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.