Monday, November 14, 2016
The Dow keeps climbing as it gained another 21 points on extremely heavy volume. The advance/declines were barely positive and the overall market was weaker than the Dow. The summation index is still trying to turn around. Volume has been incredible lately and it is to the upside. I do think that this election rally has legs beyond the near term. I'm still holding on to the SPY November calls but the risk increases with each passing day. There's only 4 days left in the November option cycle. This trade still shows a profit but it appears the ideal time to sell has come and gone. I'm looking for another run to the 2180 level to get rid of them. Running out of time though and the market is short term overbought. GE lost 20 cents on lighter volume. Probably time for a rest here. Gold lost a few bucks on the futures as the US dollar continues its recent run up. The XAU and GDX had fractional gains on heavy volume. Perhaps things have gone too far, too fast for the gold shares. We'll see as the week unfolds. Mentally I'm feeling OK. Plenty of economic data out this week, beginning with tomorrows retail sales. Inflation data is coming out as the week progresses. My thinking is that traders will take care of any business this week as it is a holiday week next week with Thanksgiving. The technical indicators are overbought on the short term but we have had a pause after the initial huge run up after the election. Markets tend to stay overbought during up trends and that is what I think we are seeing now. That is why I've continued to hold on to the SPY November call trade, even though time is running out. I do think that another attempt at the 2180 level on the S&P 500 is not out of the question this week. I could be wrong. Asia was mixed and Europe slightly positive overnight. We'll keep an eye on the overnight developments.