We now have a date for the start of the October China trade talks. It’s going to be October 10-11. So that is when we’ll find out if there is going to be more trade tensions or a final trade truce deal ahead of the 2020 elections.
Despite all of the headlines coming out of Washington this week the stock market has done very little. Yes it has had a day in which the DOW fell over 100 points, buy daily gyrations mean nothing when what happens one day is simply reversed the next day.
The reality is that the market is really just drifting into those key trade talks. That’s why stock market volatility as measure by the VIX is falling and the 20-day Bollinger Bands on the S&P 500 are now narrowing as you can see from this chart.
The 20-day Bollinger Band width indicator on the bottom of this chart is heading down to 2.50. When that happened in July the market made a quick move down as volatility expanded. The market is setting itself up to breakout on news from those trade talks or break down.
I doubt anything is going to happen until then.
But will happen that Friday two weeks from now?
I don’t know – I’m not going to predict that at this moment.
And really knowing WHEN the market is going to move can sometimes be just as useful as knowing what direction it will move as it gives you time to prepare. That is when options traders put on straddles.
Now the big money I believe is really to be made in gold, silver, and mining stocks. We have seen a dip in gold and silver prices to start this month to set the stage for consolidation, but even as this happened a lot of small cap mining stocks have simply sat there trading sideways not even falling at all getting ready to breakout.
As I posted Wednesday there is huge potential to turn a small stake into a big one in the world of small cap stocks.
That’s what I have my eyes on and talked about in a video I posted on the website for you this week. I believe October is going to be an exciting month for small cap mining stocks. To watch this video go here:
-Mike
