Tuesday, August 18, 2020
Another mixed bag today on Wall street as the Dow lost 68 points on better volume. The advance/declines were negative. The summation index is starting to move sideways. The overall market was stronger than the Dow again. The S&P 500 set a new all time high. It was the fastest bear market on record, which I hadn't anticipated. I did not believe that it would happen. However with the NASDAQ leading the way back, I should have taken that into consideration. Just another miscue on my part but it's where we go from here that matters. Three days to go in the August option cycle. GE was off a few cents and the volume was pretty light. Gold continued higher by over ten bucks. The US dollar was lower. The XAU was down about 1 1/4, while GDX shed around 1/3. Volume was light. The gold shares didn't follow the metal higher and that's generally a warning sign. However a continuing weaker US dollar will bring buyers into gold. Mentally I'm feeling a bit tired. The VIX was a bit higher today but the short term technical indicators remain oversold. I'm not getting any good signals from this indicator and the contracting Bollinger bands haven't led to any major moves. The S&P 500 itself remains short term overbought as well. I'd expect things here to continue higher into Fridays expiration. Every intra-day attempt at a sell off has been met with buying. Evidently there is still plenty of liquidity to go around. You shouldn't try to fight that. There's been more rumblings about getting the US stimulus deal done but nothing concrete as of yet. That should provide the bulls with a least some kind of pop to the upside if and when it occurs. May provide a boost for gold as well. The pandemic virus remains but is still being ignored by the market for now. Asia was generally higher with Europe lower overnight. We'll see what tomorrow brings.
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