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Monday, December 04, 2017

Interesting start to the week as we opened much higher and sold off for the rest of the day.  The Dow did manage to hold on to a gain of 58 points on good volume.  The advance/declines were barely positive.  The S&P 500 and the NASDAQ had one day reversals to the downside.  We're still short term overbought for the major stock indices.  Will this be the beginning of some sort of actual downside?  Time will tell on that.  I have seen weakness in the beginning of December before though.  Not anything new on the news front today.  As I stated last week, once we get the tax reform approval, what else is there remaining to drive the market higher?  GE was up a few cents on heavy volume.  I've decided to stick with the GE January call trade for now.  Some more drop here will probably get the order filled.  Gold lost a few bucks today.  The US dollar closed little changed.  The XAU fell 7/8 and GDX shed about 1/3.  Volume was average.  Still no love for the gold shares.  Mentally I'm doing better.  I'm still adjusting to the office move but the markets won't wait.  The VIX has come to life and volatility has returned for now.  There's still room for it to move higher from here.  The small stocks are showing relative weakness and that is not a plus for the bulls.  There are also some potential negative RSI divergences on the daily index charts.  So we can make a case that this time we will see some downside.  On the plus side there's still no overhead resistance and no positive trend lines have been violated.  So we'll see where we go from here.  We'll get the employment report on Friday.  Asia was mixed and Europe higher overnight.  We'll keep an eye on the trading action tonight.  

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