Taking a step back on the final trading day of October as the Dow lost 128 points on good volume. The advance/declines were slightly negative. The summation index is moving up. The NASDAQ led the way lower but there doesn't seem to be lot of conviction here. The S&P 500 is still short term overbought. It's all about what the Fed has to say on Wednesday as the widely expected rate hike is already accounted for. So we'll just have to wait and see. I would not expect a lot of price movement ahead of the Fed but I've been wrong before. So we're in a wait and see mode for now. Gold was off $8 on the futures. The US dollar was higher along with interest rates. The XAU lost 1 1/2, while GDX shed 1/2. Volume was average. I canceled my open order and replaced it with another that is closer to the money for the GDX November calls. It will take some decline to get filled. The short term indicators for GDX have now rolled over and it will take a few days to get back down to oversold if it gets there. NEM reports earning tomorrow and that will move GDX one way or the other most likely. Remaining patient for now and might consider abandoning this idea as the week moves on. Mentally I'm feeling OK. The VIX was slightly higher and remains short term oversold as it hangs around the 200 day moving average. If it breaks away from the 200 day to the downside, the rally will continue. If not then the selling will return. I'm still leaning towards higher prices going forward with the summation index heading higher at the moment and getting closer to the zero line on this upswing. But we'll see what the market has in store for us. Asia was mixed with Europe higher to end the month and start the week. We'll keep an eye on tonights headlines.

The market exploded to the upside today as the Dow gained 828 points on good volume. The advance/declines were around 3 to 1 positive. The summation index is moving higher. Last night we got a signal from the McClellan oscillator for a big move within the next two days. Todays price action fulfills that. The inflation data today was within expectations. There was a huge move up in AAPL on the earnings but the earnings were nothing to write home about. Perhaps after all the negative earnings reports from the other big cap tech stocks it was a relief that AAPL wasn't as dour. Whatever the case it certainly doesn't explain such a huge move up in stocks. This is why we often say that the market will go where it wants. It is also why we stick to the technical factors to make our decisions. The S&P 500 closed above its 50 day moving average and remains short term overbought. It can remain short term overbought during rallies and we're in one now. Sellers have left the building. The NASDAQ led the way and that's a plus. The next down trend line for the S&P comes in at 4100 and it is a major one. The trend is up until proven otherwise. Gold was down $17. The US dollar was slightly higher and interest rates rose. The XAU and GDX had fractional losses on light volume. Once again the gold shares out performed the precious metal and that is bullish. I am leaving out my open order for the GDX November calls. GDX is short term overbought here but if can stay that way as well if this is indeed a rally in the gold shares. The inverse head and shoulders pattern is still in place. Mentally I'm feeling OK. The VIX continues to drop and is now below its 200 day moving average. Oversold and staying that way. 20 is the level to watch on the VIX and we are still a long way from there. As always the market can turn on a dime. However with the rising summation index coupled with the declining VIX you cannot argue with where prices are heading. The only caveat is that the rally that began a couple weeks ago came out of nowhere and that is classic bear market action. We'll be checking the charts over the weekend as usual. Asia was lower and Europe mixed to finish the week. It's Friday afternoon and time for a break.

Another mixed market as the Dow was up 194 points on good volume. The advance/declines were positive. The summation index is moving up. Once again the overall market was much weaker than the Dow with both the S&P 500 and NASDAQ posting losses. The NASDAQ led the way down again as tech earnings continue to disappoint. GDP came in better than expected. The S&P 500 is still short term overbought and the indicators appear to be rolling over. Tomorrows inflation data should provide short term direction for stocks. The small stocks have already started to head lower. The Dow has been the leader and that is not usually a positive. Big cap tech is heading lower. So you can see that it's a mixed bag when it comes to the stock market at the moment. Gold was off a few bucks on the futures. The US dollar was higher and interest rates continued to drop. The XAU fell 1 1/2, while GDX shed around 1/3. Volume was average. I did place another order for the GDX November calls and I'm leaving it out there again. As long as the inverse head and shoulders pattern remains intact I'm willing to try and take a chance with this trade. Mentally I'm feeling OK. The VIX was up just a touch as it hangs around its 50 day moving average. Still short term oversold here. Not sure what to expect next from this indicator. At this juncture we'll just wait and see how the market reacts to the data out tomorrow and take it from there. We were looking for a pause in the rally and so far we've gotten that. Whether or not it turns into something else remains to be seen. As long as the summation index is moving up the path of least resistance is higher. Europe and Asia were mixed in last nights trade. We'll close out the week tomorrow.

Weakness in general today but the Dow did manage to move up a couple of points on heavy volume. The advance/declines were positive. The summation index is moving higher. Tech earnings reports came in disappointing, leading the the NASDAQ to having an over 200 point decline. The S&P 500 was lower as well. It has stalled at the 50 day moving average and remains short term overbought. Would not be surprised for the market to take a rest here but you never know. We'll get a look at 3rd quarter GDP tomorrow and that should be a market mover. The inflation data out on Friday certainly will be. Gold was up over ten bucks on the futures. The US dollar continues to drop along with interest rates. The XAU gained 3 1/4, while GDX was up 3/4. Volume was average. I canceled my open order for the GDX November calls as GDX has already moved up from its recent low. GDX is already close to the neckline of the inverse head and shoulders pattern on the daily chart. If we get some pullback from where we are I might consider chasing this trade. The measuring objective from the pattern is 30 and GDX is around 25. But the ideal time to take the position has passed. Mentally I'm feeling a bit frustrated for missing out on the GDX call trade. However you've always got to make adjustments in the game and this could be one of those times. I might put in another order overnight. The VIX was lower today and closed below its 50 day moving average. This does not match up with a weaker overall market. The VIX is now short term oversold. Not sure what to expect next from this indicator or what the chart now implies. It does remain oversold during rallies but I'm thinking this short term stock market rally needs a rest. I could be wrong and often am. Europe and Asia were higher overnight. We'll keep an eye on tonights developments.

Continuing to move higher as the Dow gained 337 points on heavy volume. The advance/declines were 5 to 1 positive. The summation index is now moving up. The NASDAQ was the leader today and that's a plus. The S&P 500 broke through the down trend line at 3800 on good volume. We are now short term overbought on the S&P and also at the 50 day moving average. A pause here would not be out of the question. But it appears that buyers have taken control now. We do have the GDP report on Thursday and inflation data on Friday to get out of the way. However I think it's safe to say that the decline is done for now. Gold was up around 5 bucks on the futures. The US dollar was lower along with interest rates. The XAU was up 1 1/2 and GDX up 1/2 on good volume. My open order remains in place for the GDX November calls but it looks like it won't get filled at this point. Another missed trade perhaps. Mentally I'm feeling OK. The VIX was lower with fits with todays stock gains. Short term oversold now but the VIX remains that way during rallies. We'll see how long this can last. The tone of the market has changed as sellers are now not to be found. But we all know that can change in a day, an hour or a minute. However the recent evidence now favors the bulls. Europe was higher and Asia mixed again overnight. We'll see how it goes tomorrow.

The rally lives on as the Dow climbed 417 points on good volume. The advance/declines were positive. The summation index is still trying to turn back up here. The S&P 500 is almost at the next resistance line at 3800. Getting short term overbought here now though. The Dow led the way today and that isn't the most bullish scenario. Plenty of earnings due out this week so we'll get some moves one way or the other. For now it looks like the sellers have retreated. Gold dropped a couple bucks on the futures. The US dollar finished little changed and interest rates were mixed. The XAU shed 1 1/3, while GDX lost 3/8. Volume was average. I did place another open order for the GDX November calls and I'm leaving it out there. Not as close to being in the money as I'd like it to be but the premiums are inflated as we've just rolled into the November option cycle. If it does get filled and the head and shoulders pattern on the daily GDX is valid the trade will work. Unless I mismanage it again of course. Mentally I'm feeling OK. The VIX was up slightly which does not coincide with a market up over 400 points. Somewhat short term oversold on some of the technical indicators here. Not sure what's going on with the VIX here. That's been the case for a while now with this indicator. Europe was higher and Asia mixed to start the week. We'll keep an eye on the overnight headlines.

Markets climbed higher today as the Dow soared 748 points on expiration heavy volume. The advance/declines were better than 2 to 1 positive. The summation index is making a sideways channel. I was looking for lower prices today and was wrong. The short term indicators for the S&P 500 have now turned back up. Not sure how to explain todays price action. Short covering perhaps or maybe option related buying on the expiration. Or a combination of the two. The next down trend line for the S&P is at 3800. If we can get through there the picture will change and this down leg will be completed. Hasn't happened yet but after todays price action you get the feeling that it will. But we'll wait and see what happens next week. Gold was up over $20 on the futures. The US dollar was lower along with interest rates. The XAU gained over 5 points, while GDX was up 1 1/8. Volume was good to the upside. I canceled my open order for the GDX November calls as it was not going to get filled after GDX took off to the upside at the open. The inverse head and shoulders pattern for GDX now looks valid again and I'll be looking to purchase those Novermber calls on any pullback but it may already be too late. This looks like a trade that should be chased as the measuring objective for the head and shoulders pattern comes in around 30. GDX is currently at 24 and change. I'll try and figure out what to do over the weekend. Mentally I'm feeling a bit frustrated for not buying the GDX calls this week. Although my orders were out there they didn't come close to being filled and adjustments needed to be made. I guess I just didn't have the faith that the pattern would hold up but it has for now. The VIX was slightly lower today. Some of the short term indicators here are getting oversold but aren't quite there yet. The VIX has broken the short term up trend line on the daily chart and that implies more rally to come. It is another reason that we could be in the midst of a change in the medium term direction of the market. We'll learn more as we go forward. Today was another one of those rallies out of nowhere though. Plenty of charts to check over the weekend as usual. Asia and Europe were generally lower to finish the week. It's Friday afternoon and time for a break.

The selling continued today but it wasn't too bad as the Dow 90 points on good volume. The advance/declines were better than 2 to 1 negative. The summation index is still trying to stabilize here. The market action now seems more option expiration related than anything else. The short term indicators for the S&P 500 are starting to roll over here though. Stock market indices here in general have been moving sideways for a month. A rollover here could lead to new lows or at least another test of the recent ones. Hasn't happened yet but the TRAN was pretty weak today. We'll have to see what the market has in store for us but lower prices would not be a surprise. Gold finished off a couple bucks on the futures after being higher earlier in the day. The US dollar was slightly lower and interest rates continue to rise. The XAU was up 1 1/3, while GDX added about 1/4. Volume was average. The gold shares were off of their highs as well but did finish in the black and outshined the metal once again. I do continue to have an open order out for the GDX November calls but I moved it to a closer to the money strike price. The inverse head and shoulders is still valid on the GDX daily candlestick chart but any downside in the gold shares from here will kill that pattern. Mentally I'm feeling a bit tired. The VIX was lower today despite a drop in stocks and that doesn't fit. The VIX did close below the up trend line that has been in place since mid-August. I'm not sure exactly what to expect from the VIX now. Tomorrows results will probably tell us a lot. Even though stocks were lower today is wasn't led by the NASDAQ and that's a small plus for the bulls. Technical indicators look like they want to roll back down here but haven't yet. Not sure what to expect tomorrow but I'm leaning towards the downside. It's expiration Friday and anything goes. Europe up and Asia down overnight. We'll close out the trading week tomorrow.

Sellers returned today as the Dow fell 100 points on average volume. The advance/declines were better than 3 to 1 negative. The summation index is beginning to track sideways. The NASDAQ was a slight leader but the volume wasn't all that much. The short term indicators for the S&P 500 are starting to stall their upwards movement. I'm not sure where we go next. The fundamental backdrop with higher interest rates remains. We won't be making any SPY option trades this week. It is the sidelines in that regard for now. Gold fell over twenty bucks on the futures and appears to be about to make a new low for the year. The US dollar was higher along with interest rates. The XAU lost 2 3/4, while GDX shed about 3/4. Volume was light. Another day like today and the inverse head and shoulders pattern on the daily GDX chart will be negated. It looks like that's where we're headed. I did adjust my open order for the GDX November calls but I may just cancel it and move to a closer to the money strike price. If gold doesn't hold in here we'll most likely be heading to $1600. Perhaps forgetting about gold here would be the best strategy. We'll see. Mentally I'm feeling OK. The VIX was slightly higher today and the short term technical picture remains the same. The Bollinger bands are starting to get closer together which implies a big move coming one way or the other. We'll remain patient for now with only 2 days left in the October option cycle. Not to mention the inflated premiums for the November SPY options as there is plenty of time left in them. Asia was mixed and Europe slightly lower last night. We'll keep an eye on the overnight headlines.

We saw some upsiode follow through for a change as the Dow gained 338 points on good volume. The advance/declines were better than 2 to 1 positive. The summation index is trying to turn around here and has stopped moving lower for now. The Dow was the leader today and that is not the most bullish scenario. We opened with a huge gap up higher to start and worked out way lower from there for the rest of the session. The short term technical indicators for the S&P 500 are now around mid-range so it could go either way from here. So far the positive expiration week bias has been in effect. But as we've seen lately, the market can turn on a dime. Not a lot of economic data this week but plenty of earnings. It is looking like we'll let this week pass for the S&P option trades and then go from there. Only 3 days left in the October option cycle. Gold was off $7 on the futures. The US dollar and interest rates were both little changed. The XAU and GDX both had fractional gains on light volume. The gold shares out performed the metal itself again and that's bullish. I have an open order out now for the GDX November calls. If it gets filled I will make it a point to do a better job than the disastor that was the last trade there was. We'll see. The potential inverse head and shoulders pattern for GDX is still there but it will have to get moving to the upside soon for it to work. Mentally I'm feeling OK. The VIX was lower with stocks higher and that fits. We got even closer to the 30 level for the VIX today and a break below there will certainly empower the bulls. Hasn't happened yet and the VIX could just as easily move back up tomorrow. Interesting times. We'll be keeping a close watch on this indicator for clues on the markets direction as things have the feeling of at least a short term break from the recent constant selling. Europe and Asia were higher overnight. We'll see how things go tomorrow.

A rally out of nowhere to begin the week as the Dow was up 550 points on good volume. The advance/declines were 5 to 1 positive. The summation index is trying to stabalize. The NASDAQ led the way and that's a plus. Volatility is the rule with the market trying to regain some footing here. Perhaps the positive expiration week bias will take effect. The short term indicators for the S&P 500 have turned back up with room to move higher. But we do have down trend lines in charge on most of the major index charts. Until they are taken out the trend is down. We are right at the first short term down trend line for the S&P. If we can move higher from here the next is at around 3800. Gold was up $7 on the futures. The US dollar was lower and interest rates were mixed. The XAU was up 2 2/3, while GDX rose 3/4. Volume was light. The potential inverse head and shoulders pattern is still there on the daily candlestick chart for GDX. I'm now considering the November calls there. Might place an overnight order. Mentally I'm feeling OK. The VIX was lower today and the short term indicators are mid-range again. So we could go either way here. There is an up trend line on the VIX daily chart that comes in at the 30 level. If we can somehow break down through that line we would see a more sustained rally in stocks. The VIX is a bit over 31 as of the close today. However there's nothing stopping the VIX from moving higher and stocks heading lower either. That has been the pattern since the middle of August. But we are moving into a seasonally favorable period for stocks even though it is the beginning of 3rd quarter earnings reports. I guess we'll just try and get through expiration week and go from there. Europe was higher and Asia mixed to begin the week. We'll keep an eye on the overnight developments.

Back to the downside as the Dow fell 403 points on average volume. The advance/declines were 4 to 1 negative. The summation index continues lower. After breifly being in positive territory at the start, the market moved lower all day. Yesterdays big gain was a mirage. The NASDAQ led the way lower. The short term indicators for the S&P 500 turned back down. At this point I think the best we can hope for next week is sideways instead of straight down. Bank earnings were mixed. Retail sales were flat which missed expectations. The daily candlestick chart for the S&P now posts a bearish configuration. We could not build on yesterdays gains. Options expiration week will be upon us. Anyones guess which way things will go. The usual positive market bias there will be hard to come by in this bearish atmosphere. Gold was off $28 on the futures. The US dollar was higher along with interest rates. The XAU dropped 4 1/2, while GDX was down a point. Volume was average. I dumped the GDX October calls for about an 80% loss. Selling yesterday would have resulted in an acceptable 50% loss. Obviously should not have waited. This trade was a disastor. The entry was horrible, then it showed a decent gain which I let turn into an unacceptable loss. So it checked off all the boxes for a terribly managed trade. Not sure what my train of thought was there or if there even was any. We'll put it behind and move on. I might even try the GDX calls again next week for a short term trade. Mentally I'm feeling OK. The VIX finished unchanged on the session which makes no sense whatsoever. A big move down for stocks and no movement on the VIX? I have no idea what is going on with this indicator. The VIX is in a solid uptrend though and that could make for a rocky week for stocks coming up. The VIX is overbought on a weekly basis. Options expiration week with more earnings reports on tap for next week. It won't be boring. I'll be checking the charts as usual over the weekend and see if I can find a trade for next week although the short term trades are not exactly my best ideas sometimes. Volatility will certainly be something to consider. Europe and Asia were higher to close the week. It's Friday afternoon and time for a break.

Volatility with a vengeance as the Dow opened down over 500 points lower and then finished the day up 827 points on heavy volume. The advance/declines were better than 2 to 1 positive. The summation index is still moving lower. We got a signal last night on the McClellan oscillator for a big move within the next couple of sessions and we certainly saw it today. The inflation data was worse than expected which explains the early sell off but I can't say there's any reason for the rally. We were looking for an oversold bounce and we got it. Rallies out of nowhere are classic bear market traits. However todays price action has the makings of an exhaustion to the downside, which would mean higher prices going forward for a more extended period of time. That's my best guess at the moment. A market that rallies on bad news is also usually bullish. The short term techncial indicators for the S&P have turned up. We'll have to see if there is any follow through tomorrow. The NASDAQ wasn't the leader today. It was one of the wilder days on Wall street. Gold was off $6 on the futures. The US dollar was lower and interest rates were up. The XAU and GDX had fractional losses but came back from their lows of the session just like the overall market. Volume was good. The short term indicators for GDX are still mid-range. My GDX October calls are solid losers and they're running out of time. Not sure why I'm still holding this position but I'm thinking that it has a chance to reach break even. We'll see. The trade has already been poorly executed and a part of me also thinks it's time to take the loss and move on. Nothing comes easy in this game. Mentally I'm feeling OK. The VIX was lower and the short term indicators have turned down. We'll see where it goes from here. The daily chart looks like it wants to go lower which would imply more upside for stocks. But I haven't been able to figure the VIX out lately. We'll get a look at retail sales tomorrow along with some bank earnings. Asia lower and Europe higher last night. We'll close out the trading week on Friday.

Inflation data failed to have a big impact as the Dow was off 28 points on lighter volume. The advance/declines were negative. The summation index is moving down. The producer inflation data was a bit higher than expected but it did not cause any massive selling that we've seen lately with these reports. We'll see what happens with the consumer number tomorrow. The S&P 500 remains short term oversold. I'm expecting a short term bounce in the stock indexes but it hasn't happened yet. I suppose there's always a chance that things will fall apart again tomorrow if the inflation data comes in worse than expected but that is not what I'm looking for. Most of the major stock indices are oversold and some have potential positive RSI divergences. So we'll see how it goes. Gold was off about $5 on the futures. The US dollar finished flat and interest rates were a bit lower. The XAU and GDX had fractional moves higher on light volume. The short term indicators for GDX remain mid-range. My GDX October calls are still sporting a small loss. GDX could be forming an inverse head and shoulders pattern on its daily candlestick chart. Or that could simply be wishful thinking on my part. We'll know in due time. Mentally I'm feeling OK. The VIX finished flat on the day. The short term techniclas remain overbought. The 50 day moving average here has just crossed through the 200 day which implies higher VIX readings going forward. Which in turn means more volatility and lower stock prices. However we'll just have to wait and see what the market decides to do here. Europe and Asia were both lower again as there are no buyers for now. We'll see how the market reacts to the inflation data on Thursday.

It was a mixed bag today as the Dow was higher and the overall market was lower. The most watched index added 36 points on good volume. The advance/declines were negative. The summation index continues lower. The NASDAQ was the downside leader and that is not a plus. The S&P 500 remains short term oversold and is on the cusp of making new lows. We'll get the producer inflation numbers tomorrow and my guess is that is won't be as bad as anticipated. But that's just a guess. The NASDAQ closed on a new low but the Russell 2000 is holding up better than the rest. The Russell led the way down and now could be the canary in the coal mine for at least a short term rally here. But we'll know more as the week unfolds. Regardless, we're still in the grips of a bear market. Gold was off a couple bucks today. The US dollar was a bit higher and interest rates a touch to the upside. The XAU and GDX had fractional losses on better than average volume. The short term technical indicators for GDX are now mid-range, so we could go either way here. The near term will be directed by the reaction to the inflation data. My GDX October calls are now back in the red. I have certainly rode this trade up and down and that is a recipe for disastor. Mentally I'm feeling OK. The VIX was up today and is getting to short term overbought but not there yet. Hard for me to figure out what the VIX means lately. The only thing for sure is that it implies more volatility going forward. I do think that it is an opportune time to put some longer term funds to work here and I did just that today. It would be pretty lucky to catch the bottom of this bear but my thought today is that we'll be higher than todays close by the end of the year. I could be wrong and often am. But with the longer term money you don't have to be completely exact and you have time on your side unlike the options trading. Both Europe and Asia were down. We'll see how it goes tomorrow.

We did not get the significant downside follow through to Fridays selling today as the Dow ended lower by 93 points on light volume. The advance/declines were 2 to 1 negative. The summation index is moving down. It was basically a day of hanging around as the market could not find a direction of travel. The NASDAQ did lead the way lower as the overall market was weaker than the Dow. Getting short term oversold for the S&P 500 but not completely there yet. It also looks like the short term indicators downward movement is starting to stall here. Waiting on inflation data due out Wednesday and Thursday. Gold was down $35 on the futures. The US dollar was up and the bond market was closed for a holiday. The XAU lost 1 3/8, while GDX shed over 1/3. Volume was light. Considering the drop that we saw in gold, the gold shares held up rather well. Not sure what it means going forward but the gold shares continue to out perform the metal itself. My GDX October calls are now back to where I bought them. I have obviously held on to this trade for too long as the management of it has been abysmal. Less than 2 weeks left in the October option cycle. The short term indicators for GDX continue to move lower. Mentally I'm feeling OK. The VIX was higher today but came back from its best levels of the session. The short term technical indicators here are pointing up. The 50 day moving average is about to cross the 200 day to the upside on the VIX which would imply more volatility and lower stock prices. We'll see. Europe and Asia were lower to begin the trading week. We'll keep an eye on the overnight headlines.

The market got whacked today as the Dow fell 630 points on good volume. The advance/declines were around 6 to 1 negative. The summation index is starting to move lower. The jobs report was a bit better than expected but not by much. That gave sellers some ammo I guess as we had a gap lower at the open and continued down from there. The NASDAQ led the way and that's a plus for the bears. The short term indicators for the S&P 500 have rolled over. After a huge start higher to begin the week, we are ending with a thud. It kind of has a feel as if things might just start to fall apart but we are already oversold for an extended period of time. I'm not sure what's next for the market at this stage. Gold dropped almost twenty bucks on the futures. The US dollar was up and interest rates rose as well. The XAU lost 5 points, while GDX shed 1 1/4. Volume was good to the downside. I don't know why I'm still holding on to the GDX October calls that I own. The short term indicators for GDX have now rolled over and have plenty of room to go lower. There is still two weeks left in these options but after today you have to think that gold is going lower with the overall market. I still have a price target that I thought would be met before expiration but this obviously could be wrong. The trade is still showing a small profit and I probably should have taken that today and been done with it. It looks like there could be a lousy exit for this trade to go with the lousy entry. Mentally I'm feeling OK. The VIX was up today but not as much as you would have expected with the market tanking like it did. The short term indicators here are around mid-range still. I'm not sure what we have going on with this indicator right now either. I will have to regroup over the weekend and try to figure out what to do next. With a couple of weeks to go in the October option cycle, there's still plenty of time to come up with a SPY trade. However with the market acting as it is at the moment and my inability to figure things out the sidelines might be a better idea. I will have to come up with a strategy for the current GDX call trade though. Plenty to ponder in the next couple of days. Europe and Asia were lower to end the week. It's Friday afternoon and time for a break.

Some selling ahead of the employment report as the Dow fell 346 points on average volume. The advance/declines were better than 2 to 1 negative for the second day in a row. The summation index is now tracking sideways. Not a huge decline or one to worry about in my mind as the NASDAQ wasn't the leader. The short term indicators on the S&P 500 are stalling at the mid-range level. So you could make a case for going either way here. We'll get the market reaction to the jobs report tomorrow and go from there. Gold finished flat on the futures. The US dollar was higher along with interest rates. The XAU was up a point, while GDX added 1/4. Volume was a bit above average. Some of the indicators for GDX are short term overbought. During rallies the indicators can remain overbought as price moves higher. That is the situation that I believe we're in with regards to GDX. I have an upside target there but we haven't reached it yet. Since there is still 2 weeks left in the October option cycle, I've decided to hang on to this trade for now. It is still in the black. Mentally I'm feeling OK. The VIX was up today and that fits with a market decline. However the VIX moved a lot higher than todays minor volatility would normally suggest. Not sure what that implies. The short term technical indicators for the VIX are starting to turn back up. The stock market has stalled after the huge gains to begin the week. That is not unexpected. How we close the week out will be important. More selling tomorrow will put into question the recent bottom. If we have a positive session it will be a plus for the bulls. At this point all we can do is wait and see. Asia was higher and Europe lower overnight. We'll close out the trading week tomorrow.

A pause in the upside today as the Dow fell 42 points on average volume. The advance/declines were around 2 to 1 negative. The summation index is trying to turn around to the upside and I suspect that it will be successful. Digesting the huge gains of the first two days of the week is what I think we have going on here. We opened with a gap lower but unlike recent market action todays decline was met with buyers that eventually took the market higher before dropping back down near the close. The short term indicators for the S&P are still moving up and have room to go higher. It feels like some type of bottom has been put in. The question remains whether or not this is the end of the decline that started in the beginning of the year. Tomorrow should be a waiting for the jobs report kind of day. Gold dropped $5 on the futures. The US dollar was higher along with interest rates. The XAU fell around 1 1/2, while GDX shed 1/3. Volume was better than average. GDX is now hanging around its 50 day moving average. My GDX October calls lost some ground and it's possible that yesterday was the day to sell them. I'm hanging on to them for now though it may not be the proper strategy. Mentally I'm feeling OK. The VIX was a bit lower today which doesn't fit with a down market. The short term indicators are moving down but look like they're beginning to stall. Not sure what to expect next here but Friday should tell the story. Fundamentally nothing has changed for the stock market. However the technical measurements got so out of whack to the downside that some kind of upwards movement was long overdue. We got that upside the first two days of this week. The question is just how long it will last. It seems like buyers are willing to step in now where before they dissappeared. We'll just have to wait and see where we go from here. Asia higher and Europe lower in last nights trade. We'll keep an eye on tonights headlines.

Upside follow through as the Dow gained 825 points on heavy volume. The advance/declines were better than 6 to 1 positive. The summation index is turning back up here from a deeply negative position. That usually means that the decline is over for now and this rally will have legs. It is also possible that the decline has ended for good but we'll only know that as time moves on. We did meet the measuring objective from the head and shoulders top for the S&P 500 at 3600 on Friday. Sellers have hit the sidelines for now. It looks like we may have missed the best opportunity to put longer term funds to work. But we'll see where we go from here. The short term technical indicators for the S&P have finally turned back up from being oversold. We are also heading back towards the 50 day moving average which is something that we've been looking for. Today we made it past the first down trend line for the S&P. The next one comes in at around 3925 and there is resistance at 3900 as well. That seems to be where we are headed in the short term. Gold was up another $30 on the futures. The US dollar sank and interest rates dropped a bit. The XAU added almost 3 points, while GDX was up around 3/4. Volume was good again to the upside. GDX is getting to be short term overbought and I have to consider selling my October calls here. I do have a higher price target in mind and the options still have over two weeks left in them. So I'm also considering being patient and perhaps getting out at a higher price on the option premium. Always plenty of unknown decisions to be made in the game. Mentally I'm feeling OK. The VIX was lower today but not by much considering the huge move higher we had in stocks. Not sure what that means. The short term technical indicators are mid-range on the VIX. My thinking is that near term the VIX will head down and stocks will continue up. We'll see. Earnings season is about to get under way and all I'm seeing and hearing is that it will be worse than expected. So we'll expect the opposite. Companies will drag down their estimates and then surprisingly beat them in this shell game that comes around each quarter. Europe and Asia were higher overnight. We'll see how things go tomorrow.

Now today we saw a nice oversold short covering bounce as the Dow soared 765 points on good volume. The advance/declines were 5 to 1 positive. The summation index is still moving down. A sharp rally out of the blue is typical for your usual bear market. This rise could have legs though as we have a positive RSI divergence on the SPY daily chart. Not to mention that we've been short term oversold for weeks. And I have mentioned more than once that we are pretty far away from the 50 day moving average on many stock indices. Not sure if this is the bottom though as the NASDAQ didn't lead today. But it's a great start to the month for the bulls. Gold jumped $35 on the futures today and closed above $1700. The US dollar was lower along with interest rates. The XAU was up 5 points, while GDX gained 7/8. Volume was good again to the upside. My GDX October calls are now solidly in the black. GDX is now at its 50 day moving average and that should provide some near term resistance. The short term indicators here are getting oversold but not completely there yet. Plenty of time left in this trade but the key will be when to sell it as the entry was not good. Mentally I'm feeling OK. The VIX dropped and the short term indicators have rolled over. It seems to me that the VIX should go lower and stocks higher from here but who knows? We'll know more as the week goes on. One day doesn't make a rally. Europe was higher and what was open in Asia mixed. Parts of Asia are on holiday this week. We'll see if we get any upside follow through tomorrow.