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Monday, July 01, 2019

Well we made it through the weekend unscathed and the Dow rose 117 points on good volume today.  The advance/declines were positive.  The summation index is moving up.  The US/China meeting didn't really do anything but it was better than more tariffs.  So the market rallied.  We did finish well off of the highs for the day but at least it was positive.  Volume was good and that's a plus.  It's a short holiday week with an early close on Wednesday.  Thursday the US markets will be closed.  If not for the employment report on Friday, most traders would take the rest of the week off.  We did hit another new all time high for the S&P 500 today but now I don't know how much further we can go in the near term.  We are now right at the top of the Bollinger band there.  I'm not bearish here but we'll probably be in a holding pattern waiting on the jobs report.  GE was up 1/8 on light volume.  Gold took a beating today as it doesn't like peaceful resolutions.  The gold futures fell $27 as the US dollar was sharply higher.  The XAU dropped 2 7/8, while GDX lost almost a point.  Volume was heavy.  This fits in with the scenario of falling back to the breakout point for the gold shares.  That would be 23.5 for GDX and the spot to try the longer term calls there if you're so inclined.  I myself would like to try them if all goes according to plan.  Mentally I'm feeling OK.  The VIX dropped a full point today and has pierced the lower Bollinger band.  That is usually the spot where things would turn around.  This implies some volatility retuning to the marketplace in the near term.  I'm not so sure that will happen given the holiday week time frame.  But it's something to keep an eye on.  I myself will be keeping an eye on the gold shares and looking for an entry point.  More downside would be a plus as it would shake out whoever chased the recent move higher.  There's always the chance that my idea for the gold shares here is completely wrong as well.  However I am a believer in price and volume.  The recent move up had those requirements.  Europe and Asia were both higher overnight.  We'll see how things go tonight.

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