Thursday, February 23, 2017
The rally lives on as the Dow rose 34 points on good volume. The advance/declines were positive. The summation index is moving higher. The broken record of new high after new high for the Dow continues. Overbought now for weeks but no decline in sight. I'm not really sure what to say here. I would like to think that we are closer to the top than to a bottom. And I do think that. But trying to guess the top is a losers game. I'm going to wait for some type of negative divergence and go from there. Hasn't happened yet. We did get weakness in the TRAN and the smaller stocks today. So perhaps a top is near. GE was down a few cents but did come off of its lows. Volume was average. Gold found a bid as the futures rose $15. The US dollar was weaker. The XAU and GDX were little changed. It isn't a plus when gold rallies and the gold shares do not follow. Mentally I'm feeling OK. The Dow has been up ten days in a row. This isn't your normal market activity. At this rate we'll tack on 1000 points in less than a month. So I would certainly be careful about getting long here and really would not consider it. I think the next trade for me will be the SPY March puts. Perhaps we'll see a blow off top and then I would feel confident about getting short. But until we see some kind of signal, the sidelines are the place for me at the moment. Europe and Asia were lower overnight but not by much. We'll close out the week tomorrow.