Wednesday, November 09, 2016
Now that was an interesting 24 market hours. The US election was an upset as Donald Trump prevailed. I was wrong on that guess. Markets around the world collapsed on the realization that Trump was going to become president of the US. The S&P 500 futures were down over 100 points. It was incredible. Even more incredible was the comeback. The market came all the way back and then some. The Dow finished today up 256 points on extremely heavy volume. The advance/declines were positive. The summation index is still trying to turn around. The weak advance/declines for the past 2 sessions is puzzling. I would have thought that we'd see at least a 2 to 1 or 3 to 1 ratio there. You can't argue with price though. My SPY November calls are still in the black. GE was up almost 1/4 on heavy volume. Gold, which had rallied $50 overnight finished with a gain of $5 on the futures. The US dollar was stronger. The XAU was up 2 2/3, while GDX added 2/3. Volume was heavy but the gold shares finished well off of their highs. Mentally I'm feeling OK. The stock market crashed and came back all in a 24 hour period. Well, the futures market did. The cash market fell a bit this morning but then rallied hard. We are getting to short term overbought but aren't there yet. Of course we could always remain overbought once we get there. I'm inclined to take whatever profit I have in this SPY trade tomorrow but I do think that we're going higher before expiration. Friday is a semi-holiday for Veterans day and the bond market will be closed. What happened in the markets last night was crazy and I hope we don't see anything like that again anytime soon. There is no way to trade that kind of market action using options when the options market is closed. The volume today was huge and we did break some downtrend lines on various indices. So I still think that we're going higher. It is a matter of how much before expiration and when to sell out the current SPY November call position. I can make a case for holding on until next week but that's something I'll have to think about tonight. Asia got rocked last night, while Europe was able to follow the US and finished with decent gains. We'll keep an eye on the overnight action.