Wednesday, September 30, 2020
It was a wild ride to end the month as the Dow gained 329 points on good volume. The advance/declines were positive. The summation index is still trending sideways. Overnight the S&P futures sold off and the Dow was off over 300. The market roared all the way back by the open and was up over 500 points. With two hours to go the Dow suddenly dropped 400 points. It then bounced back to finish the day where it did. A lot of end of the month and quarter volatility. The overall market wasn't as strong as the Dow. I'm not exactly sure what it all means but we could have sold off today but didn't. The advantage is with the bulls. October starts tomorrow and we'll see how that goes. Jobs report on Friday should be a mover. GE was up 1/8 on average volume. Gold dropped about $5 on the futures. The US dollar finished little changed. The XAU and GDX had slight fractional losses on pretty light volume. The light volume shows the lack of interest here for the gold shares either way. I do still have an open order out for the GDX October calls. However this is one to be careful with because the monthly candlestick chart now for gold shows a topping pattern. This implies that gold will be heading lower or sideways at the least. The gold shares are short term oversold here and if we get a rollover here again on price, it could set up the call trade. It's a risky one however and time is running out day by day. Mentally I'm feeling OK. The VIX finished a bit higher despite the rally in stocks. It once again bounced off of its 50 day moving average. If it could get through the 50 day moving average, then the rally would have some legs most likely. The S&P 500 is stuck at its 50 day moving average as well. I'm not really sure as to what to do with the SPY right now so I'm on the sidelines there. The short term techncial indicators here have moved up but not convincingly so in my mind. We'll know more as the week progresses. The pandemic virus backdrop remains along with the upcoming presidential election. The ongoing stimulus drama is in the picture as well. There's room for good news to drive things higher. Last nights presidential debate was viewed as a disaster but the market came back from the overnight drubbing. Perhaps that's a clue as to the underlying sentiment. That's a guess as usual. Europe and Asia were lower overnight. We'll see what tomorrow brings.
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