Thursday, June 22, 2017
A bit lower today as the Dow fell 12 points on average volume. The advance/declines were positive. The summation index is still trending down. The market dropped from positive territory in the final half hour. It doesn't appear that there will be the light volume rally that we need to see in order to get some SPY July puts. I'll still have to remain patient for the time being. GE was off about 1/4 on good volume. Gold was up $5 on the futures as the US dollar was little changed. The XAU added 1 1/2, while GDX rose 1/4 on almost average volume. ABX rose 1/3 and is now right at a down trend line that began in April. Perhaps I've missed this opportunity as well. Mentally I'm feeling OK. A pretty quiet week so far for the major stock indices after the nice upside move that we saw on Monday. The lack of follow through after that rally seems noticeable to me and I really do think that we are getting ready to see some sustained downside for stocks. I could be wrong. I'll be keeping an eye on the summation index for clues. Not much else to report from todays price action. We do have the RUT rebalancing tomorrow. Europe and Asia were both mixed overnight. We'll close out the trading week tomorrow.
Wednesday, June 21, 2017
The Dow fell 57 points today on average volume. The advance/declines were shy of 2 to 1 negative. The summation index is now heading down. Unlike yesterday the small stocks did pretty well and were strong out performers. The overall market was much stronger than the Dow. I'm still in the camp of more downside here. What I'd like to see is a light volume rally attempt back to the recent new all time highs. That would be where Id look to try the SPY July puts. We'll see how things play out going forward. GE was off 1/3 on average volume. I don't have any trades in the works here at the moment. Gold was up three bucks on the futures as the US dollar was a bit lower. The XAU was up 1 1/8, while GDX added 1/3. Volume was light. My order for the ABX October calls remains in place. Mentally I'm feeling OK. A couple days of decline here doesn't exactly make a trend but I do think that a change is coming. I'll take my cues for now from the summation index and that has turned around. However with the small stocks taking the lead today, perhaps my ideas here are wrong. But volume has picked up a bit going lower and that is something to watch. There really isn't much data to come out yet this week to make a difference. So I'll be patient for now and hope my light volume set up happens in the next few sessions. Europe and Asia were both lower again overnight. We'll see what tomorrow brings.
Tuesday, June 20, 2017
Back to the downside today as the Dow fell 61 points on average volume. The advance/declines were over 2 to 1 negative. This should turn the summation index lower. The overall market was much weaker than the Dow. We did not get any upside follow through to yesterdays gains. There is a chance that yesterday was a short term top as the technical indicators have now rolled over on the charts. The TRAN got clobbered today. The negative divergences that I have previously mentioned may now come home to roost. It is only one day lower but I have the feeling that this could be the beginning of something more. The Dow has been leading the way here and that is usually a late stage of the up trend event. GE was off 2/3 and the volume was heavy. The resistance at $29 is pretty strong. Gold and the US dollar were both little changed. The XAU and GDX had fractional losses on light volume. I did place an open order for some ABX October calls. We'll need to see a drop in ABX for this order to be filled. ABX was off 1/8 today. Mentally I'm feeling OK. I really think we're going to head lower here as the signs of technical deterioration have been there for a while. The under performance of the small stocks has not been a good sign for the bulls. Yesterdays rally was on light volume. We also finished near the lows for the session. The SPY options are still rather pricey with so much time left until the July expiration. But the market won't wait around if it wants to go lower. I'll check the option premiums again tonight and try to come up with an entry point. We will also need to see some follow through lower on Wednesday to confirm the weakness. If we do head lower I think that will confirm my thoughts. Europe and Asia were both lower overnight. So after we saw a global push into stocks on Monday, we got the exact opposite on Tuesday. I think that caution is advised. This has the potential to be something more than just a pause before we move higher. We'll keep an eye on the overnight action.
Monday, June 19, 2017
The strength showed up today as the Dow climbed 144 points on light volume. The advance/declines were shy of 2 to 1 positive. The summation index should be moving back up. Still overbought and staying there for the big caps. The small caps are coming off of their oversold readings. Interesting how the market just happens to climb after the June expiration has passed. Never under estimate the market makers in this game. They'll do what they have to and keep the profits rolling. New all time highs for the Dow and the S&P. Perhaps this is the beginning of the summer rally. Just a guess on my part. GE was off 20 cents on lighter volume. Stalling at resistance here. Gold dropped over $10 on the futures as the US dollar was higher. The XAU and GDX had slight fractional losses on light volume. I still favor the longer term gold share calls as a trade within the next few weeks. Mentally I'm feeling OK. Plenty of time in the July option cycle for a trade. It is just a matter of getting a decent signal as always. No hurry here as I'll simply have to wait for something to develop. Not a lot of economic data to trade off of this week. There is no overhead resistance for the S&P 500 but we will not stay overbought forever. Europe and Asia were both higher overnight as money is flowing into stocks around the globe. We'll keep an eye on the developments this evening.
Friday, June 16, 2017
A pretty quiet quarterly expiration as the Dow gained 24 points on extremely heavy volume. The advance/declines were positive. The summation index is back to trending sideways. I did expect higher prices over the past two days and it didn't happen. I'll still be looking for some upside early next week. Or perhaps my view of things here is simply off. I am looking for a spot to purchase some SPY July puts. The weekly negative divergence that I see on the chart hasn't gone away. The problem is the premiums for the July options are expensive, with an extra week of time on them. GE was up a few cents and the volume was very heavy. Plenty of overhead resistance here. Gold was up a couple bucks on the futures as the US dollar fell. The XAU and GDX were little changed on average volume. The lack of progress in the price of gold despite the fall in the dollar is a concern for the precious metal bulls. Mentally I'm feeling OK. So here we are. The big caps have held up here and are closer to short term overbought. The small stocks have sold off and are short term oversold. The Dow has been the recent leader. In my mind the market is getting more narrow and we are closer to some sort of top rather than some sort of bottom. But how can we trade it? I'm still going to have to wait for some sort of signal, despite the last one for strength at the end of this week not working. There isn't a lot of economic data out next week so we'll probably just trade off of the technical readings unless there is a headline event. Perhaps the summer slowdown will begin. I do not have any solid trading ideas right now but I'll be checking the charts over the weekend. The ideal scenario in my mind would be a light volume rally to get short term overbought all the way around. Then attempting the July puts would make sense to me. But as always the market will go where it wants. It's Friday afternoon and time for a rest.
Thursday, June 15, 2017
A bit lower today as the Dow fell 14 points on light volume. The advance/declines were negative. The summation index is still trending up but sluggishly. The overall market was weaker than the Dow again. Keep that in mind going forward. The small stocks are lagging and that is a sign of a tired market. The S&P 500 was down almost 20 points early on. I did place an order for the SPY June calls but it wasn't filled. I was only going to attempt this trade on my terms and the option price didn't hit my target. You could make a case for trying it again tomorrow on weakness but I think that I'll step aside. My idea for this trade was valid though and I'll take that moving forward. I would not be surprised with an up session to tomorrow to close out the week. My work says to expect higher prices late this week but we are almost out of time. GE was up 1/2 on pretty good volume. Plenty of overhead resistance at 29-29.5. Gold fell $20 on the futures as the US dollar rallied. The XAU lost 1 1/3, while GDX shed 1/8. Volume was good. The gold shares took most of their losses for the move in gold yesterday. It looks like the dollar could rally from here so that should add to weakness in the precious metal. I'll be keeping an eye on the longer term gold share calls here going forward. ABX will be my preferred vehicle. Mentally I'm feeling OK. Another option cycle goes by without a trade. I can't say that there was a lot of opportunities as the S&P has moved sideways the past couple of weeks. The July option cycle has an extra week and a holiday on a Tuesday. I'm certainly not looking to go long anytime soon as the tone of things has changed. There is still what I consider a glaring negative divergence on the RSI for the S&P 500 weekly chart. The non leadership of the small stocks is not a positive. The leadership of the Dow here is usually a late stage bull market indicator. We'll see how things play out from here. Europe and Asia were weaker in overnight trade. We'll have the quarterly expiration as we close out the trading week tomorrow.
Wednesday, June 14, 2017
Another mixed bag today as the Dow rose while the overall market was lower. The most watched index gained 46 points on average volume. The advance/declines were slightly negative. The summation index is moving up but barely. We did get a sell off during the Fed press conference but the market came back. I did place an order for the SPY June calls but once again it wasn't filled. I'm willing to try this again tomorrow if we see some weakness because I'm convinced that we'll see higher prices going into the expiration on Friday. However today may have been the last chance to try that. The Fed raised rates a quarter point as expected. The economic data out today was weak. GE was up 1/4 today and the volume was good. I don't see any trades here at the moment. Gold was off $6 on the futures and fell off of its highs. The US dollar finished little changed but did come up from its lows. The XAU shed 3 1/4, while GDX lost 3/4. Volume was heavy and the daily candlestick pattern is bearish. This will be the time to keep an eye on the longer term gold share call options. Mentally I'm feeling OK. There is no doubt here that the overall market is weaker than the Dow. That is a change from how it's been for quite some time. It isn't a bullish development but it can sometimes take some time for this to play out. It is something to be aware of though. Two days left in the June option cycle and if we get weakness early tomorrow, I'll probably try the SPY June calls. It's risky but my work is calling for higher prices in the next two days. If we simply rise from the open then there won't be a trade worth taking and we'll roll out to July. I expect we'll see more new all time highs in the Dow and the S&P before the week is out. It's then quite possible that the market will head into summer mode. Europe and Asia were mostly lower yesterday but the moves were muted. We'll see what tomorrow brings.
Tuesday, June 13, 2017
Moving higher today as the Dow gained 92 points on light volume. The advance/declines were over 2 to 1 positive. The summation index is now moving higher. It appears that the SPY June call trade won't happen. We needed to see some more decline today to set up the trade but it didn't happen. Perhaps if we get a sell off tomorrow I'll take the risk. But with only three days left in the June option cycle it may not be worth it. We did set some new all time highs today as the bull lives on. GE fell 1/2 on heavy volume. I guess the excitement of hiring a new CEO has worn off rather quickly. Gold finished little changed and the US dollar didn't do much either. The XAU and GDX had fractional moves up on light volume. I'd like to see another sell off in the gold shares to set up the longer term call trade there. Mentally I'm feeling OK. We'll get the Fed tomorrow and the market should do something after the announcement. I'm wondering if I dare attempt the SPY June calls still with so little time remaining. My work still suggests that we'll be higher towards the end of this week. But it simply could be that it is just too late and that yesterday was the time to purchase the calls. I suppose I'll wait and see what happens tomorrow. I certainly don't want to make a trade just for the sake of making one. So we'll see. Europe and Asia were generally higher overnight. A rate hike is expected tomorrow and we should get one. It may be what happens in the later press conference that gets things going. I'll be keeping an eye on things tonight and getting ready for what could be an interesting session tomorrow.
Monday, June 12, 2017
A bit lower today as the Dow fell 36 points on pretty good volume. The advance/declines were slightly positive. The summation index is trying to go up but is basically moving sideways. We did come up from the lows of the session and that's a positive. However the small stocks are relative under performers here and that isn't a good sign. I did place an order for the SPY June calls but it wasn't filled. I would like to attempt this trade at some point in the next two trading days. I do believe that we'll see strength towards the latter half of the week. The entry will have to be spot on since there is such little time remaining in the June option cycle. We do have the Fed to contend with on Wednesday. GE suddenly came to life today and jumped a buck on extremely heavy volume. The double bottom with the RSI positive divergence actually ended up working out. GE announced a new CEO today and that was the reason for the jump. Gold lost a couple of bucks on the futures as the US dollar was little changed. The XAU lost almost a buck and GDX almost a dime on light volume. I'm still considering a longer term option trade for the gold shares. Mentally I'm feeling OK. We got another pop in the VIX today but it is not completely overbought just yet. One more sell off should do it but when that will happen is the question. Once again, with only four days to go in the June option cycle the risk is very high. I'm hoping that I'm up to the task. With a Fed announcement thrown in there as well, you can see how difficult things can become. I might have to wait until after the Fed meeting to put on this trade but we'll have to see how things move before that event. I do think that the SPY June calls are the way to go here and I do think that there will be some money to be made. We'll see. Europe and Asia were both lower overnight as the worldwide markets are taking a breather as well. We'll keep an eye on the overnight developments.
Friday, June 09, 2017
Volatility returned today as the market rocked and rolled for a change. The Dow did gain 89 points on heavy volume. The advance/declines were positive. The summation index is still moving sideways. However the overall market was much weaker, led by the NASDAQ which lost 113 points. The S&P 500 had a one day reversal to the downside as it opened higher and closed lower. It finished with a loss of two points. I did place an open order for the SPY June puts but it wasn't filled. I basically missed this trade as I was not quick enough to take advantage of the opportunity. It still could work but I think the chance has passed. I do however think that there could be a chance to play the SPY June calls next week if things line up. GE rose 1/3 but the volume was light. Gold dropped another $10 on the futures as the US dollar was a bit higher again. The XAU fell 1 1/3, while GDX lost 1/3 on average volume. We had a false break of the down trend line in gold that's been in effect for about 5 years. This should turn traders even more bearish on gold and the next time the line is violated, there won't be a lot of believers. I'm still looking at taking a longer term gold share call trade at some point in the near future. ABX or GDX will be my preferred vehicles for this trade. The next time we are both short and medium term oversold here will be the time to take the trade. I'll go out to the September or October options. Mentally I'm feeling OK. A very interesting trading session today and we haven't had one of those in a while. I did miss the put trade that I wanted to do but there is still a possibility to try something next week if things line up right. The big 5 stocks, AAPL, AMZN, FB, GOOG and NFLX all got crushed today and that led the small stocks down. These five issues have accounted for much of the gains in the major averages lately and when they started to fall today it simply fed on itself. They all did bounce back some, just like the S&P. This could be the beginning of a much needed breather for these issues or we could simply just turn around. I'm inclined to think that things will eventually be going lower from here. There is a glaring negative RSI divergence in the S&P 500 weekly chart. It is only a potential event at this point, as we could somehow rally back to a higher RSI reading that would negate this pattern. But I do not see that happening. The problem is that we would have to roll into the July option cycle and there is an extra week of time on those options. But it is something that I'm considering. For now if we get a weak start to next week, I'd like to try the SPY June calls on around Wednesday. This would be a highly risky endeavor with only two days left in the June option cycle. But my work points to strength at the end of next week and I'd be willing to give it a try under the right circumstances. Plenty of things to consider when checking the charts over the weekend. Europe and Asia were higher overnight with the exception of Hong Kong. The British election did not have the huge impact overseas as expected. It's Friday afternoon and time for a rest.
Thursday, June 08, 2017
Another day of hanging around as the Dow gained 8 points on good volume. The advance/declines were positive. The summation index is still heading sideways. We were both up and down today so it was frustrating no matter which side you're playing. At this rate I probably won't be attempting any trades in the June option cycle. We're still short term overbought and have been all week. The small stocks also continue to outperform and that is a positive sign. I think that I'll still try the SPY June puts if we get to 2450 on the S&P but that isn't a given at this rate. The news today didn't do much for trading and we've got the election results from England coming in soon. With only six days to go in the June option cycle the risk only increases from here. GE was off about a dime on good volume. Gold dropped over $10 on the futures as the US dollar was a bit higher again. The XAU and GDX had fractional losses on average volume. Gold has now dropped back from the breakout point of the long term down trend line. That makes the breakout this week invalid unless we get a rally tomorrow. Mentally I'm feeling a bit slow, did not sleep well. So we've made it to Friday and still no trade. Even if we do rally tomorrow, I may have to wait until Monday to attempt the put trade. Due to the short term overbought condition of the market, I do not expect to try the calls. The fact that we've stayed overbought for so long puts the odds of trying the calls even higher. So at this point I'll wait to see the reaction to the British election and go from there. Europe and Asia were mixed in last nights trade. We'll close out the week tomorrow.
Wednesday, June 07, 2017
More of just hanging around as the Dow rose 37 points on good volume. The advance/declines were slightly negative. The summation index is moving sideways. The market is trying to figure out what to do here. Still short term overbought for the major indices. Ideally I'd like to see a light volume move higher from here to attempt the SPY June put trade. But we are running out of time in the June option cycle, so the risk increases with each passing day. We'll get the British election out of the way tomorrow along with some testimony regarding the Russia fiasco in Washington. That may pave the way for stocks to go higher. Or not. GE was off 1/4 and the volume was good. It appears that the double bottom on the GE daily chart may not work after todays price action. Gold dropped $8 on the futures and the US dollar was a bit higher. The XAU and GDX had fractional losses on average volume. We'll need to see gold hang in here or move higher to have a valid break of the long term down trend line form 2012. Mentally I'm feeling OK. It's getting late to try a trade in the June option cycle but I'm hoping that the market will cooperate. We should get some kind of movement tomorrow with the results of the election in England. There's no economic data to move things. My thought is that we just spent a couple of days to digest things after moving to a new all time high. We now should resume the trend higher to new all time highs again. That will be the opportunity to try the SPY puts at around the 2450 level on the S&P. Any other scenario will probably mean that we'll have to wait for a better entry point for the next trade either way. So we'll see what happens. Asia was mixed and Europe lower overnight. Tomorrow should be interesting.
Tuesday, June 06, 2017
Lower again today as the Dow dropped in the final hour and closed with a loss of 47 points on about average volume. The advance/declines were negative. The summation index is now heading sideways. A couple more days like today and the SPY June put trade will not be feasible. The market will have to turn around here tomorrow or that trade isn't happening. We're still short term overbought, so a pop up tomorrow might still set that trade up. But things will have to set up just right to attempt it. As of right now it's still a wait and see attitude for me. GE was off a few cents on average volume. Gold found a little life today as the futures rose $14. The US dollar was lower. The gold shares finally got going with the XAU up 4 1/4, while GDX climbed a point. Volume was heavy. It appears that gold is finally breaking through its long term down trend line that has been in effect for years. We'll have to see how it closes out the week. This would be a very bullish development if it holds up. It may be too late for the longer term gold share call trade that I mentioned earlier. I'm still considering it though if this breakout holds up and we get a pullback. Mentally I'm feeling OK. Only 8 days to go in the June option cycle. I'll need to see some sort of light volume rise from here to try the SPY June puts. Otherwise I'll have to start looking at July. No economic data to trade off of for the rest of this week. We do have the Fed a week from tomorrow. But for now we're here and it appears that we're working off a short term overbought condition before making a run at new all time highs again. That's my guess. The action in gold today was interesting and it could be the start of something worthwhile to the upside. But it is only Tuesday. Asia was mixed and Europe lower overnight. We'll see what tomorrow brings.
Monday, June 05, 2017
A quiet trading day to start the week as the Dow fell 22 points on light volume. The advance/declines were negative. The summation index is still moving up. I didn't place any orders today as my thinking is that we are simply seeing a pause before we head back up. If we are lower for the beginning of the week, I'll try the SPY June calls on Thursday or Friday. If we start to head back up here soon, I'll try the SPY June puts later in the week. After todays economic data, which came in a touch weaker than expected, the rest of the weeks reporting is light. So I expect things to be headline and technically driven for the remainder of the week. GE was up a dime on good volume. On the daily chart here it looks like a double bottom has been put in with a positive RSI divergence. This could bode well for the overall market. Gold didn't do much today despite another terrorist attack in London. The US dollar had little change as well. The XAU and GDX had slight fractional losses on very light volume. They did come up from the lows of the session. Mentally I'm feeling OK. Really not much to take away from todays session. We're still overbought for all the major indices. I'd still like to see a move to the 2450 level in the S&P. That would give me the confidence to try the puts if we can get there this week. But the market rarely cooperates. There's still no overhead resistance and todays volume was pretty light. So I'm pretty sure there will be another attempt to move higher in the near term. The only action that would negate that would be a sharp drop in price. I'll still try to be patient but with only nine days to go in the June option cycle, the risk increases with each passing day. Europe and Asia were lower overnight with the exception of the DAX. We'll keep en eye on the overnight trading.
Friday, June 02, 2017
Another day, another new all time high as the Dow rose 62 points on average volume. The advance/declines were positive. The summation index is heading higher. The overall market was stronger than the Dow. Short and medium term overbought and staying that way. Even a weaker than expected jobs report could not derail this rally. We came out of the sideways consolidation to the upside and there is no overhead resistance. I still tried the SPY June puts today, adjusted the order and then canceled it. It really seems as if long is the only way to go here. But I will probably try this trade again in the beginning of next week. It will be tough to do though. GE was up over 1/8 and the volume remains good. Gold once again was up over $10 on the futures as the US dollar continues lower. The gold stocks just don't react though as the XAU and GDX had slight fractional moves higher on light volume. I'm not sure what is going on but it isn't exactly bullish for the precious metal stocks. Perhaps they're looking ahead to the expected rate hike in a week and a half. I have no explanation. Mentally I'm feeling OK. The market can last longer than you can remain solvent or something like that. That is what this rally reminds me of. Shorts have been squeezed and new money has hopped on board for the breakout higher. There's still a possible RSI divergence on the weekly S&P 500 chart and the daily chart is overbought. My thinking is that perhaps the 2450 level is the place to try the SPY June puts. That is my only idea at the moment. But a short trade here carries plenty of risk because until we actually see some decline, there is no telling how high this thing can go. Any bad news is being shrugged off and that's pretty bullish. Small stocks are leading the way with the exception of the RUT. I'll go over all the charts again over the weekend but maybe staying on the sidelines would be the smarter play for now. But you don't make any money with that strategy. Europe and Asia were higher as money flows to stocks worldwide at the moment. It's Friday afternoon and time for a break.
Thursday, June 01, 2017
The Dow took off to the upside today as the most watched index gained 135 points on good volume. The advance/declines were about 5 to 1 positive. This will turn the summation index back up. Beginning of the month money flows and some short squeezing was probably the cause of todays price action. The volume was good and there is no overhead resistance. I adjusted my open order overnight for the SPY June puts and then canceled it during the morning today. My idea of getting puts here looks simply wrong after todays price action. Many of the major stock indices are breaking out to new all time highs. Volume is good, so the move up is for real. We're both short and medium term overbought but in bull market rallies that condition can last for a while. GE was up 1/3 on average volume. Gold was off five bucks and the US dollar was a bit higher. The XAU and GDX had slight fractional losses on very light volume. Mentally I'm feeling OK. The Dow closed at a new all time high, finally catching up to the other major averages in that regard. It looks like there is room to go higher as well. It now appears that the decline that we saw yesterday was the opportunity to get long. I'm not sure how long the run up will last but some of the individual charts in the Dow look bullish. I do still think that the June SPY puts will work at some point but I do not know when that point is. Perhaps early next week if we continue higher. The VIX is very low again and I suppose I could make a case for getting some S&P 500 puts tomorrow. There are some potential negative divergences in the RSI for the small cap indices. But we don't see anything like that for the big caps. So I'll take another look at things tonight and go from there. Europe and Asia were higher overnight. We've got the employment report tomorrow and we'll gauge the stock markets reaction to those numbers. We'll also see if the foreign markets rally off of the US price action today. We'll finish things for the trading week on Friday.