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.