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Tuesday, July 21, 2020

A mixed bag today as the Dow gained 159 points on what now passes for light volume.  The advance/declines were around 3 to 1 positive.  The summation index is basically moving sideways.  The overall market was weaker than the Dow, with the NASDAQ in the red.  Not much on the economic data front but we will get some on Thursday.  The major indices remain short term overbought.  Waiting on the details of another coronavirus bailout package form Congress.  There is a potential negative RSI divergence for the NASDAQ but it hasn't manifested itself just yet.  The trend remains higher as liquidity abounds for now.  GE was up over 1/8 on what now might pass for average volume.  Gold continues its ascent as the August futures climbed over twenty bucks.  The US dollar continues to drop.  The XAU added 2 1/4, while GDX was up 1/2.  Volume was average.  The gold shares are overdue for a rest in my humble opinion but they continue to climb higher.  They did underperform the precious metal today so perhaps a stall in the uptrend is coming.  I still like the GDX August calls on a pullback.  Mentally I'm feeling OK.  The VIX continues to hug the lower Bollinger band and remain below its 200 day moving average.  The touching of the lower Bollinger band sell signal that has been in effect looks like it is over.  I'd keep an eye on the NASDAQ here because it led the way up but was the weakest group today.  If it rolls over tomorrow the potential negative divergence could be for real.  But it could just as easily rally back up to new all time highs as well.  It's something to watch.  No summer doldrums so far this year.  It looks like I'm going to try and let this week pass on by before attempting another trade.  Depending on what happens for the rest of the week from here of course.  Europe and Asia were higher as money flows seem to be plentiful around the world.  We'll keep an eye on the overnight developments.

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