A positive start to expiration week as the Dow gained 189 points on light volume. The advance/declines were 3 to 1 positive. The summation index is turning back up. Once again the NASDAQ led the way up and that's a plus. The S&P 500 broke through the near term down trend line. The short term indicators here are moving higher with room to go. It looks like there is no way to go but higher from here. That said, I did purchase the SPY September puts today ahead of tomorrows inflation report. My entry could have been a little better but it wasn't bad. The closing price is right about where I got them this morning. This trade will hinge on the reaction to tomorrows data. We do not trust light volume rallies and that is what we've witnessed here. Gold was up $7 on the futures. The US dollar was lower and interest rates were steady. The XAU was up 1 1/2, while GDX gained 1/3. Volume was about average. The gold shares have been acting much better lately. They are approaching short term overbought but aren't there yet. Any pullback would be a chance to get the GDX October calls in my opinion. My open order for them is still out there. Mentally I'm feeling OK. The VIX was up today and that does not fit with a positive stock market. Not sure what it means but it did close back above the 50 day moving average. It could make for an interesting session tomorrow. The consensus is for a benign print on the consumer inflation data. We cannot predict the numbers but it's safe to say they'll have an effect one way or the other. Sticking with the technicals is always the way to go in our opinion. Our view is that we got the light volume rally off of the recent lows that we were looking for and an attempt at a short term trade now involving the SPY September puts is worth the risk here. We'll find out tomorrow if it was the proper idea. Much of Asia was on holiday but open markets were higher. Europe was up as well. We'll see what tomorrow brings.