I think most of Wall Street must be on vacation as the trading action has been fairly dull this week overall. There is an old adage: "Never short a dull market". I think that adage should be heeded today. A significant correction will occur, but there is just no evidence that it will occur any time soon. That may change next week, but I would not count on it. New NYSE 52 week lows remain in the 0 to 5 range most days, the McClellan Summation index remains at high levels, advance/decline lines continue to rise. I suspect that we will see increasing demand for stocks the first week of September and a surge into an October high. I continue to wait for another opportunity to add to index long positions, even at these so-called "nose-bleed" levels.
Oil just cannot get going, which is as I expected. Negative divergences are developing and traders should be on the look out for a move below the July lows.
Gold continues to taunt us by not showing its hand. Time is running out. It can't do this forever. Frankly, I will be glad when it's over. I have been holding this DZZ gold short position since I initiated my first partial position on June 3, going on 12 weeks now. Some traders use a time stop. I don't. The key is consistency. Either use one all of the time or not at all.
Finally, the Qs are approaching significant resistance at the March 08 lows at 41.05. This is a critical area that the Qs must hurdle in order for the uptrend to resume. If they are successful in overcoming this level, expect another short covering squeeze to at least the July 08 lows around 43.30. I suspect that may be the end of run as it is also around the 61.8% retracement of the entire decline from Oct 07 to March 09. From that level a 50% retracement of the rally followed by a measured move higher in 2010 would put the Qs back at the 2007 high. A highly probably event I think.