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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.

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