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.