Back to the downside on option expiration Friday as the Dow lost 288 points on expiration heavy volume. The advance/declines were 2 to 1 negative. The summation index remains stuck in a sideways channel. The overall market was weaker than the Dow with the NASDAQ leading the way lower. That is not a plus. But just as we didn't know if yesterdays price action was option expiration related, we can say the same thing about today. There wasn't any really negative news to be used as an excuse for the decline. Yesterday the short term indicators for the S&P were turning up and today they have turned back down. The S&P is back below its 50 day moving average. The techncial picture here now argues for more downside going forward. Perhaps we will have better clarity after the Fed on Wednesday. Gold was up $11 on the futures. The US dollar finished flat and interest rates rose. The XAU gained 2 1/4, while GDX was up 5/8. Volume was average here. GDX is not yet short term overbought but both GOLD and NEM are. We will look to purchase the GDX October calls on any decline in GDX from here. That's the best we can hope for at this point since we have already missed the ideal entry point for this trade. We are still believers in a rally for the gold shares here but will not chase it unless there is some kind of short term pullback. We have seen the signs that interest is picking up for the gold shares. There is an extra week in the October option cycle and that could work in this trade ideas favor as well. Mentally I'm feeling OK. The VIX was higher today and the short term indicators here have turned back up. The daily candlestick chart for the VIX looks like it wants to go higher. But there's always the chance that today was a one day wonder and we'll only know that as time moves on. For now the market will be waiting on the Fed next week. We'll go over the charts as usual this weekend but our minds are made up as far as trying the GDX October call trade if we get the chance. The option premiums for SPY will be high as we move into the October cycle. Europe and Asia were higher once again to finish the week. It's Friday afternoon and time for a break.