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.