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.