A pause in the upside for the Dow today as it fell 168 points on light volume. The advance/declines were slightly negative. The summation index is moving higher. The overall market fared better than the Dow, with the NASDAQ posting a small gain. Inflation data came in where expected. The S&P 500 has now reached overbought territory on some of its short term indicators. We do favor the SPY September puts on any strength tomorrow for a short term trade. Not sure if we'll try it or even get a chance. It may already be too late for the ideal entry. We'll have to see the reaction to the jobs report. Gold was off five bucks on the futures. The US dollar was higher and interest rates slightly lower. The XAU slipped 1 1/3, while GDX lost 1/4. Volume remains light. The 50 day moving average has stopped the recent move higher in GDX for now. We'll keep our order for the GDX October calls out there. Mentally I'm still feeling a bit tired. The VIX continued lower which doesn't fit with a down market. Not sure what that means going forward but the VIX is short term oversold. We'll just have to wait and see what tomorrow has in store for us. It should be a get away day for some hoping to get the jump on a long holiday weekend. Everyone will be back at their desks on Tuesday. We'll see if the SPY puts are worth a try. Asia was lower with the exception of Japan and Europe followed suit with the exception of Germany. Beginning of month of September on Friday. We'll close out the trading week tomorrow.

Continuing higher today but less dramatic as the Dow added 37 points on light volume. The advance/declines were positive. The summation index is now pointing upwards but has just begun to turn around. The NASDAQ continues to lead the way and as long as it stays that way we remain positive going forward. The S&P 500 was higher today and the short term indicators are still moving up. Not quite short term overbought just yet here. We'll have to see the reaction to tomorrows inflation data. It's also the end of the month tomorrow. Sellers have disappeared for now but we know that can change. Gold was up another $6 on the futures. The US dollar was lower and interest rates held steady. Both the XAU and GDX finished flat on the session. Volume was light. My open order for the GDX October calls remains out there. GDX has made it back up to its 50 day moving average. Mentally I'm feeling tired. The VIX was lower today and has gotten down to short term oversold. We'll see how long it stays that way. I did consider getting some SPY September puts today but a better entry point would be on sometime Friday if the market remains higher from now until then. We'll see what happens. One thing to remember about the recent four day run is that the volume has been pretty anemic. Now it that because traders are out on their last summer vacation or is this just a short covering rise? As time moves on we'll get the answer. Asia was generally higher and Europe slightly lower last night. We'll see what tomorrow brings.

Moving higher as the Dow gained 292 points on light volume. The advance/declines were shy of 5 to 1 positive. The summation index is turning back up. Once again the NASDAQ was the leader going higher and that's a plus for the bulls. Probably some short covering today as the S&P 500 closed above its 50 day moving average. The short term indicators here are moving higher and not yet completely overbought. The bearish engulfing pattern on the daily chart for the S&P failed. The short term down trend line has been broken to the upside and it's pretty safe to say that the August decline has ended. Whether or not we make a new recovery high remains to be seen. We will wait for a decent signal in order to try the SPY September options. Gold climbed $18 on the futures. The US dollar was lower along with interest rates. The XAU added another two points, while GDX gained 1/2. Volume was almost average. I still have the open order for the GDX October calls out there but it's obvious that we've missed this move higher for the gold shares. Getting to short term overbought on GDX but not there yet. Another day like today would do it. Mentally I'm feeling OK. The VIX was lower today and closed below its 50 day moving average. Short term oversold on the techncial indicators here but that doesn't mean that it can't stay that way. The low VIX is another area of positive support for the market. I think that unless we see some kind of dramatic turnaround for stocks before the end of the week that we will trend higher from here. Don't know where the liquidity is coming from but we will not argue with price. We'll also keep in mind that things can turn on a dime if the inflation or employment reports don't come in as expected. But with the summation index turning around back to the upside we've got to be looking for higher prices from here. Europe and Asia were positive as markets are moving up around the world. We'll see if the party continues tomorrow.

Starting the week on a positive note as the Dow gained 213 points on light volume. The advance/declines were around 3 to 1 positive. The summation index may finally be starting to try and turn around. The NASDAQ led the way higher. That's two plus days in a row for the S&P but that bearish engulfing candlestick still looms. Perhaps that pattern will fail but we are still below the 50 day moving average on the S&P 500. The short term indicators there are now mid-range or getting there. No SPY trades in mind at the moment. Gold was up $8 on the futures. The US dollar was a bit lower along with interest rates. The XAU rose 2 3/4, while GDX was up over 1/2. Volume was light. It appears that we've missed this move higher in the gold shares. They are outperforming the metal itself and that is bullish. I did place an open order for the GDX October calls but it won't get filled unless we see a pullback. We'll certainly hope for the best but it appears that the train has already left the station for this idea. Mentally I'm feeling OK. The VIX was lower today and that fits with a positive stock market. Getting to short term oversold here but not completely there yet. The VIX is still above its 50 day moving average. Plenty of economic data for the market to sift through this week with inflation news on Thursday and the jobs report on Friday as the headliners. Not sure what to expect but there will be plenty of excuses for the markets to move. Volume remains light as we trade the last week in August. As I've said not everybody will be at their desks with the final summer flings taking place before the Labor day weekend. We will remain looking for the next trading signal. Europe and Asia were higher to begin the week as well. We'll keep an eye on tonights headlines.

The Fed chairman had nothing new to say and the market used that as an excuse to move higher as the Dow gained 247 points on light volume. The advance/declines were positive. The summation index is still moving down. Could it be that yesterday was a washout to the downside on fears of the Fed? We'll know as time moves on. We still have that bearish engulfing pattern staring at us on the S&P 500 daily chart. At a minimum it implies at least sideways price action. The short term technical indicators have turned back up for the S&P. We have the final week of summer coming at us so perhaps not everyone will be at their desks next week. Inflation data and the jobs report are due. We'll also close out one month and open another. The technical picture for stocks isn't exactly clear cut at the moment. Gold was off around $6 on the futures. The US dollar was a bit higher along with interest rates. The XAU lost 1 1/4, while GDX shed around 1/4. Volume was light. I canceled my open order for the GDX September calls so it wouldn't be out there over the weekend. I'm still in favor of some gold share calls here but thinking that I might head out to the October option cycle. We'll see. The short term indicators for GDX are mid-range so I probably shouldn't be in any kind of hurry. Mentally I'm feeling OK. The VIX sank today and that fits an up market. The short term indicators have turned back down and imply lower VIX readings to come. That would be supportive for the stock market if it comes to pass. I'm not exactly certain what's going on with stocks at the moment. But I do know that if we don't see a turnaround soon things will get ugly based on the location of the summation index to its zero line. WE'll have plenty to ponder as we check ut all the charts over the weekend. Asia was lower and Europe slightly higher to close out the trading week overseas. It's Friday afternoon and time for a break.

A full fledged retreat today as the Dow fell 373 points on light volume. The advance/declines were around 3 to 1 negative. The summation index is moving down. Not yet at the zero line here but on the way and we know what that means. Things could just fall apart. Hasn't happened yet and there's time to turn things around but I don't know what will. So much for my assumption that today would simply be a waiting game. Not sure exactly what's going on here but the market knows all. The NASDAQ led the way lower and that's a negative. We made it back to the 50 day moving average on the S&P 500 and quickly headed south. The option premiums on the SPY September puts were more than we wanted to pay for them even being far out of the money. The short term indicators here have now turned back down. The daily candlestick chart for the S&P has a bearish engulfing pattern now. So it appears that we are heading lower and may take out the recent lows. We'll see what happens after the Fed speech tomorrow. Gold was off a few bucks on the futures. The US dollar was higher and interest rates were up a touch. The XAU and GDX had fractional losses on light volume. The gold shares seem to be holding in there despite todays stock market losses. I re-entered my order for the GDX September calls. Not exactly sure this is the right idea here but we'll see what happens. If the overall market does tank the gold shares will probably go along for the ride. We'll keep a close eye on it. Mentally I'm feeling OK. The VIX turned back up and so did its short term indicators. The daily candlestick chart here has a bullish engulfing pattern implying higher prices for the VIX going forward which would imply more volatility. It is still below the 200 day moving average though and the important 20 level. The short term indicators here are still close to mid-range. Interesting times as we enter late summer. Asia up and Europe down in last nights trading action. We'll close out the trading week tomorrow.

Buyers returned to the marketplace today as the Dow added 184 points on light volume. The advance/declines were better than 3 to 1 positive. The summation index continues down. The NASDAQ is leading the way and was up over 200 points again. It has broken through its short term down trend line. The only caveat is the light volume. The S&P 500 is breaking through its short term down trend line as well. The short term indicators here are now moving up with room to go higher. I'm not completely sold on the down trend coming to an end here but it is certainly possible. A lot of the technical indicators were blown out to the downside despite the not so big decline that has taken place. We'll wait and see how things look going forward. Almost back up to the 50 day moving average on the S&P. Gold found buyers as well, the futures were up twenty bucks. The US dollar was lower along with interest rates. The XAU climbed 3 1/2, while GDX was up over 3/4. Volume was good to the upside. It looks like we missed the GDX call trade here and I canceled my open order. However we'd be willing to try the calls here if we get some kind of pullback in the near term. The better volume today shows that there may finally be some interest in owning the gold shares again. Mentally I'm feeling OK. The VIX was lower today and the short term indicators have turned down. This implies that stocks will continue to rise from here but the indicators are at the mid-range level. To me that means that they could go either way from here. A lot will be determined by the market reaction to the Fed chairmans speech on Friday. I'd expect tomorrow to be a waiting game. Asia and Europe were higher overnight. We'll keep an eye on tonights developments.

The Dow was one of the weakest performers on the day as it fell 174 ponts on light volume. The advance/declines were negative. The summation index continues lower. The S&P 500 opened higher and closed lower for a one day downside reversal. The S&P remains short term oversold but not completely so. The NASDAQ managed a small gain on the session so all hope is not lost for the bulls. I thought we would see a better bounce in stocks from the oversold condition but this is what we have to work with so far. We'll continue to see if the S&P can make it back near the 445 level and then take a hard look at the SPY September puts there. Looks like we could just be in a holding pattern until Fridays Fed chairmans speech. Gold was up a couple bucks on the futures. The US dollar was higher and interest rates held steady. The XAU and GDX had fractional gains on light volume. I'm thinking about canceling my open order for the GDX September calls and moving to a lower strike price. We'll see. GDX still hasn't made it down to the 27 level which would be the ideal target to put this call trade on. However it's possible that a temporary bottom is in place. The light volume is a concern though. Mentally I'm feeling OK. The VIX was lower today which doesn't fit with a lower overall market. The short term indicators here are heading towards mid-range now. I'm not getting a good reading on what's next for the VIX. So it appears that we are just waiting for Friday at this point. Europe and Asia were both up overnight. We'll see how things go tomorrow.

Bouncing higher today but mostly in the overall market as the Dow was down 37 points on light volume. The advance/declines were negative. The summation index continues lower. Both the NASDAQ and the S&P 500 had decent gains on the session with the NASDAQ up over 200 points. That's a plus for the market. The short term indicators have turned back up for these two indices. Now the question is whether this is the beginning of a real advance or just a dead cat bounce? I suppose you could make a case for either one. Just rolling into the September option cycle so premiums are high. We've got the Fed chairman making a speech on Friday but that seems pretty far off right now. I guess we'll see if the SPY makes it back to its 50 day moving avergae and take it from there. That comes in at the 444 level along with a short term down trend line. There are more bears out there now so trying the SPY puts isn't as sure as it was in the August option cycle. Gold was up $7 on the futures. The US dollar was just a touch lower and interest rates rose. The XAU and GDX had fractional gains on light volume. My order is still out there for the GDX September calls. Not sure if I should just leave it, adjust it or just forget about it. The gold shares remain short term oversold. Mentally I'm feeling OK. The VIX was a bit lower today. The short term indicators here have stalled but they are still in overbought territory. Still below the 200 day moving average here. I suppose that if the market continues higher from here on light volume we will consider the SPY puts ahead of Fridays Fed chairman speech. But we all know that the market rarely cooperates with our best laid plans. If we could get said rally and the McClellan oscillator back to the zero line, that would be the ideal set up. We'll see. Asia was mixed and Europe generally higher to begin the trading week. We'll keep an eye on the overnight developments.

We had a gap lower at the open and the market spent the rest of the day trying to make up the lost ground. The Dow rose 25 points on average volume. The advance/declines were positive. The summation index is moving down. Today seemed like a day of squaring positions on option expiration Friday. The technical picture hasn't changed. Oversold and staying that way. We will see a decent bounce on Monday or Tuesday in my humble opinion. What happens after that will determine how fast we make it down to 4200 on the S&P 500. 4200-4100 is where the next area of support lies for the S&P. My guess is that is where we are heading. We still like the SPY September puts at some point but we'd like to see some kind of relief rally to take the position. But markets rarely cooperate. Gold was up a few bucks on the futures. The US dollar was a bit lower along with interest rates. The XAU and GDX had fractional losses on light volume. I adjusted down my open order for the GDX September calls again. GDX is still a half a point away from our target of 27. Mentally I'm feeling OK. The VIX was lower today as it fell back from its 200 day moving average. The short term indicators here are starting to roll over and it looks like at least a short term top has been put in for the VIX. That would fit in with our prognosis of some kind of bounce early next week. We'll see. Just rolling into the September option cycle so premiums will be high. We aren't looking for the beginning of a sustained rally but perhaps a snap back to the recent broken up trend line. That could set us up for the September puts. Might just be wishful thinking. We'll check the charts over the weekend as usual. Europe and Asia were lower to close out the week. It's Friday afternoon in the summer and time for a break.

Another day, another loser as the Dow fell 290 points on summer average volume. The advance/declines were 2 to 1 negative. The summation index continues down. Getting quite oversold on the McClellan oscillator so some kind of bounce is due. Might have to wait until next week for that. It has been an orderly decline so far as we haven't had any super negative sessions yet. Also waiting for the final heavy volume wash out that occurs at the end of these moves. Don't know when we'll get that. The NASDAQ continues to lead the way lower and that fact remains a negative for the market. All the major averages are now below their 50 day moving averages. Oversold, staying that way and that is becoming an everyday siren song. It's a buyers boycott with no end in sight at the moment. We still want to attempt the SPY September puts after we see some kind of relief rally. But we missed this move lower as our work pointed us in the wrong short term direction this time around looking for the SPY calls during expiration week. We'll keep moving forward though. Gold was off another ten bucks today. The US dollar finished little changed as did interest rates. Both the XAU and GDX took fractional losses on light volume. I adjusted down my order for the GDX September calls. Only a half a point away from 27 on GDX so we'll see if it makes it down there. Oversold for gold itself and the gold shares. The fundamental picture there is bearish as well. We still believe in the technicals though and figure this is as good a time as any to try the GDX call trade. Mentally I'm feeling OK. The VIX was up and that fits with todays negative price action. Just about short term overbought on the VIX and another day like today will do it. That's another reason to suspect that we'll see some kind of bounce relatively soon. How that bounce actually goes will tell us a lot about just how weak things are right now. Europe and Asia were lower as selling is going on around the globe. We'll close out the trading week tomorrow.

Sellers continue to have the upper hand as the Dow fell 180 points on light volume. The advance/declines were shy of 3 to 1 negative. The summation index is heading down. The NASDAQ was the leader today and that's a negative. Now it appears that we'll just having selling into the expiration on Friday as buyers seem unwilling to step up to the plate. Still short term oversold and staying that way for the major averages. It looks like we missed our chance for the SPY August puts this time around. We'll be looking for the September puts going forward. But we'll have to at least wait for some kind of bounce. However the path of least resistance is lower until proven otherwise. Gold was off a dozen on the futures. The US dollar continues to climb along with interest rates. The XAU fell 1 1/2, while GDX shed 1/3. Volume remains very light here as there is no interest in buying the gold shares. Short term oversold on all the indicators for GDX. I did place an overnight order for the GDX September calls and I'm leaving it out there. If GDX gets down to 27 this order should be filled. If we don't try the calls here with an obvious oversold condition then when would we try them? But the 50 day moving average is crossing below the 200 day moving average and that is the implied kiss of death for GDX. Mentally I'm feeling OK. The VIX was up slightly today. Not yet overbought here so there is still room for the VIX to advance. The path of least resistance here seems to be up which would imply more volatility. We are in the midst of a summer swoon in the stock market. How low will it go? We can make a case for 4200 on the S&P 500 but hopefully not in a straight line. As usual the market knows much more than we do. Foreign markets closed generally lower. We'll see if the selling continues tomorrow.

The market sold off today as the Dow fell 361 points on light volume. The advance/declines were 5 to 1 negative. The summation index is moving down. Whatever ideas that I had about the SPY August calls appear to be wrong but we'll see. The S&P closed right at or just below its daily up trend line from March. Considering the NASDAQ has already penetrated this line it would make sense for the S&P 500 to follow. Not sure what's going on here but we'll follow the summation index and that calls for lower prices. Perhaps we'll get an expiration week bounce but not at the rate we're going. Our work had originally called for the close this week to be around 451 on the SPY. That idea may be out the window. Both the NASDAQ and the S&P remain short term oversold and staying that way. That's not a good sign for the bulls. However we will get an oversold bounce at some point. When that point will occur is the question. Gold was down ten bucks on the futures. The US dollar and interest rates were slightly higher. The XAU lost 3 1/4, while GDX dropped 3/4. Volume was slightly below average but a pick up from what we've seen lately. 27 is the number that we're looking for on GDX. I'm considering placing an overnight order for the September calls there in case we see a big drop tomorrow in GDX. GDX is oversold on a daily and weekly basis. Mentally I'm feeling OK but I must admit the market action so far this week has me second guessing things. I had thought that perhaps things would be calm this week. Wrong. The VIX was up today and that certainly fits with a down market. The short term indicators are now moving up and still have room to go higher before reaching overbought. The daily candlestick chart looks like it wants to go higher. So perhaps we'll see more selling tomorrow. No summer doldrums to be seen. Asia was mixed and Europe lower last night. We'll see what tomorrow brings.

Today had summer Monday written all over it as the Dow was up 26 points on light volume. The advance/declines were negative. The summation index continues lower. The NASDAQ along with the S&P 500 outperformed the Dow. The short term indicators for the NASDAQ and the S&P have both turned up but remain in oversold territory. I did place an order for the SPY August calls overnight but it wasn't filled. We needed to see some weakness today to really get this trade and we only got a little on the open. The market rarely cooperates. We might get a chance later in the week to try this again but time would be running out. It would have been an in on Monday and out on Tuesday type of trade because we are looking for weakness as the week goes on. However we'll just have to move on and look for the next opportunity. Gold was off $7 on the futures. The US dollar was higher and interest rates were up slightly. The XAU was down 1 2/3, while GDX shed 1/2. Volume remains pretty light here as interest in the gold shares is lacking. The gold shares did come back from their worst levels of the day though. Mentally I'm feeling a bit tired. The VIX was down just a bit today. The short term indicators here are mid-range. The VIX does remain above its 50 day moving average. Options expiration week is here. We're looking for strength early in the week, weakness in the middle followed by buying towards the end. That's the best guess from here. It may be uneventful as we are in the middle of August. There's still some earnings reports to trickle in but most of that is out of the way. Europe was generally up and Asia lower to begin the week. We'll keep an eye on the overnight devleopments.

A mixed market to close out the week as the Dow gained 105 points on light volume. The advance/declines were slightly positive. The summation index continues lower. Inflation data came in where expected and there really wasn't much of a market reaction. The overall market was lower with the NASDAQ the downside leader. The NASDAQ closed below its 50 day moving average and also below the up trend line that had been in place since March. Those are not positive developments. The S&P 500 remains above its up trend line from the spring but it is probably just a matter of time before it breaks it. Both the NASDAQ and the S&P remain short term oversold. We took a look at the SPY September puts and the premiums are sky high. But that's probably the place to be. That said we are now looking at a different trade next week involving the SPY August calls. We are considering buying weakness on Monday for a short term trade. Will consider this idea over the weekend. Gold was off a few bucks on the futures. The US dollar was higher along with interest rates. The XAU was up almost 1 1/4, while GDX added 1/4. Volume remains very light here. The short term indicators for GDX have curled back up. Should be try the August calls here with only a week to go? Probably not as the volume here hasn't been up to snuff lately. Mentally I'm feeling OK. The VIX dropped today which doesn't fit well with a mixed market. However the short term indicators here are trending down and the daily candlestick chart looks like it wants to go lower. That would be another reason to try the SPY calls in the near term if the lower VIX trend continues. But we'll have to go over the charts this weekend to see if trying calls is even worth the risk because the bears have clearly taken over for now. That said, some of our indicators are saying some kind of bounce would be due if Monday is negative. So we'll see. Europe and Asia were lower with the exception of Japan to finish the week. It's Friday afternoon and time for a break.

Well, there is something going on in the markets we just don't know what. The Dow rose 52 points on better than average volume. The advance/declines were negative. The summation index is moving down. The inflation data came in light and the the market had a gap higher at the open. The rally lasted all of half an hour and sellers once again took over. With two hours to go we were back in negative territory. Things went back and forth from there before the close. The NASDAQ managed to hold on to its daily up trend line. Both it and the S&P 500 remain short term oversold. I think that we may have to go out to the SPY September option cycle to try the puts here. But we'll have to wait and see how the week finishes. Gold was off $4 on the futures. The US dollar ened higher after being down early. Interest rates were up despite the tame inflation numbers. The XAU and GDX had slight fractional gains on light volume. Still short term oversold on GDX. Will we consider trading the GDX calls here with about a week to go in the August option cycle? We'll see. Mentally I'm in a bit of a quandary as we want to try the SPY puts but cannot seem to time the entry. The VIX was all over the place and finished little changed. The short term indicators here are starting to curl back up which would imply more selling and volatility on the way. The market always knows more than we do. The recent erratic price action has a reason that we do not know but that will eventually become apparent to all. By then it will be too late. Most likely we will let tomorrow go by and try to figure things out over the weekend. Europe and Asia had gains overnight. We'll close out the trading week tomorrow.

The Dow headed lower before tomorrows inflation data as it lost 191 points on light volume. The advance/declines were negative. The summation index continues lower. The NASDAQ led the way down which has been the case lately. It's landed on its 50 day moving average. The up trend line here on the daily chart is where the index lies now. Tomorrow will be important to see if things hold up here for the NASDAQ. The S&P 500 is almost to the same support areas. Both of these major indices are short term oversold but that doesn't mean they won't stay that way. We'd like to see stocks move up from here in an effort to buy the SPY August puts early next week. But the market rarely cooperates. Gold was off another ten bucks on the futures. The US dollar finished little changed along with interest rates. The XAU was off 1/2, while GDX rose a nickel. Volume remains extremely light here. Halfway through the session I did place an order for the GDX August calls but canceled it near the close. The gold shares holding steady with a falling gold price is bullish. GDX is also short term oversold. But I wasn't so convinced in this idea to try it a higher price than I wanted to pay. If the inflation data comes in light I would expect gold and the gold shares to benefit. Mentally I'm feeling OK. The VIX bounced around today like the overall market and ended unchanged. I'm not sure where it goes from here. It was looking positive before we had the final hour market swoon. The only thing that I can say with any certainty is that the bullish run up that we had for June and July is history. Asia was mixed and Europe higher overnight. We'll see what tomorrow brings.

Sellers returned today but it wasn't a bad as it could have been. The Dow fell 158 points on light volume. The advance/declines were negative. The summation index continues lower. We opened with a gap down and the Dow was off over 450 just an hour and a half in. But we made steady upward progress from there to finish where we did. The NASDAQ was the leader going south and that's a negative. The S&P 500 touched its lower Bollinger band and went up from there. It remains short term oversold. I still like the SPY August puts at some point but it looks like we might see a small rally from here. Or not as the market is trying to make up its mind. We'll stay on the sidelines for now. Gold fell ten dollars on the futures. The US dollar was higher and interest rates dipped a little. The XAU and GDX had fractional losses once again on very light volume. GDX remains short term oversold and I thought about getting some calls there today. The gold shares are holding up well with the price of gold dropping and that's always a plus. If the inflation data this week comes in weaker than expected we should see gold move higher. However that's a big if. Had I not had so many losing trades in GDX so far this year I might be inclined to give the calls another shot. We'll just watch and wait here as well. Mentally I'm feeling OK. The VIX was up today but fell back from its highest levels on the session. Still overbought here but not to an extreme. The daily candlestick chart for the VIX looks like it wants to head back down. However this indicator can be hard for me to gauge sometimes. I'd expect the markets to be in a holding pattern tomorrow ahead of the coming inflation news. Europe and Asia were lower with the exception of Japan. We'll keep an eye on the overnight headlines.

Buyers returned to the game as the Dow gained 407 points on light volume. The advance/declines were positive. The summation index is still trending lower. The Dow was the leader today and that isn't the most bullish scenario. We were pretty short term oversold after Fridays price action so a bounce was in the cards. What happens moving forward is what we're concerned about. I still like the SPY August put idea but when to buy them is the question. Before or after the inflation data? If we continue higher into the close on Wedneady I'll probably try them then. If not the picture isn't as clear. The short term indicators for the S&P have turned back up with plenty of room to go higher. The Bollinger bands are starting to get closer together on the S&P daily chart as well. Are we heading back to new recent highs for the stock indexes? Always plenty of questions in the game. Gold was off five bucks on the futures. The US dollar finished little changed and interest rates ticked up. The XAU and GDX had fractional losses on very light volume. Barrick Gold releases its earnings tomorrow. That will influence GDX one way or the other. We're still considering the GDX September calls. Mentally I'm feeling OK. The VIX was lower today and that fits with an up market. The short term technical indicators here have turned back down. It's another reason that there could be more gains for stocks in the near future. But we'll have to wait and see as things don't usually travel in a straight line. I may place an open order for the SPY August puts tonight but perhaps waiting until Wednesday is the better plan. Asia and Europe started the week mixed. We'll see if there is any follow through buying tomorrow.

We had a one day reversal to the downside as the market opened higher and closed lower. The Dow fell 150 points on average volume. The advance/declines were slightly positive. The summation index is moving lower. The jobs report came in where expected and we opened with a gap higher and then fell back. The market rallied good from there before turning around mid-session and dropping into the close. The S&P led the way lower. Short term oversold there now on some of the indicators. We are also pretty oversold on some of the other technical signals that we track. That said it appears today was our chance to purchase the SPY August puts and we did not. I still might be willing to give this idea a try next week if we see some kind of rally early in the week. But the tone of the market has changed and sellers have taken over. Gold rose $7 on the futures. The US dollar was lower along with interest rates. The XAU was up 1 1/8, while GDX gained about 1/3. Volume was light. The gold shares are short term oversold but I sold my GDX August calls anyway. It was an 80% loss. Not a lot of money involved but this trade was ill timed. The volume here on the up days is pretty light so there isn't any real interest in owning the gold shares here. GDX is still holding on to its 50 week moving average though. I'll perhaps consider going out to the September option cycle here but if the market drops more as we suspect it will, the gold shares will follow. Mentally I'm feeling OK despite another losing trade. Should have used a stop loss order there. The VIX was up today and remains short term overbought. Still below the 20 level here. If the VIX can work off the overbought condition we may have a chance to try the SPY August puts next week. My hope would be to purchase some SPY puts ahead of the inflation data due out on Thursday and Friday. Up trend lines remain intact on the daily charts for the major averages. But they won't hold up if the decline continues from here. Europe and Asia were higher to close out the week. We'll be checking the charts as usual over the weekend. It's Friday afternoon and time for a break.

Slight downside follow through to yesterdays debacle as the Dow fell 66 points on average volume. The advance/declines were negative. The summation index is moving lower. Just waiting for tomorrows employment report seemed to be the theme of the day. Tomorrow will be an important day. If the market continues to sell off then we probably won't get a chance to buy the SPY August puts. However if we manage to pull off a rally we'll maybe have a shot at this idea early next week. The short term indicators for the S&P 500 are still pointing down though. The longer term trend lines on the daily charts for the major averages remain in place. Gold was off five bucks on the futures. The US dollar was slightly lower and interest rates rose. The XAU had a fractional loss, while GDX was flat. Volume was light. I remain in the losing GDX August call trade for now. GDX is now short term oversold so a bounce is possible but it will depend on the reaction to tomorrows data. Mentally I'm feeling OK. The VIX was lower today which doesn't fit with a slightly down market. The short term indicators are trying to roll over here which would support the bulls if they are successful. I'm not sure what's next here for the VIX. It looks like AMZN is up and AAPL is down on the earnings after the bell. Europe and Asia continued lower overnight. We'll see what tomorrow brings.

The market got clobbered today as the US debt was downgraded by one of the rating agencies. The Dow fell 348 points on average volume. The advance/declines were around 4 to 1 negative. The summation index is starting to move down. The NASDAQ led the way lower and was off over 2%. That's a negative. The S&P 500 had a gap lower at the open and just kept on falling. The short term indicators there have dropped with room to go lower. Obviously we've missed the best entry point for the SPY August puts but we still believe in that idea. We'll be looking for some kind of snapback move to get the puts in the coming days. The longer term up trend line for the S&P comes in at 4400 and that is the target for the move lower. Gold fell $7 on the futures. The US dollar was higher and interest rates finished mixed. The gold shares followed the overall market lower which was what we feared since I own the GDX August calls. The XAU dropped 3 1/2, while GDX lost almost a point. Volume was above average again to the downside. My GDX August calls are dead and I'll be looking to exit on any kind of snapback here as well. GDX is now short term oversold. It did breach the 30 level so the potential inverse head and shoulders pattern on the daily chart has been negated. Probably should have just sold the GDX calls today and taken the loss but there's a chance that the jobs report comes in light. That would provide a reason for a bounce in gold and the overall market in theory. This trade went from a small winner on Monday to a loser at the close today. That's just how it goes in the game sometimes. Should have just focussed on the S&P but hindsight is never wrong. Mentally I'm feeling OK. The VIX spiked today and that's not a surprise given the decline. Not completely short term overbought here yet but one more down day would do it. Closed above the 50 day moving average here and if it stays above it there will most likely be more selling. Europe and Asia got smashed overnight as well. We'll see if the tech earnings can turn things around tomorrow.

A mixed bag today as the Dow rose 71 points on average volume. The advance/declines were 2 to 1 negative. The summation index is back to tracking sideways. The overall market was weaker than the Dow with both the NASDAQ and S&P 500 lower. The S&P is still short term overbought but the indicators are beginning to roll over. I still favor the SPY August puts at some point. As I've said the timing will have to be spot on and we don't have a clear signal just yet. It wasn't exactly a great start to the month for stocks but we'll see how the rest of the week plays out. Gold got dumped as the futures were off $27. The US dollar was higher along with longer term interest rates. The XAU lost 4 1/2, while GDX shed over 1 1/8. Volume was above average to the downside. GDX is getting short term oversold but not all the way there yet. Price needs to stay above the 30 level or the inverse head an shoulders pattern here will be negated. Unfortunately for me it doesn't look like 30 will hold after todays price action. My GDX August calls are back in the red. Had a chance at a small profit yesterday and in retrospect probably should have taken it. If our scenario of a drop in equity prices is correct, the gold shares will most likely go with them. Even though there are still over 2 weeks left in the August option cycle this GDX trade now doesn't look like the right idea. The volume pattern here in the near term looks negative. Mentally I'm feeling OK. The VIX was up today and that fits with the overall lower market. The short term technical indicators here are now mid-range and so they could go either way. Might wait until Fridays employment report to decide. I'm not sure which way the VIX will go. Europe and Asia were lower with the exception of Japan. We'll keep an eye on the overnight developments.