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Wednesday, April 22, 2020

Back to the upside today as the Dow gained 450 points on heavy volume.  The advance/declines were better than 2 to 1 positive.  This should edge the summation index higher.  No real news today to cause the market upside although there was yet another stimulus bill going forward in the US.  The short term technical indicators for the S&P turned back up but we do remain below the 50 day moving average here.  The market is trying to make up its mind what to do here.  Another leg higher would complete an A-B-C-D-E pattern and be a reason to try the SPY May puts.  But we haven't completed the pattern, which would require a run towards the 3000 level.  GE was off a few cents on lighter volume.  Gold continues to shine and the futures gained well over thirty bucks.  The US dollar was slightly higher.  the XAU climbed 6 3/4, while GDX gained almost 2.  Volume was average.  We are breaking out above the resistance at 32 for GDX.  This should lead to more gains.  I canceled my open order for the GDX May calls and moved up to a higher strike price in an effort to take part in this rally.  I am kind of trying to chase it here but am worried about the extended short term overbought condition on GDX.  There is no doubt however that gold and the gold shares are in an up trend with few sellers when there is any decline.  Buyers step up on dips.  GDX had a consolidation at around 30 to 31 and has broken out.  The up trend line from the middle of March remains intact.  It has been quite a move with prices doubling in just over a month.  But I do believe that there's more to go.  Mentally I'm feeling a bit tired, did not sleep well.  The VIX is back below its 50 day moving average and the indicators have turned back down.  I'm not doing a good job of reading this indicator lately.  The overall market did remain stronger than the Dow today and that is a plus for the bulls.  We'll get jobless claims tomorrow and that should be some more bad news for the market to digest.  I'll be keeping an eye on GDX though and trying to get involved with some May calls there.  Asia was slightly lower and Europe up overnight.  We'll see how things go tomorrow.

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