Tuesday, January 17, 2017
Weaker to start the shortened trading week as the Dow fell 59 points on about average volume. The advance/declines were negative. The summation index is trending upwards but it has a sideways tone to it. Small stocks were relatively weaker and that is a negative for the bulls. We did come back in the final hour and that is a plus. The market was down over 100 at one point. I'm still a believer based on my work that we'll be higher in the next couple of sessions. It may not be enough to save my SPY January calls though as they are back solidly in the red. I've obviously held this trade for too long. Trump said something about the US dollar today and that sent markets lower. It appears that he may become a market wild card, one way or the other. That is something that technical analysis won't help. GE was off about a dime on average volume. Gold was up a dozen on the futures as the US dollar got whacked on Trumps comments. The XAU added 2 points, while GDX rose about 2/3. Volume was good. We'll see how long this lasts. Mentally I'm feeling OK. I thought if we could get through today without too much damage my SPY January call trade would work out. The time premium is really getting sucked out here now as there are only 3 days to go in the January option cycle. I'm still looking at selling out on Thursday but we may not get high enough to make a difference. I do not really want to hold on until Trumps speech on Friday. So we'll see. Lots of bearishness in the media on the stock market today and that is a plus for the bullish cause. There is some economic data due in the next couple of days and the Feds beige book release tomorrow. The short term technical indicators for the S&P 500 remain overbought and the reverse head and shoulders pattern on a daily basis is still intact for now. Asia was mixed and Europe lower overnight. We'll see what tomorrow brings.