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.