Friday, July 22, 2016
Back to the upside today as the Dow gained 53 points on light volume. The advance/declines were 2 to 1 positive. The summation index continues higher. Overbought, no overhead resistance and summer market conditions. There is no reason that we simply won't continue to move up. Plenty of time in the August option cycle to make a trade. GE was off 1/2 on the earnings and the volume was heavy. GE did finish quite above the low of the day though. The short term technical indicators have rolled over here. Gold was off around $8 on the futures as the US dollar was higher. The XAU and GDX had slight fractional losses on very light volume. A pause in the uptrend for now, which to me is a good thing looking out longer term. Mentally I'm feeling OK. No reason we can't go higher here as the earnings are beating the lowered expectations for now. We'll get the Fed next week but I don't expect any surprises. Perhaps we can make it up to 2200 on the S&P but that's just a Friday afternoon guess and a nice round number. Certainly not a lot of volume on the rise but as always, you can't argue with price. Some would say that summer is the cause for the lack of participation but that might be the excuse going up or down. I'm still going to try and wait for some kind of divergence or technical signal before attempting the next trade. There is no hurry. Europe and Asia were a bit lower overnight. I'll be checking things out over the weekend as usual. For now it's Friday afternoon in the lazy, hazy days of summer. Time for a rest.
Thursday, July 21, 2016
Lower today as the Dow fell 77 points on light volume. The advance/declines were negative. The summation index is still heading up. Still overbought all the way around for the major stock indices. The small stocks held up relatively better today so there is no reason for concern with regards to the uptrend. It remains in place and there is nothing in the way of higher prices. GE was off about 20 cents on good volume. The earnings out tomorrow should provide movement in the stock. I don't know what to expect there. Gold bounced back a bit today. The precious metal futures gained a dozen as the US dollar was lower. The XAU rose 3 1/2, while GDX added about 7/8. Volume was above average. My opinion here is that gold and the gold shares taking a break here is a good thing for the longer term trend higher. I could be wrong. Mentally I'm feeling OK. Again, this is the first week of a 5 week option cycle and there is no rush to do anything. It has a summer doldrums feel to it and tomorrow should be more of the same. We've got the Fed next week but I would not expect any surprises there either. Patience is key at the moment. We'll wait for some kind of set up before taking on the next trade, possibly in the beginning of August at this rate. Japan and Chine were higher overnight, while Europe was mixed with small moves. We'll close out the week tomorrow.
Wednesday, July 20, 2016
Another day another new all time high as the Dow rose 36 points on light volume. The advance/declines were 2 to 1 positive. The summation index is heading up. No change in the near term market outlook. Higher prices are still in the forecast. I sometimes think that perhaps I should just buy some SPY calls and for get about it. But it is too late for that. No overhead resistance for the Dow and the S&P. GE was off a bit over 1/8 on average volume. Still just waiting for Fridays earnings here. Gold dropped over $15 on the futures, while the US dollar was only slightly higher. The gold shares got clobbered. The XAU lost 6 1/3 and GDX fell 1 2/3. Volume was heavy. The pause in the gold shares is here. We'll see how far they drop because they were extremely overbought on all accounts. I do not think it will last very long though. The positive seasonal period of August/September is coming up. Mentally I'm feeling tired, did not sleep well. Quite a move since the fallout from the vote in England. I certainly didn't expect it. Earnings are coming in better than expected and that is providing legs for the rally. I'm not sure how long this will last but it usually goes longer than anyone expects. My idea is still the same. Wait for some kind of negative divergence and then get some SPY puts. Patience is still the word for now. Europe was higher and Asia mixed last night. We'll keep an eye on what transpires tonight.
Tuesday, July 19, 2016
A mixed bag today as the Dow was higher and the overall market lower. The most watched index gained 26 on again light volume. The advance/declines were negative. The summation index is still heading higher. Summer mode here as the volume has dried up and the volatility is low. The drift higher is in place for now. The VIX is very low and higher prices are in my forecast for the near term. GE was flat again on average volume. A waiting game here for Fridays numbers. Gold was up a couple bucks on the futures. The US dollar had a good day, breaking above the near term resistance. The XAU fell 1 2/3, while GDX was off 1/3. Volume was light. Time for a pause in the gold shares. Mentally I'm feeling OK. The summer doldrums have arrived. Light volume, not a lot of movement and players are on vacation. We've got the Fed next week and I don't expect any surprises but you never know. Plenty of time for now as I've mentioned in the August option cycle. So now is the time to plan your next move. I'm still leaning towards some SPY puts at some point between now and September. I do think that we will grind higher though in the short term. Once we put in some sort of top, I'll try the puts. But for now patience is warranted. Overseas markets were mixed again but the NIKK had a decent gain. We'll keep an eye on things tonight.
Monday, July 18, 2016
A quiet summer Monday as the Dow gained 16 points on very light volume. The advance/declines were positive. The summation index continues to the upside. The overall market was stronger than the Dow. No change in the overbought technical condition. I suspect that we will simply grind our way higher in the near term. Earnings will provide the excuse for either direction. Plenty of time in the August option cycle, so I'll be patient for now. GE was basically flat and the volume was lighter. Waiting on Fridays numbers here. Gold futures were flat as was the US dollar. The XAU and GDX had fractional gains on light volume. Still overdue for a rest in the gold shares in my opinion. Mentally I'm feeling OK. Not a lot of economic data out this week, mostly housing numbers. So it should be a quiet time. The market has done pretty good despite the worldwide turmoil. That is bullish. The media hasn't jumped on the new all time high bandwagon. That is bullish as well. Although the market is overbought, it can stay that way for an extended time during upturns. That is what we are seeing right now. Foreign markets were mixed overnight. We'll keep an eye on overnight developments.
Saturday, July 16, 2016
My apologies for the late post from Fridays market. The Dow managed a 10 point gain on very light volume. The advance/declines were slightly higher. The summation index continues to the upside. It was a mixed bag though, as both the S&P 500 and the NASDAQ were lower. No option expiration fireworks as the market was subdued. Summer-like conditions prevailed with no volume. Stocks remain overbought but I do think there is some more room on the upside before we take a breather. GE was up 1/4 and the volume remained good here. Earnings next week should be the next catalyst here. Gold futures were flat but the US dollar had a good day. The XAU and GDX had fractional losses on light volume. Which wasn't all that bad considering the rise in the dollar. Mentally I'm feeling OK. So we will roll into the August option cycle which contains and extra week. The option premiums are high. No hurry to put on a trade. I expect that things will be quiet for the rest of July even with a Fed meeting towards the end of the month. Stocks are extended here but there are no reasons to sell at the moment. My idea now is to wait for some negative divergences and then take a look at the SPY puts. I really think that it is too late for the calls unless we get a decent short term oversold condition and a buy signal. But I doubt that is in the near term future. Patience is paramount for now. I'll be checking things out over the next couple of days before the Monday opening. But I think for now the sidelines make sense. Enjoy the rest of your weekend.
Thursday, July 14, 2016
Another day another new all time high as the Dow gained 134 points on light volume. The advance/declines were positive. The summation index continues higher. The volume remains light but it is the summer and you cannot argue with price. How high will we go here? I certainly don't know that answer to that. There is no overhead resistance. There won't be any confirmation from the TRAN anytime soon though. The bullish expiration bias is in full swing and there are no sellers to speak of. Enjoy the ride. GE was up 1/4 on OK volume. GE has led the way here so we will keep a close eye on it. Earnings due here in a week. Gold lost over $10 on the futures and the US dollar was lower as well. The haven trade seems to be unwinding. The XAU was flat, with GDX slightly lower. Volume was light. Overdue for a pause/pullback on the gold shares. Mentally I'm feeling OK. No rush to trade here as the August option cycle has an extra week on it. The summer doldrums haven't exactly kicked in here yet as we trend higher. I suppose we could meander our way up to 2200 on the S&P and see what happens when we get there. Absent some kind of external shock, earnings will be the story for the next few weeks. The VIX has moved back down and we'll wait for some complacency before seriously looking at the SPY puts. When you start to see the Dow on the evening news headlines, be ready to go the other way. It is too late for the calls in my opinion but I could be wrong. Europe and Asia were generally higher overnight. The post will be late tomorrow as I have a previous commitment. It may not come out until Saturday. We'll close out the week with option expiration tomorrow.