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Friday, April 22, 2016

After selling off in the morning the Dow made a comeback and finished the day up by 21 points.  The advance/declines were 2 to 1 positive.  Volume was light.  The summation index is still trending up.  It was a mixed bag as the NASDAQ was down almost 40 points.  We are getting a lot of crosscurrents with the numbers right now.  Earnings were poor for the over the counter crowd but that did not lead to an overall decline.  GE was lower on its announcement as well but it did not lead to big cap selling.  With positive breadth and the failure to sell off despite bad news, this market appears to be poised to head higher.  When bad news can't drive things down, what will?  Perhaps my view of getting the SPY May puts is simply wrong.  GE was off about 1/4 on better volume.  It did however finish well off of its lows set early in the morning.  Perhaps the market is telling us to get some calls here.  Gold dropped $15 on the futures as the US dollar held the 94 level and is headed back up.  The XAU lost 1 3/4, while GDX shed 2/3.  Volume was average.  If the dollar continues higher that will put a lid on gold.  Mentally I'm feeling OK.  Small stocks down, big caps holding up and the TRAN higher as well.  The signals are as mixed as you will see them.  The overall breadth is implying higher prices and the summation index is still moving up.  With that we have to give the benefit of the doubt to the bulls for now.  I think what happens when we get to the 2125 level on the S&P 500 may tell the story.  But that's a guess, nobody knows for sure.  The RUT was higher today as well so even the small caps are somewhat mixed.  I will say once again though that when the big caps are in the lead we are closer to the end of a rally than the beginning.  The timing for the completion of the rise is always the toughest question.  I'm guessing it will occur in the May option cycle but that could be wrong.  There is the possibility that we shoot through to new all time highs.  Volume would really have to pick up to make that happen.  I just don't see it at this point.  We've got the Fed next week and 1st quarter GDP.  Plenty to ponder over the weekend.  I'll be checking the charts to look for some clues as to what to trade next.  For now it's Friday afternoon and time for a break.

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