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Friday, November 04, 2016

Down yet again today as the Dow could not hold onto its gains and lost 42 points on good volume.  The advance/declines were barely positive though and the overall market wasn't as weak as the Dow.  The summation index continues lower.  The employment report was just a tad weaker than anticipated.  There is something going on here but I certainly don't know what.  The extreme oversold condition of the market is dangerous but we still haven't seen a collapse.  My SPY November calls are still losers and it will take quite a miracle to get back to break even, if that's even possible.  The bounce that I'm waiting for has never arrived.  Oversold on all levels.  GE was up 1/8 or so on good volume.  Gold was up a couple bucks on the futures and the US dollar was a bit lower.  The XAU and GDX had slight fractional losses on average volume.  Still short term overbought for the gold miners.  Mentally I'm feeling OK.  Very extreme technical conditions at the moment.  This is something that is rarely experienced.  My guess is that we are going to get a giant relief rally after the election next week.  I do not think that we are going to crash.  The market has had that opportunity to collapse all week and it simply meanders its way lower.  The technical position that we're in is rare.  I suppose anything could happen but I would be shocked if we didn't get a huge move to the upside at some point in the coming week.  It may not last but it would be a chance to exit the SPY calls at a smaller loss.  Or who knows?  Perhaps it would be the beginning of a sustained move higher.  2 weeks to go in the November option cycle.  Once again I'll say that I do not know what is going on here with the market.  I do know that the market usually knows more than we do.  The extreme condition that we see today will probably resolve itself with something just as extreme.  Next week should be one of the most interesting market weeks that we've had in a while.  That is my prediction.  I'm also expecting a multi-hundred point move on some day during next week.  And my guess it that it will be to the upside.  I cannot stress enough the strangeness of the stock market at the moment.  The weakness is coming from something but I do not think that it's the US election.  Clinton should win and Congress should be split by party.  Perhaps there's something else that the market knows and we'll eventually find out.  I don't know.  Asia and Europe were mildly lower overnight, again with the exception of the losses in NIKK.  Plenty of charts to study over the weekend.  For now it's Friday afternoon and time for a break.

1 comment:

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