Wednesday, April 06, 2016
The Dow took off to the upside today as it rose 112 points on light volume. The advance/declines were 3 to 1 positive. This should move the summation index back to sideways. The overall market was much stronger than the Dow, with the small stocks leading the way. My SPY April puts are back in the red. I probably should have just sold them today. Once again my trading tactics are weak. Price would have to turn around tomorrow again for this trade to have a chance but I doubt it. Oil rallied today and that along with todays gains should send foreign markets higher overnight. We are seeing some back and forth in stock prices and it isn't uncommon to see April in a sideways pattern. That doesn't bode well for trying to trade some type of extended move. I'm still thinking that things will run up into the April expiration and then we'll see where we go from there. GE was off a few cents on average volume. Gold fell $5 on the futures as the US dollar lost some ground again. The dollar is close to the low end of its range at 94. I'd expect that level to hold but that's a guess as usual. The XAU and GDX had very slight fractional gains on light volume. Mentally I'm feeling disappointed yet again for not simply exiting this SPY put trade. The overall strength of the small stocks here is telling you that the rally is not dead yet. I suppose I'm mistaking the weakness in the TRAN as a leader because that hasn't happened to the overall market. The summation index also has a tendency to trend sideways in April and it appears that's what we are getting right now. The weakness in GE also has not precipitated any lasting downdraft in the major averages. GE led the way up but is not doing so as it heads lower. But there are no excuses in the game. Perhaps I can get to break even on this current trade but I wouldn't count on it. What we don't have here is any kind of strong volume. If that somehow picks up here it's possible that we can break through the overhead resistance in the S&P 500. Hasn't happened yet. Asia was mixed overnight and Europe was generally higher. Oil had a big gain today and that should help the bullish cause overseas tonight. 7 days left in the April option cycle. On to Thursday.