Monday, May 16, 2016
Another bounce today as the Dow climbed 175 points on light volume. The advance/declines were 3 to 1 positive. The summation index is still heading lower. We've held the 2040 level once again for the S&P 500. We will need to see the summation index turn around to lose the bearish bias. Once again the volume today was light. If we continue to see a rise with light volume, I'll eventually try the June SPY puts. However it is option expiration week and volatility is a distinct possibility. The head and shoulders top for the S&P is still intact. GE was up 1/3 on light volume. Gold was up a couple bucks on the futures as the US dollar didn't do much today. The XAU rose 2 1/4, while GDX added almost 1/2. Volume was average. The uptrend line from January remains intact here. Mentally I'm feeling OK. The market had an opportunity to fail this morning and it did not. I'm not sure if we are building another right shoulder here or we are going back to test the recent highs of April. There is a lot of bearishness out there and that probably means we are going higher for now. We need to see some upside with volume to be sure that we are actually going to head higher for more than a few days. The jury is still out on this market. It is probably too late, in my opinion, for a trade in the May options. So we'll see. Foreign markets were flat or slightly higher in most cases overnight. We'll see if they can follow the US higher overnight.