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.