Thursday, July 27, 2017
Volatility returned to day as the Dow gained 85 points today on heavy volume. The advance/declines were negative. The summation index is still moving up. The overall market was much weaker than the Dow, especially the small stocks. Some indices had one day reversals to the downside. The TRAN fell almost 300 points. I'm not exactly sure what is going on here but one day doesn't make a trend. The short term technical indicators for the majority of the major indices remain overbought. We'll have to see how the market behaves tomorrow. GE gained almost 1/4 on good volume. Is this the bottom for GE? Gold rose $9 on the futures despite a decent gain in the US dollar. The XAU dropped two points, while GDX shed 1/4. Volume was average. If the gold shares turn back down here, there's a possibility that I will be able to put on the longer term gold share call trade. We'll see. Mentally I'm feeling OK. GDP out tomorrow and that should have an effect on the US dollar, which in turn should move the gold market. And the overall market for that matter. Today was interesting because the volatility came out of nowhere. As long as we stay overbought, there is always that possibility. Earnings have been pretty good so far and if that continues I don't see any major drop for stocks. We are in a seasonally weak period for equities though. So we'll see how it goes. Asia was higher and Europe mixed overnight. We'll close out the week tomorrow.
Wednesday, July 26, 2017
More of the same today as the Dow gained 97 points while the overall market lagged. The advance/declines were barely positive and volume was average. The summation index continues higher for now. I really think things are getting overdone to the upside at this point. It is usually not bullish when the Dow is the leading average. Overbought and overdue for something to the downside in my opinion. But my opinion hasn't been worth much lately. The Fed was dovish with remarks and rates remained unchanged. The summer rally is in full swing. GE gained 15 cents and the volume was good. Gold rose $8 on the futures as the US dollar continued its decline. The XAU added 2 1/2, while GDX rose 1/2 on better volume. It appears that I've missed the longer term gold share call trade. The stock that I chose, ABX, has already come up off of its lows of Monday. Earnings due tonight and the gold shares have momentum at the moment. Mentally I'm feeling OK. Summer rolls on and so does the Dow. Nothing seems to be in the way but this can't go on forever can it? Still more earnings due in the next couple of sessions, plus GDP on Friday. I'm basically waiting to go on vacation next week. Europe and Asia were mostly higher overnight. We'll see how traders reacts to the earnings from ABX in trading tomorrow.
Tuesday, July 25, 2017
Earnings drove the market higher today as the Dow rose 100 points on good volume. The advance/declines were positive. The summation index continues to trend higher. The overall market was weaker than the Dow today. New all time highs for many of the major stock indices. You cannot argue with price. Overbought and staying there. GE was up a penny on pretty good volume. Gold dropped $4 on the futures as the US dollar was little changed. The XAU added 1 2/3, while GDX was up 1/4. Volume was light. Good earnings from NEM was the catalyst for the gold shares. ABX made a comeback as well. We await the earnings there after the bell tomorrow. Mentally I'm feeling OK. The VIX is at low levels that haven't been seen in years. Todays heavier than usual volume for the market is either the beginning of a blow off to the upside or then end of this two week rally. That's my guess at the moment. We'll get the Fed out of the way tomorrow but we seem to be in an earnings driven environment for the time being. And earnings are looking pretty good so far. GOOG disappointed and there could be a double top put in there on the daily chart. MMM had a huge gap down as well. But the stocks that had good reports drove things higher for the most part. We'll see if that continues and it is looking like it probably will. Asia was mostly lower and Europe higher in last nights trading. We'll see what the Fed has to say tomorrow. I don't expect any surprises.
Monday, July 24, 2017
A mixed bag to start the week as the Dow lost 66 points on light volume. The advance/declines were negative. The summation index is now grinding higher. The overall market was stronger than the Dow with the NASDAQ leading the way. That's a positive. We've got the Fed on Wednesday but it could simply be a non event. There are no changes expected there. GDP on Friday should be more of a market mover. Plus we've got a lot of earnings coming out this week. But it is the last week of July, so slow trading would not be a surprise. Still overbought on all the major stock indices any way you look at it. GE continues to fall, off 1/2 on heavy volume. So not everything is going up. Gold was flat on the session as the US dollar was slightly higher. The XAU lost 1 3/4, while GDX shed 1/3 on about average volume. One day doesn't make a trend but the volume on the recent rise in the gold shares was weak. ABX got clobbered today but I am still considering the longer term calls there. Earnings are due after the bell on Wednesday. I'll wait for that before considering putting in an order. Mentally I'm feeling OK but with a vacation coming up, my mind is not in the proper place for trading. I rarely travel and prefer to keep the normal day to day schedule with the markets. Having to take off for a while throws things out of whack. Like last year when I got stuck in the hospital, although that was more of a life and death scenario. At any rate to be successful here you've got to pay attention. That doesn't occur when you're traveling. So I'm kind of in limbo for a few weeks when it comes to trading. Now I can put on the longer term option gold share call trade, since it will go out to the autumn. I may leave in an open order depending on how it goes after the earnings announcement. Or I may simply pass altogether. I still think the overall market is due for a rest but as usual the timing is the question. Europe and Asia were mixed overnight. We'll keep an eye on the overnight developments.
Friday, July 21, 2017
Another slow trading day as the Dow lost 31 points on light volume. The advance/declines were slightly negative. The summation index continues to the upside. The Dow did come up from the lows of the session. It seems like we are in a drift here, with the market poised to go higher still. Overbought and staying there. Summer trading is upon us. GE hit another new low on the earnings and fell 3/4 on the day with very heavy volume. It too came back from its worst on the day. It's trying to hold the 200 week moving average. Gold was up $8 on the futures as the US dollar keeps dropping. The XAU and GDX had slight fractional gains yet again but the volume remains very weak. My guess is that this rally in the gold shares will fail. If it does, I'll attempt the longer term gold share calls when we get oversold here. If it doesn't fail, I will have simply missed the move. Mentally I'm feeling a bit tired, did not sleep well. We made it though expiration Friday with most of the major stock averages still hovering near all time highs. There doesn't appear to be anything in the way of the rally. I still don't like the light volume but we haven't seen much selling in the past couple of weeks. We'll roll into the August option cycle, which has an extra week in it. The option premiums will be high. I'll be keeping an eye on things but since I'll be going away in about a week, the urgency to trade will be missing. I may leave an open order for the longer term gold share calls but that will be about it. It depends on how ABX reacts to the earnings on Tuesday. As for the S&P, we're long overdue for some type of decline but it hasn't happened yet. We get sideways and then higher. As long as that continues, the path of least resistance remains up. But I would remain cautious here because the potential RSI negative divergence is still visible on the weekly chart. But nothing has happened yet. Asia and Europe were both lower overnight, with the DAX leading the way down. Could that be a sign as to what we are about to see here for the Dow? Stay tuned on that. I'll be checking things over the weekend but the overall tone of things here is the lazy, hazy days of summer. It's Friday afternoon and time for a rest.
Thursday, July 20, 2017
A bit lower today as the Dow fell 29 points on light volume. The advance/declines were barely positive. The summation index is moving up. Kind of just a sideways summer session. Overbought both short and medium term now for the S&P. The TRAN has already rolled over. I can't see us going much higher in the near term but my ideas have been quite wrong lately. We'll see how the expiration goes tomorrow. GE was off 1/4 and the volume was heavy. This stock just cannot get anything going to the upside. The daily candlestick chart is bearish. Gold was up just a bit on the futures as the US dollar continues its decline. The XAU and GDX had slight fractional gains on light volume. I canceled my open order for the ABX longer term calls for now. I'll let the earnings report come out next week and then figure out if I still want to try this trade. The gold shares have rallied for a couple of weeks but the volume has been light. Mentally I'm feeling OK. Record highs day after day for most of the major stock indices large and small. I still do not trust this rally because the volume has been light all the way up. It may just be because of the summer season but I cannot go against that principal. I still think that things will not end well here and we are on the 5th and final wave up that started with the end of the last recession. Earnings season is upon us and we'll have to see how that goes. The rise this week could simply be expiration related, combined with squeezing what is left of the shorts. Asia was higher and Europe mostly lower last night. We'll see how we close out the week tomorrow.
The rally continued yesterday as the Dow gained 66 points on the usual light volume. The advance/declines were about 3 to 1 positive. The summation index is now heading higher at a better rate. The overall market was much stronger than the Dow. There is no overhead resistance but I would expect a move back to the breakout point. However my ideas on the stock market have been wrong lately. I also still do not trust this light volume move up but you can't argue with price. Gold was little changed as was the US dollar. I got tied up yesterday and never made it back to a computer to update the blog. Things will be back to normal for the blog, or at least should be, today.
Tuesday, July 18, 2017
Lower for the Dow today as the most watched index shed 55 points on light volume. The advance/declines were slightly negative. The overall market was stronger than the Dow with both the S&P 500 and the NASDAQ higher. The summation index is still moving up. We got another signal yesterday from the McClellan oscillator that portends a big move that would now be due tomorrow. We'll see if that signal works again. Not much else for me to do here. The market is overbought and staying there. That is the way it goes in up trends. I'm still not sold on this light volume rise. GE was up a few cents and the volume was light. Gold gained $8 on the futures as the US dollar down trend continues. The XAU and GDX had slight fractional gains on light volume. Gold has been acting better than the gold shares in this rise and that generally isn't sustainable for a long term trend. You'd like to see the opposite. Mentally I'm feeling OK. It looks like we're getting the positive expiration bias for the stock market this week. No news really and we tried to sell off early today but to no avail. I'm on the sidelines for the foreseeable future due to lack of confidence combined with an upcoming vacation. I'll be canceling the open order for the longer term gold share calls this week due to the earnings coming out next Wednesday. Not exactly the summer doldrums here but the volume is slow and the price movement isn't extreme. We'll see what happens tomorrow. Asia was mixed and Europe lower overnight. The Dow did follow the DAX but not with the same degree. I'll be keeping an eye on the news tonight.