Monday, October 31, 2016
We started the week and finished the month of October pretty much flat on the session. The Dow fell 18 points on good volume. The advance/declines were barely positive. The summation index continues lower. We were positive for most of the day and did not really see any decline. I did place an order for the SPY November calls. It wasn't filled but I am leaving it open overnight. We are now short term overbought and should be heading higher from here. A bounce at the least. I can only hope that I'll be able to take advantage of it. The VIX was higher today but there wasn't any volatility or decline. I'm puzzled about that. We've got economic data due this week and a Fed meeting. So there will be plenty of excuses for things to happen. I'm sticking with the buy weakness mantra. I do believe that it will work here. GE was off 1/8 after being higher earlier on heavy volume. Still moving here on the takeover/acquisition talk. Gold didn't do much today and the US dollar was little changed as well. The XAU gained 2 1/8, while GDX added 3/4. Volume was good. Perhaps the gold shares will be leading the precious metal higher. Mentally I'm feeling OK. We'll begin the month of November tomorrow and the seasonality factor will be positive for stocks despite the election for now. Plenty of time in the November option cycle. I'm not sure what the market is waiting for but I do expect positive price action near term. It would be great to see some weakness early tomorrow morning to perhaps fill my option order but that is just wishful thinking. I would be surprised if we were lower on the day tomorrow. The SPY option premiums are too high for my taste at the moment. That said, the time for the calls is now in my opinion. Europe and Asia were slightly lower overnight. We'll see what tomorrow brings.
Friday, October 28, 2016
Another interesting session as the Dow fell 8 points on good volume. The advance/declines were negative. The summation index continues lower. We bounced around all over the place today with the overall market continuing to be weaker than the Dow. The S&P 500 challenged the support at 2120 and bounced off. Not completely short term oversold for the S&P but we will get there if Monday is negative. My thinking is that any decline on Monday can be bought. I'll be looking to purchase the SPY November calls. The premiums are still high for the strike price that I'm looking at but there will be a short term buy signal if we close lower on Monday. GE jumped 5/8 today on the possible takeover of a rival. There is no other explanation for the sudden move in GE. Volume was 2 times normal. Gold rose $7 on the futures as the US dollar was lower despite a GDP report that was a bit better than expected. The XAU and GDX had fractional gains on average volume. Mentally I'm feeling OK. My indicators are setting up for a buy on Monday if there is weakness. I'm not sure if it will be the beginning of a rally or simply another case of relieving the short term oversold condition of the market. The small stocks have been very weak of late and that isn't a good sign for calls. The Dow has had better relative strength and that is something that is also a concern. The daily chart of the Dow also has the Bollinger bands contracting to the point where we should see some type of big move one way or the other soon. It is altogether possible that we are on the verge of a breakdown. The lower summation index and small stock under performance are bearish. However we are technically nearing the condition where we should at least see a bounce after Mondays price action. I could be wrong but I'll be looking to purchase some SPY November calls. Perhaps we'll see a final shake out before heading higher. That would be the ideal scenario. There will be plenty of charts to study over the weekend. Monday will end the month of October as well. For now it's Friday afternoon and time for a rest.
Thursday, October 27, 2016
Lower today as we couldn't find any buyers in the final hour. The Dow fell about 30 points on heavy volume. The advance/declines were more than 2 to 1 negative. The summation index is heading lower. Once again the overall market was weaker than the Dow with the small stocks leading the way. That is not a bullish condition. I canceled my open order for the SPY November calls. I'd like to try this trade again tomorrow or perhaps Monday if we continue to move lower. The short term technical indicators for the major averages have rolled over with the exception of the Dow. Waiting for an oversold reading would be the prudent course of action. That reading could come on Monday if we continue to trend down. GE was off 1/4 and the volume was light. Gold was up a couple bucks on the futures today, while the US dollar was higher. The XAU shed 1 1/8, while GDX lost 3/8. Volume was average. The gold shares now appear to be rolling back over. Mentally I'm feeling OK. The VIX has turned back up and so have its short term technical indicators. That isn't a positive development. The summation index is moving lower. As much as I would like to purchase some SPY November calls, the technical picture is telling a different story. The small stocks are really under performing lately and that is not a good sign for the bulls. RUT has already broken the lower boundary of its trading channel and NYA is on the cusp of doing the same. It appears that my idea for the SPY calls is the wrong one. But we'll see. The reaction to the GDP report tomorrow will be the key for Fridays trading I believe. The final hour drop today wasn't encouraging. Plenty of time in the November option cycle to do a trade of some sort. We'll take our cues form the market and right now it is saying that we're headed lower. Perhaps things won't be cleared up until after the election. Or not. Plenty to ponder. Asia was lower and Europe little changed last night. We'll close out the week tomorrow.
Wednesday, October 26, 2016
A mixed bag today as the Dow was higher but the rest of the indices trailed. The most watched index gained 30 points on good volume. The advance/declines were almost 2 to 1 negative. This should turn the summation index back down and that is not a positive sign. The overall market was much weaker than the Dow, with the small stocks leading the way lower. These are not bullish indications. The short term technical indicators for the major averages have begun to roll over as well, with the exception of the Dow. The RUT hit a fresh new recent low. I did place an order for the SPY November calls though but it wasn't filled. I'm leaving the order in overnight. GE was up almost 1/4 on light volume. Gold fell $6 on the futures and the US dollar was a bit lower as well. The XAU shed 1 7/8, while GDX lost 1/2. Volume was good. Mentally I feel OK. The technical back drop for getting the SPY November calls isn't ideal. I may be early, as I can make a case for waiting to purchase them until we are short term oversold. I do expect Friday to be a day of movement in the stock exchanges, off of the 3rd quarter GDP report. I certainly do not know which way. We've been in a trend channel for the S&P 500 for 4 months. The range is roughly 2190-2120. Once we break out, the move higher or lower should be pretty good. You want to be in on that. I'm thinking that we'll have another test of the lower end and that it will hold. I could be wrong. For me, the question is whether or not to wait for the GDP number on Friday. I suppose I'll have to see how we move tomorrow and take it from there. Europe and Asia were generally lower last night.
Tuesday, October 25, 2016
Lower today as the Dow fell 53 points on good volume. The advance/declines were negative. The summation index is trending sideways. Better volume to the downside and that is not a positive. The market really can't get anything going one way or the other. Short term overbought and oversold conditions are met with small moves one way or the other to relieve the conditions. It is a tough and treacherous trading environment. I am still looking to try the SPY November calls this week if we continue lower. Perhaps tomorrow will be the day but the technical indicators are not exactly where I want them for a purchase. I may have to err on the side of caution. GE was off 1/4 and the volume was light. Poor performance here is another sign of trouble. However we've been dropping here for a few months while the overall market has moved sideways. Gold rose over $10 on the futures as the US dollar finished little changed again. The XAU was up 2 1/4, while GDX added better than 1/2. Volume was average. Mentally I'm feeling a bit tired, did not sleep well. I am still recovering from my hospital nightmare but do feel well enough to trade. The short term technical indicators for the major averages are starting to roll over again. That is one of my concerns in attempting to place a trade on the call side in the next few days. We do have some economic data coming out in the next 3 days. The most market worthy in my mind will be the first look at GDP for the 3rd quarter on Friday. I do believe that will be a mover for equities and as always the question is which way? I'm now thinking that if we head lower into Thursday morning, that will be where I'd take a chance on the November calls. But we still have tomorrow to get through. Things are never set in stone with this game. We could also simply head down from here and take out the lows. That would negate any ideas of trading in calls near term. So there's plenty to keep an eye on this week. Europe and Asia were mixed overnight, with nominal moves. We'll get earnings from AAPL after the bell and that could set the tone for tomorrow.
Monday, October 24, 2016
We begin the week with a nice gain as the Dow rose 77 points on what passes for average volume these days. The advance/declines were positive. The summation index is still trying to turn around and I believe that it will. The small stocks along with the overall market were stronger than the Dow. That's a positive and that's what I'd like to see. Getting short term overbought for the major indices. Any weakness now can be bought in my opinion. I'm looking at the SPY November calls and if we see some pullback this week, that is what I will purchase for the next trade. The ideal scenario would be a down day tomorrow with follow through on Wednesday morning. That would be the purchase time if things occur in that order. The market rarely cooperates. GE was of a few cents on average volume. Gold fell a couple bucks on the futures. The US dollar didn't move much. The XAU lost 1 3/4, while GDX shed 1/2. Volume was average. The short term technical indicators for the gold shares appear to be rolling back over here. Mentally I'm feeling OK. We're still waiting for something to happen with the months long trend channel that we've been stuck in. My short term indicators say that we should see some downside tomorrow but they aren't right all the time. Nothing is. Plenty of time in the November option cycle to make a trade. Perhaps I'm wrong here and we will simply continue to move sideways. However with the summation index attempting to turn back up, I'm going to take my cues from there. Europe and Asia were generally higher last night, although the FTSE was down. We'll keep an eye on the overnight developments and go from there.
Friday, October 21, 2016
The Dow lost 16 points today on what passes for average volume these days. The advance/declines were barely positive. We sold off early and spent the rest of the day trying to get back to even. The overall market was stronger than the Dow, with the small stocks leading the way. That is a positive. I'll be looking to get some SPY November calls on weakness next week. Another test of the recent lows would be the ideal scenario for me. GE was off about a dime and followed the overall market pattern for the session. Down early and trying to come back. My idea of purchasing the calls and puts only would have worked if you sold out of both positions in the first 5 minutes of trading. The profit would have been small and certainly not worth the risk. The calls would have been wiped out and the gain on the puts would have barely put the 2 trades into the black. The price movement on the earnings wasn't big enough to make that idea worth it. But of course, you don't know that ahead of time. The gold futures were flat with the US dollar higher yet again. The XAU and GDX had fractional losses on very light volume. Mentally I'm feeling OK. We made it through option expiration week and it was pretty tame considering that it's October. I'd like to think that the market is going to hold in here and some type of rally is about to begin. The short term technical indicators for the major indices are still mid-range. The summation index is trying to turn around here in my opinion. We're at an important point for the S&P. If we roll over and take out the support at 2120, we could see a decent decline. But it seems to me like the market wants to hang in here with the recent price action. What I don't want to see is more of the same sideways price action that leads to nowhere. With the November option cycle now in play, we have a full 4 weeks of time premium left. More sideways inaction will erode the premium and make outright speculation even more difficult that it already is. But we all know that you can't tell the market what to do. It will get where it's going in its own time. I'm sticking with the SPY November calls theory for now. Europe and Asia were mixed last night with slight price moves. I'll check the charts over the weekend as usual. For now it's Friday afternoon and time for a break.
Thursday, October 20, 2016
Bouncing around today as the Dow fell 40 points on light volume. The advance/declines were negative. The summation index is trying to turn around. What happens here with the summation index should tell us if we are going to get some type of rally or plummet. That is what I believe right now. The short term indicators for the S&P are back to mid-range I also still expect a positive resolution to the multi-month channel that the S&P 500 is in. I'm still looking at the SPY November calls as the next trade. GE was flat and the volume was average for lately. I did like the idea of getting both the $29 puts and calls for October, with the earnings due tomorrow. However I did not risk any money on this idea. We'll see if it would have worked. Gold was off a few bucks on the futures and the US dollar was higher today. The XAU and GDX both had very slight fractional losses on pretty light volume. It's possible that the decline in the gold shares is over. Mentally I'm feeling OK. Not a lot of volatility considering it is option expiration week. Things have been pretty orderly so far. We've worked off the short term oversold condition, so there's a possibility that we'll head back to test the recent lows again. If that occurs, I will be getting some SPY November calls unless the retest is a collapse. I don't believe that will be the case. Perhaps the recent slight move higher has some legs as well. We are going to have to let the market figure things out. Many are cautious at the moment and you usually don't get a big decline with that type of environment. But who knows? Europe and Asia were both higher in overnight trade. We'll close out the week with option expiration Friday.
Wednesday, October 19, 2016
We managed to continue higher today as the Dow rose 40 points on light volume. The advance/declines were 2 to 1 positive. The summation index is trying to turn around here. Today may have stopped the decline in the summation index. This is important as it would signify that the broader market is gaining strength. I'm a believer in this hypothesis and will continue to look at the SPY November calls as the next trade. The market softened after the release of the Feds beige book but it was not a wholesale decline. It is option expiration though and things could get tricky in the next 2 days. The S&P 500 has bounced off of a short term oversold condition. GE was up a few cents and came off of its highs. Volume was about average for lately. Expect movement here on Friday with the earnings release. Perhaps purchasing both puts and calls at the $29 strike price would be a good idea. Gold added $7 on the futures as the US dollar finished little changed again. The XAU rose 2 1/4, while GDX gained 2/3. Volume picked up. A nice bounce so far this week for the gold shares. Mentally I'm feeling OK. 2 days doesn't make a trend but I like the fact that the market has held up at this juncture. Of course it remains to be seen if this is the start of something real of just another fluctuation in the continuing trend channel. If we can get the summation index turned around, that would be an important clue. I would like to let this week pass and then attempt to purchase the SPY November calls next week. That is the ideal scenario for me at the moment. the market rarely cooperates though. I am more and more leaning towards a bullish resolution to the ongoing price action though. I do not see a collapse here as imminent. I could be wrong. Asia was mixed, with Europe slightly positive overnight. We'll keep an eye on aftermarket developments.
Tuesday, October 18, 2016
We did get a slight bounce today as the Dow rose 75 points on light volume. The advance/declines were 3 to 1 positive. The summation index is still heading lower though. However the overall market was stronger than the Dow. The short term technical indicators have turned up from an oversold reading but that doesn't mean that a rally is imminent. We could simply turn back down again tomorrow. I would be more convinced of a sustained move higher if we can build on today and get the summation index turned around. Hasn't happened yet. I am still looking at the SPY November calls though. GE was up 1/8 on light volume. Gold gained $7 on the futures as the US dollar was little changed. The XAU added 3 1/8, while GDX gained 7/8. Volume was OK. We've held the 200 day moving average on the gold shares for now. Mentally I'm feeling OK. The economic data today was in line with expectations. We'll get the Feds beige book tomorrow and that could be a mover. It would be a positive if we could build on todays gains. However the volume remains anemic and that is troublesome in either direction. Plus there's the possibility that we're on hold until the election here is over. We did get a signal for a bounce and it worked. But where we go from here is the next question. I don't have the answers at the moment. Both Europe and Asia were positive overnight. We'll keep an eye on things tonight as it appears that INTC disappointed with its earnings in the aftermarket.
Monday, October 17, 2016
Lower to the beginning of option expiration week as the Dow fell 52 points on light volume. The advance/declines were negative. The summation index continues lower. No buyers to be found as we drift lower. Technically we're short term oversold so a case can be made here for a bounce. I'm not sold on any type of sustainable rally at the moment. We would have to see the breadth improve and the small stocks take the lead to the upside for a longer term move higher. However the decline needs to be contained here and now or it has the potential to spiral down much lower than where are now. So we are at a key point in time in my opinion. I think that the bounce is possible but beyond that I'm just not sure. GE lost few cents on average volume. Earnings due on Friday. Gold was little changed and the US dollar was a bit lower. The XAU added 1 1/4, while GDX rose 1/3. Volume was light. Mentally I'm feeling a bit tired, did not sleep well. A fair amount of economic data still due this week along with the Feds beige book and more earnings reports. If we don't bounce tomorrow it could be an ugly session. If we do bounce, the nature and strength of a move higher will tell us a lot about where we are going. There has been a lot of chatter about being on hold until after the US presidential election. That could happen as well, which would simply keep us moving sideways in a channel. That has been the case for quite a while. But I think tomorrow is important, given where we are at on the charts. I'm thinking that we will bounce but I could be wrong. Asia was mixed and Europe lower overnight. Stay tuned.
Friday, October 14, 2016
We started out with a jump to the upside and the Dow was up over 150 points. However we spent the rest of the day drifting lower and the Dow finished with a gain of 39 points on light volume. The advance/declines were barely positive. The summation index is still heading lower. The economic data came in as expected. The overall market was weaker than the Dow. The small stocks continue to under perform. The short term technical indicators remain oversold for the major indices. Option expiration week is coming up. GE was up 1/8 and the volume remains light. Earnings due here in a week. Gold was off $5 on the futures as the US dollar snapped back to the upside. The XAU lost 1 1/2, while GDX shed 1/2. Volume was light. The strong dollar will remain a headwind for the gold complex. Mentally I'm feeling OK. Still watching the 2120 level on the S&P 500 as key support but I do think that 2100 is more important. I could also make the case for some kind of bounce in the next couple of days as well. However with the summation index heading lower and the small caps not showing any strength, the case for lower prices seems to be the better choice for now. I'd still like to get some SPY November calls at some point in the next couple of weeks. The market has been sideways for 3 months. The breakout will be worth trading either way. I'm still a believer in new all time highs before the end of the year. But I'll try and listen to what the market is saying. This weeks price action was not positive. I'll be checking the charts over the weekend as usual. I am feeling better but not all the way back yet. For now it's Friday afternoon and time for a break.
Thursday, October 13, 2016
The market sold off hard early and then spent the rest of the day making a comeback. We didn't quite make it all the way back as the Dow fell 45 points on average volume. The advance/declines were 2 to 1 negative. The summation index continues lower. The small stocks are still under performing. Oversold on the short term technicals for the major indices but there is still a little bit of room to move lower. The 2120 level in the S&P 500 is said to be an important point to hold. I think the 2100 level is the number but that's just my interpretation of things at the moment. The daily candlestick pattern on the S&P today has the potential to be a hammer depending on the market action going forward. GE fell 1/8 and the volume was light. Gold rose $5 on the futures as the US dollar was lower for a change. The XAU and GDX had small fractional gains on average volume. Trying to hold at the 200 day moving average for the gold share indices. Mentally I'm feeling OK. It appeared that we were going to fall off a cliff early this morning but buyers showed up and stemmed the decline. However with the summation index still heading down, the path of least resistance is lower. The VIX had another jump up and the technical indicators here are overbought. I think that we are at a spot where maybe the selling is getting exhausted in the near term. I could be wrong. I'm not sure how the market will react to the economic data tomorrow but that would be the case at any time. I'd like to see us get down to the 2100 level on the S&P 500. That would be my entry point for the SPY November calls. Could all just be wishful thinking on my part. Europe and Asia were generally lower as the data from China last night was weaker than expected. We'll close out the trading week tomorrow.
Wednesday, October 12, 2016
A day of running in place as the Dow gained 15 points on light volume. The advance/declines were slightly positive. The summation index is still heading lower. The small stocks showed relative weakness and that is not a positive. However the technical indicators on the VIX are pretty much overbought and that could spell some near term relief. We didn't have any downside follow through to yesterdays decline and that is a plus as well. But the market will go where it wants. The Fed minutes today were basically a non-event. GE was off a couple cents and the volume was light. Gold was flat on the session as the US dollar continues to rise. Overbought and staying that was for the dollar. The XAU rose 1 3/4 and GDX gained 1/2. Volume was average. Mentally I'm feeling OK but physically feeling tired. Running out of time in the October option cycle. Friday could get volatile, with retail sales plus inflation data. More oversold than overbought for the major big cap averages. Earnings just beginning here as well. It never gets easy. I'll try and be patient for a good signal. I'm still considering the SPY November calls at the moment. Europe and Asia were lower overnight. We'll keep an eye on the overnight developments.
Tuesday, October 11, 2016
Selling all around today as the Dow fell 200 points on light to average volume. The advance/declines were 6 to 1 negative. The summation index is heading down. I thought that perhaps it was going to make an attempt to turn around here. Obviously wrong after todays market action. No real reasons given for todays decline. The short term technical indicators are trying to roll over here for the major averages. Even the small caps took a beating today. We'll have to see if this is the start of some type of bigger decline. I'm not exactly sure at the moment. GE was up a few cents on average volume. The damage has already been done here. Gold was off $6 on the futures as the US dollar continues to rise. The XAU shed 1 3/4, while GDX lost over 1/2. Volume was average. As long as the dollar continues to rally, gold will not be bought. Mentally I'm feeling OK. Yesterdays gain was on light volume which most likely was the result of Columbus Day. But as usual, light volume rallies are unreliable. Depending on how this week concludes, we are breaking some up trend lines on the major indexes that began with the lows of February. But the week isn't over yet and we could potentially rally back in the next 3 days. The VIX rose today as well but isn't overbought yet. The S&P 500 did manage to bounce from its lower Bollinger band on a daily basis today. Perhaps that will keep things in check going forward. If we do get to oversold on the short term indicators for the S&P, then I may try the go out to the SPY November calls. That is the only idea that I have in the works right now. We really haven't seen any trend in the S&P since mid-July, so it is hard on whether to say that this is actually the start of one. Time will tell on that. Asia was mixed and Europe lower last night. We'll see what tomorrow brings.
Monday, October 10, 2016
The Dow rose 88 points today on light volume. The advance/declines were better than 2 to 1 positive. The summation index will still be heading lower but perhaps it is trying to turn around here. It was a partial holiday in the US with Columbus day. Not all of the players were at their desks. The market is still trying to make up its mind on which way to go here. Earnings begin again this week. No clear signal yet, so I'll remain on the sidelines for now. GE was off almost 1/4 on average volume. One of the problems that I have here for a rally is the continued under performance of a bellwether such as GE. It broke to another new low since mid July today. Gold rose $9 on the futures and the US dollar was higher today as well. The XAU and GDX had slight fractional gains on very light volume. Mentally I'm feeling OK. 9 days left in the October option cycle. It doesn't appear that I'll be making a trade unless things line up technically for the S&P 500. The indicators that I follow continue to hover mid-range for the short term. I will say that the continued strength in the small caps does bode well for the overall market going forward. However the timing of my next trade is always in question and I just don't have the answer right now. I'm still recovering from my recent bout with ill health but am feeling better at least. Asia was mixed and Europe higher overnight. We'll look for some follow through upside in the markets tomorrow.
Friday, October 07, 2016
The employment report came and went and we are still in a sideways pattern of indecision. The Dow fell 28 points on average volume. The advance/declines were 2 to 1 negative. We did come off of the lows for the session. The summation index is still moving down. There's still no resolution to which way we're going to break out here. A lot of the short term technical indicators for the major indices remain mid-range. We did have a British pound flash crash overnight and the market shrugged that off. I'm still a believer in higher prices eventually but the timing is far from certain. GE fell about 20 cents on better volume. This issue has been lower since mid July and is not offering any overall support to the market at this time. Gold was up $5 on the futures and the US dollar was a bit lower. The XAU and GDX had slight fractional moves one way or the other on average volume. The jobs report was slightly less than anticipated but offered nothing in the way of moving gold much higher. Mentally I'm doing OK. We waited for the employment report but we still have no clarity in the stock market. I'm not sure what the issue is. I don't think it's the upcoming presidential election in the US. The next interest rate move won't be until December, if at all. Perhaps it's the fear of some kind of October collapse but these things never happen when everyone is looking for one. So I'll simply continue to wait it out. When we get oversold, I'll look to the SPY calls. If we move up to get to be overbought, I'll look to the SPY puts. At this point going out to November seems to have to the prudent choice. The market will move at its own pace. There will be some economic data due next week but not a lot. Europe and Asia were generally lower overnight. I'll be checking the charts over the weekend but the plan of waiting for a decent signal should remain intact. For now it's Friday afternoon and time for a break.
Thursday, October 06, 2016
A one day reversal to the upside for the S&P 500 as we opened lower and closed higher. The Dow ended the day down 12 points however. The advance/declines were slightly negative and the volume was light. The summation index is still heading lower. Early weakness today was bought and then we moved sideways for the rest of the session. Simply waiting for the market reaction to tomorrows employment report. There is nothing to read into todays market action. Tomorrow will be the key. GE was off 1/4, volume was nothing special. Gold dropped another dozen as the US dollar continues to rise. Foreshadowing a decent jobs report tomorrow? Who knows? The XAU shed another 2 1/2, while GDX lost 3/4. Volume was good. Quite a negative week so far for gold and the gold shares. Mentally I'm feeling OK. The price action today for the major indices implies higher prices tomorrow. But it isn't 100% accurate, as nothing is in this game. I do think that tomorrow will set the tone for which direction we're going to go here. You can make the case either way, which is why it is probably best to simply wait it out and see where we go. As always, the markets reaction to the numbers and not the numbers themselves will tell the story. We've basically waited all week for this and hopefully it doesn't disappoint. Asia was higher and Europe slightly lower last night. All eyes on the jobs report and we'll close out the week tomorrow.
Wednesday, October 05, 2016
Back to the upside as we are in a holding pattern until Friday. The Dow rose 112 points on average volume. The advance/declines were positive. The summation index is still moving lower. Still just waiting on a break out higher or lower for the S&P. The catalyst could be the employment report on Friday. Plenty of time left in the October option cycle. I'd expect tomorrow to be a wait and see affair. GE was flat and the volume was average. Gold and the US dollar both finished the session little changed. The XAU and GDX had slight fractional gains on good volume. No real downside follow through to yesterdays gold debacle. However the damage was so severe that perhaps we're temporarily sold out there. Mentally I'm feeling OK but still tired and still not up to par. The technical indicators for the major averages remain mid-range with the exception of the TRAN, which are overbought. Perhaps the TRAN is leading the way here but time will tell on that. So far, the recent rally in the TRAN hasn't led the INDU higher. However we all know that the market goes where it wants. The relative out performance of the small stocks is another positive that has yet to manifest itself. I'll remain on the sidelines for now. Europe and Asia were mixed overnight. We'll continue to watch the overnight action.
Tuesday, October 04, 2016
Lower again today as the Dow fell 85 points on what passes for average volume these days. The advance/declines were shy of 3 to 1 negative. This should get the summation index heading lower. Just waiting for Friday in my opinion here. Plenty of time in the October option cycle to make a trade if you're so inclined. I'm on the sidelines until a decent signal occurs. GE was off 1/8 and volume picked up to the downside. The big news was with gold today as it got clobbered. The precious metal futures dropped 40 bucks as we sliced through the $1300 level. The US dollar was higher but not by enough to justify a $40 drop in gold. Not sure what is going on here. The XAU lost 8 2/3, while GDX fell 2 1/2. Volume was off the charts heavy on the selling. It appears that everyone headed for the exits at the same time. The usual positive seasonal bias for gold did not show up this year. Mentally I'm doing OK. Feeling tired but that is to be expected as I recuperate. The market is trying to figure out which way to go here. The small stocks are acting relatively better so a bullish outcome is probably to be expected eventually. They continue to trade above their 50 day moving averages, while the big cap indices are below the 50 day. Just an observation there, may not mean anything. Asia was slightly higher overnight, with Europe having a better upside performance. We'll see what tomorrow brings.
Monday, October 03, 2016
We begin the week and the month with a loss, as the Dow fell 54 points on light volume. The advance/declines were negative. The summation index is trending sideways. The short term technical indicators for the S&P 500 are either mid-range or overbought. No trades in mind at the moment. Fridays jobs report will be the headline for the week. GE was up a couple cents and the volume was pretty light. Gold was off a couple bucks on the futures as the US dollar was higher. The XAU dropped almost 2 points, while GDX shed 1/2. Volume was light. Mentally I'm doing so-so, physically I've still got a ways to go. I'm not completely back to normal so the trading will have to wait. I don't see a solid signal here for the SPY one way or the other. I do think that we will get to new all time highs for the S&P 500 before the end of the year. But the timing is the question. Perhaps the market will simply be on hold until Friday. That's just a guess and guesses are not what we base our trades on. Europe and Asia were generally higher overnight. We'll keep an eye on what happens tonight.