With the stock market finally on its bounce, I am going to give it a little room to run and prove whether it can grind into the holidays or fail before hand. The dollar has tanked hard in pre-market and recall that such a pullback was noted as key to any relief rally in US and especially global stocks, commodities, etc.
Shown are 3 viable SPX upside resistance levels that could ultimately contain the rally. If the market rampages every day like it did yesterday, the rally could be brief. If it starts to grind its gears it could extend for a few weeks. We’ll need to evaluate it on the fly.
I continued to hold 2 short positions, medical device companies BSX & CRY which are fine as of now. But my strategy will be to manage market risk as usual with cash and balance. In this case the balance of the precious metals, which are ramming upward with the weak USD this morning.
I’ll try to add to the GDX position and some miners on opportunity with the confidence of our fundamental work behind me and realize that the PMs have been sold down on the back of last quarter’s weak fundamentals, not this quarter’s improved ones. The going could still be volatile however, with tax loss season kicking in. As of now, they are going anti-USD with everything else, and that could make them vulnerable at a later date.
As noted in the In-day notes, GDX retained its grinding uptrend and it filled the ‘18.50 gap’ perfectly. I may chase a bit to add to existing shares in miners, but I am still not going to fully load up for the bull. There should be plenty of time and opportunity out ahead ahead. The SMA 200 lurks above, after all. There should be a battle of some kind around there.