will speak and who knows what the markets will do? My guess is that we'll either see a good short covering rally or another downdraft for stocks. One thing for sure is that it won't be boring. So we'll see. Asia up and Europe down in last nights trade. We'll see what tomorrow brings.

Waiting on the Fed for this post expiration Monday as the Dow gained 197 points on light volume. The advance/declines were positive. The summation index is still moving lower. Short covering is the most likely scenario for todays positive price action. However there is a potential positive divergence on the daily RSI indicator for the S&P 500. That could lead to a longer lasting move higher. But I don't see any huge rally in the works as the market has plenty going against it at the moment. Not the least of which is a restrictive Fed coming out with another rate increase on Wednesday. We are short term oversold on the major stock averages so a bounce here would not be out of the question. The summation index does continue to move down and is approaching the zero line. So the potential to fall apart is upon us as well. Gold was flat on the futures. The US dollar was a bit lower and interest rates a bit higher. The XAU was up 2 2/3, while GDX added 3/8. Volume was about average. The gold shares continue to out perform the metal. This is bullish. I still have my open order for the GDX October calls out there. The short term technicals for GDX are mid-range. My hope is we get some selling after the Fed and the order gets filled. If the gold shares continue higher from here it will just be a missed opportunity. I don't feel like chasing it here but that could change. Things are blown out to the downside for the precious metals complex. But the fundamentals at the moment don't inspire confidence of a sustained move to the upside. Just perhaps an October option cycle trend higher. We'll see. Mentally I'm feeling OK. The VIX was lower today and that fits with stocks gaining ground. This indicator looks like it wants to go lower which would mean more near term gains for stocks. It does remain above both the 50 and 200 day moving averages though. Hard for me to get a read on what the VIX is doing here lately. Not a lot of economic data due out this week. It's all about the Fed. Asia was lower and Europe mixed to begin the trading week. We'll keep an eye on tonights headlines.

Still heading lower as the Dow fell 139 points on expiration heavy volume. The advance/declines were around 3 to 1 negative. The summation index is heading down. It could have been worse as the Dow was off 400 at one point. Perhaps a temporary bottom is now in place or the buying simply could have been expiration related. We'll know more after the price action next week. The NASDAQ still led the way lower but it too came up from the lows of the day. The S&P broke through the 3900 level and closed below it. That is not a plus. The summation index is moving down and approaching the zero line. That means that the market has the chance to simply fall apart in the coming days. I'm not saying it's going to happen but the potential is there. We've got the Fed next week and it should be a waiting game until Wednesday. Perhaps we'll get some short covering ahead of the meeting because there's really no reason to be a buyer at this point. Gold bounced back six bucks. The US dollar was slightly lower and so were interest rates. The XAU and GDX had fractional gains on good volume. The gold shares did come up off of the lows for the session. My open order for the GDX October calls wasn't filled and I'm considering changing it to get the long position. The gold shares continue to act well relatively here and I do think that the October call options are the way to go. I'll reconsider this idea over the weekend. Mentally I'm feeling somewhat remorse for not holding on to the SPY September puts longer. I did not have the patience or the nerve to hang on until today which turned out to be the proper strategy. I had considered it on Tuesday after the big drop but could not bring myself to do it. Trading and regrets sometimes go hand in hand. More importantly though is the ability to forget the last trade and keep moving forward. Not easy but it is part of the game. The VIX was barely higher and capped again at the 28 level. The short term indicators here are trying to roll over which would imply higher stock prices for the near term. I'm not exactly sure that is going to happen. I haven't had a good handle on the VIX lately. Plenty of work to do over the weekend to get ready for next week. An extra week in the October option cycle doesn't make things any easier. Asia and Europe were both lower to finish the trading week. It's Friday afternoon and time for a break.

Continuing to the downside as the Dow fell 173 points on good volume. The advance/declines were better than 2 to 1 negative. The summation index is now starting to move down. The NASDAQ led the way lower. The economic data out today was mixed. It appears that the battle for 3900 on the S&P 500 is on. We did dip below there in the final hour today but made it back above by the close. Getting short term oversold on the S&P but not all the way there yet. I don't think that 3900 will hold but we'll see. Option expiration tomorrow so anything can happen. If the summation index does continue lower towards the zero line we may test the June lows. Hasn't happened yet and there is no impending doom but it's possible given where we are. The market hasn't been able to sustain a rally since the inflation report this past Tuesday. Gold fell $36 on the futures and is solidly below the $1700 level. The US dollar was steady but interest rates continued their climb. The XAU dropped 3 points and GDX shed 3/4. Volume was good to the downside. Despite the drop the gold shares continue to do better on a relative basis than the price of gold. My open order for the GDX October calls is still out there. The prices of the GDX call options for October are holding up better than you would think given the decline in the gold shares. That tells us something. I still like this idea and the order will possibly get filled if the S&P 500 breaks 3900 and takes the gold shares with it. Mentally I'm feeling OK. The VIX was slightly higher today. I'm still not getting a good read from the short term indicators here. Expiration Friday should be interesting. Asia was mixed and Europe lower in last nights trade. We'll close out the weeks trading tomorrow.

A day of stabalization as the Dow rose 30 points on good volume. The advance/declines were slightly positive. The summation index is beginning to move sideways. It was back and forth for much of the session but no big moves either way. The NASDAQ was the leader today but we don't know if the decline is all of a sudden done. It is option expiration week so there are plenty of things in play. The fact that we didn't follow through lower today is a plus for the bulls. The short term indicators for the S&P 500 are not overbought or oversold. With only 2 days left in the September option cycle the risk was too much for me to hold on to the SPY puts and I sold them today. The exit was poor as the market rallied in the final half hour and I simply got out. Had I been more nimble I would have had better results. The profit was 400% in two days but it should have been better. I also didn't have the guts to hang on until Friday but we'll see where we go from here. Gold was off a dozen on the futures. The US dollar was lower and interest rates ticked up. The XAU and GDX had slight fractional moves one way or the other on lighter volume. The gold shares continue to hold up rather well despite gold itself. My open order for the calls remains out there. Mentally I'm feeling a bit frustrated as I did not exit the SPY trade in good fashion. I did have a chance for better profits but wanted to see how the close went. Unfortunately it went against me. However you've got to keep moving in the game and that trade has been completed so we'll have to move on. October has an extra week in the option cycle so premiums will be higher than usual. The VIX dropped as the 28 level has proven to be a ceiling here lately. The short term indicators here are mixed and I'm not getting a good feel for what's about to happen with the VIX next. Plenty of economic data out tomorrow led by the retail sales numbers. Europe and Asia were lower overnight. We'll see what tomorrow brings.

Sometimes the market doesn't act rational. Today was one of those times. The Dow got clobbered when the inflation report came in hotter than expected. The most watched index fell 1276 points on average volume. The advance/declines were 8 to 1 negative. The summation index has turned back lower. Not sure if the summation index will track sideways or start heading down to the zero line. The NASDAQ led the way lower and lost over 5%. Major markets opened with a gap lower and traveled down for much of the session. The S&P 500 is close to the support at 3900. What happens there will tell the story as 3900 is the line in the sand for the bulls. It is expiration week so anything can and will happen. My SPY September puts are in the black. Now the question is when to sell them. I suppose we'll keep an eye on the 3900 level and take it from there. The stop loss order has been modified to lock in a profit if the market turns back up here. Gold was off over $25 on the futures. The US dollar resumed its climb higher as did interest rates. The XAU fell 4 1/4, while GDX lost a point. Volume was good to the downside. The short term indicators have moved lower for GDX. However the gold shares, despite todays losses, held up rather well. My open order for the GDX October calls remains in place. Mentally I'm feeling OK. The VIX jumped and is back above its 200 day moving average. The short term indicators here are mixed. We closed at the recent highs for the VIX at 27 and change. Yes, it could go higher but whether or not it does is the question. Only 3 days left in the September option cycle. We'll get producer inflation data tomorrow and I don't think it will be viewed like the consumer numbers today. I could be wrong. Retail sales and other data due Thursday. The market will have plenty of excuses to go one way or the other. However after todays debacle it will be hard to see a quick turnaround for stocks. But anythings possible in this game. Asia was up and Europe down in last nights trade. We'll keep an eye on the overnight developments.

A positive start to expiration week as the Dow gained 189 points on light volume. The advance/declines were 3 to 1 positive. The summation index is turning back up. Once again the NASDAQ led the way up and that's a plus. The S&P 500 broke through the near term down trend line. The short term indicators here are moving higher with room to go. It looks like there is no way to go but higher from here. That said, I did purchase the SPY September puts today ahead of tomorrows inflation report. My entry could have been a little better but it wasn't bad. The closing price is right about where I got them this morning. This trade will hinge on the reaction to tomorrows data. We do not trust light volume rallies and that is what we've witnessed here. Gold was up $7 on the futures. The US dollar was lower and interest rates were steady. The XAU was up 1 1/2, while GDX gained 1/3. Volume was about average. The gold shares have been acting much better lately. They are approaching short term overbought but aren't there yet. Any pullback would be a chance to get the GDX October calls in my opinion. My open order for them is still out there. Mentally I'm feeling OK. The VIX was up today and that does not fit with a positive stock market. Not sure what it means but it did close back above the 50 day moving average. It could make for an interesting session tomorrow. The consensus is for a benign print on the consumer inflation data. We cannot predict the numbers but it's safe to say they'll have an effect one way or the other. Sticking with the technicals is always the way to go in our opinion. Our view is that we got the light volume rally off of the recent lows that we were looking for and an attempt at a short term trade now involving the SPY September puts is worth the risk here. We'll find out tomorrow if it was the proper idea. Much of Asia was on holiday but open markets were higher. Europe was up as well. We'll see what tomorrow brings.

More upside today as the Dow gained 377 points on light volume. The advance/declines were 5 to 1 positive. The summation index is starting to try and turn around. Once again the NASDAQ was the leader. I did place an order for the SPY September puts but it wasn't filled. I'll probably try again on Monday because we are seeing a light volume rally going up to the near term down trend line in the S&P. It is possible that I'm too late though. It all depends on the price action Monday. The short term technical indicators for the S&P along with the other major averages have turned back up. So we also have the possibility that a bottom is in place and that the rally for the past three days will continue. But you have to pick your side and for now I'm going with a bearish scenario at the trend line. Inflation data on Tuesday will provide some answers when we get the market reaction to it. We'll have all weekend to decide what to do. Gold rose $6 on the futures. The US dollar was lower and interest rates were steady. The XAU was up almost three points and GDX gained 3/4. Volume was about average. The gold shares are out performing the metal itself and this week is the first time we've seen that for a while. It's a positive. Any pullback in the gold shares can be bought in my opinion. But once again we may already be too late if the gold indices simply continue to move higher. My order for the GDX October calls remains out there. Mentally I'm feeling OK. The VIX continued down and there's still some room on the short term indicators to go lower. It fits with the higher stock prices that we're seeing. Perhaps we should just pay attetion to what's happening here but we'll know more on Monday. We can make a case for the S&P to get to 4100 before a pause but that would put it through the down trend line. It did close above its 50 day moving average today. There is also now a bullish engufling pattern on the weekly candlestick chart. So being bullish here has its backers too. Plenty to ponder over the weekend. Europe and Asia were both higher to close out the week as there seems to be a better tone for stocks at the moment. It's Friday afternoon and time for a break.

Continuing higher today as the Dow gained 193 points on light volume. The advance/declines were positive. The summation index is still moving down. We bounced around today but managed to finish near the highs for the session. For now it is fitting in with our scenario of a light volume rise to the near term down trend line in order to try the SPY September puts. But that doesn't mean that it's going to happen as a bottom is in place and it could lead to a longer rally. The short term technicals for the S&P 500 have turned up and have plenty of room to move higher. The potential inverted head and shoulders pattern is still there on the S&P and the NYA. So we have a lot to think about in the coming days. Do we want to be short going into the weekend if we see more upside tomorrow? Do we wait until before the inflation report that is due out on Tuesday? Or do we simply step aside and let the market go where it goes? Always plenty of questions in this game. Gold dropped $9 on the futures. The US dollar was steady and interest rates ticked higher. The XAU rose 1 3/8, while GDX was flat. Volume was average. The gold shares held up better than the metal itself and we haven't seen that in a while. I'm still a fan of the GDX October calls and my open order remains in place. Mentally I'm feeling OK. The VIX continues to fall and it closed below its 50 day moving average. There's also plenty of room on the short term indicators here for the VIX to move lower. That implies higher prices near term for stocks. That fits with our hopes of a rise to the down trend line on the S&P. The problem is that it could mean a much better rally and a break to the upside of that line. We will have to make a decision rather soon, as in the next couple of trading sessions. We're also running out of time for this option cycle so the risk is high. The option premiums will be moving quickly and it has already been established that the short term trades are not my best. However at this point I'm still inclined to try the SPY put trade if we move higher towards that down trend line. Asia was mixed and Europe generally higher overnight. We'll close out the shortened week tomorrow.

Looking for a bounce and we got one today as the Dow climbed 436 points on light volume. The advance/declines were better than 3 to 1 positive. The summation index is still moving down. The NASDAQ led the way higher and that's a plus for the bulls. The question now is whether or not the bottom for this move lower is in or if this is just a bear market bounce. It feels like the latter since the up move came out of nowhere, which is often the case in bear markets. We still remain short term oversold for the S&P 500 despite the move higher today. The light volume also doesn't inspire us to believe that this is more than just a bounce in an ongoing down trend. The next down trend line for the S&P 500 comes in about 100 points from here. Will we get there or have the patience to wait? The trading is never easy and time is running out in the September option cycle. Gold jumped $15 on the futures. The US dollar was lower along with interest rates. The XAU added about 3 2/3, while GDX was up 7/8. Volume was good and the short term technical indicators for GDX have turned back up. My open order for the GDX October calls wasn't filled and it appears that it won't be. I'm still leaving it out there but it doesn't look like it will get filled if this is indeed a bottom for the gold shares. Mentally I'm feeling OK. The VIX dropped and closed back below its 200 day moving average. The short term indicators here are rolling over which implies more gains to come for stocks. It is another sign that the potential is there for the recent decline to be over. However we'll only know that for sure as time goes on. Meanwhile we have to trade with whatever information that we have today. If we continue to move up with light volume I will probably try the SPY puts before expiration next week. I'm also a believer in the gold shares right now so I'll be hoping for some near term weakness again there to try the October calls. Markets rarely cooperate. Asia was lower and Europe higher with the exception of the FTSE overnight. We'll see how things go tomorrow.

Slightly lower to begin a shortened trading week as the Dow fell 173 points on average volume. The advance/declines were better than 2 to 1 negative. The summation index continues lower. Once again the NASDAQ led the way down but it wasn't a huge decline. Short term oversold and staying that way for the major averages. I'm still looking for some kind of decent bounce in stocks this week. Hopefully that would set us up for the SPY September puts. But the market rarely cooperates with the best laid plans. Plenty of bears out there now so a move in the other direction would not be a surprise. Running out of time in the September option cycle. Gold dropped $11 on the futures. The US dollar was higher along with interest rates. The XAU fell a point and GDX lost 1/3. Volume was average. My open order for the GDX October calls remains out there. We'll need to see more of a decline in the gold shares for this order to be filled. Not sure it's the best idea but the gold shares are blown out to the downside on all the time frames. The indicators also remain oversold as they have been for a while. Mentally I'm feeling OK. The VIX was higher today and that fits with a down market. Short term overbought here and staying that way. That condition won't last forever but we certainly don't know when it will end. It lends to the possibility of more downside for stocks if it persists. A positive is that the S&P 500 has held the 3900 level so far. We remain at a critical juncture. Europe was up and Asia mixed in the overnight trade. We'll keep an eye on tonights headlines.

A one day reversal back to the downside today as the Dow opened higher and closed lower. The most watched index fell 338 points on light volume. The advance/declines were negative. The summation index is moving down. The market liked the jobs report as we were higher early on. Then about halfway through the session the sellers took over and moved things lower until we reached the support at 3900 where we got a slight bounce into the close. The NASDAQ was the downside leader again. We are short term oversold and I expect to see a better bounce than what we just got. If 3900 can't hold things together for the S&P 500 we'll probably have to head down and test the June lows. However I do expect things to hold up here at least on a temporary basis. The breadth wasn't too bad today despite the drop. Plus the light volume ahead of a long holiday weekend wasn't a surprise. When everybody gets back to their desks next week we'll see where we're going. Gold saw a bounce today as the futures rose $11. The US dollar was a bit lower and interest rates dropped. The XAU rose 3 1/3, while GDX added 3/4. Volume was good to the upside so perhaps the decline in the gold shares will come to an end. Still short term oversold here despite todays gains. I'm leaving in my order for the GDX October calls. May have missed the chance though if the gold shares simply move up from here. Mentally I'm feeling OK. The VIX had a wide range today and finished just a bit lower from yesterdays close. I still can't figure out where the VIX is going here but it remains short term overbought. What we can say for certain is that volatility has returned. Only nine days left in the September option cycle. We now have a down trend line for the S&P that comes in at 4100. If we can somehow make it up close to there before expiration we'll try the SPY September puts. But that seems like a remote possibility as the S&P is below its 50 day moving average now and moving lower. We'll go over the charts as usual this weekend with an extra day to try and develop a strategy. Europe higher and Asia lower to finish the week. It's Friday afternoon and time for a rest.

We had a one day reversal to the upside as stocks opened lower and closed higher. The Dow gained 146 points on average volume. The advance/declines were better than 2 to 1 negative. The summation index is moving down. Finally at least some kind of bounce in the market that was long overdue. Possibly just some short covering but the indicators were extended to the oversold side and some kind of relief was necessary. Perhaps we'll see some follow through after the jobs report on Friday. But the fundamental backdrop of higher rates for a longer time remains. The 3900 support level for the S&P 500 has held up for now. As long as the summation index is heading lower, the overall trend remains down. Gold dropped twenty bucks on the futures. Getting close to the $1700 level here. The US dollar was higher along with interest rates. The XAU lost 3 1/3, while GDX sank another 3/4. Volume was good to the downside again. The gold shares are blown out to the downside any way you look at it. I have placed an order for the GDX October calls and I'm leaving it out there. It will take some more decline in GDX to get filled. The October option cycle has an extra week in it. Mentally I'm feeling a bit tired. The VIX was lower today and remains short term overbought. On the daily chart it looks as though the VIX has put in a short term top. This would imply that we will see some near term strength in the stock market. Perhaps that will set us up for the SPY puts before the September expiration. However the potential S&P 500 inverse head and shoulders pattern remains intact. For now we'll wait and see what the reaction is to the employment report. Europe and Asia were both lower overnight. We'll close out the trading week tomorrow.