Monday, June 20, 2016
The Dow did manage a gain today but we finished well off of the highs. It gained 129 points on light volume. The advance/declines were 3 to 1 positive. We were up well over 250 points in the first half hour. It was a steady erosion from there until the close. That was not exactly positive price action. The summation index may start to go sideways after today. Better news about England and the European Union over the weekend was the cause for the spike this morning. We are still driven by that event for now. It makes for more guesswork than usual. The short term technical indicators have turned back up for the major big cap averages. The small stocks remain oversold. GE was up 1/4 on good volume but finished way off of the highs. The daily candlestick here looks bearish like a gravestone doji. Gold was off a couple bucks on the futures but came off of its lows. The US dollar was lower. The XAU was up 2/3, GDX lost 1/8. Volume was light. Mentally I'm feeling OK. The price action today could have been very positive but instead we are left in the lurch. Trying to trade an event driven environment adds even more than the ordinary trading risk. The rewards could be substantial. But so could the losses. I have yet to make up my mind if I am going to put on a position ahead of Thursdays English vote. Perhaps the prudent course of action will be to stay on the sidelines and wait until we get back to a regularly traded market. Maybe if we get a light volume rally this week it will set up for the SPY July puts. The small stocks are lagging here and that is not a positive sign. There were decent gains in Asia and huge gains in Europe overnight. The fact that the US couldn't follow that is cause for concern. We'll keep an eye on the overnight developments and go from there.