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Friday, November 27, 2015

Quiet trading in a shortened session as the Dow lost 15 points on extremely light volume.  The advance/declines were positive and the summation index is moving higher.  My SPY December calls are still in the black.  GE was flat on the day and the volume was light.  Gold fell $14 on the futures and the US dollar was higher.  The XAU lost a point and GDX fell 1/4.  Volume was light.  No love for gold remains the story here.  Mentally I'm feeling OK.  We've been trending sideways for over a week in the major averages.  We are also more overbought than oversold on the technical indicators.  Some decline early next week would not be a surprise.  I'm still a believer in higher prices before the December expiration.  At least 2120 on the S&P 500 in my opinion.  So we'll see.  It's late on a Friday during the holiday weekend.  A break before the open on Monday is in order.

Wednesday, November 25, 2015

Pre-holiday trading was expected as the Dow was up a point on light volume.  The advance/declines were positive.  The summation index is moving higher.  Not much movement and nothing to really report.  Expect the same on Friday unless there is another terrorist attack.  GE was off 1/3 and the volume was lighter than it has been.  Gold fell a few bucks on the futures as the US dollar was a bit higher.  The XAU and GDX had slight fractional losses on very light volume.  With all the world turmoil it certainly isn't bullish to see gold languish.  Mentally I'm feeling OK.  The game plan remains to hold on to the SPY December calls until we get to an overbought reading on multiple indicators.  This could happen next week or we could simply roll over as well.  The major stock indexes are closer to overbought than to oversold at the moment.  With the exception of the TRAN which is weaker right now.  That isn't a positive sign.  Sideways on the S&P 500 would be acceptable in the near term.  For now let's enjoy the Thanksgiving holiday and long weekend.

Tuesday, November 24, 2015

A one day reversal to the upside as the Dow opened lower and finished higher.  The most watched index ended the session with a gain of 19 points on good volume.  We were off over 100 points early on.  I don't know the cause of todays volatility and certainly did not expect it.  The summation index is trying to move higher but has not picked up any steam.  I really think it will be slow for the rest of the week, with a day off for Thanksgiving and a shortened Friday trading day.  GE was up a few cents and the volume remains very heavy.  Plenty of interest here.  Gold was up a buck or so on the futures as the US dollar was lower.  The XAU was up 1 3/4, while GDX gained 1/2.  Volume was average.  Mentally I'm feeling a bit tired as my usual schedule was thrown off today due to early meetings.  I'm still in the bullish camp here and sideways wouldn't be a bad thing as well.  I expect that we will move higher in the beginning of December.  The short term technicals for the major indices tired to roll over today but turned back around.  Perhaps we'll see some holiday light volume rise in the next couple of days.  That's a guess as usual.  Not much else to report.  The foreign markets were mixed last night with most of Europe lower.  We'll see what happens tonight.

Monday, November 23, 2015

Some selling to start off the holiday week as the Dow fell 31 points on OK volume.  The advance/declines were barely positive.  Starting to work off the short term overbought condition is my interpretation of todays trading.  The summation index is trying to turn back up.  It really should be a lackluster week in the market and today exemplifies that.  GE lost a few cents and the volume remains extremely heavy.  Waiting to get some calls here.  Gold was off $8 on the futures as the US dollar was a bit higher.  The XAU and GDX had slight fractional losses on very light volume.  I don't expect much this week for the precious metals either.  Mentally I'm feeling OK.  This should be a week to take a breather.  Not much should happen in the markets and it would be a surprise if something did.  My SPY December calls lost some of the profit today and that is to be expected near term as we pull back a bit.  I'd still like to hold this trade until the beginning of December at least.  Some of the medium term indicators are not close to the overbought level.  When most of them get there, it will then be time to end this trade.  Patience for now with this one.  We'll keep an eye on the overnight action or lack of it and see what happens tomorrow.

Friday, November 20, 2015

Higher again to close out the week as the Dow gained 91 points on good volume.  The advance/declines were positive.  The summation index is still trying to turn around.  Getting short term overbought by some indications.  It was a good week for the bulls.  Next week should be lightly traded with the Thanksgiving holiday looming.  It turns out that if I would have held on to the SPY November calls I actually could have sold them today for a small profit.  Of course it doesn't matter after they have already been sold.  I probably should have held them a bit longer but the risk increases as the expiration draws nearer.  In general the short term trades are not my strength.  The SPY December calls that I have are still in the black.  GE continues to shine as it gained over 1/3 on very heavy volume.  Money has really come into this stock over the past month.  I'm still looking for it to get oversold at some point and that would be the time to buy some calls.  Gold was off a bit on the futures today as the US dollar reversed yesterdays losses.  The XAU fell 1 3/4, while GDX dropped 1/2.  Volume was light.  No trades here for now.  Mentally I'm feeling OK.  It was good to see the market come back this week despite the turmoil around the world.  I'm still a believer in higher prices going forward.  We are close to new all time highs in the S&P 500, as a repeat of this week would get us there.  Not that I think that will happen.  Another plus in my mind is the fact that the McClellan oscillator isn't in positive territory yet.  If and when that occurs will be leading us to higher prices.  The strength in GE is another plus if it is a precursor for the overall market as it often is.  Some of the weekly technical indicators for the major stock indices are getting overbought.  However they could stay that way as often happens in up trends.  But as always the market will go where it wants.  I'll be checking the charts over the weekend but the game plan is to hold onto the SPY December calls for a few weeks.  For now it's Friday afternoon and time for a break.

Thursday, November 19, 2015

A day of just hanging around as the Dow 4 points on light volume.  The advance/declines were barely positive.  The summation index is still heading lower but it looks like it is trying to turn around.  Todays economic data was in line with most estimates.  We've got expiration tomorrow and then a holiday week coming up.  The major index technical indicators are mid-range.  I'm still holding the SPY December calls and they still show a profit.  GE was off about 1/4 and the volume is heavy but not what it's been.  I'd like to get the January calls here at some point.  Gold was up $12 on the futures as the US dollar was off over 1/2 a point.  The XAU rose a point and GDX gained 1/2.  Volume was pretty light though.  I really don't see an big rally for gold here, given the fundamental back drop.  Low volume means not interest in my book.  Mentally I'm feeling OK.  We will close out the week tomorrow and it has been a good one for the bulls.  Considering the drop in the previous week, we've made quite a comeback so far.  I think it bodes well going forward unless there's a huge drop tomorrow.  Next week should be slow with option premium erosion the main catalyst.  After that it will still be a Fed waiting game for the meeting in December.  The short term technical indicators still have room to head higher.  For the medium term, the weekly candlestick chart for the S&P 500 should have a bullish look to it depending on tomorrow.  I still think that the S&P 500 will reach new all time highs before the end of the year.  Preferably before the December expiration.  Most of the foreign stock markets were higher last night and that is a positive as well.  We'll watch expiration Friday tomorrow and see what happens.

Wednesday, November 18, 2015

Quite a ride to the upside today as the Dow gained 247 points on good volume.  The advance/declines were 3 to 1 positive.  Todays action could get the summation index to stop going down.  The Fed minutes were viewed as positive.  I'm back to thinking that we will set new all time highs before the end of the year.  My SPY December calls are solidly in the black.  Of course if I would have held onto the SPY November calls instead of selling them yesterday, I could have cut the loss there even more.  But I did not want to risk the whole trade getting wiped out.  My entry timing was off there as well.  Looking back, buying index calls on the weakness early Monday morning would have worked out rather well.  We aren't short term overbought yet and have just broken through the near term downtrend line in the S&P 500.  GE was up over 1/8 but the volume pulled back.  The volume is still very heavy just not the extreme levels we have seen in the past few days.  Gold didn't do much in the futures market today and neither did the US dollar.  The XAU rose 1 7/8, while GDX was up 3/8.  Volume was light.  Most likely just following the overall market higher for the precious metals today.  Mentally I'm feeling OK.  We are strongly coming off of the recent oversold reading for the major stock indices.  I'm viewing that as a positive.  I'll probably hold onto the SPY December call trade for a while.  Plenty of time to go here.  However that doesn't mean that the market will be going straight up as it did off of the late September lows.  2 days left before we hit a holiday week.  Perhaps things will continue to run up into Fridays close but I am not completely certain of that.  The VIX did reach the 20 level and has now turned back down.  That should be a positive for the bulls.  The technical indicators on the major indexes have turned back to the upside and still have room to run.  So things are looking good for the call side at the moment.  We'll keep an eye on the overseas markets tonight as usual.