Monday, October 14, 2019
We didn't get any follow through to Fridays big day as the Dow lost 29 points on very light volume. the advance/declines were negative. The summation index is moving sideways. Some markets were closed today for Columbus day and that explains the low volume. The VIX is solidly below the 16 level so I do believe that the rally has legs. Only four days to go in the October option cycle so I don't see myself attempting any SPY trades this week. That could change with a closer look at the data tonight but the risk would be high. More overbought here than oversold for the major stock indices. GE lost almost a dime on light volume. Gold was up $7 and the US dollar was higher as well. The XAU and GDX had slight fractional gains on very light volume. I'm leaving my open order for the GDX January calls out there. Mentally I'm feeling OK. We've got the US/China trade talks out of the way for now so what's the next market mover? Earnings are on tap to begin again this week. That should provide some company specific fireworks. The S&P 500 has formed a triangle on the daily chart with an upside bias. The weekly chart still shows the bearish megaphone pattern. This implies that we'll see a near term rally to new all time highs and then a decent drop. However we're all aware that things rarely stick to the plan in this game. There's actually enough indecision in my mind to think that anything can happen. But with the break above the resistance on good volume Friday, I'll have to stick with a bullish bias for now. The Bollinger bands are still contracting on gold and the gold shares. So we'll have to wait and see which way things get going there. I'm banking on the long side. Asia was higher and Europe mixed overnight. We'll see how things go tomorrow.
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