Wednesday, November 22, 2017
A bit lower today as the Dow fell 64 points on light volume. The advance/declines were positive. The summation index has turned around and is moving up. The overall market was stronger than the Dow with the NASDAQ showing a gain. Not much to make of todays price action. More of the same on Friday. GE was up 1/3 on good volume. Perhaps the decline has ended for GE. Gold was up $10 as the US dollar got clobbered. The XAU was up a point, while GDX rose 20 cents. Volume was better than yesterday. Mentally I'm feeling OK. Holiday mode for the market and this blog. Light volume will be the norm until we get things going again next week. As I have already said, with the small stocks leading the way, higher prices should be in the future. Asia was higher and Europe mixed last night. Happy Thanksgiving everyone.
Tuesday, November 21, 2017
Powering higher now as the Dow gained 160 points on OK volume. The advance/declines were 2 to 1 positive. The summation index has turned back up here. New all time highs for the S&P 500 and intra-day for the Dow. It appears that the consolidation period is now over and higher we will go. The small stocks are leading the way and the RUT has taken off as well. The TRAN showed some life today as well. I didn't think we would see much action with this being a holiday week but I was wrong on that. Yes, I thought that we would have a positive week but not to this extent. GE isn't going along for the ride as it lost 15 cents on still heavy volume. My order for the January calls here remains in effect. Obviously I still think that this trade has a chance to succeed but it has to get filled first. Or I could simply be wrong again. Gold and the US dollar were barely lower. The XAU and GDX had slight fractional gains on light volume. Nothing new to report from this sector. Mentally I'm feeling tired, not enough sleep. It appears that the next leg up for the stock market has begun. There remains no overhead resistance so there is no telling how far we will go. With the small stocks in the lead, you can believe that the rally will last. In retrospect it looks like the SPY December calls were the way to go. However it is where we go from here that counts. I would expect things to thin out tomorrow ahead of the holiday. Friday will be a shortened trading day. So I would guess that we won't see much price movement one way or the other from here. It's probably best to simply sit back and relax until next week when everybody returns from the holiday. That's what I'm going to do for sure. Europe and Asia were higher last night as stocks are getting bid around the world. We'll keep an eye on the overnight trading.
Monday, November 20, 2017
Moving higher on Monday as the Dow gained 72 points on light volume. The advance/declines were positive. The summation index is still trying to turn around here. The overall market was not as strong as the Dow. It's a holiday shortened week, so I do think we'll see a positive bias. I also think that any trades for the SPY should be put off until next week. The trading will be thin this week. GE was off about 1/4 on good volume. Oversold and staying that way. I do still have my open order in for the January calls here. Gold fell $20 on the futures and I do not see an obvious reason for that. The US dollar was a bit higher. The XAU and GDX had fractional losses on average volume. There remains no love for gold or the gold shares. Mentally I'm feeling OK. The TRAN continues to languish, however the RUT has had a very nice 3 day gain. I'm still looking for new all time highs in the major stock indices in the coming days or weeks. There hasn't been any fundamental change in the economy and the recent stall in prices here looks like a consolidation to me. We'll know for sure in due time. With the summation index attempting to turn around here, if that were to occur then it would be all systems on go for higher prices. The summation index may turn around this week. Asia was mixed and Europe higher last night. We'll see what tomorrow brings.
Friday, November 17, 2017
There was no follow through to yesterdays bounce as the Dow fell 100 points on light volume. The advance/declines were almost 2 to 1 positive though. The summation index is trying to turn around here. The overall market was stronger than the Dow. We did not see the usual heavy expiration volume today and I have no explanation for that. We will be moving into holiday mode for Thanksgiving week coming up. I do not expect a lot of price movement in the coming trading days. Basically I'm anticipating being on hold for a week. We're still medium term overbought but could remain that way as we have for the past couple of months. Earnings season is now over and I suppose that the market will now focus on the tax deal. That's my guess for now. GE was off a few cents and the volume remains pretty heavy. I'm leaving in the open order for the January calls here. Gold caught a bid as the futures rose $16. The US dollar was a bit weaker. The XAU and GDX had minor gains on better volume. But there's still no real interest her in my mind. Mentally I'm feeling tired, did not sleep well. The market hasn't just gone straight up for the past couple of weeks but I do not think that it is a change to the upside prognosis. I'm still a believer that this is a pause before we go to new all time highs before the end of the year. The recent weakness in the TRAN along with the RUT have not manifested itself with a drop in the overall market. Those two indices are often leaders but that hasn't happened in this case. The fact that the other small stock indexes are practically at all time highs strengthens the case for a positive outcome to the recent market sideways to lower action. I'm thinking perhaps SPY calls in the future but will let next week pass at the least. Asia was higher and Europe lower last night. It's Friday afternoon and time for a break.
Thursday, November 16, 2017
We got a bounce today as the Dow zoomed 187 points on lighter volume. The advance/declines were 3 to 1 positive. The summation index is still moving lower but may attempt to turn around here. No real news to drive prices higher today so perhaps the move was a result of the short term oversold condition. It's been kind of a strange week for price movement in my mind so we'll have to see what happens tomorrow. The short term technical indicators have now turned up for the major indices, so we'll look for follow through tomorrow. GE just hung around today but the volume was huge. Apparently there are still plenty of sellers. Gold and the US dollar both finished little changed. The XAU and GDX had slight fractional moves lower on extremely light volume. Again, no interest in the gold shares. Mentally I'm feeling OK. Some small stock indices recorded new intra-day highs today. That tells me that most likely the sideways to lower price movement we've seen lately is coming to an end. Unless we see a dramatic turnaround back down tomorrow, I'd look for higher equity prices going forward. New all time highs for the Dow and the S&P should be forthcoming. That's my best guess at the moment. We'll get through the November option expiration tomorrow and then things should quiet down with a shortened holiday week on tap. Europe and Asia were both higher overnight. We'll finish up the week tomorrow.
Wednesday, November 15, 2017
Continuing lower today as the Dow fell 138 points on average volume. The advance/declines were shy of 2 to 1 negative. The summation index is still heading lower. No positive expiration bias this time around. The VIX did spike higher but came off of its highs for the session, a repeat of yesterday. We're still not completely oversold for the short term on the major big cap indices but we're getting there. It also hasn't been much of a percentage decline there either. I do expect some type of bounce before the end of the week. The quantity and quality of that should tell us something. GE was up 1/3 on very heavy volume. Has the bottom been put in? Or is this just short covering? I'm leaving in my open order for the January calls here. Gold was off five bucks. The US dollar finished little changed. The XAU and GDX were little changed as well. Volume here remains very light and uninteresting. Mentally I'm feeling OK. We sold off early again today and made our way back for much of the session. The difference today was that we sold off again into the close. We'll see if that makes a difference going forward. There were no big surprises from the economic data released today. The small stocks still have good relative strength here, so I'm not expecting some type of imminent collapse. To me it's still a sideways consolidation before the next leg up. If we drop from here then I may have to change that thesis. Foreign stock markets have had a sharper drop but they usually aren't the leaders. We'll keep an eye on this going forward. Europe and Asia were both lower last night with Asia taking the worst of it. I 'll expect some kind of bounce tomorrow in the US. We'll keep an eye on the overnight trading.
Tuesday, November 14, 2017
Just another day of selling off early and then coming back. The Dow fell 30 points on good volume. The advance/declines were negative. The summation index is still moving lower. Once again the overall market was weaker than the Dow. We've had plenty of chances to sell off here and it just hasn't happened. I do think that we are having a sideways correction before we once again move to new all time highs. I'm not sure how long we'll go on like this but that is what I think is happening here. The VIX has spiked up here but looks like it is going to roll back over. The short term technical indicators for the major averages have rolled over but are not completely oversold yet. GE got slammed again and was off over a buck. Volume was like yesterday, out of control huge and negative. I adjusted my January call option order here again to a lower strike price. I'll feel more confident about this trade the lower we go. The trouble is that I certainly don't know how far this stock is going to drop. Gold was up a little over a buck as the US dollar had a weak session. The XAU and GDX didn't move much on light volume. Still no love for the gold shares. We have yet to see the usual positive bias that occurs during option expiration week. So far it doesn't look like the TRAN and RUT are going to lead us lower here. The other small stock indices remain near their highs and that's a positive. I still do not have any SPY trades in the works for the near term. Although the summation index continues to go down, stock prices really haven't followed. Again, when the indicators stop working it's probably best to simply step aside. I also haven't had a good handle on things lately and I'm not feeling 100% yet. I will keep trying the GE trade though. Sometimes it is a good idea to try and step in when nobody else wants to. Europe and Asia were both lower but not by a lot. We'll see what tomorrow brings.