Week 45 Trading Day 1 overview

Markets did not do much for most of the day today but picked up nicely in the last 2 hours of trading. The Dow Jones and the Russell 2000 are still looking the best. However, today all the major markets went up.

My shorts on the SPY and QQQ (through put options) lost ground although I remain in position to still end up making money on these short-term trades before time runs out.

Clearly everyone is waiting to see 2 things this week: 1) the election results which we will know Tuesday evening and 2) the inflation number which is due Thursday morning. I expect the markets to mostly meander tomorrow as well during the trading day. Or maybe we will get some early indications on the election results and markets will turn one way or the other.

I went long the GDXU today which is the 3x leverage of the GDX by Market Sectors. The price of GDX (and as a result of which the price of GDXU) has gone up sharply last week and there could be some pullback. However, I expect a sustained period of bullish upside behavior for the GDX by another 15-20% from here. I took a small position as it is possible GDX has a pullback before it goes up again.

Here is the 1-year chart of GDX:

Any way which way I look at it, the price seems to be breaking out after some consolidation over the last 2-3 months. The GDX is trading at around 25 and I am looking for an upside to around 28. That is +12% on the GDX and approximately +36% on the GDXU.