A mixed bag to end the month as the Dow rose 41 points on light volume.  The advance/declines were slightly positive.  The summation index is still moving sideways.  The overall market was weaker than the Dow, with the NASDAQ lower.  The market still appears to be figuring out what to do here as we remain stuck in the congestion zone.  Still below the 50 day moving average on most of the major stock indices.  Perhaps things will become clearer next week.  GE was up 1/8 on light volume.  Gold was off around $5 as the US dollar was higher.  The XAU and GDX had fractional gains on lighter volume.  Mentally I'm feeling OK.  A long weekend ahead as summer unofficially ends.  Most players will return next week and we'll see where we go.  The VIX was higher today and we'll take our cues from there for now.  16 is the level to keep an eye on.  The short term technical indicators there remain mid range and it could go either way.  We are also still at the mercy of any US/China headline over the coming days.  I'm in an unusual position of being away from my desk starting the middle of next week.  The blog will be silent but I will try to find a computer for an update during my trip away.  However I will not usually have computer access.  That is keeping me on the sidelines here along with the non resolution of this one month trading zone.  Unless there is a really good signal one way or the other, I'll be waiting until my return for the next trade.  That goes for the gold shares as well.  I'll be checking the charts over the weekend as usual but nothing stands out to me at the moment.  There's three weeks left in the September option cycle, so there's plenty of time for a trade.  Next weeks economic data will be highlighted by Friday employment report.  Europe and Asia were higher to finish the month.  It's Friday afternoon and time for a break.

Continuing higher with a gap at the open as the Dow added 326 points on light volume.  The advance/declines were almost 3 to 1 positive.  The summation index still has a sideways range but another plus day should turn things back to positive.  Lack of trade war negative headlines would be the most likely reason for todays advance.  But we all know that can change in a flash.  The S&P 500 is still locked in the congestion zone that began at the beginning of the month but appears to be ready to break through to the upside.  There is room on the short term technical indicators to go higher.  That doesn't mean that they will but the odds are getting better.  First we'll have to see if the S&P can get through its 50 day moving average.  GE was up over 1/8 on OK volume.  Gold was down a dozen as the US dollar was higher.  The XAU fell 2 3/4, while GDX shed 3/4.  Volume was good.  GDX almost hit the 31 target that we had in mind.  However I don't want to say that the rally here is over.  But it may stall on an overall market rally if the US and China tone down the rhetoric.  The gold shares are overextended and haven't gotten oversold in three months.  Mentally I'm feeling OK.  The VIX has rolled over along with its indicators.  The 50 day moving average there comes in at the important 16 level.  If it gets there we'll be watching closely to what happens.  A break below 16 and then I'll be believing that whatever rally is taking place is for real.  However that may also be the spot to take up new short positions instead.  That's what we'll be looking at if we get there.  Let's see if the S&P can break out of its congestion zone and take it from there.  Tomorrow will be the last trading day of the month before a long weekend.  A positive session would be quite a plus for it would suggest that traders are not afraid of being long over an extended weekend.  So we'll see what happens and go from there.  Asia was mixed and Europe higher overnight.  We'll close out the week and the month tomorrow. 

Back and forth as the Dow gained 258 points on light volume.  The advance/declines were a little better than 2 to 1 positive.  The summation index is back to tracking sideways.  The overall market was weaker than the Dow and that is not a positive.  Volume is lighter on the rallies than it is on the declines.  The S&P 500 has managed to hold above the near term support at 2825 and that is a plus for now.  The technical indicators remain in the middle of the range so the jury is still out on which direction we head on this consolidation.  I was pretty sure we would be heading lower soon but perhaps I am wrong here.  When markets go down they usually do so without a lot of indecision like we're seeing now.  Time will tell but I'm not taking a position here one way or the other.  GE was flat on lighter volume.  Gold was pretty much flat as well.  The US dollar was higher.  The XAU and GDX were little changed on average volume.  Remaining overbought here but when hasn't that been the case in the past three months?  Mentally I'm feeling a bit tired.  The VIX is either putting in a short term top here or consolidating before moving higher.  We'll probably know in the next couple of sessions.  Getting ready for a long holiday week for Labor Day and then all the players shall be back.  What would really surprise me here is if we made an attempt back to the 3000 level in the S&P.  But I have seen rallies before in the beginning of September after a weak August.  It throws players for a loop.  I'm not saying it will happen this time around but it is possible.  With the technical indicators mid range you cannot count that possibility out.  I'll be leaving on a trip next week so the prudent thing for me to do is stay on the sidelines and wait to trade when I'm back at my desk.  But if I think there's a decent opportunity I may have to leave a position out there.  I'll be back the day of the Fed announcement in mid September.  For now patience is the name of the game for me.  Europe and Asia were mixed overnight.  We'll see what tomorrow brings.

Back down today as the Dow lost 121 points on good volume.  The advance/declines were almost 2 to 1 negative.  The summation index is drifting lower but isn't decisive just yet.  A plus day tomorrow would put us back in sideways mode there.  But I still think that we're going to be heading down as nothing has changed in the US/China tariff war.  The short term technical indicators for the S&P have rolled back over.  Volume also picked up to the downside today and that isn't a positive.  RUT set a new recent low as well.  Lots of time in the September option cycle but with a trip in a week for me I may have to wait things out.  GE was off 1/8 on average volume.  Gold continues to shine as it gained $15.  The US dollar was slightly lower.  The XAU added 3 1/3, while GDX rose 7/8.  Volume was good.  We're at new recent highs for the gold shares and it has been quite a run.  We are short term overbought here once again but there seems to no stopping the money flowing into gold.  GDX is almost at the resistance target of 31.  Maybe try the puts there?  That would take some guts as the rise here is for real and there is no telling how high it will go.  There was a potential negative divergence on the daily RSI for GDX but it didn't happen and now we're moving higher.  I'd still like to wait until at least an oversold reading back to the 50 day moving average before trying the calls again.  But that strategy has led me nowhere in this rise.  Mentally I'm feeling OK.  The TRAN looks like it wants to break the near term support that it has here and that would not bode well for the overall market.  Unless we see a turnaround tomorrow things could get worse before they get better.  The short term technical indicators for the VIX are at the midpoint.  So things can go either way here.  The prudent thing for me here is to stay on the sidelines but you won't make any money that way.  Won't lose any either.  Europe and Asia were generally higher in last nights trade.  We'll keep an eye on the overnight headlines.   

A surprise to the upside in my mind as the Dow opened higher and closed up by 270 points on light volume.  The advance/declines were 2 to 1 positive.  The summation index is tracking sideways for now.  The Dow somehow held up here and didn't follow through to Fridays downside.  Support on the S&P 500 held up as well for now.  But the rally today was on light volume, so we'll have to wait and see where we go from here.  The trade tariff background noise hasn't gone anywhere.  GE was up a few cents on average volume.  Gold was flat on the session despite a higher US dollar.  The XAU and GDX finished little changed on average volume.  The gold shares are getting back to overbought on a short term basis again.  I'm still waiting for some kind of oversold readings here.  Mentally I'm feeling OK.  The VIX turned around today but that doesn't mean it can't turn back tomorrow.  I'll be keeping an eye now on the 50 days moving average here as the support.  I'm still in the camp that the recent lows will be taken out in the S&P.  Exactly when is the question.  Not a lot of economic data out this week and we have a long weekend coming up.  So perhaps we will have a quiet week ahead because today really should have been lower in my mind.  I thought that quite a few traders would be away from their desks this week and perhaps the light volume is a reflection of that.  We'll see how the rest of the week plays out.  Asia was lower and Europe mixed last night.  We'll see how it goes tomorrow.

Stocks got clobbered today as the US/China trade war heated up again.  The Dow lost 623 points on heavy volume.  The advance/declines were 6 to 1 negative.  The summation index is back to moving lower.  The headline risk market environment persists.  The 50 day moving average contained whatever gains we managed in the S&P and now we're heading lower.  Forgotten in todays market action was anything said by the Fed chairman Powell at Jackson Hole.  The technical indicators for the major averages rolled back down and that does not bode well for next week.  The rallies can be shorted scenario remains in place.  The near term support for the S&P is at 2825 but I doubt that will hold.  The 200 day moving average comes in at 2800.  I think we're headed for the next support under that at 2725.  Yesterday or early this morning was the ideal time to purchase the SPY September puts even though the premiums were high.  Not sure if we'll get another chance.  GE fell about 1/4 on very heavy volume.  This stock is being completely driven by the news of an accounting problem there.  However there are also some unknown short sellers that are trying to profit off of the news.  The question is if the news is real or fabricated for the sake of a short sell gain.  Stay tuned on this one.  Gold surged with the drop in equities.  The yellow futures climbed almost $30.  The XAU was up 3 3/4, while GDX gained 1 1/8.  Volume was heavy.  It looks like I missed the opportunity here as well.  We haven't gotten completely oversold here in almost three months.  I should maybe just hop on board because the option market here looks like it is set up for the September strike on the call side.  Mentally I'm feeling OK.  The VIX held at its 50 day moving average and could not get through the 16 level.  This says more volatility is coming.  Along with more downside as well.  You can make a case that the major stock averages have now put in a continuation flag formation off of the initial drop that began at the beginning of August.  That's what it looks like after today.  I'll be watching for the S&P 500 to head down to 2725 and we'll have to hope that it holds on there.  The next support after that is much lower.  That's my prognosis for now despite whatever we hear about the tariff tiff.  The news there can cut both ways so you really have to be on your toes.  I did originally think that next week would be quiet but after today I doubt it.  Traders will vacation at their own risk.  Asia was higher and Europe lower in last nights trade.  I'll be checking the charts as usual but it won't take a genius to tell you that we're headed down.  It's Friday afternoon and time for a break.

A mixed bag today as the Dow rose 49 points on light volume.  The advance/declines were slightly negative.  The summation index is moving sideways.  The overall market was weaker than the Dow with the S&P along with the NASDAQ lower.  It was a volatile session with selloffs both early and late.  We had a gap higher at the open and then a 30 point sell off in the S&P.  The market worked its way higher for the rest of the session until the final five minutes that took us back to negative on the day.  The S&P 500 remains below its 50 day moving average and the short term technical picture is now mixed.  What happens here will determine a lot.  The volume has lightened up this week at the 50 day moving average for the S&P.  If we can get through there we'll see higher prices.  If not, we'll be headed lower again.  GE was up a few cents on good volume.  Gold was off $8 and the US dollar was slightly lower.  The XAU and GDX had slight fractional losses again on average volume.  Maybe we can finally see the gold shares reach oversold territory.  Mentally I'm feeling OK.  Chairman Powell will be speaking tomorrow and that should move things one way or the other.  The VIX bounced off of its 50 day moving average again today and closed above 16.  What happens here must be closely watched as well.  A break of the 50 day average should lead to higher prices.  However we are now oversold here and a rising VIX is a distinct possibility as well.  The option premiums remain steep and I'll be waiting until next week at least before attempting the next trade.  At least that's my thought at the moment.  Next week is the final week of summer for traders, so the volume and desks might be thin.  I suppose we'll see what happens tomorrow and go from there.  Asia was higher with the exception of Hong Kong.  Europe was lower.  We close out the trading week tomorrow.   

Now back to the upside as the Dow gained 240 points on light volume.  The advance/declines were better than 2 to 1 positive.  The summation index is trying to turn back up.  We were positive for the whole session with a gap to the upside to begin the day.  The Fed minutes had a minor negative effect that was quickly forgotten.  The market has the feel of wanting to go higher.  The short term technical indicators are moving up and aren't overbought yet.  We'll see how the rest of the week goes.  GE was off another 1/4 and the volume remains good.  Gold lost a few bucks and the US dollar was slightly higher.  The XAU and GDX had slight fractional losses on pretty light volume.  Mentally I'm feeling OK.  Perhaps if we get a light volume rally going here it will present an opportunity to purchase the SPY September puts.  I do not think that any rally here has any staying power.  I could be wrong.  We did close below the 16 level on the VIX.  That caught my eye.  The VIX now rests on its 50 day moving average.  If it gets through there I may have to adjust my thinking.  Getting oversold now on the VIX and that's something to watch.  I'm still in the camp of letting this week pass and going from there.  Asia was lower and Europe higher in last nights trade.  We'll keep an eye on the overnight developments.  

Lower today as the Dow fell 173 points on light volume.  The advance/declines were negative.  The summation index is now moving sideways.  We opened lower, had a small rally but then turned around and closed on the lows of the session.  Most of the short term technical indicators for the major averages are at their midpoints or slightly oversold.  I think that we're at the moment of truth for what's going to happen here.  If we roll over here we're probably going back to test the recent lows and I don't think they'll hold.  If things turn around then perhaps we'll get a reprieve and higher prices in the near term.  Options premiums are still pretty inflated which precludes us from taking a position here.  GE was off about 1/3 and volume remains pretty heavy.  Still trying to resolve the latest accounting scandal there, if there is anything to it.  Gold bounced back $5 as the US dollar was lower.  The XAU rose 2 3/4, while GDX added 7/8.  Volume was good.  We reached the up trend line for GDX yesterday from the beginning of the rally in June.  We've now bounced off of that line again.  Perhaps I should have been paying closer attention here as that may have been the chance to try the GDX September calls.  We still have yet to see an oversold reading on the indicators since late May though either.  Perhaps heading out to October is the thing to do.  Mentally I'm feeling OK.  The VIX moved back above 17 and bounced at its 200 day moving average.  This is another indicator to keep an eye on right now.  If we can't break below 16 the decline will begin again in earnest.  That's my best guess at the moment.  We've got the Fed minutes due out tomorrow but other than that it's a light week for data.  We will have an economic talking heads meeting on Friday and over the weekend in Jackson Hole Wyoming.  The Fed chair will speak along with other economists etc.  Not sure what will come out of that but we're always at risk of some of the wall headline.  I'm going to sit tight for now.  Asia was generally higher and Europe lower overnight.  We'll see if we get any downside follow through tomorrow.  

Moving higher to begin the week as the Dow climbed 250 points on light volume.  The advance/declines were 3 to 1 positive.  This will stop the summation index from moving lower.  It will now turn around or move sideways.  In the coming days we'll know if this is for real or just another snap back.  The short term technical indicators for the major averages have moved up but we're not out of the woods just yet.  More benign trade talk is about the only reason I can see for the buying.  That plus the fact that we were blown out to the downside on some of the indicators.  GE was off 1/8 and the volume was heavy.  Gold dropped $16 and the US dollar was higher.  The XAU and GDX had fractional losses on average volume.  Long overdue for a pause here and if we get oversold I'll be looking at the September calls.  October perhaps.  Mentally I'm feeling OK.  The VIX is back at its 200 day moving average, which contained the previous slide in this indicator.  I keep an eye on the 16 level and we're still above that.  We are working off an overbought condition there.  Of course we're one headline away from the next market catastrophe so keep that in mind.  The extra week in the September option cycle keeps things pricey as well.  I think for now I'll just watch and wait.  Europe and Asia were both higher as it appears the world is breathing a sigh of relief.  At least for today.  We'll see how it goes tomorrow.

It was a positive expiration day as the Dow rallied 306 points on good volume.  The advance/declines were almost 4 to 1 positive.  The summation index is still moving lower but may try and turn around here.  The positive divergence in the McClellan oscillator came to fruition today.  With the comeback in stocks from the debacle on Wednesday, you can make a case that the up trend line on the S&P weekly chart is still intact.  That would be a major plus for the bulls.  Some of the medium term indicators that I have are signaling a bottom.  Nobody is looking for that.  Next week will tell a lot in my view.  Is it actually possible that we rally from here?  We'll see.  GE was up 3/4 and the volume was extremely heavy again.  Things will get settled there sooner or later.  I do not think that GE is going to go out of business.  Gold was slightly lower and the US dollar slightly higher.  The XAU was off a point, while GDX lost about 1/2.  Volume was average.  We now have a bearish engulfing pattern on the weekly GDX candlestick chart.  Perhaps we'll get a chance for the GDX September calls after all.  Mentally I'm feeling OK.  Quite a volatile week for stocks as the summer hasn't been as sleepy as one would like.  I have no idea what next week will bring.  The VIX remains above the 16 level and as long as that's the case, volatility will rule.  There's an extra week on the September options so there's no hurry to enter the next trade.  We've managed to hold on to the near term support for most of the major stock averages.  Some, like the RUT and TRAN have held longer term support levels.  Others, like the Dow and the S&P have held their shorter term ones.  We are still oversold on the short term technical indicators for the major stock averages.  That may be able to support some kind of short term rally here.  Beyond that I'm not so sure as we still have the big megaphone pattern on the weekly S&P 500 chart to contend with.  I think that a run to new all time highs from here would be the biggest surprise but the medium term indicators contend that isn't out of the realm of possibility.  I'll probably be keeping a closer eye on GDX this week to see if it continues to weaken.  Another thing I have to contend with is that I'll be out of the office in the beginning of September and the blog will be off line for about a week and a half.  I'll be back for the Fed announcement on the 18th.  So that has to be taken into consideration as well.  Europe and Asia were generally higher to finish the trading week.  I'll be checking things over as usual this weekend.  It's Friday afternoon and time for a rest.

The trading day seemed like the market was stuck in limbo but the Dow did manage a gain of 100 points on heavy volume.  The advance/declines were slightly positive.  The summation index is moving lower.  It was a mixed bag with the NASDAQ posting a loss.  Unlike yesterday, it was a back and forth affair with huge swings.  There was a dip out of the range in the afternoon but the market recovered.  It has the feel of just waiting for the next drop to come.  I finally did sell my SPY August puts in the morning.  I didn't get the best price on the day but I wasn't going to wait around either.  The gain was 220% and I was lucky to get that.  2 days ago this trade was a 50% loser.  I am simply better with longer term time frames on the options.  GE got slammed today on news of accounting irregularities.  It dropped a buck which was over a 10% loss on the day.  Volume was extremely heavy.  Gold added $6 on the futures and the US dollar was a bit higher as well.  The XAU was up almost a point, while GDX rose 1/3.  Volume was average.  There seems to be no stopping the gold shares as they have remained overbought for 2 1/2 months.  Yes I'd like to own some gold share calls but no I'm not going to chase them here.  Maybe I should though.  Mentally I'm feeling OK.  The VIX had a rise and fall today and remains over 20.  As long as it holds above 16 in my mind the volatility will remain elevated.  I still believe that there's something brewing under the surface of the market that is causing the decline that we're seeing at the moment.  Players are running to safety when there is no apparent reason to at the levels we've seen.  Yes there is a trade war and yes growth is slowing down a bit.  But I think the problem is beyond that when you have debt around the world that doesn't even yield anything and is actually costing you money to buy.  That makes no investing sense whatsoever.  But here we are.  Something has to give sooner or later and perhaps we're on the cusp of that.  For the S&P we're still oversold and the indicators are trying to turn back up again.  We're also in the process of testing the recent lows.  I don't think that they will hold but who knows?  We did get a potential positive divergence on the McClellan oscillator last night so perhaps there is some upside coming.  Hasn't happened yet.  Europe and Asia were lower overnight but Hong Kong bucked the trend.  We'll get option expiration tomorrow to close out the trading week.        

Volatility has been the name of the game so far this week.  The Dow got clobbered today and fell 800 points on heavy volume.  The advance/declines were 5 to 1 negative.  The summation index is heading lower.  The data out of China and Germany was weak but there is something else going on here that I just can't put my finger on.  The market is truly worried about something but I certainly don't know what it is.  The short term indicators for the major averages have turned back down but they are simply going back and forth each day now.  We did practically close on the lows for the session so that doesn't bode well for tomorrow.  But who knows?  We could be up 500 points at the open.  My SPY August puts went from big losers to big winners.  It was a trading miracle.  I'm still hanging on to them as I expect some follow through downside tomorrow.  But anything goes so far this week.  US retail sales will be out tomorrow and that will get things going one way or the other.  GE was off 1/3 and the volume was heavy.  Gold rose $14 on the futures as it continues to perform well here in uncertain times.  The US dollar showed a slight gain.  The XAU and GDX had slight fractional losses on good volume.  Perhaps some shares had to be sold for margin calls.  That's a guess as the gold shares haven't been following the metal lately.  Mentally I'm feeling tired as the volatility filled trading sessions are taking a toll.  it isn't so bad when you don't have a position.  But when you've got a trade out there that must be monitored, it's a different story.  I'm surprised that I've held on to this trade this long.  The VIX had a huge spike today but it isn't overbought yet.  Another bump up tomorrow and I'm out of the SPY put trade.  In fact with only a couple of sessions left in the August option cycle I should be out of the trade tomorrow regardless.  It is at the mercy of tonights headlines and tomorrow mornings data.  The weekly up trend line for the S&P 500 has now been broken again.  Last week we were able to close back above it.  This week I'm not so sure but anything can happen when the markets get crazy like this.  I am however getting the feeling that there's something going on under the surface that we'll maybe find out about later.  It looks like we are going to test the lows of last week at 2825 for the S&P.  If they don't hold there's the 200 day moving average at about 2800.  Asia was up and Europe down in last nights trading action.  We'll see how it goes tomorrow.   

The Dow soared 372 points today on heavy volume.  The advance/declines were better than 2 to 1 positive.  The summation index is still moving lower.  Tariffs on China will now be delayed three months for some items and the market took off.  Headline risk.  I cannot stress that enough as my profitable SPY August puts turned into a loss in minutes as the market rallied this morning.  They are now solidly in the red but I held onto them because we are getting some Chinese data overnight that could send things back down in a hurry if it's negative.  Otherwise the trade that would have been a winner will be a loser due to the environment that we're faced with.  No technical analysis can save you from the latest press release, quote or tweet.  The short term technical indicators have turned back up again and the volume today was pretty good.  Also on the weekly S&P 500 chart, the up trend line form last December is still intact.  But we'll have to wait and see how the week finishes.  GE was up 1/3 and the volume was good.  Gold fell almost $10 on the futures with the good trade news.  The US dollar was higher as well.  The XAU shed 1 2/3, while GDX lost 1/2.  Volume was heavy.  The short term indicators have rolled over here so perhaps it's time for the gold shares and gold to take a rest.  Now that hasn't happened the previous times things have rolled over so we'll have to wait and see.  Mentally I'm feeling a bit frustrated as a winning trade has turned into a loser yet again.  Of course we can't predict when news will occur but lately it seems that every other week there's something coming out of left field.  Now you could say that if it helps your trade, what's the problem?  You wouldn't have any issue with that, right?  Well actually when you're trading using technical analysis and the indicators, it is a problem.  Because if things change on a dime each day, you can throw your analysis out the window.  Volatility both ways has spiked and that's a tough trading backdrop to try and make money.  But what can you do?  You've just got to keep going.  Three days left in the August option cycle.  I'll probably take the loss on this trade tomorrow.  From there the September options have an extra week on them so the premiums will be high.  I'd like to say that I'll wait for the next signal but I'm not so sure.  Perhaps the gold shares will finally get oversold for me.  Asia was lower and Europe higher overnight.  We'll see what tomorrow brings.

Selling to begin the week but it wasn't as bad as last Monday.  The Dow did fall 389 points on very light volume.  The advance/declines were 2 to 1 negative.  The summation index is heading lower.  No big headlines today or over the weekend, however the tension in the air still exists.  Light volume today speaks of no buyers.  The short term technical indicators for the major stock averages have rolled over or are trying to.  I'm still holding my SPY August puts and they are now in the black.  I'm not exactly sure what to do here but with only four days left in the August option cycle, the risk is more than I'd like.  But with the summation index moving lower and the VIX moving higher the odds favor holding on to them for more gain.  We'll see.  GE lost a dime on OK volume.  Gold added $15 on the futures as nothing can stop this market at the moment.  The US dollar was little changed yet again.  The XAU and GDX had fractional losses on average volume.  The gold shares didn't follow the price of gold again.  Perhaps we're arriving at some kind of short term top but that's just a guess.  I would not bet against the money that has poured into gold here.  Mentally I'm feeling OK.  There will be economic data out this week but the market seems to be focused on other things.  The US/China trade war for instance.  Geopolitical tensions in Hong Kong.  Developments in Italy and now Argentina have shown up.  Again, the lack of volume today shows the reluctance of players to buy stocks at this juncture.  Now does this last all expiration week?  I don't know.  We could have a rally tomorrow.  The way it appears now is that we are going to go and test the lows of last week.  That would be around 2825 on the S&P 500.  Will we get there?  Will that level hold?  Always plenty of questions with no clear answers until after the fact in this game.  Perhaps I'll hold the SPY August puts until Wednesday or maybe I'll just get rid of them tomorrow.  I'm not sure buyers are going to reappear all of a sudden but you never know.  Asia was mixed and Europe lower in last nights trade.  We'll keep an eye on the overnight developments.

Lower to close out the week as the Dow fell 90 points on lighter than lately volume.  The advance/declines were 2 to 1 negative.  The summation index continues lower.  The overall market was weaker than the Dow.  The day started much lower in the morning, the Dow then rallied back to positive territory only to fall in the final fifteen minutes.  The short term technical indicators have stalled and are trying to turn lower.  My SPY August puts went back and forth during the session.  They finished about where I bought them yesterday.  I'm holding them over the weekend but really need to get out on Monday, win or lose.  That's my thinking at the moment.  The risk of holding the options during expiration week is pretty high.  GE was off 1/3 and the volume was good.  Gold finished little changed as did the US dollar again.  The XAU fell 1 1/8, while GDX shed 3/8.  Volume was lighter than it's been.  Mentally I'm feeling OK.  No follow through upside to yesterdays positive session.  We'll find out next week if that means anything or not.  Perhaps we'll go back to test the recent bottom but that's not a guarantee.  The VIX remains above its 200 day moving average and I'm taking my cues from that and the declining summation index.  The S&P 500 was able to finish well off the morning lows and that's a plus for the bulls.  I think that we'll find out a lot more on Monday morning.  So we'll see.  I'll check the charts over the weekend as usual and be prepared for the open on Monday.  Asia was mixed and Europe lower overnight.  It's Friday afternoon and time for a break.

The Dow took off to the upside today, gaining 371 points on good volume.  The advance/declines were almost 5 to 1 positive.  The summation index is still moving lower but another day like today will start to turn things around there.  We did get a signal last night from the McClellan oscillator for a big move in the next two sessions.  Today takes care of that.  The short term technical indicators for the major averages have turned around to the upside.  A rally out of nowhere is what happens during declines, so I'm not exactly sure if this has staying power.  I bought some SPY August puts today but my timing wasn't good.  They are already showing a small loss.  This trade already seems like it could be a mistake but we'll see what happens.  GE was up a few cents but the volume was lighter than it has been.  Gold was off around $6.  The US dollar finished little changed yet again.  The XAU and GDX had fractional gains higher on OK volume.  Remaining overbought on the gold shares and it has been an incredible rally there.  Mentally I'm feeling OK.  I decided to try a trade here today because I could see no reason for the market to take off to the upside as it did.  My regret is that I didn't wait for a better strike price.  No matter, what's done is done.  If my prognosis of a declining market is correct, we should see a run back towards this weeks lows.  That would be the short term bottom put in at around the 282 level for SPY.  Or it is entirely possible that the lows there are the bottom and we trade higher from here.  It isn't out of the question.  The VIX closed below its 200 day moving average and just below the 17 level.  We have come off of the short term overbought levels here as well.  16 is the key number here for me.  If we stay above it more decline and volatility will occur in my view.  We'll see.  With only six days to go in the August option cycle, this is a trade that has to go my direction fairly soon.  And if so, do I hold it over the weekend or not?  Do I simply take the loss tomorrow and move on?  Always an abundance of questions in the game.  I'll see how things go overnight and take it from there.  Interesting times to be sure.  Europe and Asia were higher overnight and I'd expect the same tonight following the lead of the US market.  We'll close out the trading week tomorrow.

It was a one day reversal to the upside for most indices but not the Dow as it lost 22 points on very heavy volume.  The advance/declines were slightly negative.  The summation index is moving lower.  The Dow did finish over 500 points up from the low of the session.  I'm not sure if we are actually putting in a bottom here or if this is a fake out before we head lower.  The short term technical indicators remain oversold but have turned back up.  If we continue higher from here, I'll look to try the SPY August puts.  If we fall back again, I'll try the calls if we get to the 2750 level on the S&P 500.  Running out of time in the August option cycle but I do feel that a decent trade is out there.  GE was off another 1/8 and the volume remains good.  Gold soared $30 on the futures and we've made it to the $1500 level in quite a hurry.  Obviously gold was the place to be.  That's a trade that I'll regret missing for a while.  The US dollar was little changed on the day again.  The XAU rose 1 3/4, while GDX gained 5/8.  Volume was heavy.  GDX made it to 30 today and we have resistance pegged at 31.  The gold shares haven't moved up as much as gold lately and that could be a sign that this run is losing steam.  You cannot argue with price and volume though.  If the gold shares do ever get oversold again, a call trade will probably be worth it as players who missed out will be eager to jump aboard.  Keep in mind though that GDX has risen almost 50% in just two months.  That is not sustainable.  Mentally I'm feeling OK.  The VIX looks like it wants to move lower here and that would be a plus for stocks.  We are still above 16 and that can be dangerous if we remain above that level.  The short term indicators here remain overbought but have rolled over.  One idea could be to purchase some August SPY puts on a trip down to the 16 level.  There are trades out there, it is just a matter of what is going to set up for us in the coming sessions.  But the risk is still high and just a headline away from a big move in either direction.  I still think we may be able to get something done before next weeks expiration.  We'll see.  Asia was mixed and Europe higher overnight.  We'll see how it goes tomorrow.

We got the snap back today as the Dow gained 311 points on good volume.  The advance/declines were 2 to 1 positive.  The summation index continues lower.  A day off from the trade war as the market recovered from yesterdays debacle.  That doesn't mean that the decline is over but at least we got a day of rest there.  We are at least attempting to reign in the decline here but we won't know if it's successful until we finish off the week.  It's only Tuesday.  The damage has been done though and I would not trust any ensuing rallies from here.  GE was off a few cents and the volume was good.  Gold continues to rise, with the futures up around $8.  The US dollar finished little changed.  The XAU and GDX had slight fractional gains on average volume.  We're still overbought and staying that way for the gold shares.  Mentally I'm feeling OK.  I'm trying to figure out what to do here but I assume that we'll eventually head lower.  The VIX headed back down today and the short term indicators here have rolled over.  That suggests that the near term downside is limited.  I still may try the SPY August calls in the coming days if it sets up right.  However we all know the market rarely cooperates with our best laid plans.  Not to mention that we're still at the risk of the latest headline form the US or China.  Those certainly haven't been positive lately.  8 days to go in the August option cycle and the risk is evident to all who bother to take a look.  I guess ideally I'd like to see some decline for the next couple of sessions that takes out the previous low.  That would potentially set up the SPY August calls for Friday and the beginning of next week.  We're pretty oversold here but also trading outside of the lower Bollinger bands.  So sideways is a possibility in the near term as well.  The trading is never easy.  Asia and Europe were both lower overnight with Asia taking the worst of it.  I'd expect some buying in Asia tonight, the Hang Seng has been down ten days in a row.  We'll keep an eye on the overnight developments.

Well today we got a collapse as the US and China have pretty much began a trade war.  The Dow lost 767 points on very heavy volume.  The advance/declines were almost 10 to 1 negative.  The summation index is heading lower.  We are short term oversold but in this case it doesn't matter.  Everyone is selling stocks.  The uptrend line for the S&P that had been in effect since December has been broken.  We had a gap lower to begin the session and went from there.  The first logical area of support for the S&P comes in at the 200 day moving average at 2790.  At this rate we'll get there tomorrow.  I'm looking at the SPY August calls for the snap back but I'm in no hurry.  SPY support comes in around 276.  Make no mistake the trend is down and we've got a long way to go but it won't all happen at once.  If we're lucky we'll get some bounce and look to position in the SPY September puts.  The August chance has been missed most likely.  GE lost 1/3 and the volume was good.  Gold rallied on the stock demise and was up almost $20.  The US dollar was lower.  The XAU added 3 1/3, while GDX gained 7/8.  Volume was heavy.  The gold share call trade has been missed as well.  I still think that we'll get to the 31 level for GDX.  However unless I see an oversold reading on the technical indicators, I'm going to have to try and stay on the sidelines here.  Mentally I'm feeling OK.  The VIX took off today after looking like it was going to head lower at the close on Friday.  We are now above 24 on this indicator and the short term technical indicators are extremely overbought.  Some of the medium term indicators show some room left to run higher though.  If we somehow get to 30 in the next couple of days, I will try the SPY August calls.  But it would have to be a very short term trade and definitely not held over the weekend.  We are in some very interesting times at the moment.  Opportunities will present themselves but you really have to be careful as well.  Rallies should be shorted as the positive trend line that was in effect no longer is.  The longer term trend is now lower, so you can try and play the snap backs at your own risk.  I'm pretty sure that we'll see one this week but knowing exactly when is the question.  There is also nothing wrong with staying on the sidelines and sitting things out.  You won't make any money but you won't lose any either.  Europe and Asia had declines as well last night but not as much as the US.  I'd expect them to catch up with more losses tonight.  We'll see what tomorrow brings.   

The Dow lost another 98 points today on good volume.  The advance/declines were negative.  We did come up off of the lows for the session.  The summation index is moving lower.  The jobs report came in where expected.  Foreign markets were lower and that carried over to the US.  We are now short term oversold on the S&P 500.  I'm going to say that any weakness on Monday can be bought for a short term bounce.  I'll be checking the SPY August calls over the weekend to see what's available.  This would strictly be a short term deal.  I do think that this decline is the beginning of something bigger to the downside.  The weekly technical indicators have now rolled over.  We haven't broken the uptrend line that comes in at around 2900 yet.  But I believe that in the coming weeks we will.  GE was off a few cents and the volume was good.  Gold was up $20 on the futures but it was more of a carryover from last night.  The US dollar fell as interest rates are now dropping.  The XAU and GDX were both lower on average volume.  I'm still favoring the longer term gold share calls if GDX makes it back to the 26 level.  Mentally I'm feeling OK.  The VIX spiked again today but came back form the 20 level reached early on.  It looks like a short term top there and that would support gets some index calls on Monday.  However if that trade is taken it must be exited quickly if there is a profit.  Again, the medium term indicators for the major averages have now rolled over.  The trend is now down until proven otherwise.  However there will be chances for counter trend trades and Monday may very well give us one.  Another reason to try the calls on Monday was that this decline did not have terrible breadth with it.  We did not see the usual 3 or 4 to 1 declines on the down days.  So we haven't seen the broad decline yet but it is probably coming down the road.  Those are my best guesses at the moment.  Gold looks to be supported here with all the uncertainty, especially if the US dollar keeps dropping along with interest rates.  No god days of summer here.  Europe and Asia had significant drops to end the week.  The fact that the US didn't collapse is a short term positive.  Plenty to ponder over the weekend.  it's Friday afternoon and time for a break.

We had a one day reversal to the downside as the Dow opened higher and closed lower.  The most watched index shed 280 points on very heavy volume.  The advance/declines were once again just shy of 2 to 1 negative.  The summation index is now moving lower.  The US/China trade wars perked up again today with more tariffs announced by the US.  That killed a rally that was taking place that had the Dow up over 200 points in the morning.  Technical indicators have rolled over and are getting short term oversold now for the major averages.  The jobs report is due tomorrow and if it's strong I'd expect more selling.  It is hard to trade when the headline risk occurs.  GE fell 1/3 on heavy volume.  Gold rallied on the trade war, gaining around $20 to reverse yesterdays losses.  The US dollar was slightly lower.  The XAU rallied 4 1/8, while GDX gained 1 1/3.  Volume was heavy.  The daily candlestick charts for the gold share indexes now show a bullish engulfing pattern, predicting higher prices coming.  I have tried to get the longer term GDX here for weeks and just haven't been able to do it.  I still like that idea but I will not chase things here despite the huge move higher.  But make no mistake there is a lot of money behind this particular rally in gold.  Mentally I'm feeling OK.  Volatility has ramped up this week as the VIX made it above 19 and closed above its 200 day moving average today.  That said, it is now short term overbought.  That doesn't mean that the decline has ended but perhaps a pause in the rout is due.  A weak jobs report would be a plus for stocks in my view under the current market conditions.  I could be wrong.  Volume has really picked up to the downside here and that is not a good sign for the bulls.  With August and September usually being a tough time for stocks, more downside should eventually be expected.  It is entirely possible that the megaphone pattern that I've discussed with regards to the weekly S&P 500 chart comes to fruition.  If so, we've got a lot lower to go.  Hasn't happened yet but keep that in mind going forward.  A decline in stocks would also probably be supportive of gold as money flows to havens.  But gold is pretty overbought medium term here and some decline is inevitable at some point.  Asia was mostly lower and Europe mostly higher last night.  We'll see how those markets react to the tariffs tonight.  Tomorrow we'll brace for the markets reaction to the employment report.  The quiet summer is no more.