Folks,
Market Observations for the Week: The SPX tested Tuesday’s high at 6752, but the SPX has spent nine consecutive days within the price range of 10/10. The SPX did not follow through down after Wednesday’s Negative Volume Reversal Day, but we are still cautious because of the negative seasonality of the last trading week of October. The CPI number should be released early Friday and should be a catalyst for volatility. Gold has rallied in just 3-waves from Wednesday’s low at $4017, and it is possible that the PM sector could give us another leg down into the next pivot day on 10/27-10/28 before a pattern completion in the short term. 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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