Friday, December 30, 2016
Drifting lower in an aimless market to close out the year. The Dow fell 57 points on the usual light volume we've been seeing in this shortened week. The advance/declines were negative. We're short term oversold for some of the technical indicators. It looks like I was a day early for the SPY January calls. Or perhaps my take on things here is simply wrong. That trade is now in the red. What I thought was a consolidation isn't after todays price action. Things will need to be reversed to the upside in a hurry or this trade is dead. There is no support to speak of in the S&P 500 until we get to 2210. GE was off 1/8 and the volume remains light. Gold dropped $7 on the futures despite a weaker US dollar. The XAU was off over 3 points and GDX shed 7/8. Volume was good. The fundamentals remain bearish for gold. Mentally I'm feeling OK. Volatility appears to be short term overbought now and that could lead to some positive price action for stocks at the beginning of the new year. Maybe. I also could be reading everything wrong here but some of the indicators that I use show at least some kind of bounce happening soon. I do think that it could be more than that. I'm still thinking that 20000 will be reached early in 2017. The trading was thin in the past week and we could have just seen a downside skew because of that. But who knows? We'll find out more next week when all the players return. My SPY January call trade is now in the red but there is plenty of time left in the January option cycle. I'll look things over again this extended holiday weekend. For now it's the final Friday afternoon of 2016 and time for a rest. Happy and healthy New Year to everyone.
Thursday, December 29, 2016
Lackluster is the best way to describe todays market as the Dow fell 13 points on very light volume. The advance/declines were positive. The summation index did turn lower yesterday but the action there is better described as sideways for now. Not a lot of players and not a lot to write about either. There was some weakness about halfway through the session and I did purchase some SPY January calls. They are slightly in the black. This should be a less than 2 week trade time wise. If and when we move back to short term overbought, that will be the time to exit. I still think that we'll see Dow 20000 early in the new year. GE moved up a couple pennies and the volume remains very light. Gold found some interest on a lower US dollar. The futures rose $15. The XAU climbed 4 3/4, while GDX added 1 1/2. Volume was average. The gold shares remain in a downward channel but are trying to break it. Mentally I'm feeling OK. Just a day to go in 2016 and we will probably end on a quiet note. I expect even less traders tomorrow as we approach another long holiday weekend. Things should get going again on Tuesday. I'm expecting this SPY call trade to work out but the market will go where it wants. I still view the past couple of weeks as a consolidation and not a top. I could be wrong. So we'll see what happens. Europe and Asia were generally weaker overnight. We'll finish up the week and the year on Friday.
Wednesday, December 28, 2016
Well I thought things would be quiet but that was not the case today. The Dow fell 111 points on very light volume. The advance/declines were better than 2 to 1 negative. This could turn the summation index lower. The short term technical indicators for the major averages have now rolled over. I do not think that this is the start of something big to the downside. In fact I think that any weakness tomorrow can be bought. The lack of volume tends to skew things each way. Although I thought the next trade would be in the new year, I'll be looking to purchase the SPY January calls tomorrow. I may be early on this trade but one of my short term tools is oversold at this point. GE fell almost 1/4 and the volume was light. Still short term overbought here. Gold and the US dollar were slightly higher. The XAU added 1 1/3, while GDX was up 1/3. Volume was average. Gold and the gold shares remain in a down trend. Mentally I'm feeling OK. Volatility picked up today but it was nothing drastic. I think we are simply in a light volume void with the major players either out or on the sidelines. Only 2 trading days left in 2016. I did not expect todays drop but I really don't think we'll see a repeat tomorrow. Of course I could be wrong. One of the issues here is that there is really no support under the Dow and S&P 500 at these levels. That said, I think what we've seen in the past couple of weeks is a consolidation from the recent run up. Even if I'm a bit early in this trade, there will be plenty of time for it to work out. I will re-check everything tonight but I'm pretty sure that if we see lower prices tomorrow, I'll be buying the SPY calls. Europe and Asia were mixed last night showing little price change with the exception of a rise in the Hang Seng. We'll keep an eye on the overnight developments and get ready for tomorrow morning.
Tuesday, December 27, 2016
Back to work for some as the Dow rose 11 points on extremely light volume. The advance/declines were positive. The summation index is trying to move higher. Still plenty of players on vacation as we look to close out the trading year of 2016. Nothing has changed as the major stock indexes remain short term overbought. I'm still waiting for some kind of pullback to get long the SPY January calls. A short trading week upon us but there is still plenty of time in the January option cycle to make something happen. GE up a couple pennies on very light volume. Gold was up $6 on the futures but was higher during the day. The US dollar barely moved. The XAU rose 1 3/4, while GDX gained 1/2. Volume was light. Mentally I'm feeling OK. The market took off in the first half hour and steadily eroded from there. I'm not sure what to make of that but we are in a very thinly traded environment. Probably the best thing to do here is let this week pass and take it from there. We should get a bump up in the beginning of the year due to seasonal money flows. However we all know what happened at the beginning of last year. So we'll wait for some kind of signal and take it from there. The market will not remain overbought forever. Europe was generally higher and Asia generally lower overnight but both suffered from the same lack of interest as seen in the US today. Perhaps this will be a boring week. We'll see if we get some more players back tomorrow.
Friday, December 23, 2016
Not much today as expected. The Dow rose 14 points on extremely light volume. The advance/declines were positive. The summation index is starting to go sideways again. It's holiday time and the stock market doesn't matter for a few days. I'm hoping for a Christmas present of a chance to get the SPY January calls. GE was up a nickel with the same lack of volume. Gold rose a couple bucks and the US dollar was a touch weaker. The XAU and GDX rose on anemic volume. Mentally I'm feeling OK. No real interest in stocks this week which was a bit of surprise to me. I thought that maybe we'd get to 20000, given the positive seasonal factors. Perhaps next week. We're still short term overbought on the major stock indices any way you look at it. The market takes Monday off for Christmas. I suppose I don't expect much movement next week as well but you never know. I'll be looking for clues over the next few days. For now 's Friday afternoon and time for a rest. Merry Christmas and Happy Holidays to all.
Thursday, December 22, 2016
Another pause in the climb to 20000 as the Dow fell 23 points on light volume. The advance/declines were negative. The overall market was weaker than the Dow. The summation index is still moving higher. The economic data came in about where expected. We still remain overbought on the short term technical indicators for the major indices. We've been going sideways now for a couple of weeks but remain in a very positive seasonal time period. I do believe that this will eventually take us to the 20000 promised land. The light volume indicates that a lot of the players are gone for the holidays early. We'll need to see a return of better volume to hit the milestone. GE was off a few cents and the volume was light. Gold lost a couple bucks and the US dollar finished barely higher. The XAU and GDX were slightly lower. Volume was almost average. Mentally I'm feeling OK. Not much else to say with the long holiday weekend almost upon us. I would expect tomorrow to be a very light volume levitation as it should be pretty quiet. I am still looking at the SPY January calls but the premiums remain expanded due to the time factor. Perhaps I'll get a shot at them next week. I do not think that things are rolling over here but I've been wrong before. Asia was lower and Europe mixed overnight. However the moves were once again muted as there aren't any players to drive the volume. We'll finish out the week most likely quietly tomorrow.
Wednesday, December 21, 2016
A bump in the road on the way to Dow 20000 as the most watched index shed 32 points on very light volume. The advance/declines were slightly negative. The summation index is moving up. Not to worry here as we are in the very favorable seasonal time period. Plenty of economic data due tomorrow and that should propel us the promised land. That's my best guess for today. Not a lot of players here today and that may be the case for the rest of the year. Still overbought for the major stock indices and that hasn't changed for weeks. I am looking at the January SPY calls but cannot purchase them unless we see some downside to relieve the overbought condition. Doubtful. GE was off 1/8 and the volume was light. Gold was little changed and the US dollar was a bit lower. The XAU and GDX had very slight fractional losses on extremely light volume. Apparently nobody felt like buying or selling today. Mentally I'm feeling OK. Two days to go before a long holiday weekend and todays lack of activity tells me that perhaps traders have already packed it in for the week. This really isn't the kind of market that you like to trade as it is listless at the moment. Tomorrow could bring the awaited 20000 but it probably won't have much volume behind it. I'd prefer to see some weakness to get long but it isn't that time of year. Perhaps if we run to 20000, I can start to look the other way. But let's not get ahead of ourselves. More likely it is a time to be patient. Asia was mixed and Europe higher but the moves were slight either way. We'll watch the world overnight and see how things go tomorrow.
Tuesday, December 20, 2016
The march to Dow 20000 continues as it rose 91 points today on light volume. The advance/declines were almost 2 to 1 positive. The summation index is tending higher. Just 25 points away from that magic number and we should make it tomorrow or at least before the end of the week. Still overbought any way you look at it but it doesn't matter. What will happen when we get there? Probably just more buying as nobody is doing any selling with the promise of lower tax rates next year. The lighter volume as we go higher here is a concern but it is holiday time. It appears that any option trade to the upside will not happen at this rate. GE was up 1/3 and the volume remains good. Overbought here as well. Gold was flat on the futures session, with the US dollar up just a bit. The XAU and GDX had slight fractional moves up on light volume. Certainly no interest in buying gold or the gold shares here. Mentally I'm feeling OK. It looks like we're in the holiday period run up for stocks. No overhead resistance and the technical indicators remain overbought. I suppose we'll just have to see how high this thing can go. Usually higher than you think. No real pullback opportunities to get the SPY January calls. The high option premiums are also a factor in not just buying something to get in there. I'm keeping an eye on the daily RSI indicators for the RUT and S&P 500. If we do get higher highs in the indexes with lower RSI readings, that would be a negative divergence that I'm looking for. Hasn't happened yet and this is really a bullish time of year. I'd rather see some selling to get long. Asia was mixed and Europe higher in the overnight session. We'll see if they break out the Dow 20000 hats out on Wall street tomorrow.
Monday, December 19, 2016
It feels like the holidays already as the Dow gained 39 points on light volume. The advance/declines were positive. The summation index is starting to head back up from a short sideways position. We began the day higher and went sideways after that. Plenty of economic data on the 22nd and perhaps that will get us going. Still short term overbought for the main indices. I'd like to see some pullback to get the SPY January calls but that is wishful thinking. GE was up over 1/8 on OK volume. Gold was up a few bucks on the futures as the US dollar was higher. The XAU and GDX barely moved. Volume was light. I don't see any sustained upside for this group anytime soon. Mentally I'm feeling a bit tired, did not sleep well. Overbought has been the theme for weeks now as the rally has taken a multi-day breather. We're in a good seasonal time frame for stocks, so I'm not looking at the puts now. That will be something for next year. The extra week in the January option cycle keeps the premiums above average for now. There's no rush to trade at the moment. Volatility has shrunk and Dow 20000 before the end of the year still seems likely to me. Patience is the way to go for now. Asia was lower and Europe mixed overnight. We'll watch what happens in the after hours.
Friday, December 16, 2016
We had a one day reversal to the downside today as we opened higher and closed lower. The Dow only fell 8 points though on very heavy expiration related volume. The advance/declines were positive. The summation index has begun to move sideways. The overall market was weaker than the Dow. Still short term overbought for the big cap major stock indices. We are moving into a very favorable seasonal time frame for stocks, so I do not see any major decline coming up anytime soon. If we can at least get the technical indicators to get back to mid-range, perhaps there will be an opportunity to purchase some SPY January calls. Hasn't happened yet. GE had some positive news and was up 1/2 on very good volume. The precursor theory that I mentioned yesterday is now thrown out the window. Gold rose $5 as the US dollar was a bit weaker for a change. The XAU and GDX were mixed with very slight fractional moves. Volume was good. Mentally I'm feeling OK. Only two weeks left in 2016. I'd expect the rally to continue. Most normal trading will take place next week and then we're into holiday mode for the rest of the year. I do expect the Dow to get to 20000 before the end of the year. But right now it is a matter of waiting for an opportunity to get the SPY January calls as the next trade. There is not rush because this option cycle has 5 weeks instead of the normal 4. Also at the moment I do not see any positive or negative divergences on the technical indicators that I follow. But there will be plenty of time over the weekend to check on that. We once again saw the Dow have better relative performance on the week than the other major averages. As I've said before, this is generally a late stage of the rally occurrence in a longer time frame. We'll just have to see how far that it can go. Until we some negative divergences on the weekly charts, the trend remains up regardless. So we'll do the homework over the weekend and see where that leads us. For now it's Friday afternoon and time for a rest.
Thursday, December 15, 2016
Back up today as the Dow rose 59 points on good volume. The advance/declines were positive. The summation index stalled yesterday but should be heading back up today. The overall market acted better than the Dow. We were about 100 points higher than the close early on. However it is expiration week and there is plenty going on behind the scenes. That fact could skew things tomorrow as it will be a quarterly settlement as well. We're still pretty much short term overbought after a brief pause yesterday. I think that we've got a shot at 20000 next week or before the end of the year due to the extremely positive seasonality. I could be wrong. GE was off another 1/4 and the volume was good. If GE is again a precursor of things to come, then perhaps 20000 will have to wait. We'll see. Gold got crushed again as the futures were off by about 35 bucks. The US dollar continues to forge ahead to new highs for the year. There is nothing in the near term to stop the dollars climb. The XAU lost 3 1/3, while GDX dropped over 3/4. Volume was heavy again. There is no love for gold and the gold shares. That story has no ending at the moment. Mentally I'm feeling OK. I'm still considering the SPY January calls but at the rate things are going, there won't be a decent entry point. I may have to wait things out and then look to the other side of that trade. If a negative divergence would pop up here soon, perhaps the SPY puts would be in order. But it is hard to fight the rally that we've seen here lately. Money continues to flow into US stocks and that should continue in the beginning of the new year. Another thing to consider is the extra week during the January option cycle. Premiums remain high and there isn't a rush to put on a trade, all things considered. So I'll try to remain patient as usual and look for a good set up. Asia was mostly lower and Europe higher overnight. We'll close out the week tomorrow.
Wednesday, December 14, 2016
Dow 20000 was put on hold today as the most watched index fell 118 points on good volume. The advance/declines were 4 to 1 negative. This could put a stop to the summation index moving up. We can blame the Fed as it signaled more rate hikes to come following todays anticipated move up. I don't know if this means that the rally is over but perhaps a long overdue pause is beginning to shape up. One day doesn't make a trend though and we are moving into a very favorable seasonal period for stocks. I'm still looking out for the SPY January calls. GE was off 1/4 on heavy volume. Gold got pummeled by $13 on the futures. The US dollar broke out to a new recovery high for the year. The XAU lost 4 1/4, while GDX shed 1 1/8. Volume was heavy. Gold is oversold and staying there as the fundamental picture here remains bearish. Mentally I'm feeling OK. Everybody was looking for a rise in rates and the market sold off anyway. I don't think that it's the beginning of a substantial decline. But I've been wrong often enough before. Perhaps we can get to an oversold short term technical condition to try those January calls. We will simply have to wait and see how the next few days play out. Only a couple of days here for the December option cycle. There is plenty of time in my mind to look out to January because there is an extra week in the January option cycle. The short term technical indicators for the major indices have at least rolled over now. I do still think that the market will run this thing up to the 20000 level for the Dow between now and the January expiration. I'll simply be looking for an entry point for the SPY calls. Unless we completely unravel here and I don't expect that. The recent poor breadth was a warning for something like today. Whether or not it lasts is the next question. Europe was lower and Asia mixed last night. We'll keep an eye on the overnight developments.
Tuesday, December 13, 2016
Moving right along as the Dow gained 114 points on average volume. The advance/declines were positive. The summation index is moving up. There seems to be no stopping this market. The technical indicators have been thrown out the window. We are in a momentum based run higher. Overbought, staying there and I have written that statement for weeks. I don't know how long it lasts or what happens when it ends. My guess is that it won't be pretty but we can enjoy things for now. Inflation and retail sales data out tomorrow but all ears will be on the Fed statement. An interest rate rise is already baked into the cake. GE was off 1/8 and the volume was average. Gold was down $5 on the futures and the US dollar was a bit higher. The XAU and GDX had fractional gains. Volume there was a bit light. Mentally I'm feeling OK. No SPY December put trade for me as I cannot step in front of this freight train higher. I suppose that I'll look out to the January calls if we see some weakness. But at this rate, selling stocks seems to be a thing of the past. Interesting times. I can make a case for this being the 5th leg and final move higher from the lows of 2009 in a 1 through 5 event. But the last move up can on for quite some time. That's a guess as usual. Plus my count and interpretation of things could be wrong. In the near term you cannot fight the trend up. Perhaps we'll just keep moving higher into the expiration. However the weaker breadth moving up shouldn't be ignored. Eventually the severe overbought technical conditions will come into play. I just don't know when and will not try and guess the timing. We'll look for some type of negative divergence before attempting any kind of put trade or short. Europe and Asia were higher overnight. We'll see what the Fed has to say on Wednesday and if that propels the Dow to the 20000 level.
Monday, December 12, 2016
The Dow keeps rolling along as it added 39 points today on good volume. The advance/declines were almost 2 to 1 negative though. The summation index is still moving up. The overall market was weaker than the Dow. That's 2 days in a row of weak internals but the Dow moving up anyway. That kind of technical action is at least a warning that things could change. All the short term indicators remain overbought. I am looking at a short term trade for the SPY December puts but no valid set up has appeared. With only 4 days to go in the December option cycle, doing this trade would be fraught with risk. GE gained a few cents on average volume. Gold finished flat on the session but did come up off of the lows. The US dollar was weaker today. The XAU and GDX had very slight fractional gains on average volume. Mentally I'm feeling OK. We've got plenty of economic data out this week plus the Fed. Throw in option expiration and I think we should see some volatility. The major stock indices remain very overbought despite todays pause for most. The small stocks got hit today and they can be leaders. That said, any trade of the SPY puts would have to be a very short term deal. Not exactly my specialty. But I'll have to see how things go tomorrow. Perhaps the wiser idea would be to go out to the SPY January calls. If we did get some selling this week perhaps that will set up. For the moment the rally remains intact but the negative breadth is a warning sign. Europe and Asia were mixed overnight, though Hong Kong had a decent drop. We'll keep an eye on the overnight developments.
Friday, December 09, 2016
I suppose at this point we can just start calling this a melt-up. The Dow rose 142 points on good volume. The advance/declines were barely negative. The summation index is moving up. No explanation to this type of price action. Dow up 142 and the breadth is negative? Go figure. Extremely overbought in the near term and still moving higher? I appears that a run up into the expiration next Friday certainly isn't out of the question. Hard to attempt a trade when the technical indicators aren't working. I'm still thinking about the SPY December puts for a short term trade but there is no divergences yet. It's probably best to just let the December option cycle go by and look to the January calls. GE was up 1/4 on lighter volume. Gold dropped a dozen on the futures as the US dollar continues its climb. The XAU fell 2 1/2, while GDX shed 3/4. Volume was good. No positive signs for gold. Mentally I'm feeling OK. The rally is overextended by any stretch of the imagination or measurement. The trouble is that there is no telling just how far up this thing can go. It defies the normal technical indications to the upside just as it sometimes does on the downside. So it is hard to say when it will end. When the indicators stay overbought or oversold for days and weeks, they are of no use. It simply isn't the normal market environment. It's tough to trade. At this rate you could just buy some SPY calls and hope that it continues to go up. That really isn't a market strategy. What I will do over the weekend is go over the charts once again and try to figure something out. It may be dangerous to try and buy the SPY puts next week because that idea just isn't working for those who've tried recently. However I do think that at some point next week it will. It is a historically weak time period for the market and perhaps the Fed tightening will bring some sellers. They have been absent for weeks. But I'll have to peruse the charts first. For now it's Friday afternoon and time for a break.
Thursday, December 08, 2016
The beat goes on as the Dow added 65 points on good volume. The advance/declines were positive. The summation index continues higher. At this point you have to begin to wonder just how long this will continue. All the short term technical indicators are very overbought without any relief. Plus they have stayed that way for weeks. It's as if the indicators don't matter anymore. It is simply buy, buy, buy. Day after day. Perhaps we'll just keep running up into the option expiration but that isn't until next week. I'd like to try the SPY December puts for a short term trade but at this rate, there is no way to find the proper entry point. GE was off a few cents and the volume was average. Gold was flat on the futures despite a decent gain for the US dollar. The XAU and GDX were flat on very light volume. Mentally I'm feeling OK. The ECB extended its bond purchase program but at a lower rate. The stock market shrugged. It is a runaway freight train for US stocks at the moment. No sellers or overhead resistance. I certainly don't know how long this will last. The VIX has risen the past couple of days but stocks have surged anyway. Part of me wants to just get some SPY calls but there is no technical justification to do so right now. I can make a case for the SPY puts but only if we get some kind of negative divergence in the indicators. Hasn't happened yet. So patience is advised for now. Europe and Asia were generally higher overnight. We'll finish out the week tomorrow.
Wednesday, December 07, 2016
Powering to the upside as the Dow climbed 297 points on heavy volume. The advance/declines were a bit over 3 to 1 positive. The summation index is moving higher. Overbought, staying there and there is no overhead resistance. Sellers are gone. I did not get any of the SPY December calls but that idea was valid. I've asked myself how long can this go on and I guess the answer is longer than you think. I'm looking for the next trade and perhaps the SPY December puts might be in order for a short term trade on a valid signal. However the primary trend is up and it usually doesn't pay to go against that. GE was higher by 3/8 on average volume. Gold rose $5 on the futures as the US dollar was lower. The XAU and GDX had slight fractional gains on weak volume. The fundamentals remain bearish for gold. Mentally I'm feeling OK. Quite a run we've had since the election and it appears there is no stopping this bull move. We'll see profit taking at some point but I do not look for an extended downturn anytime soon. The latter half of December is generally bullish for stocks. I will look for a short term top next week and perhaps trade it if we get some kind of negative divergence. However it is possible that the more prudent trade would be to go out to the SPY January calls. I do somewhat lament not being able to profit from the current move. But at least the hypothesis of the market was correct and having a handle on things plays out to the positive in the long run. Seven days left in the December option cycle. I have to say after today that the prices are so overextended, some type of consolidation is necessary. A pause is due and sooner rather than later. I'll be looking for a short term signal to try the SPY December puts between now and expiration on the 16th. Europe and Asia were both higher again overnight as money pours into stocks around the world. We've got the ECB to deal with tomorrow but I don't expect any surprises. We'll keep an eye on the overnight action.
Tuesday, December 06, 2016
A drift higher today as the Dow was up 35 points on good volume. The advance/declines were better than 2 to 1 positive. The summation index is moving up. The overall market was stronger than the Dow again and that's bullish. We're going higher and there isn't anything that I can see on the horizon to derail this trend. There are no sellers for now. It does not appear that the SPY December call trade will happen. I can only remain patient and look for the next opportunity. Running out of time in the December option cycle and then we have the holidays to contend with. I suppose that I'll be trying to get long at some point. GE was up a few cents on pretty light volume. Still more overbought than oversold here. Gold was off $6 again on the futures as the US dollar bounced back. The XAU and GDX had slight fractional losses on extremely light volume. Mentally I'm feeling OK. Not much else to report as we continue to move up. The Dow and the TRAN have remained short term overbought for weeks. It's hard to trade against that trend. Major stock indices are moving above near term resistance, so there is no telling how long this will go on. It has already lasted much longer than normal. We never did get back to mid-range on the technical indicators for the S&P but we did have a slight decline and now have moved up off of that. All I can do is wait for some better downside before trying the SPY calls again. But it really doesn't look like that will occur. Perhaps there will be a short term trade to try around the Fed meeting but that's not until next week. Plus I'm not that good at the short term trades. So it remains a watch and wait time for me. Europe and Asia were higher overnight. We'll see what tomorrow brings.
Monday, December 05, 2016
There was a gap up at the open and we never looked back as the Dow gained 46 points on good volume. The advance/declines were better than 2 to 1 positive. This should move the summation index back up. The overall market was stronger than the Dow. There was no opportunity to purchase the SPY December calls. Only weakness in the coming days will save doing this idea but that is unlikely. The timing would have to be near perfect as well since we are running out of time in the December option cycle. My guess is that we will continue to move higher from here. The vote in Italy turned out to be a non event for the market. GE was off 1/4 and the volume was light. Gold was off about $6 on the futures despite some weakness in the US dollar. The XAU added 1/2, while GDX was flat. Volume was to the light side. Mentally I'm feeling OK. The only way to try the SPY December calls from here would to see some decline tomorrow or Wednesday. The timing would have to be spot on. We are in the zone where the time premium gets sucked out of the options at a significant rate. That is hard to overcome if the entry isn't good. You simply don't have time to let the trade work itself out. I'm still a believer in higher prices going forward. So we are simply going to have to wait and see if the next couple of sessions play out in our favor. If not, it's on to the next thing, whatever that trade may be. Asia was lower and Europe higher overnight. There isn't a lot of economic data to trade off of this week. We'll stick with the technicals and keep an eye on things tonight.
Friday, December 02, 2016
It was kind of a wait and see type of market today despite the employment report. The Dow dropped 21 points on average volume. The advance/declines were positive and the overall market was a bit stronger than the Dow. The summation index is moving sideways for now. The jobs report was pretty much in line with expectations and we got a small rally from that. But there's really no conviction either way for stocks at the moment. I think that we're waiting for the referendum vote out of Italy on Sunday before we get going anywhere. I did place an order for the SPY December calls but it wasn't filled. I'll try again on Monday if I get the chance. GE was off a nickel and the volume was light. Gold found some buyers on Italy angst and the futures rose almost ten bucks on the futures. The US dollar was a bit lower. The XAU went up 3 points, while GDX added 3/4. Volume was good. Mentally I'm feeling a bit tired. I still think that we go higher from here and will be once again look to buy weakness on Monday. The S&P 500 has come off of its highs and is short term oversold on one of my indicators. We aren't even mid-range yet on most of the technical indicators here but if we get an Italy led sell off on Monday we'll be there. That would be the ideal scenario for my case to purchase the SPY December calls. Weakness Monday morning would be all I need to see. However we could simply rally at the open as well. Like I said before it is a wait and see game at this point. I do still like the idea that price and volume lead the way. I'm looking for new all time highs again before the year is out for the S&P. All there is to do now is go over the charts this weekend, monitor the vote in Italy and the market reaction on Sunday night. For now it's Friday afternoon in December and time for a break.
Thursday, December 01, 2016
A mixed bag once again as the Dow rose 68 points on very heavy volume to begin the month of December. The advance/declines were negative and the overall market was much weaker than the Dow. This is a trend that is not positive. The summation index may start to move sideways after todays price action. The big caps leading the way is not the most bullish of scenarios. I'm still looking at the SPY December calls though as we are getting to mid-range on the short term indicators. If the rally is for real and I do believe that it is, then buying any weakness tomorrow should work out for that trade. That is my game plan right here. If we see weakness after the employment report, I'll be purchasing the calls. GE was up almost 2/3 on good volume. There is now a bullish engulfing pattern on the GE daily candlestick chart. Gold was flat on the session but did come up off of its lows. The US dollar fell for a change today. The XAU and GDX had fractional losses on average volume. Mentally I'm feeling a bit tired. The recent drop this week in the small caps could prove ominous if it continues. However I still think that a move back to the 2180 level in the S&P 500 would be an opportunity to get long for the December option cycle. Perhaps my thinking is wrong here but that is the trade that I'm looking at. Of course the market could just start to head higher at the open and that would probably doom the trade. So we'll have to keep an eye on what happens tomorrow morning. Asia was higher and Europe lower overnight. Interest rates have risen dramatically since the election and the stock market hasn't really paid much attention. At some point it will and then there will be trouble for the bulls. It has been said that the money from selling bonds is going into stocks. Some of that is probably true but when only a few Dow stocks are going up vs. the rest of the market, there isn't the wholesale buying that you should see from such an occurrence. I don't normally talk about interest rates but they do effect the stock market at times. Sooner or in this case later, higher rates will take their toll on the market. They're having little effect at the moment. Asia was higher and Europe lower overnight. We'll see what happens with the jobs numbers tomorrow and the markets reaction to them.