Monday, June 13, 2016
The Dow lost 132 points today on light volume. The advance/declines were 3 to 1 negative. The summation index is now heading lower. The uptrend line from February in the S&P 500 has been broken. The short term technical indicators have all rolled over and are not oversold yet. There will be a bounce at some point this week but the question is from what level? You would have to be nimble and quick to take advantage of it. Those are qualities that I usually lack. I may try something though. Markets sold off around the globe last night. I'm also looking at the SPY July puts but it may be too late for that. This could also be the beginning of an extended decline but I am not sure of that either. GE was off almost 1/4 and the volume was better. Gold rose $10 on the futures as the US dollar was softer. The XAU and GDX had slight fractional moves one way or the other on light volume. The gold shares haven't followed gold higher lately and that could turn into a problem for the gold bulls if it doesn't change soon. Mentally I'm feeling OK. A lot of the weekly candlestick charts for the major indices have bearish stars on them. Perhaps we've reached a turning point in the market. With only 4 days remaining in the June option cycle, putting on a position for June entails a whole lot of risk. Perhaps the choice to make here is to wait for a bounce to get the SPY July puts. Or maybe trying a bounce off of the Fed on Wednesday. Or maybe just staying on the sidelines. There are always plenty of choices in the game. Having the patience to wait for the best set ups is part of the battle. Right now it appears that the quest for new all time highs has been put on hold once again. We also broke and closed below the near term support at 2085 on the S&P 500. We're right above the 50 day moving average. At this rate we will break that tomorrow. I'll have to look at all the very short term indicators to see if a bounce trade is possible. I'd expect more weakness around the world tonight as nothing has materially changed since yesterday. We'll get retail sales here tomorrow and that could be a market mover. The recent slow market grind higher has now shifted. Interesting times.