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Friday, February 24, 2017

The Dow winning streak remains alive but barely.  We opened with a gap lower and thanks to a final hour rally the most watched index managed a gain of 11 points on good volume.  The advance/declines were about even.  The summation index is still trending higher but not with any conviction.  The overall market was stronger than the Dow though.  We still remain overbought but that hasn't mattered for weeks.  I'm still in the camp that is calling for some type of pause here.  There's no overhead resistance but when you just go straight up in a line it never ends well.  I'm still looking at the SPY March puts.  GE was up over 1/8 and is overbought on some of the short term technical indicators.  Gold rose $7 on the futures and the US dollar was a bit higher as well.  The XAU shed a point, while GDX lost 1/4.  Volume was light.  Getting to oversold for the gold shares but not there yet.  Mentally I'm feeling OK.  Just how high will we go here is the question and I certainly don't have the answer.  It has been quite the rally since the election and we are in the leg up that began at the beginning of February.  I'm still trying to remain patient for some kind of signal.  A negative divergence would be the optimum one for me.  We did get a signal for a decent price move in the next couple of days from the McClellan oscillator yesterday but it doesn't specify the direction.  Plenty of time left in the March option cycle with 3 weeks to go.  End of the month next week and plenty of economic data as well.  Plus a Trump speech to Congress.  So there will be plenty of reasons for the markets to move.  I'm going to have to look things over again the weekend and try to come up with some kind of game plan.  Plenty to ponder.  Europe and Asia were both lower overnight.  It's Friday afternoon and time for a break.

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