Wednesday, April 26, 2017
A one day reversal to the downside as we opened higher and closed lower. Perhaps it was a sell on the news of the Trump tax plan. The plan is actually only an outline and we don't really know what will pass in Congress to become law. The Dow fell 21 points on heavy volume. The advance/declines were positive. The summation index continues higher. Certainly a pause is due after climbing 450 points in just two sessions. Not to mention that we have arrived at the overhead resistance of the previous all time highs for the Dow and the S&P. So some hesitation here isn't the end of the world. I did place an open order for some SPY May calls and I'm leaving it in overnight. It's my belief that this rally has plenty more to go on the upside and that new all time highs are coming. GE lost about 20 cents on heavy volume. GE is oversold on the short term technical indicators but hasn't participated in the rally since the beginning of December. Gold was slightly higher as was the US dollar. The XAU was up almost a point, while GDX barely moved. Volume was good. The gold shares did come off of the lows for the session. Mentally I'm feeling OK. The VIX has dropped here as well and I do believe that will help support higher prices going forward. The small stocks continue to be leaders and that is a positive as well. Perhaps some backing and filling here and then a move to new all time highs. I will try and get some SPY May calls before we break out but the premiums are still high. Timing of this trade will be important once again as usual. I do think that this is one of those times where it will pay to chase the move higher. I could be wrong but I don't think so. We're short term overbought but will probably stay that way for a while as we move higher. Europe and Asia were both generally higher overnight. We'll keep an eye on the news tonight.