Tuesday, May 31, 2016
Lower on the Dow today to begin a shortened trading week and end the month of May. The most watched index fell 86 points on better than average volume. The advance/declines were slightly positive. We were off almost 150 at one point but made a final hour comeback. The better volume may be an end of the month result. The summation index continues higher. The advance/declines were not in line with an off 86 market and the small stocks were higher as well. I'm still looking for higher prices going forward. If we get a multi-day decline there may be a chance for the SPY June calls but that remains to be seen. The short term technical indicators remain overbought. GE was up 1/8 and the volume was average for lately. Still below the 50 day moving average here. Gold rose $10 on the futures with the US dollar higher as well. The XAU added 1 1/8, while GDX gained 1/3. Volume was average. No trades in mind here for now. Mentally I'm feeling OK. 2100 seems to be the stopping point for now on the S&P 500. If we get through there I'd venture to guess we could go to 2125. After that, who knows? Still plenty of time in the June option cycle for some type of trade. We've got the employment report due Friday and that should be the next market moving event. The Feds beige book tomorrow also might induce some price action. The relative strength in the small stocks combined with a rising summation index says that we are probably heading higher in the near term. The TRAN stalled at its 50 day moving average today. We will have to see if it can get through there as well. I'll simply have to watch and wait for now. Foreign markets were mixed with Asia higher and Europe lower overnight. We'll keep an eye on things overnight.