Friday, November 11, 2016
The Dow just keeps on going as it rose 39 points on very heavy volume. The advance/declines were slightly positive. The summation index is still trying to turn around. It was a mixed bag as the S&P 500 was lower today but the small stocks rallied. The volume to the upside has been incredible this week and I believe it means that we'll still see higher prices in the coming weeks. A new all time high for the Dow and the S&P shouldn't be too far behind. We saw a lot happen in the markets this week. It probably won't be this volatile going forward. I sincerely doubt it. We are short term overbought on the major stock indices at this point. Some backing and filling is bound to take place. My SPY November calls are still in the black but here is only a week to go in the November option cycle. Getting out of this position with the best profit will be tricky. Or that time may have already passed. Plenty to think about over the weekend regarding that trade. GE was up another 1/3 on good volume. Probably too late for the January calls there. Gold got clobbered again as the higher dollar along with higher interest rates have taken the shine off of the precious metal. The XAU dropped 5 3/4, while GDX lost over 1 3/4. Volume was very heavy again. We'll have to see how low we go here. Mentally I'm feeling OK. The price action and volume this week was extremely positive for stocks. The INDU, TRAN and RUT are just some examples. I don't expect a repeat of last week going forward but I am certainly positive on the outlook for equities. Price and volume are things that you can usually count on for direction. The S&P is overbought in the short run but there's still room to go higher medium term. Exiting the SPY November call trade will be my main focus next week. I could maybe give it until Wednesday of next week for the exit. Anything beyond that would even entail more risk. As I said before, I may have already missed the ideal exit point. I'll be checking out the charts over the weekend. Hopefully we'll see the usual positive expiration week bias but there are no guarantees. It was quite an interesting trading week to be sure. For now it's Friday afternoon and time for a break.