Thursday, March 31, 2016
Some minor end of the month selling as the Dow fell 31 points on light volume. The advance/declines were slightly positive. The summation index continues higher. The small stocks are showing relative strength. We're still overbought and the market is still in an up trend until proven otherwise. The employment report will be the mover tomorrow. The market reaction to the numbers and not the numbers themselves will be the key. We are right at what I consider the important 2060 level in the S&P 500. My SPY April puts still are showing a slight gain. That could all change tomorrow and most likely will. GE was off a few cents and the volume was average. Gold was up about $5 on the futures as the US dollar was lower again. The XAU lost around 3/4, while GDX shed 1/4. Volume was very light. Mentally I'm feeling OK. We should see some positive money flows with the beginning of the month tomorrow unless there is a surprise with the jobs report. It still feels as though the market wants to go higher here. So we'll see what happens. I suppose things could go either way. Some of the short term technical indicators for the S&P 500 have been overbought for a month and a half. This will not last forever but it sure seems that way. There is a potential negative divergence on the McClellan oscillator with lower readings and higher prices. If that plays out we will head lower. But is a potential divergence, nothing has happened yet. So tomorrow could set the tone for the days to come. The overseas markets were slightly lower. All eyes will be on Fridays employment report.
Wednesday, March 30, 2016
Upside follow through as the Dow rose 83 points on light volume. The advance/declines were almost 2 to 1 positive. The summation index is moving up. We had a gap higher at the open and I did purchase some SPY April puts in the morning. They are slightly in the black. I'm not exactly sure that this trade will work but we will know by the end of the week. The 2060 level for the S&P 500 looks like the key close for the week for me. If we are much higher above that level, the long term down trend line will be broken. Things could go either way here so we will just have to wait and see. GE was up 1/3 on average volume. A gap up to start the day here as well. If GE is a leader, the overall market will be moving higher. Gold was off $10 on the futures despite a drop in the US dollar. That is not a positive sign for the gold bulls. The XAU and GDX had slight fractional losses on lighter volume. These issues are taking a rest and that could be constructive longer term. Mentally I'm feeling OK. I'm giving the SPY April puts a shot here knowing full well that anything can happen. We are still short term overbought and have remained that way for a long time. That will not last forever. The volume here is light and light volume rallies are not to be trusted. We will have a potential negative divergence in the McClellan oscillator after todays trading. The S&P is right at the long term down trend line. It will either take a breather here or simply break through the line to even higher prices. My thinking is that it will at least stall out but I could be wrong. The employment report on Friday will most likely be the catalyst one way or the other. I'd expect tomorrow to be a wait and see kind of session with light volume. Although it is the end of the month and first quarter of the year. Foreign markets were higher overnight with the exception of Japan. We'll keep an eye on the developments this evening.
Tuesday, March 29, 2016
A one day reversal to the upside as the Dow opened lower and closed higher. The most watched index gained 97 points on light volume. The advance/declines were 4 to 1 positive. This should turn the summation index back to the upside. The overall market was much stronger than the Dow with the small stocks leading the way. We are on the way to making new highs for the rally. This certainly throws the purchase of the SPY April puts into question. We simply could just continue to go higher. Yellen spoke and the market responded. The next market moving event should be the employment report on Friday. GE was flat on the day and the volume was average. Gold took off on the Yellen speech. The futures rose over 20 bucks. The US dollar took a hit as well, which supported the move in gold. The XAU gained 3 1/2, while GDX added 1 1/8. Volume was heavy. The short term technical indicators have turned back up for the gold shares. Mentally I'm feeling OK. It really looks like all signs are pointing to higher prices despite the continued overbought condition of the market. It is entirely possible that the S&P 500 will break through the longer term down trend line that has been in effect for about a year. This would be a very bullish development if it were to occur. The overall strength we saw today is a positive and I would expect some follow through tomorrow. That may be the chance to try the SPY April puts but I will have to think about it tonight. The market really has the feel of wanting to go higher now. We also have the beginning of the month on Friday and that should have some positive money flows. So we'll see. there's also the possibility that this is the last gasp up to the longer term down trend line before rolling over. However the action today sees to say otherwise. Never an easy time of it in this game. The foreign markets were mixed overnight with no big moves either way. We'll keep an eye on things overnight and see what tomorrow brings.
Monday, March 28, 2016
Just hanging around as the Dow rose 19 points on very light volume. The advance/declines were positive. The summation index is moving sideways. Plenty of foreign market closures due to Easter. Tomorrow we should be back at full strength. Yellen is blabbing tomorrow, so the markets should move off of that. I'd still like to try the SPY April puts but I'm not married to the idea. I think that we could see some strength going into the employment report on Friday. GE was up 1/3 on good volume for today. That's a new 52 week high for GE. If GE is a precursor for the overall market, then we will go higher. Gold was flat on the futures but up a bit in the cash market. The US dollar was lower today. The XAU and GDX had slight fractional losses on very light volume. Mentally I'm feeling OK. Sitting tight for now as the ideal scenario for the SPY put trade would be a rise into Thursday. However we cannot rule out even higher prices going forward. The long term down trend line for the S&P comes in at around 2060. A rise to that level would be the best chance for the April puts. At least that is my thinking at the moment. A light volume rise here would be the best background for getting short. We've got the end of the month and the quarter looming ahead of the jobs report. All of the overseas markets will be back in action overnight. We'll see how things react to what Yellen has to say tomorrow.
Thursday, March 24, 2016
A one day reversal to the upside as the Dow opened lower and closed higher. It finished the day with a slight gain of 13 points on light volume. The advance/declines were about even. The summation index is heading sideways. It's possible and maybe even likely that the decline we just saw is all we're going to get here. I really can't say for sure. I'm going to have to look at everything over the weekend. It was a light volume week, so it is hard to figure out the price action that we saw. I'm getting the feeling now though that this was just a pause before we go even higher. I could be wrong. GE was pretty much flat again on light volume. Gold was off $6 on the futures as the US dollar was a bit higher. The XAU rose 1 1/3, while GDX added 3/8. Volume was light. Mentally I'm feeling OK. There will be plenty of time this weekend to consider what to do next week. I now have mixed feelings as to which way to go next. You can kind of make a case for either way. We'll get the end of the month and the quarter to deal with. Plus the employment report on Friday. All the major players should be back as well. I'll go over the charts and decide from there. Europe and Asia were all lower last night. Plenty of foreign markets will be closed on Monday. So perhaps we won't get back to normal trading until Tuesday. What I will try to do above all else is not make a trade just for the sake of trading. I did not have any trades in the last option cycle and there is the chance that I'm getting a bit restless. It still appears that despite the slight decline we are more overbought than oversold on the shorter term technical indicators. Plenty to consider but for now it's Thursday afternoon before a long weekend. Time for a break.
Wednesday, March 23, 2016
Heading lower today as the Dow fell 80 points on light volume. The advance/declines were almost 3 to 1 negative. This could start the summation index to move sideways. The overall market was weaker than the Dow. So did I miss yet another trade? Time will tell on that. I'll probably still be looking to get some SPY April puts if we see some upside in the next couple of days. I'd expect tomorrow to be pretty quiet, considering it's the day before a long holiday weekend. But I could be wrong. This could finally be the start of the long awaited rollover. I don't expect any huge decline but at least something that could be traded. Hopefully I'm not too late. GE was flat and volume remains light. Gold got hammered today. The precious metal futures fell over $25 as the US dollar was higher again. The XAU shed 5 1/4, while GDX lost 1 1/2. Volume was good to the downside. This looks like the rest that gold and the gold shares need to take. Also right on time seasonally with the March time frame. Mentally I'm feeling a bit tired, not enough sleep. Today does break the short term up trend line in some of the major indices. So perhaps if we get a snap back to that line we will get the chance to purchase some puts. If we simply head lower then the opportunity has been missed. We'll see what the market does tomorrow and go from there. Although waiting until next week may be the best course of action. The overseas markets have been mixed since the bombing in Brussels. We'll close out the shortened trading week tomorrow.
Tuesday, March 22, 2016
Slight downside today as the Dow fell 41 points on light volume. The advance/declines were negative but not in a big way. The overall market was stronger than the Dow. Considering there was another terrorist attack in Europe, the market held up rather well. Usually a market that doesn't decline on bad news wants to go higher. It seems as though we are in a holiday week as the volume is slow. I'm now thinking of postponing the SPY April put trade until next week. However if the S&P gets to 2060 I will have to rethink this. We remain overbought on both the short and medium term. GE barely moved and the volume was light. Perhaps we can look for clues here as GE is about to make a new yearly high. Would the overall market follow? Gold was up a few bucks today but finished well off of its highs. The US dollar was higher as well. The XAU and GDX were little changed on light volume. There was no flight to safety for gold today. Mentally I'm feeling OK. We are still long overdue for some decline in stocks but there aren't any sellers out there at the moment. There's only a couple of trading days left this week and it appears that we are in holiday mode. Perhaps patience is required. I suppose there is no point in trying to make something happen as the market seems to just be biding its time right now. I'm still a believer in the SPY April puts at some point in time. Europe came back from early losses overnight despite the bombing in Brussels. Asia was mixed. We'll keep an eye on what transpires tonight.
Monday, March 21, 2016
A quiet Monday of a short trading week as the Dow gained 21 points on light volume. The advance/declines were about even. The summation index continues higher. I did place an order for the SPY April puts but canceled it later in the session. I may try again tomorrow. It's possible that we have a bit more room to go on the upside as the longer term down trend line for the S&P comes in at around 2160. It's also possible that we simply remain overbought and plow higher as other indices have already moved past this resistance. So trying this SPY put trade is not a slam dunk. We'll have to see how things look tomorrow. GE was up over 1/8 but the volume was light. No trades here for now. Gold was off $10 on the futures as the US dollar was higher. The XAU and GDX had slight fractional moves one way or the other on light volume. I still believe that gold and the gold shares need to take a rest. Mentally I'm feeling OK. Friday is a holiday so the trading this week could be slow and skewed. We have moved into the April option cycle and therefore the premiums are still high. The rally off of the recent lows has a similar look to it as the one last October. It should be just about running out of steam. Not to mention that the market will not remain overbought forever. If we get to 2060 on the S&P 500, I will probably put in an order for the April puts. It will have to be a short term deal. We'll see what happens tomorrow. The foreign markets overnight were generally lower but not by a lot. It is holiday mode there as well, with most overseas markets closed next Monday as well. So it most likely isn't a time to be making any major trades. However as always the markets will go where they want. We'll keep an eye on the overnight developments and go from there.
Friday, March 18, 2016
The rally into expiration continued today as the Dow gained 120 points on expiration very heavy volume. The advance/declines were positive. The summation index continues to the upside. Steadily moving higher for the major indices. The TRAN continues to lead the way and was up strong again today. Perhaps the SPY April puts are not the right idea here. I did place an order for some today but wasn't filled as the market didn't get high enough for the price I was willing to pay. I will probably try this trade again at some point next week. It is strictly going to be short term in nature. At some point you have to start to think that maybe we just keep going up. However we have been overbought for a very extended period and that has to break at some point. GE was pretty much flat on the day, volume was good. Gold was off around $10 on the futures as the US dollar bounced back a bit. The XAU and GDX had slight fractional gains on light volume. I really think that these stocks need a rest but just like the overall market they continue to be overbought. Mentally I'm feeling OK. We have gone practically straight up since the February lows in the Dow. We are just around 50 points away from the long term down trend line. The NYA and the TRAN have already made it through. Some of the small stock indexes are nowhere near close to breaking their respective longer term down trend lines. Usually a more sustainable rally has the small stocks firmly in the lead. That isn't the case here today. The advance/decline line for the SPX has made new highs though. So we have some crosscurrents going on. I don't think that we can just continue to go straight up but anything is possible in this game. So there will be plenty to consider when checking the charts this weekend. Not a lot of economic data out next week. I'll try my best to try and figure things out for some kind of game plan. For now it's Friday afternoon and time for a break.
Thursday, March 17, 2016
Still moving higher in an expiration week levitation. The Dow gained 155 points on average volume. The advance/declines were about 4 to 1 positive. The summation index continues higher. The TRAN took off today and that's a positive. The NYA is the first index to break its long term downtrend line. Is this a sign of things to come? Could be as we are still in the seasonally positive time frame. Volume picked up today and that is a plus as well. The only blemish is that the small stocks here are relative under performers. I'm still considering the SPY April puts for a short term trade at the beginning of next week. GE rose 3/4 today on heavy volume. We could hit new yearly highs tomorrow. Gold was off a couple bucks after yesterdays stellar gains. The US dollar dropped over a point. It wasn't a good sign that we didn't see gold rally with that drop in the dollar. The XAU and GDX both shed around 1/2 on heavy volume. Obviously we should have rallied on the weaker dollar here as well. These shares are long overdue for some pullback though. Mentally I'm feeling OK. The expected stock market run up into the March expiration is appearing on cue. It is a very interesting game to say the least. We've been overbought here as well for longer than average. So some kind of decline or sideways price action is long overdue here as well. When it occurs I do not expect it to last long. Will it be worth trading is the question we face now. If we hold up into Monday, I may try the SPY April puts. We'll let the market dictate if this happens. I did miss out on gains that could have been had with the March calls. However once we get to overbought, you never really know how long the market will stay there. Having said that, we could see a drop at any time. So I'm going to let the expiration pass tomorrow and focus on next week. Foreign markets were mixed again last night. We'll close out the week tomorrow.
Wednesday, March 16, 2016
A Fed induced rally as the Dow gained 74 points on light volume. The advance/declines were 4 to 1 positive. The summation index continues higher. New highs for some indices for the move since the lows seen in February. Breadth turned around to be pretty good. I still expect more upside into the expiration. The only warning sign here is the light volume that we've seen this week. The Fed was dovish and we got the normal reaction. Still overbought here though but that has been the case for quite some time. No SPY trades in the making. GE was off 1/8 and the volume remains light. No trades for me here either. Gold took off after the Fed as the US dollar dropped. The precious metal futures were up over $30 in the aftermarket as the dollar dropped a point. The XAU soared 4 2/3, while GDX gained 1 1/3. Volume was very heavy. Perhaps the recent sideways activity in this sector is all the decline that we are going to see for now. Evidently this is where you would have wanted to be before the Fed. Hindsight is never wrong. Mentally I'm feeling OK. Not much else to say here as I'm waiting for a set up to trade. The SPY April puts are on my radar but we will have to let this week pass first. Although we got the rally on an easy Fed it wasn't the robust type that we've seen in the past. I'm not sure if that means anything or I'm just trying to read something into it because I want to get some index puts. So I'm still in a wait and see mode. It isn't always easy to be patient but it is required at times. Foreign markets were mixed overnight. We'll see how they react to the Fed tonight.
Tuesday, March 15, 2016
A mixed bag today as the Dow was up 22 points on light volume. The advance/declines were about 3 to 1 negative. The overall market was weaker than the Dow, with both the S&P and the small stocks negative. We did finish well above the lows for the session. The summation index is still moving up. It does appear that things are beginning to deteriorate under the surface. I'm still holding out for higher prices this week though. The NYA is right at the downtrend line that is almost a year in the making. Other major indices are still shy of this important barrier. It will bear close watching right now. We'll see how it goes with the Fed tomorrow. GE was little changed and volume was light. Gold fell over $10 on the futures, while the US dollar was unchanged. The XAU and GDX were up around 3/8. Volume was average. Gold should move off of the Fed as well. Which way is the question. Mentally I'm feeling OK. Underperformance of the small stocks could be a sign of things to come if it keeps up. The ideal scenario would be for a top to build here in the coming days and weeks. But the market rarely accommodates our wishes. I am looking at the SPY April puts. The short term technical indicators are still overbought. This condition has persisted for quite a while. It will have to end at some point. But if you have tried to pick the top over the past few weeks, you have been disappointed. So we'll see. I do expect some volatility post Fed. It is simply wait and see time. The overseas markets were lower overnight. We'll see what tomorrow brings.
Monday, March 14, 2016
Waiting on the Fed would be the best way to describe todays price action. The Dow added 15 points on very light volume. The advance/declines were negative. The summation index continues higher. I'm expecting higher prices this week as it's option expiration. The next trade looks like the SPY April puts if and when we get to around the 2050 level in the S&P 500. I do not anticipate trying any trades in the SPY this week. Plenty of economic data out his week, with retail sales and inflation numbers. As always, the market reaction will be the most important part of all this. GE was off a few cents and the volume light. No trades here for now. Gold took it on the chin, losing over $20 on the futures. The US dollar was higher. The XAU lost 1 3/4, while GDX shed 7/8/ Volume was heavy. Gold and the gold shares appear to finally be taking the break that they need. Mentally I'm feeling OK. I suspect that we will continue our way higher to maximize the March calls. The major stock indices remain short term overbought and have been for weeks. At this juncture simply waiting for the market to hit the multi-week down trend line seems to be the best plan of action. Or inaction as the case may be. I would not be surprised if we headed higher tomorrow despite the technical conditions. It is the reaction to the Fed that I believe will be the most important price movement of the week. I could be wrong. Foreign markets were higher overnight as the drop in oil was a non event. Perhaps the market microscope is off that commodity now. We'll keep an eye on the overnight developments and go from there.
Friday, March 11, 2016
Perhaps today was a delayed reaction to yesterdays news but whatever the case the Dow took off to the upside. The most watched index gained 218 points on light volume. The advance/declines were 5 to 1 positive. The summation index continues strong to the upside. A new high for the rally and we're at the 200 day moving average for the S&P 500. This should provide some resistance considering how long that we've remained overbought. But it is option expiration week coming up and so far it looks like the classic run up for maximum index option call value. It looks like any trades that I had in mind will have to wait. The next idea will be the SPY April puts if we get to the 2050 level on the S&P 500. GE was up 3/8 and the volume was average for lately. I'm not looking to do any trades here at the moment. Gold fell over $20 on the futures. The US dollar was only slightly higher. I'm still waiting for gold to take an extended rest. The XAU lost 1 1/8, while GDX shed 3/8. Volume was average. Mentally I'm feeling OK. It now appears yesterdays sell off was the set up opportunity for the expiration week SPY calls. However the daily technical indicators were not sold off enough for me to try that trade. You won't catch them all. I'll be looking for some puts if we get to the 2050 level on the S&P. Can we simply keep going up and hit new all time highs? It is a possibility. There is no mention of it in the news as yet so it is possible. There is still some bearishness out there despite this rally of 4 weeks or so. I'll be keeping a close eye on the volume going forward as it seems to be slowing down. Any light volume rallies into the resistance can be shorted in my opinion. But we probably need to get through expiration week first. We've got the Fed nest week as well. I'll try and remain patient. I'll be going over the charts this weekend as usual but the best idea will be to stay on the sidelines next week. That's my thought for now. It's Friday afternoon and time for a rest.
Thursday, March 10, 2016
We bounced around a lot today but the Dow ended only down 5 points on a little less than average volume. The advance/declines were negative. The summation index is still moving up. We were up and down over 100 points during the session. The ECB statement came out and that was the given reason for the volatility. It makes for tough trading here because there really is no solid signal at this time. With only 6 days to go in the March option cycle the trading risk is high. The technical indicators for the S&P 500 are still more overbought than oversold. They started to roll over today but then the market made a comeback. I don't see any decent trades here at the moment. GE was off 1/8 and the volume was average. Gold rallied $15 on the futures as the US dollar dropped about a point. The XAU was up 2 2/3, while GDX added 7/8. Volume was lighter than lately. I still think this group needs to take a rest but it isn't listening to me. Mentally I'm feeling OK. Smaller stocks were weaker today and that is not a bullish sign. But I can't rule out higher prices in the near term due to the expiration week coming upon us. It usually has a bullish bias. I can maybe make a case for the SPY March calls if we are weaker into Monday. Otherwise I'll probably just have to sit it out. The currency action today was confusing. More accommodation from the ECB was met with euro buying and dollar selling. A normal response to this would be just the opposite. But the market always knows more than we do. It makes for tough trading for sure. Now we'll move on to the Fed next week and see how the market responds to whatever comes out of that. Really without a clear trading signal right now the best course of action should be to stay on the sidelines. Perhaps I can at least accomplish that. Europe was lower overnight after the ECB, while Asia finished mixed. We'll keep an eye on what happens tonight and close out the trading week tomorrow.
Wednesday, March 09, 2016
The middle of the week and a middle of the road kind of day. The Dow rose 36 points on light volume. The advance/declines were better than 2 to 1 positive. The summation index continues higher. The overall market was stronger than the Dow. Not much to report about todays session. Waiting on the latest from the ECB tomorrow. GE was flat on the day and the volume was light. Gold was down over $10 on the futures. The US dollar finished little changed. The gold shares sold off early but came back with fractional gains for the XAU and GDX. Volume was average. Gold is hoping for more stimulus from the ECB as is the overall stock market. Mentally I'm doing OK. I'm still looking for higher prices for the S&P 500 before the March option expiration. Whether or not there is a trade there is the question. I'd like to see a lower entry point as the technical indicators remain more overbought than oversold. That's for the call side. For the puts, I'll need to see at least the 2025 level on the S&P before considering a trade there. With only seven days to go in the March cycle it really isn't looking promising at the moment. Gold and the gold shares really need a rest and perhaps we are seeing the beginning of that now. We'll see what the ECB has to say tomorrow and see how the markets trade off of that.
Tuesday, March 08, 2016
Lower today as the Dow fell 109 points on average volume. The advance/declines were 3 to 1 negative. Overdue for some downside but one day doesn't make a trend. I still feel that we will see new highs in the S&P 500 for this move higher that began in February. I could be wrong. The summation index continues up. We had to work off the extremely high readings in the McClellan oscillator and today is the beginning of that. Although I'm not completely sure of what technical set up to look for here, I'm going back to seeking the SPY March calls. The put trade that I was looking at yesterday will now be moot. We needed to get up to 2025 for that. GE was off 1/4 and the volume was average. Perhaps if we trade back down to $29.50 I can try the March calls here as well. It probably won't be a perfect technical set up though. Gold didn't do much on the futures today as the US dollar was a bit higher. The dollar is resting on its 200 day moving average. It is something to keep an eye on. The XAU lost 3 points, while GDX shed a point. Volume was heavy. The decline in the gold shares is not positive for gold. Mentally I'm feeling tired as I have just returned from the dentist. Once again outside influences are affecting my concentration here. I think that if we continue weaker into the end of the week that I'll try the SPY March calls. It won't be the perfect set up but some of the indicators could reach a short term buy spot. It was a decidedly negative session with the small stocks and overall market weaker than the Dow. The TRAN took a pretty good drop as well. I do not think that this is the beginning of a new leg down for the stock market. The technical indicators for the major averages have turned down but I don't think that they will get all the way down to an oversold reading. But they could. The market goes where it wants. There is a chance that this is the beginning of building a top before we head back lower with a lot more steam. But building a decent top will take time and one day of decline after a huge run up doesn't really mean anything yet. The foreign markets were generally lower overnight. We'll see if we get any downside follow through tomorrow.
Monday, March 07, 2016
Back and forth we went today with the Dow finishing with a gain of 67 points on good volume. The advance/declines were 2 to 1 positive. The summation index continues higher. The overall market was weaker than the Dow, with the small stocks negative. Certainly we are due for a rest here but regardless, the trend remains up. Plenty of resistance coming up with the 200 day moving average and the longer term downtrend line. I'm thinking that the 2025-2030 level on the S&P 500 would be a good place to attempt the SPY puts for a short term trade. We'll see if the market cooperates. Not a lot of economic data due this week but we do have an announcement coming later in the week from the ECB. GE was off 1/8 on light volume. I'm still looking for new yearly highs here soon although we do remain short term overbought. The short term uptrend line remains intact. Gold was off a couple bucks on the futures and the US dollar was lower as well. The XAU was up a couple points and GDX rose 2/3. Volume was good. We remain overbought for an extended period for the gold shares and gold as well. This cannot go on indefinitely. Mentally I'm feeling OK. The rally in stocks cannot go on forever. We have been overbought for an extended period of time. The McClellan oscillator is at its highest reading in years. We are bumping up against some pretty strong resistance. The plan will be to look at the SPY March puts if we get to the 2025 level on the S&P 500 for a short term trade. 9 days left in the March option cycle. So there will be plenty of risk out there if this trade is attempted. We will simply have to keep an eye on things and see what the market does here. Oil had another good day and it appears that decline is over. It did not help stocks that much so maybe that relationship has run its course. I do think that gold needs to take a rest. Given that March is historically the weakest month for the precious metal, I'd expect some type of decline there to begin sooner rather than later. The foreign stock markets were slightly weaker overnight. We'll be watching developments overnight and get ready for Tuesday.
Friday, March 04, 2016
Still moving higher as the Dow rose 62 points on very heavy volume. The advance/declines were 2 to 1 positive. The summation index continues to roll on higher. We are starting to run into the first resistance for the S&P 500 but at this rate it doesn't look like that will matter. The employment number was strong but like I stated yesterday, it wouldn't matter either way. The market is in rally mode. Overbought, staying there and that is becoming a broken record. Small caps, big caps, all the stocks are rising. I did miss out on this great run but we'll have to look at what to do from here. 2 weeks to go in the March option cycle. GE was up 1/4 on average volume. I'm expecting new 52 week highs before the March expiration. Gold was up a few bucks on the futures. The US dollar was weaker again despite the good jobs numbers. Not sure what to make of that. The XAU and GDX were both off 1/8 on heavy volume. They both also came well off of their highs for the session. The daily candlestick charts are now showing an evening star topping pattern. We'll see if that is what unfolds. Mentally I'm feeling OK. Quite a nice run here for stocks. I think the next trade will be some SPY puts but the timing is in question. I do believe that it will take time to build a top but we are not done moving up in my opinion. Perhaps I can try a short term trade in the next couple of weeks but it will have to be a solid set up. As soon as everyone believes that we are going higher, that will be the time to try the puts. It has been an extended amount of time to be overbought. However we can not guess when it will end, we'll have to wait for the market to give some clues. I don't see any right now. In my view the solid resistance for the S&P 500 is at the 2050 level. That is where I'll be looking to try the short side. There are no guarantees though, as the strength that we're seeing now could simply continue. So as usual it's a tough game to play. I would not go chasing things here to the upside though, unless we get a short term oversold condition. And that is something we've been waiting for that hasn't happened. I'll be going over the charts this weekend to try and come up with something. For now it's Friday afternoon and time for a rest.
Thursday, March 03, 2016
The rally continues as the Dow gained 44 points on heavy volume. The advance/declines were 3 to 1 positive. The summation index is roaring to the upside. Overbought and staying there for an extended period of time. How long will it last? Probably longer than you think. Getting near the overhead resistance but not there yet. Money continues to flow into stocks. It is a shame to miss such a strong move but it is way too late now to do anything about it. GE was little changed and the volume was lighter. Gold rallied on a weaker US dollar. The precious metal futures gained over $20. The XAU was up 2 7/8, while GDX added another 3/4. Volume was good. The gold shares are overextended just like the overall stock market. There doesn't seem to be any pause for them as well. I'm not certain what is going on but the technical indicators show no signs of breaking down at the moment. Mentally I'm feeling OK. Strong readings on the McClellan oscillator say this rally will continue to have legs. I'm still thinking that it will run up into the March expiration and then we'll have to see what happens after that. The mainstream media has yet to endorse the move higher, so there is probably more room to the upside. I doubt that the employment numbers will throw any cold water on this parade. We can start looking at the SPY puts when we get to the resistance. However we have to let the market build a top and that could take some time. Plus there's a chance that we just continue to power higher as most are actually looking for a decline at resistance. Never an easy trade in this game. We will simply have to keep an eye on things and be ready if the opportunity for a trades arises. Foreign markets were mixed overnight. We'll close out the week with the jobs report tomorrow.
Wednesday, March 02, 2016
Nowhere to go but up as the Dow gained 34 points on good volume. The advance/declines were 2 to 1 positive. The summation index continues higher. Rally mode, overbought and staying there. The market will probably trend up into the March expiration and there is still over 2 weeks to go. Declines can be bought but they have been shallow so far. I'm still looking for 2000 on the S&P 500 and then perhaps to the 200 day moving average at 2025. The data that comes out doesn't seem to matter as the bulls are in control. Seasonality favors long positions as well. The employment report on Friday will most likely continue the trend. GE was up 1/3 on average volume. At this rate we'll be hitting a new 52 week high here soon. Perhaps the calls here will still work for March. I'll check the specifics tonight. Gold was up $10 on the futures. The US dollar was slightly lower today. Metals are finding buyers again for whatever reason. FCX has doubled in a little over a month. I haven't mentioned this stock before but I was looking to put it in a longer term account but by the time I started to pay attention it was too late. Simply another missed opportunity. The XAU was up almost 2 1/2, while GDX added 1/2. Volume was good. I still think the gold shares need to take a break. Mentally I'm feeling OK. All signs point to higher prices as money flows into stocks around the world. Oil has stopped going down and perhaps that is seen as a plus for now. There are weekly down trend lines for the major averages that remain in place. We are approaching them but are not there yet. That should be the moment of truth for this rally. At that point we can try the SPY puts but we have to wait until we get there. You could look at yesterdays price action as the short covering for those attempts at the 1950 resistance level on the S&P 500. Just a guess there as usual. So with over 2 weeks left in the March option cycle patience is still required. Global markets are in rally mode as well. We'll watch the overnight action and go from there.
Tuesday, March 01, 2016
A blast off to the upside to begin the month of March. The Dow jumped 348 points on good volume. The advance/declines were about 5 to 1 positive. The summation index is heading up. It was a broad based rally and there is still room to go. We have now moved above the 50 day moving average and the 1950 level on the S&P 500. Next stop 2000. We will get there and probably in the March option cycle. It doers not appear that a trade in the SPY March calls is going to happen for me. This was simply another missed opportunity. This is a move that I should have chased. Retrospect is never wrong. GE was up 3/4 on average volume. Comfortably above the 50 day moving average here now as well. Gold fell a couple bucks on the futures as the US dollar was slightly higher. The XAU fell 2 1/3, while GDX shed 3/4. Volume was above average. Perhaps this is the beginning of a pause for the gold shares that we've been looking for. We'll see. It is long overdue. Mentally I'm feeling OK. It looks like we might have to wait for the April or May SPY puts for the next trade. The key will be from what level do we attempt that. There's a chance that we could go all the way back to 2050 in the coming weeks. The McClellan oscillator continues to be at a very high level in the +200s, that usually leads to extended advances for the major averages. There is still plenty of time in the March option cycle but I do not think that price is going to accommodate us. Declines are being bought rather quickly, so I don't think the chance to get some March calls is going to happen. I could be wrong. We don't make any money sitting on the sidelines but obviously the best time to purchase the calls has passed. Foreign markets moved higher as well overnight but not to the extent of what we saw in the US today. I do expect to see a worldwide rally overnight though. We'll be watching as usual.