Folks,
Market Observations for the Week: The SPX and the NDX tested their recent ATHs on Tuesday New Moon but the gold sector got hit hard. The VIX gave us an EW 5-waves down on Friday and argued for a SPX rally into the Tuesday New Moon. The high $TRIN reading of 1.78 on Tuesday and the low ISEE call/put showed enough fear to keep us away from adding puts or shorts on the SPY or IWM. As we have harped on repeatedly, when the SPX fails to give us a decent pullback in September, we are wary of the following October – especially the second half. We continue to hold cash but our fear indicators have us more inclined to add longs on dips than try to short the SPX. Gold made a new ATH at $4398, but then fell hard to test $4000 after a furious run up since August. We watched the trade in gold and silver carefully into the 10/20-10/22 New Moon Timing Window and the bearish non-confirmation in silver kept us cautious and trimming positions in the PM sector. In the longer term, the GDX could test $90 by December, and silver stocks could continue to work higher since silver has made a weekly close above $50. Our current investment positions are: 20% cash, 5% QQQ, 25% GDXJ/SILJ/REMX, 5% XOM/COP/CVX and 20% physical gold/silver/platinum. We have a 25% overall allocation to our short-term trading account which was last updated on Monday to include: 50% cash, 0% SLV, 0% GLD, 25% SILJ, 0% ETHA and 25% XOM/CVX.
TURNING POINT DAY
Our next turn window is 10/21, which is the New Moon.
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