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.