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.