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.