The market showed signs of life today as the major indexes posted huge gains in a rally that was both broad based and backed by solid volume. Our main indicators have shown some signs of a bounce and today's fits that category. The problem for the bulls is that today probably represents the bulk of the advance. Those who get in tomorrow will probably not get to see much in the way of gains.
Our portfolios took a beating today, especially the Margin account due to the heavy leverage we carry there. We do not believe this rally can carry much further and will stick with our current positions. One of the main reasons to be cautious in the bullish case is the fact that the NASDAQ moved up quickly to resistance. Further upside should be muted. If we do see some solid upside over the course of the next few days we will try to put the rest of our cash to work.
Today, gold was a little laggard compared to the broad market. We are keenly aware of our desire to invest in this market near term. We watch the HUI index for signs that last week's low of near 180 will hold. If it can we may take a run at these stocks. The possibility remains that the dollar's rally is over and it is gold's turn to run again. We want to be sure that the HUI holds 180 before we make a move.