Thursday, February 04, 2016
More bouncing around today as the Dow rose 80 points on good volume. The advance/declines were positive. The summation index continues higher. Oil is still a topic but it was lower and the stock market higher. However the Dow was stronger than the overall market and that is not a plus. But on the plus side, the TRAN soared and that could bode well for tomorrow. I don't have any idea how the employment report will be received or what it will say. The market reaction will be the key. I still think this market is going higher. GE was up 1/2 on good volume and is once again trying to break out of the top of its trading range. If GE is a precursor, then tomorrow should be an up session or stocks. Gold was up another $15 on the futures and is now above $1150. Another good drop in the US dollar today. Perhaps the dollar is telling us to look out for a weak jobs report tomorrow. The XAU was up 2 1/2, while GDX gained 3/4. Volume was heavy again. Price and volume tell the story and that means that the rise in the gold shares is for real. That said, the short term technical indicators here are extremely overbought and a pause is overdue. Mentally I'm feeling OK. The major stock indices are short term overbought but that doesn't mean that they can't continue that way for a while. I still do not have a decent signal to trade off of though. If we see some decline, I'd be willing to attempt the SPY February calls. But time is running out and there will be only 9 trading days left in the February option cycle after tomorrow. So we'll see. The signs today are pointing towards higher prices tomorrow but the market as usual will go where it wants. I've remained patient so far so there is no reason to rush into a trade here. Foreign markets were mixed overnight but leaning to the positive side. All eyes on the employment report tomorrow.