Tuesday, June 02, 2020
The Dow bounced around early on but took off to the upside in the final half hour to finish the day with a gain of 267 points on good volume. The advance/declines were 2 to 1 positive. The summation index is moving higher. The Dow was stronger than the overall market. Overbought and staying that way. The TRAN had a good day as well. It is positive to see the two major averages in sync. None of the recent headlines in the news are having an impact for stock prices. The pandemic virus is fading from view for now. Waiting for Fridays jobs report and the market reaction at this point and it's only Tuesday. GE was up over 1/4 on good volume. Gold dropped $15 on the futures despite the US dollar being lower yet again. The XAU lost 4 1/3, while GDX fell 1 1/4. Volume here was average but we are seeing more volume on the declines than the advances here lately. My GDX June calls are now at a small loss. The short term technical indicators here have rolled back over and this trade is in trouble. We'll need to see a turnaround here before the end of the week or this trade will be a loser. I'm still a believer in the gold shares but GDX could be trading in a range and that would not be good for this particular trade. Still 2 1/2 weeks left though. Mentally I'm feeling OK. The VIX was lower and is heading down to the 200 day moving average. It remains oversold. Some of the NASDAQ indices are about to break out to new all time highs. They will either break out or form huge double tops. Let's face it, there's no reason to guess what's going to happen here. We will wait and see how it plays out. It is definitely bullish when the small stocks lead the way and that is what is occurring here. The most likely scenario is for the rally to continue. Especially with the market being able to ignore plenty of bad news. We'll see if that happens again on Friday. Gold had a sour day and we'll see if there's downside follow through tomorrow. Europe and Asia rallied in last nights trading session. It seems as if there's plenty of liquidity to go around the world. We'll see how things go tomorrow.
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