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Monday, March 18, 2024

We had a gap higher at the open and spent the rest of the day moving sideways to lower as the Dow gained 75 points on average volume. The advance/declines were about even. The summation index continues sideways. The NASDAQ was the leader to the upside. Waiting on the Fed Wednesday as that should be the big mover this week. The short term indicators for the S&P 500 are now approaching mid-range as the continuious overbought condition is beginning to fade. Not sure exactly what it means going forward as the market has been quite resilient. No SPY trades in mind at the moment. Gold was up a couple bucks on the futures. The US dollar was higher and interest rates ticked up. The XAU lost 1 1/8, while GDX shed a little over 1/8. Volume remains good here. I still want to try the GDX April calls if we see a pullback in the gold shares. GDX remains short term overbought though. Mentally I'm feeling OK. The VIX was just a touch lower today. The indicators here are mid-range so it could go either way here. Not sure what to expect next but we'll keep an eye on it. We've rolled into the April option cycle and premiums are high. Waiting on a signal for the SPY options. We'll probably let the Fed get out of the way and go from there. Asia up and Europe lower to begin the week. We'll keep watch on the overnight developments.

Friday, March 15, 2024

The selling continued as the Dow was off by 190 points on expiration heavy volume. The advance/declines were slightly positive. The summation index is moving sideways. The NASDAQ led the way lower. Technical conditions have changed as the short term indicators for the S&P 500 have now rolled over. I'm not sure if this is the beginning of a much needed rest or just another fake out before higher prices. The short term indicators for the NASDAQ have moved lower than the overall market. We'll probably know by next week after the Fed meeting where we're heading. For now we'll simply remain patient on the sidelines with regards to the SPY. Gold fell $7 on the futures. The US dollar finished flat and interest rates ticked up. The XAU had a fractional gain while GDX finished unchanged. Volume was average. GDX remains short term overbought. If we see a decline in GDX next week I'll most likely try the calls there again. Mentally I'm feeling OK. The VIX was higher early on but finished unchanged. The daily candlestick chart there appears to be heading lower which would be bullish for stocks. The short term technical indicators for the VIX are back to mid-range. Moving now to the April options cycle with an extra week in the time frame. Premiums are high. Hopefully after the Fed we'll have a better idea of where we're heading. I'll be going over all the charts as usual this weekend. Europe and Asia were lower to close out the week. It's Friday afternoon and time for a break.

Thursday, March 14, 2024

Option expiration gyrations today as the Dow fell 177 points on good volume. The advance/declines were 4 to 1 negative. The summation index is now back to a sideways movement. The inflation data was hotter than expected but we actually opened a bit higher before selling off. The day would of ended up worse but we got the last half hour buying spree again. The Dow led the way lower and that's not the worst case scenario. The TRAN did get whacked though. The S&P 500 is still short term overbought and now in a sideways configuration. We're on the sidelines with regards to the SPY options for now. The April option cycle has an extra week in it so the premiums are high. Gold was off another dozen or so on the futures. The US dollar was higher along with interest rates. The XAU dropped 1 2/3, while GDX shed over 1/3. Volume was average. GDX remains short term overbought and we'll need to see that condition change before attempting the April calls there. Markets rarely cooperate with our best laid plans. I'll try and remain patient with GDX here as we have a Fed meeting meeting next week. Mentally I'm feeling OK. The VIX was higher today but off from the best levels on the session. I'm not sure where it goes from here but the 50 day moving average seems to be the level of near term support. Expiration Friday on the docket. Would not be surprised if the SPY finished tomorrow around where it is today. At least that is what the open interest is perhaps telling us. We'll let tomorrow pass and take it from there. Asia was mixed and Europe generally lower last night. We'll close out the trading week tomorrow.

Wednesday, March 13, 2024

A quiet sideways session for the most part with a little volatility in the last half hour. The Dow managed a gain of 37 points on good volume. The advance/declines were positive. The summation index is still moving higher. Both the NASDAQ and the S&P 500 finished in the red with the NASDAQ leading the way. We did get a signal yesterday from the McClellan oscillator for a big move within the next couple of days. We'll see if that pans out tomorrow but that signal hasn't worked lately. The S&P 500 remains short term overbought. Inflation data tomorrow should provide a reason for market movement. I wanted to try the SPY March puts but there isn't a clear signal so I'm on the sidelines. We'll roll into the April option cycle there. Gold was up a dozen on the futures. The US dollar was slightly lower and interest rates were up a bit. The XAU gained 3 1/4, while GDX was up almost 3/4 making up for yesterdays losses. Volume was above average. GDX is short term overbought and staying that way. It appears that GDX is poised to run up into Fridays expiration but we'll see. I still like the idea of the GDX April calls but do not want to chase it here. However if there isn't a pullback soon I may have to change my mind. Mentally I'm feeling OK. The VIX was slightly lower today. Not sure what's next here as it closed on its 50 day moving average. An inflation surprise tomorrow will get things moving either way. If the numbers are in line most likely the market will move higher. But we'll let the market decide where it's going in the near term. Asia was generally lower and Europe generally higher overnight. We'll see what tomorrow brings.

Tuesday, March 12, 2024

The inflation data was a bit hotter than expected but the market didn't care as the rally continues. The Dow gained 235 points on average volume. The advance/declines were positive. The summation index continues to trend higher. The NASDAQ led the way up and that's a plus. The S&P 500 closed at a new all time high. It remains short term overbought as it has been for weeks and months. Not sure how long it can go on like this but obviously it's longer than we think. Probably will not attempt any SPY trades before the end of this option expiration week. Only possibility would be the SPY March puts ahead of Thursdays inflation reoport. But we see that idea would have been a loser ahead of todays CPI data. Gold took a breather as the futures were off over $25. The US dollar ended around unchanged after being higher early on. Interest rates were up. The XAU fell 1 7/8 and GDX lost over 1/2. They did finish up from the worst levels on the session. Volume remains above average here. The gold shares remain short term overbought and are due for a rest. I still like the GDX April calls as the next trade but will try and wait for some more pullback before trying this idea. Money has been pouring into this sector so we have to believe that the rise is the start of something real to the upside. I could be wrong. Resistance at 31.5 on GDX so we should at least make it up to that level on this move. Mentally I'm feeling OK. The VIX was lower today and the short term indicators have now rolled over. This implies more upside in the near term for stocks. We'll see. Perhaps we are just witnessing the positive expiration bias in play. Whatever the case you cannot argue with price. Asia was generally higher and Europe was up in last nights trade. We'll keep an eye on the overnight headlines.

Monday, March 11, 2024

A mixed bag to begin the week as the Dow rose 47 points on average volume. The advance/declines were about even. The summation index is trending up. The Dow managed a gain today but both the NASDAQ and S&P 500 finished in the red. Awaiting tomorrow inflation data and we should move off of that. The S&P 500 remains short term overbought but not at extremes. I did not purchase the SPY March puts today as we don't have a clear techincal signal to do so. Not sure what to expect from the data tomorrow but would not be surprised if it comes in worse than expected. Just a guess there. Gold finished up a couple bucks on the futures. The US dollar was a bit higher and so where interest rates. The XAU gained 2 2/3, while GDX added another 1/2. Volume was pretty good once again. GDX remains short term overbought and staying there. Money left on the table as I sold the GDX March call position too soon on Friday. We'll wait for a pullback to try the GDX April calls. There is a two year down trend line at 31.5 that should provide resistance if GDX gets there. Mentally I'm feeling OK. The VIX was up today but down from the highest levels on the session. Getting to short term overbought on the indicators but not there yet. Don't know what to expect from the VIX tomorrow. Four days left in the March option cycle. Do we dare attempt another trade before the weekend? We'll have to see how the technicals line up. Asia was mixed as Japan got whacked and Europe generally lower to start the week. We'll see how things go tomorrow.

Friday, March 08, 2024

It was a one day reversal to the downside today as the market opened higher and closed lower. The Dow fell 62 points on average volume. The advance/declines were slightly positive. The summation index is now moving higher and out of the recent sideways channel. The jobs report came in better than expected and the market liked that. As the day wore on we had a bout of selling followed by another rally attempt before rolling over again into the close. The NASDAQ led the way down and that's a negative. The S&P 500 remains in short term overbought territory but the indicators appear to be rolling over again. However every time this has happened in the past two months buyers have reappeared. The longer term up trend line is still intact on the S&P. I still might try the SPY March puts ahead of Tuesdays inflation data but that's a decision to be figured out over the weekend. Gold was up about twenty bucks on the futures but off of the best levels on the day. The US dollar finished almost unchanged after being down early. Interest rates bounced both up and down during the session only to finish about where they started. The XAU had a fractional loss while GDX was unchanged. Both finished off of the highs for the session. Volume picked up and was good once again. I sold my GDX March calls but not sure if that was the right decision. Gold and the gold shares are due for a rest, the question is when. The gain was a little over 1000%. In plain english this trade returned better than ten times the amount traded in a week and a half. The entry was spot on but we'll have to see about the exit. However as always win or lose we move on from here. I'm considering the GDX April calls now if we see some sort of pullback in the gold shares. Mentally I'm feeling OK. I don't want to get too excited over the last trade because it means nothing now and you've always got to be moving forward in the game. The VIX was up today but off of its highest levels. The short term indicators still have room to go in either direction. Not getting a good feel for what will happen with the VIX next. Only a week left in the March option cycle. We'll check the charts over the weekend and try to come up with a profitable idea for next week. Plenty of data out highlighted by the inflation reports on Tuesday and Thursday. Asia was up and Europe generally down to close out the week in the foreign markets. It's Friday afternoon and time for a break.