Thursday, December 31, 2015
We ended the year with a thud as the Dow lost 178 points on light volume. The advance/declines were not even 2 to 1 negative. That is the only positive that I can see here. The summation index is still moving up but appears to be stalling. The S&P 500 finished the year negative. The Santa Claus rally isn't here. The usual action this time of year is buying to try to get ahead of the crowd. This year it seems like there's selling for the same reason. I am not positive on the stock market for 2016. I could be wrong, as I was this year. GE was up a dime and the volume was pretty good. GE has held up well lately and is out performing. It is not however, acting as a clue to where the overall market is headed. Gold was flat on the session but the US dollar was higher. The XAU and GDX had little change on light volume. I don't see much progress for gold in the coming year. The fundamentals here remain negative in my opinion. Mentally I'm feeling OK. My SPY January calls are back solidly in the red. As much as I don't want to begin the new trading year with a loser, it appears that will be the case. The entry timing was horrible and the market is heading lower. The short term technical indicators have rolled over for the major indices. We only need the summation index to turn around here and the rout will begin in earnest. So stocks went nowhere in 2015 and 2016 doesn't look any better. But time will tell on that. We'll close the books for 2015 with a slight trading gain of 2%. I'll be checking the charts as usual in the next few days. It's time to enjoy a holiday weekend. Happy New Year everyone.
Wednesday, December 30, 2015
Back to the downside as the Dow fell 117 points on light volume. The advance/declines were better than 2 to 1 negative. There was no upside follow through to yesterdays positive price action. That is a problem for the bulls. The summation index is still heading to the upside but the lack of prices going forward today is a bad sign. This is generally a positive time of the year but the market isn't quite cooperating just yet. My SPY January calls remain in the red. GE was off 1/4 and the volume is still light. It looks like GE could potentially roll over here but we will have to see what happens tomorrow. Gold was lower by $7. The US dollar was little changed. The XAU fell about a point, while GDX was off around 1/3. Volume was nothing special. Mentally I'm feeling OK. The final trading day of the year is upon us. It looks like a loser this year for the Dow. The S&P 500 is close to break even. Tomorrow will tell the story there for the year but it certainly wasn't a good one regardless. My trading showed a slight gain for the year but there were too many big losses. My mistakes tended to be huge ones and that is something that I will have to work on in the coming year. For the major indices it appears the short term technical indicators are starting to roll over. Unless things turn around tomorrow, this would not be a positive development. Tomorrow will finish out the year and end this short, light volume trading week. The overseas markets were mixed last night with more down than up. We'll finish the 2015 trading year and get ready for 2016.
Tuesday, December 29, 2015
Santa Claus arrived today as the Dow rose 192 points on light volume. The advance/declines were almost 3 to 1 positive. The summation index continues higher. I don't trust light volume rallies but it is a holiday week. We'll see if we can build on this tomorrow. Only 2 trading days left for 2015. My SPY January calls are trying to make it back to break even. GE was up 3/8 on OK volume for this week. Hopefully GE is leading the way for the bullish cause. Gold was flat on the futures session as the US dollar was higher. The XAU and GDX had slight fractional moves higher on light volume. Mentally I'm feeling OK. The S&P 500 is trying to finish the year higher. If we can hold up for the last 2 days it will make it. The Dow still needs a little over 100 points more to get to break even. The usual year ending in 5 decent gains did not show up this year. I don't know what that means going forward. The short term technical indicators are now overbought for the major stock indices. It's possible they can stay that way but who knows? I still plan on holding my SPY January calls until the new year. The foreign markets were generally positive last night. We'll keep an eye on things overnight and see what tomorrow brings.
Monday, December 28, 2015
Quiet trading as the Dow fell 24 points on very light volume. The advance/declines were negative. The summation index is still moving up. The Santa Claus rally hasn't shown up yet. This rally is historically the last 5 trading days of the year combined with the first 2 trading days of the new year. So we still have 5 days to go. Not a lot of economic data due this week. A lot of players will be off as well. My SPY January calls are still mired in the red. GE was up a few cents and the volume was light. Perhaps GE can help get things moving to the upside. Gold was off $8 on the futures. The US dollar was little changed. The XAU was down 2 points and GDX fell 1/2. Volume was OK here. No compelling reason to own gold at this juncture. Mentally I'm feeling OK. Barring some outside shock it looks like a quiet holiday trading week. Of course this won't help my SPY trade but the environment is what it is. The foreign markets were mixed overnight but more negative than positive. We'll keep an eye on things tonight.
Thursday, December 24, 2015
A very quiet day of Christmas Eve trading as the Dow dropped 50 points on extremely light volume. The advance/declines were positive. The summation index continues higher. My SPY January calls are still in the red. GE fell 1/8 on very light volume. Gold was up seven bucks as the US dollar was weaker on the session. The XAU was up a little over a point, while GDX added 1/3. The same very light volume here. Mentally I'm feeling OK. Next week should be slow. Perhaps some early buying in anticipation of next year or some late tax loss selling. I do not expect anything dramatic. Perhaps the Santa Claus rally will appear. We'll see. Merry Christmas everyone.
Wednesday, December 23, 2015
More holiday upside as the Dow gained 185 points on average volume. The advance/declines were 6 to 1 positive. The summation index is moving higher. That is now 3 days of triple digit gains for the Dow and that cannot be ignored. The short term indicators have now all turned around. We're not overbought yet so there's even more room to head higher. It looks like the market got a head start on the Santa Claus rally. My SPY January calls are still losers. GE was up 1/2 on what passes for light volume these days. Once again trying to break out of the top of the Bollinger bands. We'll see if it makes it this time around. Gold was flat on the day while the US dollar was bit higher. The XAU rose 1 1/3 and GDX was up 1/4. Volume was light. Mentally I'm feeling OK. It appears that we're seeing a year end rally here as the major averages try to finish the year in the black. The Dow is still a little over a couple of hundred points shy of break even. We at least did not break down this week and that is a plus. The TRAN has had a good week as well and that is positive. Tomorrow should be a very quiet, light volume, short trading session holiday affair. The major players have already taken care of business for the year. Unless there is some major unexpected news event, we should finish off the trading week with a yawn. We'll keep an eye on things overnight.
Tuesday, December 22, 2015
Heading higher as the Dow rose 165 points on average volume. The advance/declines were 3 to 1 positive. This should turn the summation index back up. It appears that disaster has been averted for now. Perhaps we are getting an early Santa Claus rally. Whatever the case, we'll take it for now. The TRAN had a good day as well. Not all of the short term technical indicators have turned around though. GE was up almost a dime but the volume is lighter than it has been. I'm not sure if the January calls are still on my wish list. GE has been moving sideways for a month and a half. Gold fell 8 bucks on the futures despite another lower session for the US dollar. The XAU and GDX were pretty much flat on very light volume. There doesn't appear to be any reason to buy gold right now. Mentally I'm feeling OK. The market is trying to hold up here and for now we'll give it the benefit of the doubt. However the market always goes where it wants to. My SPY January calls are still solidly in the red. That's what happens with lousy entry timing. Even a couple strong days in your favor don't do much for your trade. The only plus here is that there is plenty of time for this trade to possibly work. I am planning on holding this trade until the first trading day of the new year. The ideal scenario would be to have a rally into that day. The S&P 500 began the year at 2058. I'm thinking that the powers that be would like to keep the year ending in 5 winning streak intact. A close above that level will ensure that the streak stays alive. Now that is all simply a guess on my part. We'll see how it plays out. Tomorrow should be the last major trading day of the week. The market will close early on Christmas Eve day. As always we'll be watching the overseas markets tonight.
Monday, December 21, 2015
It was an up and down session but we moved higher in the last half hour to finished with a gain of 123 points on the Dow. The advance/declines were 2 to 1 positive and the volume was pretty good considering it's a holiday week. The summation index continues lower. Perhaps it can turn around this week but we will need to see more market strength for that to happen. My SPY January calls are solidly in the red. At least we didn't completely fall apart today but the week is young. Plenty of economic data due in the next couple of days. The market is still on shaky ground for now. GE was up 1/8 and the volume was light. Still waiting for a decent Bollinger band breakout from GE. Gold found buyers on a weaker US dollar. The precious metal futures rose a dozen on the session. The XAU was up 3/4 and GDX gained 1/4. Volume was average. Mentally I'm feeling OK. It was important for the major indices to hold up today and they did. There is a chance that Friday was simply option related with the blow out downside volume. If that is the case we can perhaps rally from here. But I'm not completely convinced yet. How the rest of the week shapes up is important. Things could still go either way. The foreign markets were generally weaker overnight. The next two days will probably tell the story for the week as the day before the Christmas holiday should be very slow. So we'll keep an eye on tonights developments and take it from there.
Friday, December 18, 2015
It's beginning to look a lot like, well not Christmas but a market collapse. The Dow fell 367 points on expiration extreme heavy volume. The advance/declines were only 2 to 1 negative again which really has me puzzled. The summation index continues lower as we approach the zero line. Either the recent market action is option expiration related or we are in for a crash. Make no doubt about that. I really did not believe that the market would fall apart here but it appears to be doing just that. The TRAN is now making a new low and that's bearish. The weekly candlestick charts for the major stock indices look bearish. The short and medium term technical indicators have turned down. My SPY January calls are losers. I almost bought some more today at a closer strike price. But somehow reason appeared in my mind and said that would be like throwing good money after bad. For once my brain worked and I didn't buy them. GE was off 1/4 on heavy volume. If GE continues downwards from here that would be another bad sign if you're long. Gold bounced back $15 as the US dollar was lower. The XAU was up 1 1/3, while GDX gained 1/3. Volume was average. Perhaps a flight to safety for the gold shares and gold today but I wouldn't expect any sustained rally here. Mentally I'm feeling OK. At this point I'm a little afraid of what might happen on Monday. We had a gap down to start the day today and nothing but selling after that. Plus we closed on the low of the day. Things just really look bearish after the past two trading sessions. In retrospect I should have just stayed on the sidelines for the remainder of the year but it's too late for that. The S&P 500 has never had a down year that has ended in a 5. We may be on the verge of breaking that. Is it possible that things will turn around on Monday? Maybe but it certainly doesn't look probable at this point. Once again there are things going on underneath the surface that only the market knows about. Or so it seems. The breadth in the past two days certainly does not suggest a market down over 600 points. We now roll into the January option cycle which has 2 less days in it due to the holidays. We will need to see quite a Santa Claus rally to get things turned around here. Normally I would expect next week to be slow with Christmas occurring on Friday but in this environment, who knows? I'll be going over all the charts over the weekend but it is really a time to be cautious regardless. If we somehow have a strong bounce back on Monday, then my bearish posture here could be wrong. If we continue to head lower, it could be a pretty ugly day. For now it's Friday afternoon and time for a break.
Thursday, December 17, 2015
The Dow reversed course today and fell 253 points on good volume. The advance/declines were 2 to 1 negative. The summation index did not turn back up and continues lower. We closed at the lows of the session and that is bearish. My idea was that declines could be bought and I did purchase some SPY January calls today. They are already in the red. Perhaps my take on things here is wrong but time will tell on that. I don't know how tomorrows expiration will play out but todays price action wasn't what I expected. GE lost 20 cents on good volume. Perhaps we had a false breakout from the Bollinger bands here. Gold got clobbered as it fell over $25 on the futures. The US dollar had a strong session to the upside. The XAU fell 3 1/2, while GDX shed more than 3/4. Volume picked up to the downside. Mentally I'm feeling OK. Already into the next trade and my entry timing was obviously off. The breadth today was not what you would expect with a down over 250 market. So that is a plus. Once we get through tomorrow, I would expect things to slow down for the rest of the year. The volatility should subside. However with the summation index turning back down and in close proximity to the zero line we are at risk for a total market collapse. I do not think this is the scenario that will occur but I could be wrong. Some of the short term technical indicators have rolled back over for the major indices but not all of them. Tomorrow will be important as it would bode well for the bulls if we could finish the week on a positive note. The foreign markets were strong overnight. We'll keep an eye on them tonight and close out the week with option expiration tomorrow.
Wednesday, December 16, 2015
Moving higher after the Fed as the Dow rallied 224 points on heavy volume. The advance/declines were 5 to 1 positive. The summation index is trying to turn around here and it should be successful. The McClellan oscillator is bouncing from a very oversold level. The short term technical indicators for the major indices are moving to the upside. Declines can be bought. Weakness Monday should have been bought but it is always easy looking back. That was simply another missed opportunity by me. GE took off today as well. It gained 2/3 on heavy volume. We are finally getting a resolution to the contracted Bollinger Bands and it is to the upside. Another missed trade there for me. Gold rose $10 and the US dollar was higher as well. The XAU rose 2 points and GDX added 1/2. Volume picked up going higher. Mentally I'm feeling OK but obviously not happy about missing out on this weeks rise. And there's 2 days to go in the December option cycle. The TRAN had a big day to the plus side as well, so that means that what we are seeing here is for real. If the market gives us a chance to get long that is the strategy I suggest. The Fed is now out of the way. We'll see the summation index turn around in the next couple of sessions. So all systems are looking like higher prices are in the future. We should see the foreign markets rally overnight. So for now we'll wait for a pullback if one occurs and try to get some SPY January calls.
Tuesday, December 15, 2015
A better bounce today as the Dow rose 156 points on good volume. The advance/declines were over 3 to 1 positive. This rise was expected as the McClellan oscillator was in an area that was very oversold and we were due for something better than the rise yesterday. The question is now where do we go from here. I'm looking at the SPY January calls now because I believe that the worst is over for this decline. My guess from here is that declines can be bought. Perhaps if we see weakness tomorrow on the Fed, I'll purchase some index calls. The short term technical indicators are starting to roll back to the upside. GE was up a few cents and the volume remains good. The Bollinger bands here have been contracted for a couple of weeks and still we haven't seen a major move from that. I don't know what to make of it. I'd still like to own the January calls here. Gold was off a couple bucks on the futures as the US dollar had a strong session. The XAU and GDX were basically flat on the day. Volume was very light. There is not interest in owning gold at this stage of the game. Mentally I'm feeling OK. We'll get the Fed tomorrow and the whole world is expecting a small rate hike. Once we get that out of the way, I suppose the market will move on to worrying about the next thing. Whatever that may be. If we head lower tomorrow with a good head of steam then perhaps my call for higher prices from here is wrong. We'll have to wait and see what the market says. It is expiration week and that in itself brings volatility. Next week is a holiday week as well. The major players will be finishing up business this week I presume. The summation index is still heading lower but today could be the beginning of it trying to turn around. Or not. The game, as always, is never easy. But with a very oversold McClellan oscillator and the short term technical picture improving the odds favor a positive resolution to the question of where we're going. We'll keep an eye on the foreign markets overnight and see what tomorrow brings.
Monday, December 14, 2015
We got a much needed bounce today as the Dow gained 103 points on heavy volume. The advance/declines were almost 3 to 1 negative however. The summation index continues lower. I would like to say the decline has ended but I can't with that awful A/D mix. The McClellan oscillator is still very negative and that needs to change before we can tell that this rout is over. Todays market action will probably send this indicator even lower. I would like to attempt the SPY December calls this week because at some point there will be a decent bounce. But the level at which to try this trade remains the all important question. Probably a better course of action for me would be inaction. I am usually not too good at the short term trades. GE was flat on the day after being much lower. Volume remains good here. Perhaps I'll try the January calls but the premiums will have to come down for me. Gold lost a dozen on the futures and the US dollar was a bit lower. The XAU fell about 2 3/4, while GDX lost a bit more than 3/4. Volume was nothing special. I cannot see anyone buying gold ahead of a Fed that will raise rates. Even if it is just 1/4 percent. Mentally I'm feeling OK. The Fed on Wednesday will be all the attention of traders. I still think that the market will rally after the Fed announcement. We remain oversold for the major averages on a short term basis even with todays gains. The small stocks underperformed today and that isn't bullish. The weak breadth is a negative as well. The TRAN did come off of its lows and is trying to hold up at the lows of August. This is something to keep an eye on. The VIX also turned around today. So there are a mix of positives and negatives to weigh in on. We are at levels on some of the indicators where things have turned around in the past. But not everything is lined up to be positive. Obviously there is something going on beneath the surface that we are not aware of. Perhaps the sidelines would be prudent and them maybe try something for the Santa Claus rally. I have yet to make up my mind. The foreign markets were mostly lower overnight. We'll see if they rebound taking a cue from the US today. I'll consider if making another trade in the December option cycle is what I want to do tonight.
Friday, December 11, 2015
The market ended the week with a thud as a gap lower led to big losses. The Dow fell 309 points on heavy volume. The advance/declines were about 7 to 1 negative. The summation index continues to slide. Oversold, staying that way and that is not good sign. I suppose I should have heeded the market warnings of lower prices early in the week but I didn't. That's one of my common problems when I'm holding a long position. But the market is always right and must be listened to. The retail sales didn't matter as some kind of worldwide liquidation is taking place. There are problems with redemptions at some institutions that deal with commodities and junk bonds. At least that is the excuse that they're pedaling. I certainly don't know. I did take the loss on my SPY December calls to the tune of 60%. This trade was a winner early on. Just another mistake in a year that had a few. GE was off over 1/3 and the volume was good. I still like this issue for the January calls but it will have to get oversold for me to try it. Gold was up a few bucks as the US dollar was lower. No flight to safety here. The XAU and GDX had slight fractional gains. Volume remains weak. Mentally I'm feeling OK. Option expiration week is coming up with the Fed announcement on Wednesday. There will be some economic data due but when we are in this type of unknown environment the data takes a back seat. The McClellan oscillator is very oversold and did not have a good bounce yesterday when it should have. We are now in the territory where we should see some kind of decent bounce with the next couple of days. However the timing of this is almost impossible to determine because we could have a washout before this occurs. That is probably what we are seeing now and should have downside follow through in the market on Monday. How long this washout lasts is the question that I do not have an answer to. It could set up for the Santa Claus rally and higher prices into the beginning of next year. Or it could be an anemic attempt to move higher which would be bearish to say the least. There will probably be an opportunity to get some index calls next week for a short term trade at some point. I do think that the market will rally on the Fed announcement. However I am usually never nimble enough to profit form the short term action. Next week would probably not be an exception. But I do believe it will be there for the taking. The summation index is not in the zone for a crash yet. So expect at least some sort of huge upside move at some point next week. Keep an eye on the TRAN as well as it has been a leader as to what the market has done lately. The technicals on the VIX are blown out now as well and in the area where things have turned around. There will be numerous things to consider over the weekend. Or you can stay on the sidelines and let what is happening right now play itself out. I'm not sure which to do but caution is again advised either way. I did not enjoy booking the loss today but it is part of the game. I'll be checking the charts over the weekend and keeping an eye on the headlines as well. For now it's Friday afternoon and time for a break.
Thursday, December 10, 2015
Slightly higher today but the market could not hold onto the majority of its gains. The Dow rose 82 points on average volume. The advance/declines were about even. The Dow was stronger than the overall market. The summation index continues lower. The market has a feel of gloom to it and we are probably heading lower from here. All recent buying has been met with selling and that is not bullish. The retail sales data due tomorrow will most likely be the market mover. Six days left in the December option cycle. My SPY December calls remain losers. GE was up 18 cents on OK volume. I canceled the open order for the January calls here. I might try it again but at this point GE has moved too far away from the strike price that I desire. Gold fell five bucks on the futures as the US dollar bounced back. The XAU and GDX had slight fractional moves one way or the other. Volume was very light. Still no love for gold and the gold shares. Mentally I'm feeling OK. If the market doesn't turn around to the upside tomorrow, I think that my SPY trade will be dead. The market was up 200 points today and couldn't hold on. My thinking is that we will see a rally if rates get nudged up next week on Wednesday. However I do not think that will help my call trade if we continue lower into that event. Obviously I should have exited this trade long ago but that did not fit the scenario I had envisioned. The summation index is down, prices are heading lower. But we all know that could change tomorrow as well. It's anybody's guess what will happen. We are still oversold on a daily basis for the short term technical indicators. The foreign markets are in daily downtrends. We'll close out the week tomorrow.
Wednesday, December 09, 2015
Another day to the downside as the Dow fell 75 points on heavy volume. The advance/declines were negative. The summation index continues lower. We did see a bounce in the morning but the market could not hold on. I'll be the first to admit that I simply do not know what is going on here. When the market doesn't do what's expected, it's a time to be cautious. Oversold now and with the summation index going down things could get rough. My SPY December calls are now solidly in the red. I did consider selling them today but again, the McClellan oscillator is in an area where at least a bounce should occur. But who knows? The market will go where it wants. The overall market was much weaker than the Dow and that is a negative. GE was up a quarter though on good volume. I still have the open order for the January calls there. Gold was off a few bucks on the futures despite the US dollar getting whacked again. Plenty going on for a usually quiet month. Mentally I'm feeling OK. Perhaps we are getting the selling out of the way before a nice year end rally takes hold. There may not be enough time left to save my SPY December calls. The weakness is global so perhaps something underneath the scenes is taking place. We should take our cues form the summation index though and with that in a downtrend lower prices should be expected. Whatever idea that I had before on the stock indices moving higher here was wrong. It also now appears that last Friday was your chance to get out of whatever long positions that you had. Well, it certainly isn't the first time I've made a mistake. We'll go on from here and I'll look for the bounce tomorrow. We'll keep an eye on tonights developments and see what tomorrow brings.
Tuesday, December 08, 2015
Follow through to the downside as the Dow fell 162 points on good volume. The advance/declines were 2 to 1 negative. The summation index continues lower. The S&P 500 is trying to hold the 200 day moving average. The overall market was stronger than the Dow and that is a plus. However with the summation index moving lower at a good pace, a breakdown could occur. The commodity collapse of the past few days isn't helping the bullish cause. I continue to hold the SPY December calls and they have moved back into the red. Only eight days left here. GE was off 18 cents and the volume was good. I'm leaving in the open order for the January calls here. Gold was basically flat on the futures as the US dollar was lower. The XAU and GDX had fractional losses on average volume. Mentally I'm feeling OK. The TRAN got whacked today and that is another negative. If lower oil prices can't help this sector, then what will? This price action also doesn't bode well for the overall market. Maybe we are on the verge of a breakdown and I simply refuse to see it because I own some index calls. Or perhaps today was the end of the selling with the McClellan oscillator now in an area where we have seen bounces or turnarounds happen. Tomorrow could be a very important day for where things are going to go from here. The short term technical indicators remain neither overbought or over sold. So I suppose you can make a case either way. The breadth wasn't as negative as a down 162 market would suggest. The foreign markets have rolled over but are short term oversold already. Any improvement overseas could help US equities. Also if oil could stabilize that would be a plus for stocks. But none of these things have happened yet. We'll keep an eye on the overnight trading and be ready for whatever happens in the morning.
Monday, December 07, 2015
Negative to start the week as the Dow fell on good volume. The advance/declines were 4 to 1 negative. The summation index continues lower. Sideways would be OK here for a couple of days. What you don't want to see if you're bullish is a break to lower lows. The breadth hasn't been bullish lately and that will have to change if we are going to go higher. The summation index needs to turn around for a more than one day advance as well. My SPY December calls are still in the black but not by much. The volatility here will help keep the premiums up but there is still the time decay factor to deal with. I'm holding on for now. GE lost 1/8 and the volume was heavy. I still have the open order in for the January calls here. I may consider going up to a higher strike price. The Bollinger bands on the daily chart here are getting very tight. That implies a pretty good move one way or the other coming soon. Gold dropped $13 on the futures as the US dollar was higher. The XAU fell 2 2/3, while GDX dropped 2/3. Volume was good to the downside. The fundamentals for gold remain negative. Mentally I'm feeling OK. No follow through to Fridays big gains and that's a negative. The overall market was weaker than the Dow and that's not bullish either. I however am still thinking that a move up to the 2120 level in the S&P 500 will occur before expiration. We've got nine days to see that happen. We do not get the Fed announcement until Wednesday of next week. Things could simply be on hold until then which would not help the case for my SPY December calls. The technical indicators for the S&P are back to mid-range on a daily basis. So we'll see how things shape up. December is seasonally a good time for stocks but that doesn't happen every year. We'll keep an eye on the foreign markets overnight and see what tomorrow brings.
Friday, December 04, 2015
Whipsawed back to the upside today as the Dow climbed an incredible 370 points on good volume. The advance/declines were 2 to 1 positive. Not exactly good breadth for a market up like that. Even with todays rise the summation index is still heading lower. The employment report was in line with estimates. The short term technical indicators are now turning back up for the major indices. The volatility has increased dramatically this week. I don't know what it means. Like I have said a number of times, the market will go where it wants. I doubt anyone could have predicted the week we just saw. Next week should be interesting. My SPY December calls are back in the black. GE was up almost 1/2 on good volume. I still have the open order in for the January calls there but it doesn't look like I'll get filled at the price that I want. I may consider ending this trade attempt next week. Gold found buyers despite the good jobs report. The precious metal futures were up $25 despite a rise in the US dollar. The XAU gained 2 3/4, while GDX added 3/4. Volume was more that it has been lately. I'm not exactly sure what is going on here but I will say that the fundamentals for gold remain negative for now. I also don't see anything that would change that going forward. Mentally I'm feeling a bit tired. The market volatility makes for more angst than usual. But it's part of the game. After todays gains I'd like to say that I'm back believing that we'll see new all time highs in the S&P 500 before years end again. But we do know that one day does not make a trend. The breadth was lacking despite the huge move higher to day. That isn't a good sign. I wouldn't be surprised if we move sideways next week as well. But with the turnaround today the odds for higher stock prices have increased going forward. Perhaps my target of 2120 for the S&P 500 before expiration will come to pass. We still have 2 weeks to go. However things can turn on a dime as we have seen today. The Fed announcement won't be for another week and a half. There are plenty of variables that we usually don't have here in the month of December. So there will be a lot to ponder over the weekend. I'd bee a lot more positive if we could see the summation index start to move back up. Hasn't happened yet. For now it's Friday afternoon and time for a break.
Thursday, December 03, 2015
To the downside with some strength today as the Dow fell 252 points on heavy volume. The advance/declines were 4 to 1 negative. The summation index is heading lower. Yellen spoke again and the ECB disappointed traders. It looks like my scenario of new all time highs before the end of the year will not come to pass. My SPY December calls are now in the red. We've got the employment report tomorrow and who knows what that will bring. I will say that we have gotten oversold in a hurry. However the uptrend line from October in the S&P 500 has now been broken. If we get a snap back to that line in the next couple of days I should be able to get rid of my calls. If not, they'll be losers. So we'll see. GE was up a few cents and the volume was heavy. I still have the open order in for the January calls here. Gold was up $8 on the futures as the US dollar got absolutely crushed. The dollar drop had more to do with the ECB than anything from the Fed in my opinion. The XAU and GDX had slight fractional gains. Gold outperformed the gold shares and that usually isn't bullish. Mentally I'm feeling OK. With two solid days lower, it's hard to imagine that tomorrow will bring any good news for the bulls. But you never know. The turning back down of the summation index is not a good sign for holding index calls. It looks like I've mismanaged another trade into a loser but there is still a little over a couple of weeks to go. However unless we see some decent upside tomorrow, I'd say another losing trade is a done deal. I'm still positive on GE despite the negative market back drop. As I said before, a lot of money poured into that stock and that is impressive. Money equals interest which shows up in volume. The volume for GE has been off the charts for a month. So I'll remain bullish on that issue. The foreign markets were a bit weaker overnight. However after todays drubbing in the US, I'd expect some negative action to take place around the world. We'll keep an eye on things and await the employment report in the morning.
Wednesday, December 02, 2015
Back to the downside today as the Dow fell 158 points on good volume. The advance/declines were 3 to 1 negative. Yellen spoke today and the market didn't like what it heard. We also got the beige book minutes. Whatever positive that we got with yesterdays price action was negated by todays move. I may have to rethink what I'm doing here. The summation index is moving up but looks like it could turn around. The short term technical indicators are rolling over. My prognosis of higher prices is now in doubt. The SPY December calls that I have are still showing a profit but they lost a lot of ground today. GE lost 20 cents on what now passes as average volume. I am leaving in the order for the January calls here. This too could be a mistake if we do roll over here with the regards to the overall market. Perhaps canceling this trade and dumping the SPY calls before further damage is done is the right move here. Gold lost $11 on the futures and the US dollar was a bit higher. The XAU dropped 1 1/3 and GDX fell 1/3. Volume was average. Mentally I'm feeling OK. The TRAN turned around today as well and perhaps it and GE is telling us that the rally is over. The TRAN broke its uptrend line from the summer today. Other major indices have not. I still may wait to see what happens if the S&P 500 gets to the 200 day moving average and uptrend line at 2065. Of course there's the chance that by then it may be too late. So there will be a lot to think about overnight. If we get some downside follow through tomorrow, the case for the rally being over is strengthened. If not, then it's a toss up going into the employment report. Technically, we're more overbought than oversold. I was pretty confident in my appraisal of things before today. But you've got to be able to listen to the market and hear what it is telling you. So the price action tomorrow will be pretty important. We'll see if the foreign markets follow the Dow lower and take it from there.
Tuesday, December 01, 2015
Back to the upside to begin the month of December as the Dow gained 168 points on average volume. The advance/declines were 2 to 1 positive. The summation index continues higher. Todays economic data was mixed. The short term technical indicators for the major indices are overbought but they could stay that way. My SPY December calls remain in the black. I still think that we will see 2120 on the S&P 500 soon and perhaps by the end of the week. I will consider selling this position if we get there. GE was up 1/4 on good volume. GE was lower during the session and I did place an order for the January calls here but the order wasn't filled. It looks like I could have missed this trade but I am leaving the order open in case GE heads back down again. Gold was up $3 on the futures as the US dollar was lower today. The XAU gained 1 1/2 and GDX rose 3/8. Volume was nothing special. Mentally I'm feeling OK. The market is heading higher as anticipated for now. There is a bullish belt hold pattern on the daily Dow candlestick chart. The TRAN turned around today as well. We are overbought but can stay that way during up trends. I believe that is the case at this point in time. But there is plenty of news to come later this week. I'm still looking for new all time highs in the S&P 500 before the years end. One of the indicators for GE today was solidly in the buy zone. That is why I put in the order for the January calls. I may have gotten too cute with the pricing though. What I mean is instead of buying the calls at what was offered, I was looking for a cheaper price. Hopefully GE will pull back again because the money has really come into this issue over the past month. There is no better sign of strength than that. The overseas markets were generally positive with the exceptions of France and Germany. Perhaps things will be on hold until the ECB announcement on Thursday. That's my guess for now. We'll see what tomorrow brings.