The oversold bounce finally arrived after the Fed as the Dow soared 430 points on heavy volume. The advance/declines were over 10 to 1 positive. We gyrated a bit after the Fed but then came a powerful final hour rally. The Fed promised to keep rates low until the middle of 2013. Really? That must be some crystal ball they've got. But that doesn't really matter. What matters is what the markets say. We reached a new extreme negative on the McClellan oscillator and had to start moving higher. I placed an early order for some OEX calls but it wasn't filled. There is so much premium in the index options at this point that they are overpriced in both directions. I still think some money can be made though. I also don't think that the bottom of this rally will mark the low. We'll see. GE was up 1/2 on extreme volume. I'm still thinking of the January calls here but would like to see some base building. Plenty of time for this trade. Gold had a wild day. It reached a new all time high as it was up over $30 at one point. However it has fallen about $50 from there at the moment. The GLD daily chart shows a heavy volume reversal to the downside. Gold could be taking a rest here but we'll see. The US dollar fell on the Fed statement. The XAU followed the overall market higher by 8 1/2. ABX up 1 1/2, GG rose 1 2/3 and NEM gained 1 1/4. Volume was heavy here. My ABX calls are still showing a profit but that won't be the case if we see a sustained sell off in gold. There's still plenty of time for this trade to work but if the stock indices get choppy it could complicate things for the gold shares. Not to mention we will eventually head back down to test this recent low in the stock indices. Mentally I'm feeling OK. The expected bounce appeared. Looking back at previous extreme oversold readings shows that most likely there will be more downside to come. If we reach short term overbought before next Fridays expiration, I'll try the OEX puts. I'm not sure this rally has long legs. But it's only Tuesday. Gold certainly looks like it reversed to the downside today so I will have to reconsider this ABX trade as well. I'll ponder things tonight and try to come up with some sort of game plan going forward.