Thursday, May 19, 2016
Lower today as the Dow fell 91 points on light volume. The advance/declines were over 2 to 1 negative. The summation index continues lower. The S&P 500 closed right at the 2040 level. The McClellan oscillator has gotten very negative and I would expect some kind of bounce. I am thinking about getting some SPY June calls. We are at a point on the oscillator where the market should be dropping quite hard and it is not. I do not have an explanation. The decline we have seen has been quite orderly. Of course that could change at a moments notice. So I can't exactly say that I know what is going on here. The technical indicators for the short term remain oversold. GE had a gap lower and closed off 1/4 on good volume. If GE is a precursor perhaps the market is about to let loose to the downside. Gold was off over $15 on the futures but much of that was factored in after the futures close yesterday. The US dollar was slightly higher. The XAU rose 1 2/3, while GDX was up 3/8. Positive divergence there. Volume was average. Mentally I'm feeling OK. Perhaps some volatility tomorrow as it will be option expiration. Probably the best course of action would be to let tomorrow pass and try to figure things out over the weekend. We're due for a bounce according to the McClellan oscillator but what happens after that is anyones guess. Maybe we are simply in a general market malaise. The neckline of the head and shoulders top pattern on the S&P was broken today but we climbed back up to it. That may be a fake out as well. Time will tell on that. I've been patient up to now so I suppose there is no reason to change that. Foreign markets were weak across the board overnight. We'll close out the week tomorrow.