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Sunday, September 25, 2016

The blog will return.  I was taken by ambulance to the emergency room on the night of the 12th.  I was released from the hospital on the 20th.   I'm home now but the recovery will take some time.  We all know that the market doesn't care.  As always, stick with the technical indicators as best you can.  When I get my wits about me, the blog will be back to normal.  We live in the unpredictable trading world but there is one thing you can be sure of.  Be ever so thankful for your family and friends because they will be worth more than any amount of money that you'll make playing this game.

Monday, September 12, 2016

The Dow roared back today with a one day reversal to the upside.  It gained 239 points on better than lately volume.  The advance/declines were shy of 3 to 1 positive.  The summation index is still heading lower.  GE was up 3/8 on good volume.  Gold was up $7 on the futures and the US dollar was lower.  The XAU rose 3 1/3, while GDX added 2/3.  Volume was good.  My apologies for the short blog with my usual comments but I am ill today.  I can say that volatility is back and I think we will have to bounce around before we move to new all time highs.  I am looking at the October SPY calls.  But I am very under the weather and would not put much stock in what I'm thinking under these physical conditions.  Hopefully I'll be back to normal tomorrow.

Friday, September 09, 2016

We finally got the break out of the months long congestion zone but it wasn't to the upside as I expected.  The Dow got clobbered today and fell 394 points on what passes for better than average volume these days.  The buyers disappeared.  The advance/declines were 17 to 1 negative.  The summation index is heading back down.  The market recently tried to get through the zero line on the McClellan oscillator and it did but barely.  It has now quickly reversed course.  We're also short term oversold in a hurry.  It looks like the possible negative RSI divergences in the small caps are now valid.  We are also practically right back at the uptrend line in the S&P 500 that began in February.  The breakout in the S&P was the 2100 level and I did expect that level to hold.  But after the carnage today, I'm going to have to rethink that idea.  GE fell 7/8 on good volume.  It looks like GE was an early leader all the way along.  We're back to the 200 day moving average here.  Gold fell $9 on the futures as the US dollar was higher.  The XAU shed 5 3/4, while GDX lost 1 1/2.  Volume was heavy.  The positive seasonal factor for gold is not happening this year so far.  However the negative seasonal factor for stocks seems to be now in effect.  Mentally I'm feeling OK.  The talk today was about the Fed but the Fed has been talked about for weeks.  There may be some trouble in the bond market that we're not aware of but something the market may already know.  It will all be figured out eventually.  The fact that we have already almost reached the near term support for the S&P, probably doesn't bode well.  The weekly charts here have just rolled over on the technical indicators.  I had thought that the double support from the breakout point and the uptrend line from February would contain things if we broke down in the S&P.  I will have to rethink that theory.  I had planned on getting some SPY October calls if we reached 2100 on the S&P.  After today that idea doesn't look so good.  I'm not exactly sure what is going on here but there is a chance that this could be a one day wonder as well.  There are numerous questions at the moment without answers.  Obviously the volatility that had been missing for the past couple of months has returned.  Option premiums will be higher but the potential for profits will return as well.  There will be plenty of work to do over the weekend.  Only a week to go in the September option cycle.  I don't think that I'll be attempting a trade there next week but who knows?  For now it's Friday afternoon and time for a break.   

Thursday, September 08, 2016

Muddling through another day as the Dow fell 46 points on better volume.  The advance/declines were negative.  The summation index is still trying to turn back up.  Directionless is probably the best way to describe the past couple of months.  It appears that the market needs some kind of stimulus to get things moving one way or another.  Only 6 days to go in the September option cycle.  No good trading signal that I can see as of now.  GE was off a couple cents on average volume.  Gold fell $7 on the futures and the US dollar had a slight gain.  The XAU lost 1 3/4, while GDX shed 2/3.  Volume was good.  Mentally I'm feeling OK.  I still feel that we are going to move higher here but at this rate anything could happen.  I do notice some potential negative RSI divergences on some of the small cap indices.  But they are only potential unless we break down from here.  Something will eventually get things going here but until then, it's more of the same.  It has been one of the least volatile times for the market in quite some time.  It makes for tough trading.  I'm on the sidelines still for now.  Asia was higher overnight with Europe mixed.  We'll close out the trading week tomorrow.

Wednesday, September 07, 2016

Another attempt at a sell off but the market keeps coming back.  The Dow did fall 12 points on light volume but it was off more for much of the day.  The advance/declines were positive and the NASDAQ was higher.  The summation index is turning back up.  It is a market that seems to want to go higher.  So the grind upward is probably going to continue.  However with the lack of volatility, it makes the trading tough.  There simply isn't enough price movement to get the option premiums moving a lot.  I'll continue to wait for a decent signal.  Hopefully sometime soon.  GE was flat on lighter volume and came off of its lows as well.  Gold was down around $5 on the futures as the US dollar was up slightly.  The XAU and GDX had fractional losses on average volume.  The same coming off of the lows pattern prevailed here as well.  Mentally I'm feeling OK.  The market is attempting to break out above the months long consolidation but we'll need to see some volume for it to be real.  The TRAN had a good session today and perhaps that will lead things higher.  We are up at near term resistance there.  More short term overbought than oversold for the major stock indices.  It doesn't look like I'll be attempting a trade in the September option cycle at this rate.  You can't try and press things sometimes in the game because it usually leads to trouble.  I will do my best to remain patient and wait for what I deem a decent signal.  It isn't easy.  Europe was higher and Asia generally lower overnight.  Not much important economic data before we finish the week and it looks like the trading for me will be in a holding pattern.  We'll keep an eye on things overnight as usual.  

Tuesday, September 06, 2016

The grind higher continues as the Dow rose 46 points on light volume.  The advance/declines were positive.  The summation index is trying to turn around here.  If successful, we'll be moving to new all time highs again and perhaps the 2200 level on the S&P 500.  No good technical signal to trade here but I do think that the path of least resistance is higher.  It appears that weaker economic data will be interpreted as positive by the stock market for now.  Eventually if the data continues to be light, that relationship will change.  GE was off 1/4 and the volume was good.  GE is well off of its recent highs and not a good clue as to what the overall market is doing.  Gold rallies on the drop in the dollar.  The precious metal futures were up over 20 bucks as the dollar fell a full point.  The XAU gained almost 5, while GDX added 1 1/3.  Volume was good.  ABX was higher as well and it doesn't appear that it will fall back below $17 and give us a shot at a call trade there.  Mentally I'm feeling OK.  All the players are back at their desks and it did not appear as though there were a lot of sellers.  Only 8 days remain in the September option cycle.  If we get a valid signal, perhaps a short term trade will be in the picture.  Otherwise we'll roll out to October.  Volatility has shrunk again.  That implies higher prices in the near term.  I do not see anything on the horizon to negate that view.  Even though we are in a seasonal weak period for stocks, they don't go lower every year.  perhaps things can hold up into the expiration.  That's a guess as usual.  Asia was higher overnight and Europe generally slightly lower.  We'll keep an eye on the overnight developments.

Friday, September 02, 2016

We finally got the employment number today and the Dow rallied 72 points on light volume.  The advance/declines were 4 to 1 positive.  The summation index will be trying to turn around again.  We jumped sharply in the first half hour and were never able to get back to that level.  But with the breadth as good as it was, you cannot argue with the gain.  The overall market continues to be positive and there won't be any sustainable decline as long as that is the case.  The trading trouble here is that with the muted day to day action, it's hard to make any money by speculation.  Writing the options continues to be the most profitable idea for now.  GE was up a few cents and the volume was light.  Gold found a bid on the weaker jobs numbers and the futures rose over $10.  However the US dollar came off of its lows and ended positive for the day as well.  The XAU added 3 1/3, while GDX gained 7/8.  Volume was good.  I'll try the ABX call trade again if we get back below 17.  Mentally I'm feeling OK.  We got the expected upside today but it certainly wasn't anything robust.  Perhaps all the players haven't returned just yet.  Things should get more back to normal after Labor day.  There's one less day left in the 2 week September option cycle with the holiday.  The risk will be elevated.  October has an extra week on the option cycle, so the premiums will be inflated.  The trading is never easy.  The volume on the rallies has been light and we never like to see that.  The short term technical picture for the S&P is now mixed.  The Bollinger bands have now contracted and we have yet to see a big move.  My guess is that it is still coming.  The small caps continue to act well but they are overbought.  This will not last forever.  We are in a weak seasonal period.  I do not know what the catalyst will be for a break from this trading range but I'm going to try and be ready to take advantage of it.  I'll be going over the charts over the long holiday weekend.  For now it's Friday afternoon and time for a rest.

Thursday, September 01, 2016

The market again tried to sell off today but made it all the way back.  The Dow finished with a gain of 18 points on light volume.  The advance/declines were  slightly negative.  The summation index is still trending lower.  You just get the feeling that the S&P will be moving higher tomorrow with the recent price action.  The daily candlestick chart now shows 2 hammers at the lower Bollinger band.  The short term technical indicators are mid-range or a bit lower.  I didn't purchase any SPY calls but I certainly think that is the correct play for tomorrow.  We'll see what happens after the employment numbers are released.  GE was off a few cents and the volume was pretty good.  Not sure what to make of that.  Gold was up 5 bucks on the futures as the US dollar was lower ahead of tomorrow.  The XAU rose 3 1/8, while GDX added 7/8.  Volume was heavy.  I did place an overnight order for some ABX September calls after checking the charts last night.  The double top price objective in ABX had been met and the technicals were blown out to the downside.  My order wasn't filled.  ABX was up about 3/4.  I may revisit this idea if we head back below $17.  Mentally I'm feeling OK.  It is simply a matter of waiting for the jobs report and the market reaction now.  There really isn't anything else to say.  If there would have been a decent signal here, I would have attempted a trade in the SPY.  But I erred on the side of caution.  I do still expect us to move higher in the near term.  We'll see.  Europe and Asia were mixed overnight.  We'll close out the week tomorrow.