Top Line: The options expiration last week (quadruple witching, as some call it) provided some support for stocks late last week...but that's over and the next few days should see the sell off reassert itself.
[Our next post should be on Wednesday evening...summer schedule.]
There's not much to add to our comments of last Tuesday because not much has changed since then. The only change is that it's a few days later and the sell off is much closer. We are expecting a strong down move here in the next week to ten days and we are prepared for it.
We have put on some shorts to protect our long positions that we have had for a while. We started buying GDX back but still think that it can go lower. When it does, we will buy more. In the mean time, we are going to continue buying back what we sold. So far we have been buying GDX back in the 37's and hope to get it cheaper than that in the coming days.
For those of you who have not sold anything, this next week may scare you but don't let it scare you out of your positions. If you have additional cash, focus on how to invest that as prices get cheaper and you can afford more stock.
The week ahead includes some more Treasury auctions, about $104 Billion, as well as a Fed meeting. The possibility exists for some volatility.
We normally think the end of the month is a period of strength. If that's true this month, we would expect more selling early in the week with a slight rally into the last few days of the month and quarter. This may not be a normal time due to the position of the market. Still, the market could drop very hard for a few days and then recover some into month end with further selling out of the employment report next month.
The June employment report is scheduled to be released next week on Thursday, July 2nd, because the Fourth of July holiday is observed on Friday the 3rd and the markets are closed. This means we could pack quite a few moves into the next two weeks. Volatility should return.