It was so hot today that I had to turn back while en route to the driving range. This heat wave has driven up the price of natrual gas during the past week, and our long natty position has benefited greatly. We took profit today, however, and plan on buying into the next sell off. Stocks opened in the red this morning and remained down flat throughout the day. Then during the last half hour of trading, we saw the bulls rush in to close the market with stocks tailing up. With respect to NDX, not only is today's close disconcerting, but I also noticed that the recent parallel downtrend has not been confirmed (at least to our satisfaction) by the RSI or MACD indicators. These factors concern our short NDX position, but we will wait to see further confirmation. We maintain our stop at 1525 and our target at 1400.
Silver had a big rally today, showing what could be a breakout to the upside from its triangle formation. Silver also has a very important resistance level at 11.8, and a break above this level should be a strong buy signal.
Tomorrow Aqua America (WTR) wil be reporting its earnings, and we will be keeping an eye on whether the potential head and shoulders formation will come into play. Looking at various techincals, we hope to see a break above 23. It's really hot out there, so drink a lot of WTR.
The caveat to our forecasts is, of course, the uncertainty of next week's FOMC meeting. Jim will talk more about the Fed in his belated weekly wrap-up.
Disclosure: Long Gold Futures; Short NDX
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