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Thursday, October 31, 2019

The market traded lower to end the month as the Dow fell 140 points on heavy volume.  The advance/declines were negative.  This should start to turn the summation index sideways.  I don't think that this is the beginning of a huge decline.  The market came up from the worst levels of the day.  The overall market wasn't as weak as the Dow either.  Of course things could change with the reaction to the jobs report tomorrow so we'll see.  We are still short term overbought for the major stock indices.  I might still consider the SPY November puts before expiration.  GE was off 1/8 and the volume was heavy.  No follow through to yesterdays gains.  Gold was up over $15 as the US dollar was lower.  The US house also voted for impeachment hearings against the president.  Those are possible reasons for todays rise in the precious metal.  The XAU added 2 1/3, while GDX climbed almost 3/4.  Volume was good to the upside and this could be the beginning of the huge move projected by the tight Bollinger bands.  If so it is something worth chasing despite the short term overbought condition of the gold shares.  It looks like I may have missed it here again.  My open order remains out there for the GDX January calls but it is far from being hit.  Mentally I'm feeling OK.  The VIX spiked up today but we'll know more if it is real after tomorrow.  To me it seems as though we are in a drift upward for stocks.  Of course this will eventually end but I don't think right now is the time.  I could be wrong.  If gold and the gold shares continue to rise tomorrow I may just have to jump on board.  There is the potential for something big there in my view if we continue higher.  As for the S&P 500, the price action at the end of the day says that we are not going to simply drop from here.  If we closed near the lows it's a different story.  Let's see how things go tomorrow.  Asia was higher and Europe lower last night.  We'll watch for the market reaction to the employment report tomorrow and take it from there. 

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