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.