As recently stated, the updates posted on RSOTC will continue to be light this week as my preference is to let the dust settle from Wednesday’s Fed-induced pop. I also want to reiterate a couple of things that I stated earlier this week before the Fed announcement, both of which may still come into play. Those comments (cut & pasted as is) were, from Tuesday: With the SPX & Dow so close to making new highs, I would almost be surprised not to see them at least briefly pop above their early August highs, possibly even trading above those levels for as much as a few days before coming back in to alleviate the near-term overbought conditions. …And from Wednesday morning: Keep in mind that the Fed meeting announcement is scheduled for 2:00 pm ET today and Fed announcement days are almost always followed by sharp movements in the broad markets in either direction, often again followed by (a) sharp reversal in the direction opposite the initial reaction. In other words, Fed days are about the worst days to enter new breakouts or stop out of existing trades as large intraday whipsaws are more the rule than the exception.
The primary take-away from those comments is 1) I believe that it is still prudent to keep things light, both existing positions and any new trades and 2) Remember that is not unusual to see the initial reaction following the regularly scheduled FOMC meetings completely reversed and then some (currently, the SPY/SPX has already given back nearly 3/4ths of the post-Fed announcement gains). Below are the updated 4 hour charts of both the SPY & GDX, along with my comments and preferred scenarios. However, my opinion on both the markets as well as the gold & silver stocks is not very strong right now so take it FWIW. I have yet to add back any of the mining shares that I sold on the post-Fed rip but might do so as/if prices approach this uptrend line although I won’t be making any position changes until at least early next week.
