Friday, October 02, 2015
Today was a one day reversal to the upside as the Dow opened 250 points lower only to turn around and finish the day up 200. Quite a ride. The advance/declines were almost 3 to 1 positive and the volume was heavy. Today should turn the summation index back up. The employment report was weak, which was met with selling. But things turned around and we closed on the high of the session. That's bullish. I'll go out on a limb and declare this decline over. A double bottom is in place and declines can be bought. The potential positive RSI divergence has panned out to be valid. Now of course things can change on a dime in this game but the odds are we've seen the lows for this move. My October SPY calls are now in the black. GE turned around as well and gained 1/4 on good volume. It appears that it is going to be too late to try the November calls there unless I move to a higher strike price. Not sure that I want to do that. Gold rallied on the weaker data as the futures here rose over twenty bucks. The US dollar was slightly lower. The XAU gained 3 7/8, while GDX rose over a point. Volume was heavy. Perhaps we'll see more upside for gold but there hasn't been a sustained rally here for months. Mentally I'm feeling OK. Getting short term overbought already on some daily indicators for the major stock indices. Upside on Monday would take us there. The S&P 500 is just getting through the daily chart downtrend line that began in August. Although I would like to hold the SPY October calls that I have for a longer time, getting out on any strength Monday might be the prudent path. I've held onto this trade longer than anticipated already. But I am pretty sure the stock indexes are going only higher from here. The weekly candlestick charts look bullish now as well, with plenty of room to the upside for the technical indicators. Today was a pretty good short squeeze on the bears. So there will be plenty to think about over the weekend. Gold had a nice move higher but we haven't seen any rally hold up here for a while. Until we get through the $1150 level on good volume, the yellow metal appears to be stuck in a trading range. I'll be checking the charts out over the weekend to come up with some sort of game plan for next week. For now it's Friday afternoon and time for a break.
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