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.