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Intraday Market Notes: Junior Miners Rockin'! -- October 31

|Includes:Yamana Gold Inc. (AUY), GDX, GDXJ, GWYRF, MVG

4:00 pm ET: Following the biggest storm to ever hit the eastern seaboard in recent history, the stock market was surprisingly calm with the major averages maintaining the status quo. That's the good news.

The bad news is that VIX did not behave in a like manner, choosing to move up instead of remaining in place. The Trin is also rising which only adds fuel to the bears' campfire. While it's not set in stone that the market will drop tomorrow, I wouldn't be at all shocked if it did. The S&P is still firmly in the Sell zone, so I'd be very wary of taking on big bullish positions at this time. What seems to be happening is that investors are sitting on their hands waiting for the results of next week's election. There's a lot of differences of opinion in the media about what could happen to the market should one or the other candidate win, and as there's no clear consensus (that I've been able to discern) on it I do think that warming the bench until then isn't such a bad idea. In short, will the election trick us or treat us?

Trade Note: Junior miners rockin'!
Sorry for the bad pun but it is true: junior gold and silver miners are taking off. Hitting new yearly highs today are the following: Mag Silver (NYSEMKT:MVG), Galway Res (OTC:GWYRF), and Yamana Gold (NYSE:AUY). (In fact, Yamana and Galway are at all-time highs.) Both the Gold Miner etf (NYSEARCA:GDX) and the Junior Gold Miner etf (NYSEARCA:GDXJ) were up over 3%.

Trade Update: The importance of follow-through
We noted an exhaustion gap in the chart of NTT Docomo (NYSE:DCM) in last Friday's notes. An exhaustion gap is generally a bullish indication but had we pulled the trigger on Friday, we would be mighty grumpy today as the stock not only failed to bounce, but shed nearly 5%--ouch! I'm actually glad it did because this drives home the importance of follow-through in many types of technical set-ups. Just because there's a technical indication of a possible change in direction, confirmation (i.e., follow-through) is needed to prevent making a losing trade. 'Nuff said.

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