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Friday, December 02, 2016

It was kind of a wait and see type of market today despite the employment report.  The Dow dropped 21 points on average volume.  The advance/declines were positive and the overall market was a bit stronger than the Dow.  The summation index is moving sideways for now.  The jobs report was pretty much in line with expectations and we got a small rally from that.  But there's really no conviction either way for stocks at the moment.  I think that we're waiting for the referendum vote out of Italy on Sunday before we get going anywhere.  I did place an order for the SPY December calls but it wasn't filled.  I'll try again on Monday if I get the chance.  GE was off a nickel and the volume was light.  Gold found some buyers on Italy angst and the futures rose almost ten bucks on the futures.  The US dollar was a bit lower.  The XAU went up 3 points, while GDX added 3/4.  Volume was good.  Mentally I'm feeling a bit tired.  I still think that we go higher from here and will be once again look to buy weakness on Monday.  The S&P 500 has come off of its highs and is short term oversold on one of my indicators.  We aren't even mid-range yet on most of the technical indicators here but if we get an Italy led sell off on Monday we'll be there.  That would be the ideal scenario for my case to purchase the SPY December calls.  Weakness Monday morning would be all I need to see.  However we could simply rally at the open as well.  Like I said before it is a wait and see game at this point.  I do still like the idea that price and volume lead the way.  I'm looking for new all time highs again before the year is out for the S&P.  All there is to do now is go over the charts this weekend, monitor the vote in Italy and the market reaction on Sunday night.  For now it's Friday afternoon in December and time for a break.

Thursday, December 01, 2016

A mixed bag once again as the Dow rose 68 points on very heavy volume to begin the month of December.  The advance/declines were negative and the overall market was much weaker than the Dow.  This is a trend that is not positive.  The summation index may start to move sideways after todays price action.  The big caps leading the way is not the most bullish of scenarios.  I'm still looking at the SPY December calls though as we are getting to mid-range on the short term indicators.  If the rally is for real and I do believe that it is, then buying any weakness tomorrow should work out for that trade.  That is my game plan right here.  If we see weakness after the employment report, I'll be purchasing the calls.  GE was up almost 2/3 on good volume.  There is now a bullish engulfing pattern on the GE daily candlestick chart.  Gold was flat on the session but did come up off of its lows.  The US dollar fell for a change today.  The XAU and GDX had fractional losses on average volume.  Mentally I'm feeling a bit tired.  The recent drop this week in the small caps could prove ominous if it continues.  However I still think that a move back to the 2180 level in the S&P 500 would be an opportunity to get long for the December option cycle.  Perhaps my thinking is wrong here but that is the trade that I'm looking at.  Of course the market could just start to head higher at the open and that would probably doom the trade.  So we'll have to keep an eye on what happens tomorrow morning.  Asia was higher and Europe lower overnight.  Interest rates have risen dramatically since the election and the stock market hasn't really paid much attention.  At some point it will and then there will be trouble for the bulls.  It has been said that the money from selling bonds is going into stocks.  Some of that is probably true but when only a few Dow stocks are going up vs. the rest of the market, there isn't the wholesale buying that you should see from such an occurrence.  I don't normally talk about interest rates but they do effect the stock market at times.  Sooner or in this case later, higher rates will take their toll on the market.  They're having little effect at the moment.  Asia was higher and Europe lower overnight.  We'll see what happens with the jobs numbers tomorrow and the markets reaction to them.

Wednesday, November 30, 2016

We finished the last session of the month mixed as the Dow added 2 points on very heavy volume.  The advance/declines were negative and the overall market was much weaker than the Dow.  The summation index is still moving up.  OPEC has decided to cut oil production and the Fed beige book was in line with what was expected.  Technically speaking the short term indicators have rolled over but are not at mid-range yet.  At this rate I may have to wait for the employment report to come out before getting into a position on the SPY.  We also have a potential market mover in the Italian election on December 4th, which is a Sunday.  So there is plenty to consider in an attempt to get the SPY December calls.  GE was off almost 1/3 and the volume picked up to the downside.  Could GE be a precursor to lower prices?  Gold was off $15 on the futures as the US dollar rose again.  The XAU lost a point and GDX shed 3/8.  Volume was average.  Mentally I'm feeling OK.  The VIX picked up today but I do not think that it is the beginning of some kind of big down trend.  Perhaps a move back to the breakout level of around 2180 for the S&P 500 at the most.  That's my view at the moment.  I still favor the SPY December calls in the coming days.  I may place an open order overnight.  There are some near term unknowns concerning the jobs numbers and the situation in Italy.  But once we get through that, I don't see any major obstacles to higher prices.  I could be wrong.  One thing that is a concern is that the small stocks are not in the lead higher here and it's just the opposite.  The Dow leadership is usually a late in the rally type of action.  But for now I'm giving the benefit of the doubt to the recent rise in prices.  The volume has been really good and the small stocks have led the way up until now.  The rising summation index is also a positive.  Europe and Asia were generally higher overnight but not by much.  We'll move on to the month of December tomorrow.

Tuesday, November 29, 2016

Just hanging around today as the Dow fell off of its highs for the session.  The most watched index rose 23 points on OK volume.  The advance/declines were barely negative.  The summation index is moving up.  Still on the overbought side for the short term.  Perhaps we'll get a chance to purchase some calls on Thursday, if the short term decline continues.  Otherwise I'll have to take a wait and see approach.  There's still room to go lower here as most stock indices are still pretty far above their 50 day moving averages.  The prudent course of action would be to wait for a fall back towards those averages before attempting the SPY December calls.  GE was off 20 cents on average volume.  No hurry to do anything here.  Gold barely budged on the futures and the US dollar was off a bit.  The XAU and GDX had fractional losses on lighter volume.  Mentally I'm feeling OK.  End of the month tomorrow.  There's an OPEC meeting on the docket.  Plus the Feds beige book.  Not sure what that will bring but trying to remain patient for now.  I still think that the rally has legs, it is just a matter on the timing for getting long in the December option cycle.  Not an easy task to be sure.  But one that should be profitable if I can pull it off.  So we'll wait and see.  Asia was mixed and Europe generally higher yesterday.  We'll keep an eye on the overnight developments.

Monday, November 28, 2016

The week begins with a thud as the Dow fell 54 points on average volume.  The advance/declines were around 2 to 1 negative.  The overall market was weaker than the Dow.  The summation index continues higher though.  The market could not go up in a straight line forever.  I think that any pullback can be bought at this stage.  If we are weaker into Thursday, I'll be looking at the SPY December calls.  The short term technical indicators remain overbought but if we get back to mid-range on them I'm a buyer.  I'd probably like to be long going into the employment report if the market cooperates.  GE was off about 20 cents on light volume.  Overextended here as well.  Gold rose almost $15 on the futures as the US dollar was a bit lower.  The XAU was up 2 1/2, while GDX gained 3/4.  Volume was good here.  I don't think this is the start of anything serious to the upside but I've been wrong before.  However the fundamentals do not favor gold at the moment.  Mentally I'm feeling OK.  We've had quite a post election rally and today is really the first negative session for all of the stock indices.  We opened lower and stayed that way for much of the trading day.  Could the rally be over?  perhaps in the short term but I do believe that this advance has legs.  Unless the summation index turns around, I'm looking for higher prices going forward.  It will be tricky because I don't think the indicators will get to all the way oversold, as they did on the last trade.  However we will keep a close watch on things as they develop this week.  The ideal scenario of a clear signal probably won't show up before this trade needs to be entered.  I'm pretty confident of higher highs before the December expiration.  Asia was mostly higher and Europe lower overnight.  We'll see what transpires overnight.

Friday, November 25, 2016

A very light volume levitation for the day after Thanksgiving as the Dow rose 68 points during the shortened session.  The advance/declines were almost 2 to 1 positive.  The summation index continues to move up.  No overhead resistance and we'll just have to see how far it goes.  Overbought, staying there and due for some kind of rest at some point.  Where that point develops is anyones guess.  GE was up a dime on the same listless volume.  Gold was basically flat as the US dollar was off a bit.  The XAU and GDX had slight fractional gains on anemic volume.  Mentally I'm feeling a bit tired, did not sleep well.  New all time highs in many indices on a daily basis now.  Not a lot of press or media about it here so the rally can continue.  When everybody is talking about how great stocks are will be the warning sign to head for the exits.  We aren't there yet.  I'll continue to look and hope for some decline to try the SPY December calls.  However at the rate things are going, I may just have to remain on the sidelines.  3 weeks to go in the December option cycle.  Plenty of economic data due next week including the jobs report.  End of the month as well with the Feds beige book.  Enjoy the rest of the long weekend.

Wednesday, November 23, 2016

Still moving higher as the Dow gained 59 points on light volume.  The advance/declines were barely positive.  The summation index is moving up.  The overall market was weaker than the Dow, with the NASDAQ lower on the session.  But as I said before, it won't matter because we are on a ride to higher prices.  Still overbought on the short term indicators with no signs of rolling over.  It's a holiday week rally and there is no overhead resistance for the Dow and S&P.  GE was up over 1/8 on light volume.  The same overbought conditions are in place here.  Gold fell below the $1200 level as the futures dropped over twenty bucks.  The US dollar was higher.  The XAU lost 3 points and GDX shed a point.  Volume was heavy.  It appears the theme since the US election has been dump gold and bonds.  At the same time buy stocks and the US dollar.  Mentally I'm feeling OK.  No break in the rally and the idea for getting some SPY December calls seems as though its time has passed.  No point in chasing this rally now.  Perhaps the best idea is to take a break now that Thanksgiving is here.  Friday will be a light volume shortened session that will probably have an upward bias.  There will still be 3 weeks to go in the December option cycle when things return to normal on Monday.  Asia was slightly higher and Europe slightly lower overnight.  Have a Happy Thanksgiving everyone.