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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.

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