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Wednesday, February 15, 2017

Overbought to the extreme at this point as the Dow climbed 107 points on good volume.  The advance/declines were positive.  The summation index continues higher.  The positive expiration week bias is in full effect and there is still no overhead resistance as we continue to hit new all time highs day after day.  My SPY February puts are losers and I'll be lucky to get out tomorrow without any further damage.  This was a trade that in retrospect was best let undone.  Not a lot of money but not a low risk trade either.  We are powering ahead like a freight train and you should not try and step in front of that.  There will be better opportunities down the road.  Selling the SPY calls too early was my biggest mistake though.  GE was up a few cents on lighter volume.  Gold rose $8 on the futures as the US dollar was lower.  The XAU was off 7/8, with GDX unchanged.  Volume was very light.  Not a positive for gold to rise and the gold shares lag.  Mentally I'm feeling a bit tired.  The market continues to soar as the shorts get squeezed and there are no sellers.  This should continue into Friday I expect.  After that I would think that things would settle down as the breadth on the rise hasn't been good at all.  You cannot argue with price though.  Taking a losing trade here will not help my confidence level but the trading will go on.  Perhaps I should simply forget about the short term trades since they really are not what I'm successful with.  I think that my wrong tactics on the SPY February call trade contributed to me trying this other SPY put trade.  The battle in this game seems to always be with oneself.  As I've said before the markets can be irrational longer than most can remain solvent.  2 days left in the February option cycle and a long weekend on the way as well.  Europe and Asia were higher overnight.  However none can match the gains in the US stock market lately.  We'll probably continue the overbought ride higher tomorrow.

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