Friday, April 29, 2016
We got some downside follow through today as the Dow fell 57 points on good volume for a change. The advance/declines were negative. We were down well over 150 points during the session but made a last hour comeback. Short term oversold on some indicators. The recent breadth has not been as bad as the decline has been. I'm looking for a short term rally at the beginning of next week. Right now I think that any weakness Monday can be bought for a bounce trade. I'll probably be looking at the SPY May calls to start the next month. The decline here has been short and quick for now. I don't know if it will actually be the beginning of something more sustainable. Time will tell on that. GE was off 1/8 and the volume was light. Gold took off to the upside on a still weaker US dollar. It appears that the precious metal is finally breaking out to the upside from its sideways congestion zone. That would coincide with the dollar breaking down from the support at 94. It appears that the rally we've seen so far in gold this year is for real. The XAU was up almost 6 points, while GDX added 1 1/2. Volume was just a bit higher than average. Mentally I'm feeling OK. An interesting end to the month as volatility picked up in the last two days. Once again I must admit that I don't know why. My thinking is that we'll see some type of rally attempt in the beginning of next week and after that, who knows? My theories haven't been working lately though. Technically the short term indicators have either rolled over or are oversold for the major stock indexes. The small stocks, which were acting poorly lately compared with the big caps, are now showing some relative strength. Overall it remains a very mixed bag. Three weeks to go in the May option cycle so the premiums are where we want them for trading. There is a little volatility built into the prices now though. Some Asian markets were closed overnight and Europe was weaker. Something is going on here that we'll find out about in due time. Plenty to ponder over the weekend. I think that you have to be extra nimble trading right now. Do not fall in love with positions. I'll be checking the charts over the weekend to come up next weeks game plan. for now it's Friday afternoon and time for a break.