I kind of like this left coast schedule. Market closes at 1:00. Head out for a relaxing lunch. Come back for some market review and blogging and I've still got the whole evening in front of me. No wonder Gary is always so laid back! Well, the market delivered a few desired developments today, the most important of which is our swing high in the dollar.
We also saw follow-thru across the board on Friday's reversals. Silver's move was particularly strong.
That said, the action certainly didn't seem as strong as one would expect coming off a yearly cycle low in stocks. While the percentage gains were healthy, the intraday action was indecisive.
Explosions off significant bottom usually commence with one or more bull run sessions. A bull run, in the trading lingo of this author, is a day that gaps higher on the open, rallies consistently throughout the day, and exits very close to the session high. Now, my current outlook and decision process is heavily weighted toward the dollar action. Since the DX resolutely posted a swing high today, I am operating under the assumption that the lows in equities and precious metals have been printed. However, the weaker-than-expected action in equities warns us to expect a test of the bottom before we see our launch. If we see gold posting a positive divergence versus the S&P 500 as the latter tests its bottom, we should then anticipate a few bull run days to emerge from that test.
Maybe we'll be pleasantly surprised and see market just launch from here, but I think it would be prudent if we were mentally prepared for a bottom test.