Thursday, November 03, 2016
The downtrend continues as the Dow fell 29 points on good volume. The advance/declines were negative. The summation index continues lower. The overall market was weaker than the Dow. I have no explanation for what we are seeing here. We are at a point where we should have seen a bounce or a collapse. Neither has occurred. The decline is slow and orderly. Oversold on all indicators with no short covering or relief rally. My SPY November calls are solidly in the red. I suppose at this rate I will at least wait for the election before dumping them. This is one of the strangest market periods that I've seen. GE was off another 1/4 on light volume. Gold was off around $5 on the futures as the US dollar continues to the downside. The XAU rose 1 2/3, while GDX gained 1/2. Volume was average. Still overbought on the short term for the gold shares. Mentally I'm doing OK besides being confused about the goings on here. Perhaps the employment report tomorrow will bring some added volatility. That's just a guess. The VIX is already in the 20's and overbought. But at the rate things are going here, that won't mean anything. An extremely puzzling market situation is what we have here, only because the oversold condition persists without any relief. The trend is obviously down and the small stocks have been the leaders. Near term support has been violated on many charts and the 200 day moving average is now in play in several instances. I've been looking for a bounce all week and it hasn't happened. I guess I can't rule out the status quo move lower until the election. That is something that I did not count on or expect. When the normal technical indicators don't work, it usually means we're in extraordinary times. It certainly doesn't seem like that to me. But the market always has the final say and the support I saw at 2100 for the S&P 500 hasn't held either. Asia and Europe were mostly lower with NIKK having the biggest decline. We'll finish up the week tomorrow on the jobs report. Interesting times.