Volatility at it’s Best

Today the market opened and the DOW pushed up about 170 points with the S&P trading at 1968. By 11:15-11:30 the market started to sell off and actually went negative on the day. The S&Ps were trading at 1944 and then by mid afternoon the market rebounded up 120 points on the day and the NASDAQ inched out a small gain. This significant volatility tells me the market is trying to put in some type of a bottom. I see this backing and filling as a bottoming process. I am looking for a higher low in the equity market and am 75%-80% sure that the low of 15379 is in. I would like to see a pullback to the 15500-15900 range to make a higher low before we push up higher towards the end of the year.

I am now looking at the November contract for oil. Today oil was up over 4.5%. I said I was looking to buy oil and oil stocks on a pullback into the 39-43 range. Twice it got down to the mid to low 43 level but never entered my range. I am still looking for this higher low in oil.

Gold is showing a very overbought condition. Today gold was down 5.5-6. I am looking for a pullback in gold to make a higher low. If the 1144 level gets taken out on a daily basis I would get a buy signal on the daily charts. I would then be looking for a pullback to get long in gold and gold stocks.

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