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.