Friday, November 06, 2015
The employment data came in stronger than expected and the market sold off early. However we made it all the way back and then some as the Dow gained 46 points on heavy volume. The advance/declines were negative. The small stocks had good relative strength. The market remains overbought. I'd still like to get some SPY November calls but now I'll have to wait until Tuesday to see how things play out. If we get some weakness early next week, I will give this trade a try. We will not stay overbought forever but it sure seems that way at this point. GE was up 1/4 and the volume remains extremely heavy. With GE keeping up its gains, I have to think that will be the case for the overall market. I could be wrong. Gold broke through the $1100 level today and the futures lost $16. The US dollar had a strong rally of over a point on the employment data. The XAU lost 2 1/2, while GDX shed almost 2/3. Volume was good. It has been a rough week for the gold bulls. The fundamentals remain negative for gold. I suppose buys the puts was the proper play here but it's probably too late for that now. Mentally I'm feeling OK. The market just doesn't sell off regardless of the data or intraday action. I do not know why. The volume has been pretty impressive as well. You cannot fight that. I really think that we will get some kind of run to new highs in the S&P 500 before the November expiration. That is my guess right now. Weakness on Monday and Tuesday would be the ideal set up. However the market will go where it wants. I also thank that GE is a precursor here and that bodes well for the bullish case going forward. I don't know what is keeping things so bullish now but obviously liquidity is not an issue. Money needs a home and US stocks have out the welcome mat. This, despite the fact that it appears December will see the first rate hike in years. This is how I see things at the moment but that could change at any time. I'll be checking the charts over the weekend to see if I can come up with something other than that. For now it's Friday afternoon and time for a break.