Tuesday, October 06, 2015
A mixed session today after the nice recent run up in prices as the Dow added 13 points on heavy volume. The advance/declines were positive. The summation index continues higher. The small stocks and the S&P 500 were lower. A pause here would not be out of the ordinary. Short term overbought for the major stock indices. I will be looking at the SPY October calls again on more weakness. However the ideal scenario would be to purchase the at the beginning of next week. We'll see. GE was up another 1/2 and the volume was very heavy. GE is poised to attack its high for the year at the $28 level. If we get through there, $30 is on the table. Probably too late for the November calls. Gold found buyers again as it rallied about $10 on the futures. The US dollar was lower today. The XAU rose 2 1/8, while GDX gained 1/2. Volume remains good here. Perhaps a bottom is in place for the gold shares. Mentally I'm feeling OK. Patience is required now before the next SPY trade. I'm also considering going out to the November options here as well. The summation index has turned around and that is a major positive. If we get through the 500 level there, I think that the all clear sign will be given. The double bottom in place on the daily charts for the major stock indexes appears to be valid. Only a break below the lows would negate that. I don't think that will happen. Silver has made it back to its 200 day moving average. Can gold get there? Gold needs to break through the resistance at the $1150 level to turn positive in my opinion. We are knocking on the door there. Silver and the gold shares leading is bullish. So we'll see. We'll keep an eye out on the overnight action and see what tomorrow brings.
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