HAPPY HALLOWEEN

Due to Halloween tomorrow, I won't have a Monday night posting. The move up last Thursday was big, but most of the move took place on the gap up at the open. I warned not to chase that gap because I felt that it was an exhaustion gap. This means that I think that the rally is nearing its end. I can't predict the future, so there is always the chance that the market move up a bit further...but it looks like it is ready to correct. This October rally has turned many people bullish. This is what often happens in Bear Market rallies. Just as you believe the market is going to start going up further, it reverses and moves to lower lows. I'm not predicting a panic sell off...yet. I don't see any strong signals yet that the market is reversing, but pay attention and start looking for them. This is a prime area for a reversal to take place. I received several emails asking my opinion on silver (SLV). I'm still bearish short term and I feel that silver will make another move down before staging a possible rally. I feel the same way about gold (GLD). The recent pattern on both of those stocks looks bearish to me...like a bearish ABC pattern. I also expect the dollar to rally soon which would also put pressure on gold and silver to go down. We'll see what happens this week. Hopefully we will get some good signals this week and jump back in the market. If you see some strong weakness tomorrow, you can always buy puts on the SPY, DIA, or QQQ...until I can get some more specific trades listed on the blog. Don't build any large positions until we get some clearer signals. Use good money management.