Friday, October 30, 2015
Some selling to finish off trading in the month of October as the Dow lost 93 points on good volume. The advance/declines were positive though. We're still overbought for the major stock indices. If we see some decline next week, I'll probably try the SPY November calls. However the market just seems to want to go higher despite the noise around it. The summation index is moving sideways. GE was down 3/8 on good volume. If GE is a precursor for the overall market again, then maybe we'll get the decline needed to set up the SPY call trade. I'm also now looking to go out to the January GE calls as well. Gold continued lower as the futures fell $5. The US dollar was lower as well. The XAU and GDX had fractional losses on light volume. It was a rough week for the precious metal complex. Mentally I'm feeling OK. Another week to the upside for the major stock indexes but the gain was small. Plenty of data out next week with Fridays employment report the key element. I don't know what to expect there. There should be some beginning of the month money flows coming early in the week. The game plan for me remains the same. If we get oversold, then purchase the SPY November calls. Otherwise it continues to be a waiting game for me. I'll be checking the charts out over the weekend as usual. For now it's Friday afternoon and time for a rest.
Thursday, October 29, 2015
Another day of hanging around as the Dow fell 23 points on heavy volume. The advance/declines were negative. The summation index has begun to trend sideways. GDP came in lighter than last time but really wasn't a market mover. We are still simply moving higher for the overall trend. Like a broken record, the market continues to be short term overbought. I'm still going to have to wait for a pullback from overbought before I attempt the long side. I do not think that trying to buy puts is a viable strategy here. I could be wrong. GE was off a nickel and the volume was lighter. I still have the November calls on my radar here but must keep in mind that most of the gain here has already been made. Gold fell another $15 today as the hawkish Fed tone gets priced in around the world. The US dollar was lower. The XAU lost 1 7/8, while GDX fell 3/4. Volume was good to the downside. ABX did have a slight gain on the earnings report but was well off of the highs for the session. I have no trades in mind here for the gold shares. Mentally I'm feeling OK. Watching and waiting is all I can do here as the market continues higher. Hopefully my patience will be rewarded eventually. There is still a lot of time in the November option cycle. I also still think that new highs in the S&P 500 will occur prior to the end of the year. That is my forward scenario for stocks. Gold remains uninteresting to many and I do not know when that will change. The fundamentals for gold are still negative in my opinion. Long term, the gold shares look very cheap at these levels but you have to have an extended holding time to make it work. The foreign markets did not follow the US higher last night. We'll have to keep an eye on that and see if it means anything going forward.
Wednesday, October 28, 2015
The market roared back to the upside as the Dow gained 198 points on very heavy volume. The advance/declines were over 3 to 1 positive. We opened higher and then came all the way back to unchanged after the Fed statement. But then things turned around again for an almost 200 point gain in the last 2 hours. Still overbought and it doesn't look like I will get a chance to get in the upside game. We simply remain with the technical indicators near the top of their ranges. Plenty of overhead resistance here for the S&P 500 but I don't think it's going to matter. GE was off a few cents but the volume continues to be very heavy. I'm going to try and not chase it here. Gold rallied early but fell after the Fed. Unlike the overall market, gold did not come back. The futures were off $10 as the US dollar rallied. The XAU and GDX had fractional losses on good volume. No trades for the gold shares here. ABX earnings are out tonight for those still interested there. Mentally I'm feeling a bit frustrated as I haven't gotten any calls as the market remains overbought for an extended time. I'll say again that we are heading to new all time highs for the S&P 500. There is also no resistance once we get above there. I don't want to buy some SPY calls just for the sake of having them but perhaps just getting long is the answer. The 3rd quarter GDP is out tomorrow and that should provide the next catalyst for the market. There's still plenty of time in the November option cycle to do something but the best time to get long has passed. We'll see how the foreign markets react to the US rally in trading tonight.
Tuesday, October 27, 2015
Another day of just hanging around as the Dow fell 41 points on good volume. The advance/declines were almost 3 to 1 negative. The small stocks still show better relative strength here but the overall market breadth was weak. Just waiting on the Fed tomorrow. I'm still looking at the SPY November calls as I expect positive outcomes going forward. The best case scenario would be to reach some type of oversold reading on a daily basis. We are not near that yet. GE fell 9 cents and the volume remains rather heavy. We have been overbought here for 3 weeks so some type of decline is overdue in my opinion. Gold was flat on the futures as the US dollar was a bit higher. The XAU along with the GDX were flat on very light volume. We're still just moving sideways here. Mentally I'm feeling OK. We'll get the Fed out of the way tomorrow. The market reaction, as always, will be more important than what is said. I don't think that there will be a big reaction unless there is some surprise. But that's a guess as usual. I'm still in the patient camp for now, waiting on a decent signal. Todays market action could turn the summation index back down. However even if that were to occur, I don't think that an extended decline is on the horizon. We'll watch the foreign markets tonight and see what the Fed has to say on Wednesday.
Monday, October 26, 2015
A meandering Monday as the Dow fell 23 points on light to average volume. The advance/declines were negative. The summation index continues to the upside. Plenty of economic data out this week plus the Fed. We're still overbought for the main stock indices. I'm still considering the SPY November calls if we get to oversold. Until then it's wait and see time period for me. GE was up a few cents ands volume was lighter than it's been. Gold was basically flat on the session while the US dollar lost some ground. The XAU fell 1 3/4 and GDX was off 1/2. Volume was average. I'm not sure where gold is going here. The US dollar has rallied recently and gold has only moved sideways. That can be seen as a plus. Mentally I'm feeling OK. I'd expect tomorrow to be more of the same as we await the Fed. I don't expect any changes out of Yellen and company. Of course the statement from the Fed will be put under a microscope and we'll trade off of that. Thursdays GDP number will probably be more important. I'm going to have to stay on the sidelines until we get a decent technical signal. Still a lot of time in the November option cycle. So we'll sit and be patient. We'll see what transpires overseas tonight and take it from there.
Friday, October 23, 2015
Powering higher as the Dow gained another 157 points today on heavy volume. The advance/declines were positive. The summation index continues higher. The overhead resistance appears to not be a problem. The small stocks out performed and that is bullish. Overbought, staying there and it doesn't seem like there is anything out there to derail this rally. New all time highs are coming, it's just a matter of when. I really need to get some SPY November calls because this market looks like it is going to go straight up. The double bottom measuring objective for the S&P 500 is 2120. GE was off a few cents but the volume remains very heavy here. Gold was off a few bucks on the futures as the US dollar continues to rally. The gold shares went up as the XAU gained 1 3/8, while GDX rose 3/8. Volume was average. I'm not sure why the gold shares rose with a much stronger US dollar for the past 2 days. Probably just tagging along with the overall market. Mentally I'm feeling OK. Well I wanted to let this week pass and now it looks like I should have done something. Hindsight is never wrong. However there wasn't a decent technical signal to trade off of. So you've got to let it go and move on from here. Perhaps we'll see something out of the Fed next week to get things going again. I do think that the beginning of the week will be a wait and see affair. The earnings keep plugging along. This is a game played by companies and wall street 4 times a year. As usual the numbers don't mean anything but the stocks and markets reaction to them are the key. It looks like all systems are go for higher overall prices in the weeks to come. I'll be checking the charts over the weekend as usual to try and come up with something for next week. For now it's Friday afternoon and time for a break.
Thursday, October 22, 2015
It was a strong move higher today as the Dow roared ahead by 320 points on heavy volume. The advance/declines were about 3 to 1 positive. The summation index continues to the upside. Overbought and staying there for the major stock indices. We are breaking above the downtrend lines set over the summer today in some of the major indexes. All signs point to higher prices going forward. We are into the overhead resistance right now for the S&P 500. But it appears that all systems are go. Easy money talk out of Europe fueled the bullish fun today. GE was up 3/4 on heavy volume once again. If GE is a precursor for the overall market, we will be seeing new all time highs in the Dow and the S&P 500 before the end of the year. I do believe that will be the case. I certainly don't know the reasons why but we have to follow price and volume. Gold barely moved today despite a rise of over a point in the US dollar. Interesting to say the least. The XAU rose 1 1/4 and GDX added 1/3. Volume was very light here. Mentally I'm feeling OK. How can we find the next trade when the market just continues to remain overbought? Plenty of time in the November option cycle and we will find a signal to trade eventually. However we could remain overbought for quite a while as it appears that the market wants to simply go straight up. There is nothing you can do about that. So we will wait. This is an easy money market but when that changes all I can say is look out. However it doesn't appear that there will be anything in the way of higher equity prices in the near term. I would expect some hesitation here though because the overhead resistance is pretty long in time. Plus players should be moving to the sidelines ahead of the Fed next week. Also the small stocks haven't approached their resistance yet although the QQQ is doing much better than the rest. We'll look for upside in the foreign arena overnight and close out the week tomorrow.
Wednesday, October 21, 2015
An up and down session that ended with a decline as the Dow fell 48 points on good volume. The advance/declines were over 2 to 1 negative. Perhaps we will relieve the overbought technical condition in the coming days. The summation index is still moving up. The overall market was weaker than the Dow with the small stocks once again leading the way lower. No hurry to trade here as I continue to favor getting some SPY November calls if we get oversold. GE was up a few cents as the volume remains above average. I'll consider some calls here if we get back to $28. Gold was off over $10 on the futures as the US dollar was a bit higher. The XAU fell 2 points, while GDX shed 1/2. Volume was lighter. I do not have any trades in mind here at the moment. Mentally I'm feeling OK. The plan for now is to let this week pass and we'll go from there. We've got the Fed next week and that usually provides some excitement. Earnings are the driver for now. Although the Dow has broken through the down trend line on the daily charts, the other major indices have not. This is a line that has been in effect since the summer. It usually isn't bullish to have the Dow leading the way. It's better to have the broader averages in front from a bullish point of view. So we'll see where this leads us. The overseas markets were mixed overnight. We'll watch for some downside follow through in tomorrows trading session.
Tuesday, October 20, 2015
The opposite of yesterday today as the Dow fell 13 points on light volume. The advance/declines were positive. The small stocks were relatively weaker today. The summation index continues higher. Things here have the feel of trying to make up its mind in my view. There's no hurry to put on any trade here. Still overbought on the short term indicators. Watch and wait is my strategy at the moment. GE was off almost 1/4 and the volume is still very heavy. I'm waiting for more of a pull back here. Gold was back up a few bucks today. The US dollar finished the session almost flat. The XAU was back up 2 points, while GDX rose 2/3. Volume was good here. Maybe the up trend in the gold shares isn't over yet. Time will tell on that. Mentally I'm feeling OK. Patience is key here as the signal is for a decline but I do not think that it is worth the risk. High option premiums along with plenty of time in the November cycle has me on the sidelines for now. My ideal scenario would be a decline to an oversold reading and then the purchase of some SPY calls. The market rarely accommodates you. It appears that the foreign markets are in the same going nowhere mode at the moment. You cannot force the issue. It is a time to keep an eye on things and get ready for the next opportunity. We'll follow the overnight action as usual.
Monday, October 19, 2015
We begin the week with a 14 point gain on the Dow. The advance/declines were slightly negative and the volume was light. The small stocks had good relative strength and that's a positive. The summation index continues higher. Still short term overbought for the major stock indices. GE was flat on the session but volume remains extremely heavy. Due for some kind of pause here I would think. If we get back to $28, I'll look at the calls again. Gold was off a few bucks today as the US dollar was higher. The XAU was off almost 2 1/2, while GDX fell 2/3. Volume was heavy. It appears the 2 1/2 week gold share rally has run its course. No trades here for now. Mentally I'm feeling OK. Not much economic data this week, mostly housing numbers. Earnings should be the driver of prices for the time being. I'm still looking for the S&P 500 to reach the 2050 level at least before we stall or pull back. The short term overbought nature of the market here should mean that the upside is limited in the near term. The extra week on the November options makes the premiums more expensive. That is another reason to watch and wait for now. We'll keep an eye on the overnight action and go from there.
Friday, October 16, 2015
Moving along to the upside as the Dow rose 74 points on average volume. The advance/declines were positive. The summation index continues higher. Still moving towards linger term resistance for the S&P 500. A closer look says that it's between 2050 and 2080. We should get a pause when we get there. Overbought here in the short term but the medium term indicators have plenty of room to go higher. GE gained almost a buck on very heavy volume. We're at yearly highs here with no overhead resistance. The earnings were liked by the street. The November call trade here was missed. However if we pull back to the previous highs at $28, there may be a call trade there. Just a thought, not completely sure. Gold was off $11 on the futures as the US dollar was a bit higher. The XAU dropped almost 2 points and GDX lost 1/2. Volume was average. Overbought here and due for a rest. The fundamentals for gold haven't changed and they are not really bullish. Mentally I'm feeling OK. Not much to do here except watch and wait with respect to the SPY. November has an extra week in the option cycle and the premiums are high. The technicals remain overbought on the short term and that will have to work itself out before taking on the next position. I'm still bullish on equities as we had a 10% move down and have moved nicely off of a double bottom. The next thing that we have to deal with is the market reaction when we hit resistance. I still think that declines can be bought. However we have basically had a straight line up since the beginning of October. I'll continue to keep an eye on things in pursuit of the next opportunity. But right now it appears that watching and waiting is the best course of action. I could be wrong. Gold has found some positive interest lately but I'm not sure how long it can last. Overbought short term here as well. I'll be checking all the charts over the weekend as usual. For now it's Friday afternoon and time for a break.
Thursday, October 15, 2015
Back to the upside in a big way as the Dow gained 217 points on good volume. The advance/declines were 4 to 1 positive. The summation index continues higher. We might get to 2050 on the S&P 500 sooner rather than later. I'm still a believer in higher rather than lower prices going forward. I'll be looking at the SPY November calls if we come off of the overbought readings in the short term technical indicators. For now it's patience as the main idea. GE was up 3/8 on very heavy volume. Earnings out tomorrow morning. We are right at the 52 week high and will probably shoot higher tomorrow. That's my guess at least. There's no overhead resistance once we move higher past here for GE. If by chance GE falls tomorrow, I'm still interested in the November calls. Gold was up a few bucks on the futures despite strength in the US dollar. The XAU and GDX didn't do much on light volume. Overbought now for the gold shares. Mentally I'm feeling OK. The market acts like it wants to go higher here. However resistance is not that far off. With an extra week in the November option cycle, there isn't any hurry to take on another trade right now. We'll wait for the next signal and act on it when it occurs. If GE does break out to new highs tomorrow, then I think the overall market will be going a lot higher before the end of the year than most believe right now. That's my take on things at the moment. The foreign markets were higher overnight. So we'll get through tomorrows expiration and go from there.
Wednesday, October 14, 2015
Lower again today as the Dow fell 157 points on average volume. The advance/declines were negative but not as much as a down 150 market would suggest. The overall market was stronger than the Dow. Hence I'll repeat what I said yesterday. I do not think that this is the beginning of something big to the downside. The summation index is still moving up. The loss today in Walmart contributed to the downside in the Dow. The short term technical indicators have started to roll over for the major stock indices. I got rid of my October SPY puts for a small gain of 40%. As usual I could have gotten a better price. With only 2 days to go here in the October option cycle, I decided to just get out with what I could. I'll be looking at the SPY November calls to purchase now. GE was off 1/4 and the volume was OK. Just profit taking here before the earnings on Friday is my guess for what's going on here. Gold was up almost $20 today on the futures as the economic data came in weak and the Feds beige book had no surprises. The fact that the dollar dropped helped gold as well. The XAU added 3 3/4, while GDX gained a point. Volume was heavy for the gold shares. Finally some interest in the gold shares as they are overbought and staying that way on the daily charts. The September/October seasonal strength for gold has shown up late this year. But here it is. Can it last? Perhaps. We have broken above the highs set in August. Mentally I'm feeling OK. I still think that higher prices for equities are coming in the weeks ahead. We had very high McClellan oscillator readings lately and the summation index is moving up. I think that the S&P 500 can make it back to the 2050 level before resistance really kicks in. If we get some more pull back next week, the SPY November calls are in the plan for the next trade. For now, I'll let the expiration pass on Friday before I do anything else. Gold appears to have finally gotten some interest. However there is a lot of resistance at the $1180 to $2000 level for the yellow metal. There's also a downtrend line at $1225 to deal with. So I would not get overly bullish there for now. Most of the major foreign markets were weaker last night. We'll watch and see if that trend continues tonight.
Tuesday, October 13, 2015
A bit of downside today as the Dow fell 50 points on average volume. The advance/declines were shy of 3 to 1 negative. We were overdue for some profit taking at the least. I don't think that this is the start of anything big to the downside. The summation index is still heading up. The short term technicals are starting to roll over. However it is option expiration week and that usually has an upwards bias. My October SPY puts are now showing a small profit. I really should dump them tomorrow. With just 3 days left in the October cycle, the risk is more than anybody would normally want. GE was off 1/4 on pretty good volume. GE led the way up and now perhaps it will lead the way down. Earnings on Friday will tell the story here. Gold was up $3 on the futures as the US dollar was just slightly lower. The XAU and GDX had very slight fractional gains on light volume. Still no real interest in the precious metals complex. Mentally I'm feeling OK. So perhaps this SPY put trade can work out if we see some downside follow through tomorrow morning. We've got some earnings coming out along with inflation and retail sales reports. Later in the day we'll get the Feds beige book release. So the potential for volatility is there. The small stocks helped lead things lower and closed at or near their lows. That is bearish. But the markets can turn on a dime so we will have to see what happens. At any rate, I think that getting out of this SPY trade sooner rather than later is the proper course of action. We'll see. Most of the major foreign markets were lower yesterday but not by a lot. We'll have to see if they follow the US tonight. As always we'll keep an eye on the overnight developments and go from there.
Monday, October 12, 2015
A holiday mode market as the Dow gained 47 points on light volume. The advance/declines were slightly positive. The summation index continues higher. Columbus day in the US and various foreign markets were closed as well.. My SPY October puts are in the red. If we don't see some decline tomorrow, this trade will be a loser. Both short and medium term overbought on the major stock indices. Hasn't meant anything yet. GE was flat on the day and the volume was light. I'll guess I'll let the earnings on Friday pass before I decide to do anything here. Gold was up $7 on the futures and the US dollar was a bit higher as well. The gold stocks didn't follow. The XAU fell 2 points, while GDX dropped 1/2. Volume was good. That could be the end of the gold share rally for now. Just a guess as usual. Mentally I'm feeling OK. Plenty of economic data out later in the week and lots of earnings as well. So we should see some movement in stocks. It's just a matter of which direction. Expiration week usually has a positive bias but the overbought nature of things here along with the supposed A-B-C-D-E move higher led me to go the other way. Tomorrow should tell the story there. It does look like the market is going to go straight up though. The gold shares not following gold higher today is a negative. The daily candlestick charts for the gold share indices look negative now as well. No trades in mind here for now. We'll see how the rest of the world trades overnight and the markets will be back at full strength tomorrow.
Friday, October 09, 2015
We finished the week on a positive note as the Dow gained 33 points on good volume. The advance/declines were positive. The summation index continues higher. Sill overbought for the major stock averages. I did buy some SPY October puts today, as I will try and be nimble enough to make this trade work. On the hourly charts for the S&P 500, there appears to be a completed A-B-C-D-E pattern to the upside. The short term technical indicators are in overbought territory as well. We may very well simply stay overbought and continue higher from here. But I felt that the risk may be worth it and I'll keep the trade short in duration. GE was up a few cents and the volume remains very good. Earnings are due at the end of next week. Perhaps that will propel GE to a new yearly high. Gold bounced back twelve bucks today and it is now above $1150. The US dollar was lower on the session. The XAU rose 2 1/3, while GDX gained 7/8. Volume was good back to the upside here. Perhaps we are finally seeing a rally in gold that has some legs. Still not even above the 50 day moving average though. Mentally I'm feeling OK. Monday is a holiday in some countries and some banks will be closed in the US. The stock market will be open but trading may be slow or skewed. We'll be in option expiration week and we will see if the usual positive bias is in effect. I'm in the next trade now, so I will have to concentrate on that. My view here short term could be wrong as well. However technically, some downside is overdue. So we'll see how it plays out. The SPY puts that I bought are at break even. The major trend is now up and I'll be looking at November SPY calls if we do head lower next week. Gold has barely made it through $1150, so we'll need to see some upside follow through on good volume to be sure that the resistance has been broken. Not a lot of interest here for the precious metals but at least they have stopped going straight down. I'll be checking the charts over the weekend as usual. For now it's Friday afternoon and time for a rest.
Thursday, October 08, 2015
Continuing higher as the Dow rose 138 points on good volume. The advance/declines were 3 to 1 positive. The summation index is moving up. Overbought and staying there. We are not seeing a move back to the broken downtrend line. The market is basically moving straight up. The rally is for real and a double bottom is in place. I sold my SPY October calls much too early. Another bad trade even with a profit. We'll see if there is any chance to get long again before the expiration next week. GE was up 1/4 and the volume remains heavy. Challenging the yearly highs here. I'd still like to try the November calls here if the chance arrives but it probably won't. Gold was off about $10 on the futures and the US dollar was a bit lower as well. The XAU and GDX had slight fractional losses and the volume was lighter than lately. Still trying to crack the $1150 level on gold. Mentally I'm feeling a but frustrated for not having a bigger profit on the latest trade. There was a chance that we would go straight up from the recent lows but I played it safe and just got out as soon as we were overbought. That was a mistake on my part. It's always easy to second guess yourself on trades. But it really doesn't matter. You've got to move on. It isn't easy. We are setting up for a put trade but the way things are moving you would have to be very nimble. That's something that I certainly am not good at. Perhaps waiting for some weakness in GE is the route to go here. Always plenty of questions in the game. Gold remains range bound. We'll watch the overnight action and finish things for the week tomorrow.
Wednesday, October 07, 2015
Continuing higher as the Dow gained 122 points on very heavy volume. The advance/declines were 3 to 1 positive. The summation index continues higher as well. We are going up. Declines, if there are any, can be bought. We may just move straight up, which I was afraid of because there won't be an opportunity to purchase the SPY October calls on weakness. And so it goes. Overbought and staying there for the major stock indices. Obviously I should have simply held on to the SPY calls that I had. But looking backwards does you no good. GE up another 1/2 and the volume remains heavy. We should hit new highs for the year on GE if this pace keeps up. GE is leading the way and that's bullish for now. Gold was off a couple bucks on the futures as the US dollar was slightly higher. The XAU was fractionally higher, with the GDX little changed. Volume shrunk here. No trades in the gold shares for now. Mentally I'm feeling OK. The S&P 500 has made it back to the 50 day moving average. So have some of the other major stock indexes. With the overbought conditions, I would at least expect some type of pause here. But who knows? We may just keep shooting higher. Only seven days left in the October option cycle. There will have to be a pretty good set up to try and attempt a trade now. I do think that going out to November is an option because this rally is for real in my opinion. Gold has made it back to resistance at $1150. We will have to see what happens here. No overbought for gold, so maybe there is a chance that we'll break through. We'll watch the overseas markets overnight to see if they follow the Dow higher.
Tuesday, October 06, 2015
A mixed session today after the nice recent run up in prices as the Dow added 13 points on heavy volume. The advance/declines were positive. The summation index continues higher. The small stocks and the S&P 500 were lower. A pause here would not be out of the ordinary. Short term overbought for the major stock indices. I will be looking at the SPY October calls again on more weakness. However the ideal scenario would be to purchase the at the beginning of next week. We'll see. GE was up another 1/2 and the volume was very heavy. GE is poised to attack its high for the year at the $28 level. If we get through there, $30 is on the table. Probably too late for the November calls. Gold found buyers again as it rallied about $10 on the futures. The US dollar was lower today. The XAU rose 2 1/8, while GDX gained 1/2. Volume remains good here. Perhaps a bottom is in place for the gold shares. Mentally I'm feeling OK. Patience is required now before the next SPY trade. I'm also considering going out to the November options here as well. The summation index has turned around and that is a major positive. If we get through the 500 level there, I think that the all clear sign will be given. The double bottom in place on the daily charts for the major stock indexes appears to be valid. Only a break below the lows would negate that. I don't think that will happen. Silver has made it back to its 200 day moving average. Can gold get there? Gold needs to break through the resistance at the $1150 level to turn positive in my opinion. We are knocking on the door there. Silver and the gold shares leading is bullish. So we'll see. We'll keep an eye out on the overnight action and see what tomorrow brings.
Monday, October 05, 2015
The market took off to the upside today as the Dow gained 304 points on heavy volume. The advance/declines were over 7 to 1 positive. The summation index is moving higher. A double bottom is in place for all the major stock indices. Declines can be bought in my opinion. The S&P 500 has broken through the downtrend line that began in August. That doesn't mean that we will move straight up but it does mean that the tide has turned. Short term overbought now for the stock indices but we could stay that way. I would expect some weakness at some point this week but I think that buyers will be waiting. That's a guess as usual. I sold my SPY October calls this morning for a 65% gain. Should have held them longer. GE led the way higher as there was positive news on the stock. It gained 1 1/3 on extremely heavy volume. GE was a precursor for the overall market this time around. The time for the November calls has passed and I missed it. Perhaps if it gets oversold before the November expiration the calls can be purchased. Gold was off just a bit on the futures as the US dollar was slightly higher on the session. The gold shares were higher though, as the XAU rose 2 1/3 and GDX was up 2/3. Volume was good again here. The gold shares are showing better relative strength here and that's a positive. Mentally I'm feeling OK. Out of the SPY trade now. Both the entry and exit were not good on that trade. I really should have realized that today was going to be strong, given the change of direction in the summation index. But you have to move on. I may try the calls here again before expiration if we get some weakness into early next week. The next technical expectation from here for the S&P 500 would be some type of move back towards the downtrend line that was just broken. If that does occur, then trying to calls during expiration week may be worth the risk. As usual, the market will go where it wants. Barring some unforeseen catastrophe though, we're heading higher. Gold remains in the background and uninteresting. I think that the gold shares simply followed the overall market higher. Time will tell if it's a sustained uptrend or not. It is possible that a bottom is in place here though. We'll see if the foreign markets follow the Dow higher overnight.
Friday, October 02, 2015
Today was a one day reversal to the upside as the Dow opened 250 points lower only to turn around and finish the day up 200. Quite a ride. The advance/declines were almost 3 to 1 positive and the volume was heavy. Today should turn the summation index back up. The employment report was weak, which was met with selling. But things turned around and we closed on the high of the session. That's bullish. I'll go out on a limb and declare this decline over. A double bottom is in place and declines can be bought. The potential positive RSI divergence has panned out to be valid. Now of course things can change on a dime in this game but the odds are we've seen the lows for this move. My October SPY calls are now in the black. GE turned around as well and gained 1/4 on good volume. It appears that it is going to be too late to try the November calls there unless I move to a higher strike price. Not sure that I want to do that. Gold rallied on the weaker data as the futures here rose over twenty bucks. The US dollar was slightly lower. The XAU gained 3 7/8, while GDX rose over a point. Volume was heavy. Perhaps we'll see more upside for gold but there hasn't been a sustained rally here for months. Mentally I'm feeling OK. Getting short term overbought already on some daily indicators for the major stock indices. Upside on Monday would take us there. The S&P 500 is just getting through the daily chart downtrend line that began in August. Although I would like to hold the SPY October calls that I have for a longer time, getting out on any strength Monday might be the prudent path. I've held onto this trade longer than anticipated already. But I am pretty sure the stock indexes are going only higher from here. The weekly candlestick charts look bullish now as well, with plenty of room to the upside for the technical indicators. Today was a pretty good short squeeze on the bears. So there will be plenty to think about over the weekend. Gold had a nice move higher but we haven't seen any rally hold up here for a while. Until we get through the $1150 level on good volume, the yellow metal appears to be stuck in a trading range. I'll be checking the charts out over the weekend to come up with some sort of game plan for next week. For now it's Friday afternoon and time for a break.
Thursday, October 01, 2015
A mixed picture today as the Dow fell 12 points on good volume. The advance/declines were barely negative. The overall market was stronger than the Dow. We did come off of lower levels during the day and that's a positive. The summation index is still heading lower but not as strongly as before. The positive divergences that we saw earlier in the week may be valid. It will all depend on the market reaction to the employment report tomorrow. I still have the SPY October calls and they are still showing a loss. GE was off a few cents on good volume. We came back from lower levels here as well. Gold was off a couple bucks on the futures and the US dollar was slightly lower. The XAU was off a point and GDX lost 1/3. Volume was average. No interest in gold and that has been the story there for a while. Mentally I'm feeling OK. There are potential double bottoms on the daily charts for the major stock indices. If we are up tomorrow that would strengthen the double bottom scenario. I certainly don't know which way we will go. If we do move higher, resistance for the S&P 500 remains at the 1945 level. That is where the downtrend line is from the end of August. If we do get there, I should probably dump the SPY October calls for whatever they're worth. I do not expect to get through that line on the first attempt. Of course we could just roll over tomorrow and make new lows as well. So tomorrow is another important day for the stock market. I am however, encouraged by todays price action. So we'll see. The foreign markets were mixed last night. We'll await Fridays jobs report and close out the week tomorrow.