Thursday started off lower but again, it was short lived and while we didn’t have any dramatic gains, the market internals were decidedly stronger than it looked. The advance / declines and the volume were both better than 2:1 to the upside. From where I sit it seems to me that this market is certain of the status quo being kept intact with a democratic winner in just over 110 days. As we all know, the market just loves certainty and every gaffe and stupid comment by Mr. Trump just adds to that outcome. While it’s true that the polls are often wrong (Brexit) this one doesn’t seem likely to turn into an upset.
The US$ break below 95 on Tuesday and its continued weakness since has sent both the Oil and Gold higher. Both are well into overhead resistance and are subject to pullbacks, but Friday’s are not generally the day people are abandon their “protective” positions. The 6 day gains in Oil are a remarkable 16%. To put that in context, if we had $2.00 gas last week we would be paying almost $2.35 today. Its recent highs of $53 in early June is still a bit away, but the gold is a different situation. The gold highs around $1,380 in July are only 3% away. The reason I make this comparison is because commodities are a “zero-sum” market where moves to new highs generally result in a short squeeze that propel prices even higher.
We haven’t gotten filled on our FAST calls yet, but I will use the texting service if I see the opportunity to be a buyer. I will probably also add to the SCO position a little bit lower also. The position is roughly 1/3 the size of our normal commitment so I’m not concerned with the minor loss it now represents. CAM
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