A full fledged rally should ensue if the VIX closes below 14.95 (down 3 from its peak the other day) today. However, I am having trouble believing this is possible. There are two obstacles. 1) A turn date is 10/20, which could mark a peak tomorrow or Thurs, if it gets to the 216 to 217 area. 2) One election year seasonal chart I have seen says we peak in the next couple of days and revisit the lows ( with a probable low turn date of 10/28) before rallying into the first week of Nov. The other says we rally and have a shallow retracement before finishing high in the first week of NOV. To date, the sudden up, sharp down into yesterday and the sharp up move starting today looks more like the one, which implies we retrace to the bottom again. The actual SPY pattern also looks more like the non-election year pattern for Oct, which also calls for revisiting this bottom area next week.
We still have a GLD peak potential for the 10/28 time frame, which I am looking GLD to run up to at least 123-124.5 before it stalls and puts in another bottom on 10/28 or more likely mid-Nov. If it rallies to 10/28, I would see it getting to the 126-128 area.
I have been selling both call and put spreads over the last two weeks and letting them terminate in the weeklies expirations I purchased at profits. The next week may prove to be a little more complicated and I am thinking of cutting the bull put spreads i got into on Friday and Monday short of their Nov 3 and Nov 20 expiration rather than risk retesting to bottom again. Either way, the next week or two could be pretty nasty for current positions making profits.
