Wednesday, March 29, 2017
A mixed bag today as the Dow lost 42 points on light volume. The advance/declines were almost 2 to 1 positive. The overall market was stronger than the Dow with the small stocks leading the way. The summation index is now moving up. All signs point to higher prices coming for stocks. Weakness can be bought in my opinion and I'll be looking for some SPY April calls. I did sell the SPY weekly call options that I purchased yesterday. With only 2 days to go for these calls, I took the profit that I had. It was 150% but I could have done a little better if I had just sold them at the right point yesterday. Once again I 've got to emphasize the capital appreciation of option trading vs. trading stocks. Owning stocks for the long haul is a solid choice. But when it coming to trading, options should be the vehicle of choice. You tie up less money for quicker gains with options than by trading stocks. Today was mostly a sideways affair, so I'll consider myself lucky to get out when I did. GE was up a few cents and the volume a bit lighter. Gold was off $3 on the futures and the US dollar gained a bit of ground. The XAU and GDX had slight fractional gains on very light volume. Mentally I'm feeling a bit tired, could have slept better. I gave the SPY weekly options a try and it worked out this time. But I certainly don't think that this is a strategy that I'll use too often. Things won't always line up like they just did. But it will be something to consider in the future. We got a bounce off the short term oversold technical indicators for the S&P. Those indicators are now mid-range. I do think that we're going to go higher from here but there isn't a solid signal right now. The S&P 500 did manage to hold and bounce off of its 50 day moving average. The better support is at 2300 but the way things have turned around it appears that we're not headed down there. I could be wrong but there is no indication to me that's about to occur. There's still plenty of time in the April option cycle for another trade to line up. That's what I'll be looking for now. Asia was mixed and Europe generally higher overnight. We'll see what tomorrow brings.