Wednesday, May 31, 2017
A bit more weakness to end the month as the Dow lost 20 points on heavy last day of the month volume. The advance/declines were about even. The summation index is trending sideways. The market started to sell off today but then came back. I'm leaving in my open order for the SPY June puts but I've adjusted it to a lower price. I do expect that we'll see some upside from here that could take the S&P 500 to new all time highs. If the volume remains light, that will be the opportunity to try this trade. If the volume picks up, then we are going higher than I anticipate. We are still short term overbought for the S&P. The Fed minutes came and went. I'd expect tomorrow to be a quiet session ahead of the jobs numbers on Friday. Perhaps if we get a rally out of that, it will give the chance for the SPY June put trade. That's a lot of ifs and we'll have to see how it all plays out. GE was up a couple cents and the volume remains pretty good. Gold rose $11 on the futures as the US dollar was lower again. Do the currency traders know something that we don't? The XAU and GDX were basically flat on light volume. The fact that gold continues to rise and the gold shares do not is not a positive sign in my opinion for the continued rise of the precious metal. I could be wrong. Mentally I'm feeling OK. We got a signal for weakness and we have seen some in the past couple of days. But it was not the kind of move lower that would show a lot of profit. So I am hoping that we'll see another light volume rally here to new highs and that will be the time to get short. That said, we know that the market rarely cooperates with our wishes. We'll be medium term overbought after tomorrow as well. So it is possible that things will line up in favor of trying the SPY puts. Europe and Asia were mixed overnight. We'll keep an eye on things overnight and see how the month of June begins tomorrow.
Tuesday, May 30, 2017
Lower to begin the week as the Dow shed 50 points on light volume. The advance/declines were negative. This should move the summation index sideways. I put my SPY June put trade in again and I'm leaving it overnight. I do expect one more run up here and that will hopefully get my order filled. I'm certainly not committed to this trade for an extended time period but I do think it can work in the short term. But only if the above scenario of a quick rise materializes. We'll close out the month of May tomorrow followed by the jobs report on Friday. The Dow was the relative leader lower today so perhaps we'll get the short term rise that I'm looking for. GE was off about a dime on good volume. There's a potential double bottom being put in here on the daily chart. Gold fell about $5 on the futures and the US dollar was lower as well. The XAU lost over 1 1/8, while GDX declined 1/3. Volume was light. The lower dollar didn't help gold and that isn't a positive for the precious metal. Mentally I'm feeling OK. A shortened trading week to deal with and today looks like many players decided to take the day off. We were short term overbought for the major stock indices and today slightly relieved those conditions. Volume has been pretty light lately and that is another reason not to trust the new all time highs here. I would like to get this trade in but there is also the possibility that we simply remain overbought and continue higher. As usual anything can happen in this game. But I do think that getting the puts here has a chance to work so we'll have to see what the market has to say tomorrow. If we simply head lower from here, it will be too late for this idea. Asia was mixed with slight moves overnight, while Europe was lower. We'll keep an eye on the overnight trading.
Friday, May 26, 2017
It was one of those pre-holiday market days as the Dow lost 2 points on light volume. The advance/declines were barely positive. The summation index is still moving up. The trading range was thin for the day with no real movement. It was as if the summer doldrums arrived early. There's a chance we could see this again on Tuesday but we'll wait and see. I canceled my open order for the SPY June puts and will reconsider this idea over the weekend. Although I am still committed to the trade for now. Short term overbought, staying that way and that is the hallmark of a bull move. GE lost a few cents on average volume. Gold rose $10 on the futures and the US dollar was up a bit as well. The XAU and GDX had slight fractional gains on light volume. Mentally I'm feeling OK. Off to a 3 day weekend for traders. We'll come back next week to close out the month and view the employment report. June isn't the most bullish month in the calendar but predicting a drop in this market seems impossible. That said, I do think that a some point next week trying the SPY June puts will be worth it. I could be wrong. I'll have an extra day to try and figure out if that strategy is viable. But first I think that taking a day or two off from the game isn't a bad idea. I will get around to checking the charts as usual in the next few days. For now it's Friday afternoon and time for a break.
Thursday, May 25, 2017
The rally continues as the Dow climbed 70 points on average volume. The advance/declines were slightly positive. The summation index is still moving up. The overall market was stronger than the Dow. We've broken through the resistance on the S&P 500. There appears to be nowhere to go but up. I did place an order for the SPY June puts today but canceled it later on. However I also decided to leave in an open order overnight for the SPY June puts as well. We're short term overbought here but could stay that way because we are in rally mode. I do however, want to attempt this trade. The overnight order will only be filled if we get a decent rally tomorrow morning. Now this could absolutely be the wrong strategy here but I think it is worth a shot. GE dropped another 1/3 and the volume was good. GE certainly has not participated in the rally since the election. Gold was up a couple bucks and the US dollar was a bit higher as well. The XAU and GDX had fractional losses on light volume. Mentally I'm feeling OK. We'll get the GDP revision tomorrow along with durable goods. It's a Friday before a holiday weekend. I'm thinking that the players will be leaving early. We do have some major stock indices at new all time highs with some potential negative RSI divergences. They are only potential though. I'm not sure that the SPY June put idea is the best thing to do here but I will be sure to put the stop loss order in if it gets filled. Early next week could be another time to try this trade if it doesn't get filled tomorrow. I do have a sell signal on one of my short term indicators. However these signals can be unreliable in up trends. RUT is under performing here and that could be a clue. It did lead the way up but has since stalled. Perhaps I'm only looking at the indicators that would make the put trade seem feasible. Certainly a case can be made that we'll simply continue to rally from here. The theory that we sold out last Wednesday on the Trump headline has proven to be valid so far. So maybe my idea here is wrong. We'll see what happens tomorrow and go from there. Asia was higher and Europe mixed overnight. We'll finish up the trading week tomorrow.
Wednesday, May 24, 2017
It's as if last Wednesday never happened as the Dow gained 74 points on light volume. The advance/declines were positive. The summation index is heading up. The S&P 500 closed at a record high. The small stocks are acting OK but the RUT is lagging. We're back to short term overbought for the major stock indices. I did place an order for the SPY June puts but it wasn't filled. I may be early on this trade but could try again tomorrow. The volume here is light, so I do not really trust the rise. However if we break out tomorrow with good volume, the rally could be on. GE continues to struggle as it lost almost 1/2 today on heavy volume. Gold did find a bid after the Fed minutes but the futures only rose a couple bucks. The US dollar was lower. The XAU gained a point and GDX added 1/3. Volume was average. Mentally I'm feeling OK. I'm looking for the next trade here but certainly there is no rush. Both short and medium term overbought but in bull markets we simply stay that way. We've also got a holiday week coming up so I may want to let that go by as well. That said, if I see another light volume levitation tomorrow I may do the trade. We're at the top of the sideways channel that's 3 1/2 months old. The VIX has now calmed back down and is almost back under 10 again. It's also possible that I want to put on a trade since I haven't done one in so long. That must be guarded against at all costs. I have my reasons for trying the SPY puts here but I could be wrong as well. The way the market came right back after dropping hard last week tells me there are still buyers out there. I'll reconsider things overnight and go from there. Asia was higher and Europe lower overnight but both had small moves. We'll keep an eye on what transpires in overseas trading tonight.
Tuesday, May 23, 2017
Up another 43 points today for the Dow on light volume. The advance/declines were positive. The summation index is heading back up but not with any conviction just yet. Approaching new all time highs again for some of the major stock indices. However the volume here is light and that is a concern. The small stocks were under performers again and that is another problem. I've been bullish for quite a while but that is beginning to change. If we do continue higher for the next couple of days on light volume, I'll be looking for the SPY June puts. GE was up a dime and the volume was light. Gold was lower as the US dollar got a bounce. The precious metal futures lost $10. The XAU shed 2 1/3, while GDX lost 1/2. Volume was average. I'm still considering a gold share call trade with an extended time period in the coming weeks. However for now I have to wait for an oversold condition and we are not close to that yet. Perhaps in June. Mentally I'm feeling OK. Nothing but higher prices since the Trump debacle of last week. It is appearing to be a one day wonder but the upside volume seems to be drying up to me. Who knows? Maybe we'll get the high volume breakout that I've been looking for. The problem for me is I do not see where that would come from. We've got the Fed minutes tomorrow and the GDP revision on Friday. Will that be enough to move us forward in a big way? I don't think so. The S&P 500 has been sideways since mid-February. It looks like a distribution top to me now, since it has taken so long to form and really nothing has happened to break prices higher. The market has ignored a lot of bad news. But unless price bursts higher soon, I'll be looking to get some puts. June is not the kindest month for stocks either. Asia was mixed and Europe generally higher overnight despite yet another terrorist attack in England. We'll see what tomorrow brings.
Monday, May 22, 2017
The bounce from last Wednesdays debacle continues as the Dow gained 90 points on light volume. The advance/declines were 2 to 1 positive. This should turn the summation index back up. The overall market was stronger than the Dow and that's a plus. The small stocks acted better too. I looked for some ideas all weekend but came up empty. I'm waiting for the next technical signal now and will trade it either way. If we approach the resistance again on light volume, I'll look towards the SPY June puts. If we pull back from here and get oversold, I'll try the SPY June calls. Patience is the idea for now and it isn't a bad one since we just rolled into the June option cycle. GE was up 1/8 and the volume was light. Gold rose six bucks on the futures as the US dollar was lower. The XAU gained a point and GDX added 1/3. Volume was light. I'm also considering some gold share calls in the coming weeks but with the expiration in the fall. Septembers or Octobers are what I'm looking at if they get oversold in the coming weeks. Just a thought for now. Mentally I'm feeling OK. Volume continues to lighten as we move higher and that is not a positive. However the price action since the huge one day drop is. Perhaps if we back off from here and retest the low it will give me a chance to get some SPY June calls. But even that scenario could go wrong if we don't get oversold as well. I will say that we've had plenty of chances to break out higher through the overhead resistance and continue to fail. That's not a good sign. A breakout with volume will be the clue to buy some SPY calls because there won't be any overhead resistance. But we haven't been able to get there yet. Asia was higher and Europe generally lower in last nights trade. We'll keep an eye on the overnight developments.
Friday, May 19, 2017
Still moving up but we did finish off of the highs for the day. The Dow gained 141 points on good volume. The advance/declines were 3 to 1 positive. That should stop the decline in the summation index. The small stocks are not out performing here and that is a concern. They are however, oversold. Not sure what we've seen this week as I thought that we have a distribution top in place after Wednesdays debacle. But when the market goes down it simply goes down. It doesn't really rally like it has in the past two days. The problem there is that it simply could be expiration related and not the start of a new trend higher. So many questions and so few answers. GE finally came to life. It gained more than 1/2 on good volume. Gold was up a couple bucks on the futures which was disappointing considering the drop today in the US dollar. The XAU and GDX had fractional gains on light volume. Mentally I'm feeling OK. Quite a volatile weeks for stocks as we were shaken out of complacency, courtesy of Trump. Perhaps the worst is over for now but you never know when another surprise in the headlines might come up. Some will argue that it's always the case but I do think the odds go up when you've got a guy like Trump to deal with. The market did ignore most of the noise up until this week. As always, the market knows more than you and me. Sticking with the technical indicators for the S&P, they've already turned back up. One of the problems now is that by rolling into the June option cycle the premiums are already pretty high. Add in the recent volatility and prices are more than they normally would be. So any trade here had better be right because volatility premium will be coming out of the options as we move forward. I'm now more inclined to believe that Wednesday was an aberration. However I will spend the weekend trying to determine where we go from here and how to trade it. There's no rush to trade. I do think that the lack of small stock leadership puts a lid on any upside going out from here. I could be wrong and I'll have a couple of days to assess the situation before moving ahead. There's plenty of work to do. For now it's Friday afternoon and time for a rest.
Thursday, May 18, 2017
Got a bounce today as the Dow came back 56 points on good volume. The advance/declines were barely positive. The summation index is heading lower. Not the greatest move up in the world but at least we've stopped going down. There's probably more to go on the downside but how much is the question. Yesterday certainly got the attention of all the players so we'll see where we go from here. Getting short term oversold for the S&P 500 but not there yet. I think the best thing to do now is let Friday pass and try and figure out what to do over the weekend. That way you can take the time to go over possible scenarios and be ready for next week. GE was up a few cents on heavy volume. If GE is putting in a bottom here, that would be a positive for the overall picture in my view. Gold was off over ten bucks on the futures as the US dollar had a bounce as well. The XAU lost 2 1/4, while GDX shed 3/4. Volume was good. That's probably it for the recent bounce in gold. Mentally I'm feeling OK. The shock from yesterday is wearing off but we are still in an event driven theme for the market until this calms down. The thing with Trump is that he never really does calm down but the market usually doesn't pay attention. So we'll have to see if all the fuss is for real or not. I'm still thinking that we just had a distribution top put in and it will be a while before we attempt new all time highs again. But maybe I'm wrong. Maybe this is the last of the sellers getting out of the way before we get a good volume break out to the upside. There's always two sides to the story but I'm leaning towards the negative one at this point. So we'll see. Europe and Asia were both lower overnight. We'll close out the week tomorrow.
Wednesday, May 17, 2017
Well that should be it for new all time highs for a while as the Dow got clobbered today on Trump drama. The most watched index fell 372 points on good volume. The advance/declines were almost 4 to 1 negative. The summation index will be heading down. We're now at the mercy of headline risk and that is a tough environment to trade. I'm not sure how low we'll go here but this probably isn't just a one day wonder. I could be wrong. It now appears that we just had a multi-month distribution and are falling away from that. If so, support looks to come in for the S&P at 2330 and then 2280. Trump has been in the headlines since the election but this is the first time he's had a real negative influence. GE lost almost 2/3 on heavy volume. Perhaps GE had the right idea all along. Look for at least some support at 26 which is the 200 day moving average. Gold found a bid on safe haven activity. The precious metal futures rose $24. The dollar continues to fall due to the uncertainty now in Washington. The XAU and GDX had fractional gains on OK volume but the gains were not that great considering the circumstances. Mentally I'm feeling OK. Volatility returned today with a vengeance. How long this lasts is unknown. It should provide some trading opportunities though. With only a couple of days left in the May option cycle, looking out to June makes sense. If and when we get to support, I'll take a look at the June SPY calls. But it really is too early to tell what will happen from here. The VIX is overbought here but not extremely so. Most of the short term indicators for the major stock indices have rolled over but are not oversold. That tells me that we probably have more downside to go. Tomorrow should be interesting as well. We practically closed on the low for today. I'd advise to simply sit back and watch for the rest of this week. Europe and Asia were lower overnight but not as much as the US. We'll see how they fare overnight.
Tuesday, May 16, 2017
Back to hanging around as the Dow lost 2 points on average volume. The advance/declines were negative. The summation index is heading sideways. The NASDAQ continues to out perform as it remains very overbought. I'm still looking for higher prices here in the short term. What we really need to see is a high volume breakout one way or the other to get things going. With the small stocks doing so well there really isn't a reason to be bearish here. The economy seems to be plugging along and the market with it. GE lost another 1/8 and the volume was average. Gold was up $7 on the futures as the US dollar dropped again. The XAU and GDX had slight fractional gains on very light volume. Still no love for the gold shares. Mentally I'm feeling OK. It doesn't appear as though I'll be getting in a trade for the May option cycle. We'll have to look out to June. There really isn't a clear signal at the moment as the SPY call opportunity has passed for this week in my opinion. So patience will be the strategy for the time being. I certainly don't want to press the issue or start to get into a guessing game. So the sidelines are where I'll be for now. Europe and Asia were generally higher overnight but no big moves. We'll see what tomorrow brings.
Monday, May 15, 2017
We had an upside gap at the open and the Dow finished with a gain of 85 points on average volume. The advance/declines were 3 to 1 positive. This should turn the summation index back around but not out of the sideways pattern. There was no weakness in the morning to take the SPY May call position and it is probably too late now. I'll have to chalk it up to just another missed opportunity. With only 4 days to go in the May option cycle, any trade attempted now would have a ton of risk. I'm looking for the SPY to hit the 241 level at least. We hit a new all time high for the S&P today and there is no overhead resistance. GE was off almost a dime on good volume. No doubt that GE is not participating in the move higher for the overall market any way you look at it. Gold was up a couple bucks as the US dollar was lower. The XAU and GDX had very slight fractional gains on light volume. Mentally I'm feeling OK. So where do we go from here? I'm still convinced that we'll be moving a bit higher from here but without expanding volume any rise will be sluggish. If we get a high volume breakout I would suggest jumping aboard. But we haven't seen that yet. We do have the positive expiration bias in our favor this week if you're bullish. I suppose I'll have to start looking out to the June SPY options. Not exactly sure which way to go there yet. However with the small stocks extremely overbought and RUT lagging the puts could be the way to go. But as always, waiting for a decent technical signal will be key. Europe and Asia were both higher in last nights trade. We'll keep an eye on things tonight but it appears that there will not be any trades for me this week.
Friday, May 12, 2017
Just another day in a listless market as the Dow fell 22 points on light volume. The advance/declines were negative. The summation index is barely moving lower. The NASDAQ was up again today in the usual mixed market that we have been held hostage to for the past three weeks. The short term technical indicators have rolled over for the S&P. That's one reason not to be in a hurry to get the SPY calls here. That said, I do believe that any weakness can be bought on Monday for a short term trade. Of course it will have to short term since there is only a week left in the May option cycle. I canceled my open order for the calls but will probably be putting it back on Monday morning. GE got crushed today on a downgrade and was off almost 2/3 on very heavy volume. If GE is a precursor for the overall market then lower prices loom. Gold was up a few bucks on the futures and the US dollar was lower. The XAU rose 1 1/8, while GDX added 1/3. Volume was light. The gold shares had a good week but the volume just wasn't there. Which means we'll probably be heading lower going forward. Mentally I'm feeling OK. Low volatility, mixed markets and no real price movement despite the statistics coming out. This is a confusing set of circumstances for me. I'm not even sure if it is worth putting on a trade next week. I do still favor the SPY May calls for the short term but it won't be an easy trade to do. We've stalled for so long at the level to break out to new highs that it may be getting too late. We are either getting all the selling done before a breakout or the final lemmings are being sucked in before we drop. Expiration week usually has a positive bias so the bulls will have that going in their favor. One of my short term indicators is in the buy signal range as well. I'll probably try the call trade if we're lower on Monday but I'll also go over everything this weekend to see if it is worth the risk. Once again, the timing in and out will have to be spot on. Asia was generally lower and Europe higher overnight. It's Friday afternoon and time for a break.
Thursday, May 11, 2017
A sell off and a comeback today as the Dow fell 23 points on good volume again. The advance/declines were negative. The summation index is still trending sideways. We were off almost 150 in the morning but buyers stepped in. My open order for the SPY May calls wasn't filled but it did get close. I've adjusted the order for overnight but it's possible that the opportunity is gone. The Dow did bounce off of its 50 day moving average. The market has repeatedly tried to sell off but has made a comeback each time. Sooner or later this pattern won't hold up but it has so far. GE was up over 1/8 on average volume. If we could put in a bottom here it would be overall constructive in my opinion. Gold was up 5 bucks on the futures and the US dollar was little changed. The XAU rose 2 1/3, while GDX gained almost 1/2. Volume was better. I don't think that this is the start of a new trend but what do I know? Mentally I'm feeling OK. Running out of time in the May option cycle. However I'm still willing to attempt a SPY May call trade under the right circumstances. We'll get more inflation data and retail sales data tomorrow morning. If we see another sell off, there's a chance that my open order could get filled. I'm also looking for the usual positive expiration week bias to show up next week. The short term technical indicators for the S&P 500 have rolled over and that may be a concern. The price action in the next couple of days will tell us if it's for real or not. I don't believe that it is just yet. The small caps continue to hold up well and out perform the overall market. As long as that's the case I can't get too bearish. But that could all change at any time. For now however, I'm going to continue to look for higher prices. Asia was higher and Europe lower last night. We'll finish up the week tomorrow.
Wednesday, May 10, 2017
More of the same here for the market as the Dow fell 32 points on good volume. The advance/declines were almost 2 to 1 positive. The overall market was stronger than the Dow. The summation index is trending sideways. Basically moving sideways in the S&P 500 for 2 1/2 weeks. Indicators remain overbought and staying that way. I did place an overnight order for some SPY May calls but it wasn't filled. I'm leaving the order in overnight. Sooner or later we'll get some kind of breakout. The question remains, in which direction. I'm still looking for an upside resolution. GE was off 1/4 on what passes now for average volume here. We're still oversold here. Gold was up a couple bucks on the futures, while the US dollar was little changed. The XAU rose 1 1/3 and GDX gained 3/8. Volume was light. Mentally I'm feeling OK. Running out of time in the May option cycle. The timing of any trade from here on out would have to be impeccable. It can be done but you've got to have the market cooperate as well. If we get some pullback, I'd be willing to go the other way with the calls. If we start to rally, there is not overhead resistance so purchasing some puts would be even riskier that usual. Not to mention the running out of time factor. Volatility seems to have disappeared and the lack of price movement is frustrating. So I do think that the prudent course of action remains to wait for a decent set up and go from there if we get one. If we don't, I'll simply have to wait for the June option cycle. Europe and Asia were generally higher overnight. We'll keep an eye on tonights developments.
Tuesday, May 09, 2017
Another day of not much but there was a little volatility in the final hour. The Dow fell 36 points on good volume. The advance/declines were negative. The summation index is basically moving sideways. Another down day would change that. Nothing new to report. The short term technical indicators for the major stock averages remain overbought. I still favor the SPY May calls between now and expiration. If we drift lower in the next couple of days, I'll give that trade a shot. Until that happens it's just a wait and see attitude. GE was off 1/8 and the volume was light. Oversold here for GE. Gold fell $5 on the futures as the US dollar rose again. The XAU and GDX had very slight fractional losses on light volume. The gold shares haven't followed gold lower here in the past couple of days. Perhaps things will turn around soon. But that's a guess as usual. Mentally I'm feeling OK. The overall market was stronger than the Dow today and that's a plus. But the overall lack of movement in the major averages is not helping the trading. It's great if you're a writer of options but not if you are looking for gains on directional movement. I'm going to try not to press the issue here but I would still like to do a trade if the conditions set up properly. No guarantees that will happen. Asia was mixed and Europe higher in last nights trade. We'll see what tomorrow brings.
Monday, May 08, 2017
Another day of hanging around as the Dow rose 5 points on average volume. The advance/declines were negative. The summation index is moving sideways. The market tried to sell off today but could not. The RUT is under performing here and that is a concern. The TRAN lagged as well. However I would still like to try the SPY May calls if we get some kind of pullback this week. The short term technical indicators for the major stock averages remain overbought. I can only watch and wait at this point with only 9 days left in the May option cycle. I do still favor an upside breakout from these levels. GE was off 1/8 or so on light volume. Gold finished flat on the session and well off of its highs. The US dollar was higher. The XAU and GDX barely moved and the volume was extremely light. Obviously no interest here. Mentally I'm feeling OK. I am going to try and not press things here as the May option cycle is running out of time. There is however, enough time for a decent signal to materialize. We got the French election out of the way and there is some economic data due out later this week on inflation plus retail sales. So we'll see where things go from here. Volatility is extremely low and that won't last forever. Asia was higher and Europe lower overnight. We'll see how it goes tomorrow.
Friday, May 05, 2017
Moving higher today as the Dow rose 55 points on average volume. The advance/declines were better than 2 to 1 positive. The S&P 500 hit a new all time high. The summation index is trying to move back up. The employment report was a bit better than expected but the market didn't really get going to the upside until midway through the session. Short term overbought now for the S&P but it's been that was for days. I canceled my open order for the SPY May calls as we didn't get any downside to get it filled. It appears that this trade has passed me by. I do not think it would be a good idea to chase it now. I do expect higher prices early next week though. If we do see some selling, I may try it again. But for now it looks like missed opportunity. GE was up a couple cents and the volume was really light. The gold futures were up a buck and the US dollar was lower. The XAU gained 2 points, while GDX added almost 1/2. Volume was average. Mentally I'm feeling OK. Two weeks left in the May option cycle and it doesn't look like I'll get a set up for a trade. The next logical way to go would be the SPY puts if we continue higher. Which I think that we will. There isn't any overhead resistance for the S&P 500. There was plenty of chances over the past week for the market to drop but it simply trended sideways. We have now broken out to higher prices. The French election is on Sunday but the result really isn't in doubt. It is probably already baked into the market. I'm not sure what the catalyst will be to get things moving next week. The employment report certainly didn't lead to the volatility that it normally would. I still think that we're heading higher and the Dow should hit a new all time high next week as well. I'll be checking the charts over the weekend to see if there is any trade that I can do next week. However there isn't a set up as of now and I do expect higher prices in the beginning of the week. Perhaps a fade of that will be the play. We'll see. Europe was higher and Asia mixed once again. For now it's Friday afternoon and time for a break.
Thursday, May 04, 2017
Another day of hanging around as the Dow lost 6 points on heavy volume. The advance/declines were almost 2 to 1 negative. The summation index has turned around and is now moving lower. We did have a midday sell off when oil dropped but the stock market recovered. The overall market was just a bit stronger than the Dow. Good volume lately but no movement for the major stock indices. I'm not exactly sure what that means but I'm still looking for a positive resolution to the sideways movement we've seen lately. I've left in my open order for the SPY May calls. Perhaps tomorrows employment report will get things going one way or the other. GE was off a few cents. The short term technical indicators here are oversold. Gold continues to fall as the futures dropped $20 today. The US dollar fell as well. The XAU fell 2 1/3, while GDX lost 3/8. Volume was good. Not sure what is happening with gold but commodities in general are falling. Weakness in oil doesn't help gold either. With both gold and the dollar dropping something has to give soon. Mentally I'm feeling OK. Just a bit of weakness in the small stocks with the exception of RUT which has rolled over. The technical indicators for RUT are mid-range. Like I said before, RUT led us up and now we will have to see if it will lead us down. My feeling is that the market is on the verge of something here. I'm still looking for new all time highs. However with the summation index now moving down, you can make a case for lower prices. But if the market starts to take off on the jobs report, I may just have to get in and follow. We'll see. I probably should wait for a decent signal though and the short term technical indicators for the S&P remain overbought. They have stayed that way for a few days and we haven't seen the usual upward price movement. The trading is never easy. Asia was mixed and Europe higher in last nights trade. We'll be on the lookout for the jobs numbers and close out the week tomorrow.
Wednesday, May 03, 2017
A one day reversal to the upside for the Dow as we opened lower and closed higher. The Dow edged up 8 points on good volume. The advance/declines were negative though. The overall market was weaker than the Dow. The summation index is barely moving up. The small stocks are now showing relative weakness instead of strength. The short term indicators for RUT have rolled over to the downside. RUT led us higher. Is it about to lead us lower? We've had good volume lately and have only been able to move sideways. Is that a concern going forward? It could be. I still have the open order in for the May SPY calls. The Fed came and went today and it was the expected non affair. Next up is Fridays employment report. GE showed some life and was up 1/4. Volume was nothing special. Gold dropped $17 on the futures as the US dollar was higher. The XAU and GDX had fractional losses on average volume. We are back to no love for gold and that could accelerate with a strong jobs report. Mentally I'm feeling OK. Just about 2 weeks to go in the May option cycle. I'm still looking for new all time highs for the S&P 500 before expiration but there are some warning signs starting to appear. The under performance of the small stocks recently being a concern. Not to mention that the short term technical indicators for the S&P remain overbought with any upside movement in the index. Could the stock market roll over here? Perhaps. Sometimes the month of May can be negative. But I do still think that this is a pause near the all time highs for the Dow and the S&P before we break out to new highs. But the longer the small stocks lag, the less likely that outcome becomes a possibility. So keeping an eye on things is as important as ever. Europe and Asia were mixed last night. I expect tomorrow to be a wait and see session before the data on Friday. We'll keep an eye on things.
Tuesday, May 02, 2017
Another day of hanging around as the Dow rose 36 points on good volume. The advance/declines were barely positive. The overall market was weaker than the Dow for a change. The summation index continues higher. Still short term overbought on the major stock indices. I did place an open order for the SPY May calls and left it in overnight. We'll have to see some decline for it to get filled though. We've got earnings from Apple tonight and Facebook tomorrow. They probably will be market movers. Also we'll get the Fed statement tomorrow but I do not think that it will have much effect but I could be wrong. There's no expected change in policy forthcoming. GE was up a nickel and the volume was a little better. Gold was up a couple bucks on the futures and the US dollar was slightly lower. The XAU and GDX had slight fractional gains on light volume. Mentally I'm feeling OK. We've been moving sideways for a week now right at the overhead resistance. I really believe that we'll be breaking through to new all time highs in the coming days. Once we get through, there won't be any resistance left. Sometimes markets can remain overbought for quite some time. My guess is that we are in one of those times now. I could be wrong. However I am leaving the order for the SPY May calls out there. Ideally we'd see weakness ahead of the jobs report on Friday and then a rally to new all time highs on the reaction to the data. Things don't always go as planned in this game though. Europe and Asia were higher overnight. We'll keep an eye out on the overnight developments.
Monday, May 01, 2017
The Dow hung around in positive territory all day but then dropped in the final half hour. the most watched index fell 27 points on light volume. The advance/declines were positive. The overall market was stronger than the Dow. The summation index continues higher. The small stocks are leading the way and as long as that's the case we'll be heading up. The S&P stalled at the near term resistance again but I do believe that it will be overcome soon. The short term technical indicators remain overbought for most of the major stock indices. They can remain that way during a rally. We've got the Fed this week but it should prove to be a non event. GE was off a nickel and the volume is light. Gold was off $10 on the futures and the US dollar was little changed. The XAU lost 2 1/3, while GDX shed 1/2. Volume was OK. Gold and the gold shares are back on the decline. We'll have to see if they can hold the recent lows. Mentally I'm feeling a bit out of sorts. Email problems on my end but they'll eventually get resolved. I'd still like to try and find a way to get long here but will need to see some kind of short term decline. It may not happen. How ever I am firm in waiting for a decent signal because there is still plenty of time to go in the May option cycle. We've got the jobs report out on Friday as well and that could be a mover. The ideal scenario is a decline into Wednesday to give me a chance at the SPY May calls. That's the idea at the moment. Today was somewhat a partial holiday in the world markets with the May Day celebrations. Foreign markets were quiet. Things will be back at full strength tomorrow.