Monday, December 17, 2018
The market got pounded lower again today as the Dow fell 507 points on very heavy volume. The advance/declines were over 6 to 1 negative. The summation index is heading lower. We are very oversold and staying that way. A bounce is overdue but it probably won't hold. I did even consider getting some SPY December calls for the week. But I stayed out. We've broken all the S&P support and there isn't much else to say about that. I can make a case for the S&P to stop at around the 2500 level. But in this kind of market that defies the indicators, anything can happen. RUT continues to lead the way down. We'll get the Fed announcement in a couple days and anything can happen after that too. Buyers have disappeared for now. It's another 10% correction you'll hear but make no mistake. The bull market is over and we'll have to wait for the bear to finish before we can really be positive about the trend again. GE was actually up a nickel on the usual heavy volume that we've seen here for quite a while. I just went ahead and bought GE today, as this will be a long term hold and I do believe that it will be well worth it in the years to come. Gold was up today as the US dollar traded lower. The XAU was up by over 1 1/2, while GDX gained 1/2. Volume was good. It does not look like there will be a pullback here for the gold shares in order to try the GDX January calls. Mentally I'm still not up to snuff as this cold/flu will not go away. The market doesn't care though. Oversold any way you look at it but there hasn't been a hint of any kind of sustained rally. We did have a little bounce at the end of the day of over 100 points but that was probably short covering ahead of the Fed. Any way you look at things here it doesn't bode well for the stock market. In what is usually one of the most bullish time periods all we are getting is selling. We also now have lower lows with lower highs on the charts. I thin that the next idea will be to try the SPY puts when the VIX gets back to the 16 level. That seems to be the level where the selling starts. Another idea would be for the SPY puts if it makes it back up to the declining tops line on the daily chart. Right here though I'm looking for some kind of bounce because the oversold readings on some of the indicators are at extremes. Unless we get some kind of crash out of nowhere but that possibility at this stage is remote. Asia was higher overnight and Europe lower but not to the extent of the US decline. We'll see what happens overseas tonight.
Friday, December 14, 2018
We finished the week on a downer as the Dow dropped 496 points on heavy volume. The advance/declines were over 3 to 1 negative. The summation index is heading lower. The market tried to rally this week, had a weak bounce and rolled over again. It must know something that we don't. Short term oversold and staying that way. The fact that the summation index made it back to the zero line and was turned away is a huge negative as well on a technical basis. Option expiration week is coming up along with the Fed announcement. I'd expect to see some kind of upside at some point but it probably won't last. RUT has broken down as well. We have yet to see the wash out bottom that we need to get rid of all the sellers. Not sure if that will happen any time soon either. I guess we can hope for the Santa Claus rally. But it appears that the long bull market has finally come to an end. GE lost a dime and volume remains heavy. I'm guessing that we've seen the low here at 6.75 and I'm going to try and buy some of this issue on Monday for a long term play. Gold fell over $5 as the US dollar was lower. The XAU dropped 1 1/8, while GDX shed 1/3. Volume was average. If the gold shares get oversold I may again try to get some GDX January calls. Mentally I'm still not feeling right, tired and need to get rid of this cold/flu. We closed lower for the week on the S&P and things will get even uglier if we don't turn around here soon. This is the last area of support right here and now. Oversold and staying there is not a good sign. No seasonal strength is not a good sign. A return to the falling summation index and RUT leading the way down all point to even more trouble going forward. The elevated VIX isn't helping things either. I'm pretty much on the sidelines until next year at this point. I'll be checking the charts over the weekend but the risk of trying to get long here is too high for me. I'm pretty sure that we will see a decent bounce next week but trying to time it will be difficult. This is the last week before the holidays so you can figure all that needs to be done before the end of year will be taking place. It should be interesting to say the least. Europe and Asia were both lower to finish out the week there. It's Friday afternoon and time for a rest.
Thursday, December 13, 2018
A mixed bag today but the Dow managed a gain of 70 points on good volume. The advance/declines were almost 2 to 1 negative. The summation index is still tracking lower. The NASDAQ was lower today along with RUT. That isn't a good sign for the bulls. I'm not exactly sure what's driving prices here. We've broken down from the near term support in RUT. The other indices are trying to hang in there for now. We need to see some upside soon or there's a chance the overall market will break support and roll over here as well. RUT is generally the leader and has already found fresh lows. GE got a bump on an analyst recommendation. It rose 1/2 on extremely heavy volume. Gold was slightly lower with the US dollar just the opposite. The XAU and GDX had minute gains on average volume. Mentally I'm still slow, not 100% and feeling tired. I am again going to cut the blog short today. Asia was higher and Europe slightly lower last night. We'll close out the week tomorrow.
Wednesday, December 12, 2018
A rally to start the day but it tailed off again. The Dow did gain 157 points on good volume. The advance/declines were almost 2 to 1 positive. The summation index is trying to turn around again. I think that the market is being held hostage by the Brexit drama out of England at the moment. We did expect a bounce and got it today. Whether or not it has any staying power remains to be seen. Volatility still rules the day and with that backdrop no rally is safe. The usual seasonal bullishness is absent and that is a problem for the bulls. GE was off a nickel and the volume remains heavy. Gold was up a bit today as the US dollar was lower. The XAU added 1 1/2, while GDX rose 3/8. Volume was good. The gold shares are overbought and staying that way. If GDX can get through 20.5 there should be more room to run. Mentally I'm still a bit off, not feeling well again. I'm tired with some kind of cold or flu and the concentration just isn't there. I'll be cutting the blog short again but the basic bearish theme remains. Europe and Asia rallied overnight. We'll see what comes out of England tomorrow.
Tuesday, December 11, 2018
It as an up and down session to be sure and the Dow ended with a loss of 53 points on good volume. the advance/declines were slightly negative. The summation index is heading lower. The market opened up around 300 points higher but could not hold on. Not sure exactly what is going on here but it isn't positive for the bulls. This is normally a very good time for the market but this year is different. The VIX remains elevated and volatility is now the rule. I don't have any SPY trades in mind here at the moment. We are short term oversold though. Even if we get a pop to the upside here the overall tone is bearish. GE was off over 1/8 and the volume remains very heavy. Perhaps some tax loss selling going on here. I'm still looking to purchase GE down here for a longer term investment. There has been so much bad news here and the dividend has been cut as far as it can go. I do not think that this company will simply fold but I could be wrong. Gold was a bit lower and the US dollar a bit higher today. The XAU and GDX had slight fractional losses again on good volume. Mentally I'm feeling a bit tired, still not feeling well. In a way we're still waiting for the market to figure out what it wants to do here. But I must say that all the technical evidence points to bearish conclusions. It appears that the market has found its top and is in the process of rolling over. Even though we are short term oversold any rally will probably be sold into. The game has obviously changed. If we can ever get below the 15-16 level on the VIX, then I'd say we're back to the bull case. However that does not appear to be in the cards anytime soon. Asia was mixed and Europe higher last night. We'll see what tomorrow brings.
Monday, December 10, 2018
It was a one day reversal to the upside as the Dow, which was down 500 points, made it all the way back to finish with a gain of 34. The advance/declines were 2 to 1 negative though. Volume remains heavy. The summation index is moving lower. Perhaps today it was short term bottom that was put in but there's no telling in this volatile market. The VIX almost made it to 26. RUT was negative but could be at a short term bottom along with the TRAN. We'll have to see how it plays out from here. GE was off a few cents and closed below 7. I do have an order in to buy the stock at lower levels but it isn't a trade, it will be long term. Gold was off a couple bucks and the US dollar was higher. The XAU and GDX had fractional losses on OK volume. Mentally I'm feeling tired and I have a chest cold so I'm not up to snuff. You cannot make the proper decisions when your health isn't where it's supposed to be. I'm also going to cut the blog short to get some more rest. We saw a comeback in stocks two days ago and then we simply headed right back down. The market is more oversold this time around, so perhaps we can get a few days of rally. Support has broken down though and numerous indices have had their 50 day moving average drop below their 200 day. The back drop for stocks here is negative. Europe and Asia both traded lower last night.
Friday, December 07, 2018
Another downer on Wall Street as the Dow fell 558 points on heavy volume. The advance/declines were 2 to 1 negative. The summation index has turned lower. The jobs report was a bit light. After a brief rally the market nosedived, which negated whatever positive price action we saw with yesterdays comeback. The RUT broke below its recent support and that is a harbinger of lower prices for the rest of the indices in my opinion. There will be no miracle comeback for the bulls in the near future. I dumped my SPY December calls for a 90 % loss. They had a 50% gain on Monday. But that is the nature of the game and goes along with what is my worst year of trading that I can remember. Like I've said, I don't really know what's going on here but the market is never wrong. There's still two weeks left in the December option cycle, so it's possible that I'll try another trade but I doubt it. GE was off 1/3 and the volume remains heavy. Gold was up on the futures and we've broken resistance at $1240. The US dollar was lower. The XAU added 1 1/2, while GDX gained 1/2 on heavier volume. The gold shares are looking like the place to be but I think that it's too late for that trade. Mentally I'm feeling OK. The S&P is back to its near term support on the daily chart. The indicators are just about oversold. The weekly chart looks terrible with a very large bearish engulfing pattern on the candlestick version. Also on the daily chart the 50 day moving average just crossed over the 200 day moving average to the downside. The technical picture for the S&P is negative. The VIX is getting overbought but isn't completely there yet. I really don't see any good news coming from anywhere to turn this thing around in the near term. All the good news came out early in the past week. I guess there isn't much more for me to do here except lick my wounds and move on. Asia was mixed and Europe generally higher overnight. It's Friday afternoon and time for a break.