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The drop, consolidation, and resumption upward has been seen many times before. Just look at the start of this month (the red circle near the center of the graph). But does the trendline break mean this time it's different? That's the million dollar question.
I'm hanging on to my GDX long position, which is having a good day so far. The yellow tint below is the retracement. I am very impressment with the surge in volume recently. The real question is whether it simply fights its way back up to around 45 and then slips again, or whether it can muscle its way through that entire retracement area and push beyond it – – which would be insanely bullish, given the volume. I'm going to hang up and push the stop higher as we go.
I'm pretty surprised what a lame-o reaction GLD is having to the strength in equities; it looks like the dollar's strength is getting the best of it. So far this morning, equities are strong (The Dow is up well over 100 points, and all my index quotes are green); as you can see below, SPY is kicking GLD's hiney. I'm throwing my GLD long under the bus, at a modest profit from Friday, and I've taken some handsome profits in DIG and SSO. I'm holding on to all fourteen of my lottery longs – – the sixteen in my 401-k are all in the green (the two extra being OIH and GDX, both long as well).
Happy new week to everyone – a week where we kiss September good-bye (well, actually, where we punch it and throw it down the stairwell) and welcome (*sigh*) October.
As you're aware, what lies ahead is really all tied up in what the dollar does. I think the long-term view of EUR/USD points downward, and so in turn I'm going to go full-on bear within the next couple of weeks (at this point, I've only got the upper half of the costume on). The medium-term view of the EUR/USD, shown below, could be construed as mildly bullish, as long as it stays above that line I've drawn.
Taking a closer look, things seem more vulnerable – – just the same as with equities. The market is on a downward tilt (again, short term) so I'm going to be keeping very tight stops on my OIH, DIG, and GLD long positions.
The quality of the comments over the course of the weekend was even higher than usual. If you've got some time to spare and haven't done so, I'd suggest you thumb through the past couple of days' worth of comments; there are some real gems in there.
The number of followers I have on Twitter is so close to 3,000 I'll mention it again – follow me! It's free!
I am paying more attention to the patterns of index charts than I am anecdotes about Jewish holidays, and I'd like to use the $TRAN as an example this morning:
Even though I still have a good quantity of short positions and puts, I have loaded up my only large positions with bullish plays. The dip we've had over the past week has been healthy and orderly, and I think one last lunge higher across the psychologically-significant and media-friendly 10,000 level on the Dow would, paradoxically, be a wonderful gift for the bears.
The tricky part is gauging just how high it will go. The cyan and magenta tints in the chart indicate how the push higher could come in either a "medium" or a "large" size (God forbid fast-food-loving America super-sizes it, as it is wont to do).
A run-up into earning seasons………..and a subsequent, honest-to-God, no-messing-around change in direction based upon earnings season (and the realization that, gee, companies have to make money the normal way without government gimmicks) makes sense to me. Slopers seem to be honing in on the October 9-16 area as the apex. I'm sure we'll all be watching. My final thought is – – if VIX were a stock, it sure is starting to look like a "buy".
