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.