Thursday, April 23, 2020
An interesting session as most indices opened higher and then gave up their gains during the rest of the day. The Dow rose 39 points on heavier volume. The advance/declines were positive. The summation index is still moving up. The overall market was a bit weaker than the Dow. Most of the major indexes now have bearish stars on their daily candlestick charts. This implies lower prices going forward but a decent up day tomorrow would negate that. Still waiting on the next bailout from Congress but it's assumed to be a done deal. Still short term overbought on the major averages. GE was up almost a dime on OK volume. Gold rallied another $15, while the US dollar was a bit higher. The XAU was up over 3 1/8, while GDX gained 7/8. Volume picked up a little on the rise. However there are bearish evening stars on the daily candlestick charts here as well. Coming after the recent gains that we've had, these stars certainly look legitimate. Not to mention being very overbought here for an extended period of time. But markets go where they want and can remain overbought for quite some time. I'm still bullish the May GDX calls if we get a pullback. Mentally I'm feeling OK. The VIX is still hanging around its 50 day moving average. Tomorrow should be interesting because if we do close lower it could show a turnaround on the weekly charts. That would have bearish implications. I'm really still in the bear camp for the overall market. The pandemic virus shows no signs of going away anytime soon. Unemployment keeps on rising by huge numbers. Earnings for many companies just won't exist. I simply do not see a quick turnaround for the global economy. But I could be wrong and often am. We've had a breakout in the gold shares. There is no doubt about that. A pause here is needed though in my opinion to shake some of the players out and get back closer to the 50 day moving average on a daily basis. I still see any decline as a reason to buy though because there is plenty of money flowing into this market. It doesn't matter if you like gold or not, the trend is up and there are plenty of buyers. Europe and Asia were generally higher overnight. We'll close out the trading week tomorrow.
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