Tuesday, June 07, 2016
We drifted higher for much of the session but fell in the final hour to finish with a gain of 18 points on the Dow. The advance/declines were positive and the volume remains light. The summation index continues higher. I'm still a believer in higher prices going forward but we may have hit a short term top today. If so, perhaps the SPY June calls will be back on the table. The small stocks were underperformers and that's a negative. The TRAN came to life though and closed above its 50 day moving average. Running out of time for the June option cycle, so the risk increases with each passing day. GE was flat on the session and the volume remains light. Like the Dow, GE finished well off of session highs. Gold lost a buck on the futures as the US dollar was a bit lower again. The XAU fell 1 1/4 while GDX shed 1/3. Volume was very light. Mentally I'm feeling OK. Are we still heading to new all time highs on the S&P? I'd like to think so but we have to remember that the volume is still lacking. Even if we make it that far it doesn't mean we are in for an extended gain unless we see some kind of huge volume breakout. That really doesn't seem possible considering the climate lately and the time of year. What I'd like to see in the next couple of days is a pullback under 2100 that would potentially set up an expiration week trade in the SPY June calls. The market rarely cooperates with the best laid plans though. If that doesn't materialize I'll simply have to wait for the opportunity for some SPY July puts on a light volume advance to new all time highs. Those are the scenarios on my trading list for now. We do have the Fed meeting next week but that seems to be a foregone conclusion of no change. So we'll see. Foreign markets were higher overnight. We'll keep an eye on the overnight developments.