Continuing lower as the Dow lost 380 points on heavy volume.  The advance/declines were over 2 to 1 negative.  The summation index is now trying to turn back down.  No news to account for the drop today.  Perhaps the market is wary of tomorrows words from the new Fed chief Powell.  However now technically the S&P 500 has broken the short term trend line form the beginning of the month and lower prices can be expected.  We closed near the lows for the session and I am assuming that it is too late to get the SPY March puts again.  At this point I'll have to wait for the VIX to get back to the 15 level to attempt any SPY puts.  GE was off 3/8 and the volume remains pretty good.  I did place an order for the GE March calls but we'll have to see some more weakness for it to get filled.  I'm not exactly sure this is the best idea here going forward but there isn't a lot of money involved.  I may even cancel this trade tomorrow if things really begin to unravel in the overall market.  Gold was flat on the day and the US dollar was a bit higher.  The XAU and GDX had fractional losses on lighter volume.  I'm still of the belief that the fundamentals for the gold shares aren't positive at this time.  Mentally I'm feeling OK.  Well the former SPY March puts that I sold for a loss last week are now back in the black.  Of course looking back will usually do you no good in this game.  Where we go from here is what counts.  Obviously it looks like we're going lower as the up trend line has been broken.  Could this be a retest of the lows set in the beginning of February?  Perhaps.  The only thing that I can say for sure is that volatility has picked up.  We will not be seeing a repeat of the market that just keeps going up and remains overbought for weeks on end.  With the losses of the past two sessions I suppose we can wait for a short term oversold signal if we continue lower.  That would be an opportunity to try the SPY March calls at some point before the expiration.  But we're a long way from that.  Staying nimble here is the best advice and taking profits when you get them isn't a bad idea either.  Europe and Asia were both lower in last nights trading action.  We'll see how the market reacts to the Fedspeak tomorrow.      

Back to the downside today as the Dow lost 299 points on good volume.  The advance/declines were almost 4 to 1 negative.  The summation index is still moving up.  The VIX almost made it to 15 and the market turned around.  That is the level to watch for on the VIX.  It looks like when we get down there the market will turn.  We'll have to wait for it to head back there.  One day doesn't make a trend.  What I'd like to see is another run back to 15 on the VIX with a light volume rally from here.  But the market rarely cooperates.  The new Fed chief spoke today and the market didn't like what it heard.  We were getting short term overbought on some indicators so a drop here isn't a big surprise.  It would be a surprise if it turns into something more.  GE lost what it gained yesterday and finished well off of the highs.  It was the most actively traded on the big board.  Yesterday there was a hammer and today there's a shooting star.  Basically GE is trying to make up its mind here.  I'll still maybe try the calls if we head back to $14.  Gold got hit on the Fedspeak and lost $14.  The US dollar was higher.  The XAU fell 2 1/4, while GDX shed 2/3.  Volume was good.  Mentally I'm feeling OK.  We've now snapped back to the recent breakout on the S&P 500.  If we hold here we should start moving back up.  If not the short term up trend line from the rally that began in the beginning of the month could get violated.  We do have bearish candlesticks on the daily charts after todays price action on the major stock indices and we closed near the lows of the day.  So we are at an important near term point for the markets.  Just yesterday it appeared that all systems were on go and we were simply going to go back and test the all time highs.  That may still happen.  QQQ was on the verge.  We'll need to keep a close eye on what goes on for the rest of the week.  We've got the end of the month tomorrow.  The Fed will speak again on Thursday.  The jobs numbers will be out on Friday.  There are plenty of potential market movers.  Perhaps today was the time to try the SPY March puts again.  Time will tell on that.  For now I'm going to have to wait and see how things go ahead of the employment report.  Perhaps the VIX can return to the 15 level relatively soon.  That is more wishful thinking than anything else.  But at least we have something to go on.  Asia was mixed and Europe lower overnight.  We'll see how we finish out the month tomorrow.  

The market continues to advance as the Dow soared 399 points on OK volume.  The advance/declines were 2 to 1 positive.  The summation index is moving higher.  No fear in the market now as the bulls have taken over.  The VIX is heading back to its 50 day moving average at around 15.  In my mind that is a key level and I'll be watching to what happens when we get there.  It may be a spot to try the SPY March puts again.  But for now it looks like we are going to go back to the old highs of a month ago.  It's early but we could be building a double top in the major stock averages.  However we'll have to wait and see on that.  GE had quite a turnaround after getting below $14 today.  It finished with a gain of over 1/8 on pretty heavy volume.  Perhaps $14 is the line in the sand for the decline.  If we wander back down there, the March calls could be the next trade.  Gold was up a few bucks and the US dollar was a bit higher as well.  The XAU and GDX had fractional gains on light volume.  I think that the fundamentals do not favor gold at the moment.  But there is a potential short term double bottom on the daily charts for the gold share indices.  Mentally I'm feeling OK.  So I'm over last weeks loss and trying to figure out where we go from here.  It appears that the rally is back on and I don't want to argue with that.  But I don't think that we will simply head straight on higher again as we did for most of January.  I would be surprised if we did.  If we continue higher into Thursday, then I may try the SPY March puts again because we will be short term overbought.  However that hasn't happened yet and there is plenty of time left to trade this week.  Some of the short term technical indicators are getting overbought.  At this point I'm going to simply wait and see where the market takes us before Fridays employment report.  If things line up for the SPY put trade I'll take it.  If not I'll stay on the sidelines until I see something else.  GE is still on the radar for the March calls but today could have been the day to initiate that idea.  We'll see.  Europe and Asia rallied in the overnight session.  We'll see how the market reacts to the new Fed chiefs remarks tomorrow.

The market powered higher today as the Dow gained 347 points on light volume.  The advance/declines were over 4 to 1 positive.  The summation index has now turned around and is moving higher.  My idea of a decline here only lasted a couple of days as the market was digesting its gains and not making a short term top.  I did manage to bring myself to sell the SPY March puts that I had for a 20% loss.  They did show a 10% gain at one point during the trading session but as usual I hung around hoping for a turnaround.  The market proved me wrong and I got out.  The light volume today is a concern for the bulls but I did not want to hang around.  It appears that my overall prognosis that the top is in could be wrong at this point as well.  The small stocks continue to act well and it looks like we're going back to test the all time highs.  GE didn't participate as usual and was off a penny.  Volume was light for lately.  I'm still considering the GE March calls but GE is such a slow moving stock that perhaps forgetting this idea all together is the best plan.  However the SPY moves very fast and it seems like that I'm really not up for that task at the moment for some reason.  Gold didn't do much today and neither did the US dollar.  The XAU and GDX had slight fractional gains on light volume.  Mentally I'm feeling OK.  Another losing trade in the books.  I'm not sure how I feel about that.  I was able to at least get out with a relatively small loss but I had plenty of chances to eek out a small gain.  But my trading tactics were lousy.  More than once today my mind was saying just get out and I didn't.  I kept waiting for a roll over to the downside that just didn't happen.  The market didn't do as I expected, as my work suggested a down session today and we got more than just the opposite.  I'm beginning to thank that my idea of where we are going here is wrong.  If we get follow through buying on Monday, then I think that I'll have to reevaluate what I'm thinking.  We did close on the highs of the session and that's bullish.  There's still plenty of time in the March option cycle to attempt another trade.  But will I be up to the task?  I'll be checking the charts as usual over the weekend.  Asia was higher and Europe mixed with muted moves last night.  I'll try and put todays loss behind me and start the week off on a fresh note.  For now it's Friday afternoon and time for a break.

Kind of a mixed bag today but the Dow did gain 164 points on OK volume.  The advance/declines were slightly positive.  The summation index is still trending sideways.  The overall market was weaker than the Dow, with the NASDAQ slightly lower.  I'm not exactly sure where we go from here but I should probably get rid of my SPY March puts tomorrow.  They are still showing a profit for now.  Many of the short term technical indicators are still mid-range, so we could go either way.  The Dow was up over 300 points during the session but once again could not hold on to the bulk of its gains.  We are stalling at the 50 day moving average for most of the major stock indices.  My work says tomorrow should be a negative day but for some reason I'm not believing it.  GE was up 1/8 but finished well off of its highs.  Volume was good again.  Plenty of volume for GE but no upside.  Gold had a slight gain and the dollar had a slight loss.  The XAU and GDX had fractional losses on light volume.  Mentally I'm feeling OK.  It really feels like the market is trying to make up its mind here on which way to go.  The daily candlestick chart for the S&P 500 shows some spinning tops along the 50 day moving average.  It looks bearish.  However you could also make the case that we are in a flag formation and digesting the strong move higher that began a couple of weeks ago.  With mid-range technical indicators, a pause at the 50 day and the charts looking as they do you can see how the trading here is going to be tough.  I should probably just get out of what I own and move on to next week.  The volatility and decent entry are the only things keeping this trade profitable at the moment.  What I don't want to do is project the extreme volatility from two weeks ago on to this trade.  The odds are that we won't see that again for a while.  So maybe taking whatever I can get out of this and moving on is the best case scenario.  I'll know more on the open tomorrow.  The trading is never easy.  Europe and Asia were mixed overnight.  We'll close out the shortened trading week tomorrow.

Lower again today as the Dow fell 167 points on good volume.  The advance/declines were slightly negative.  The summation index is starting to trend sideways.  The overall market wasn't as weak as the Dow and the small stocks had a lesser relative decline.  We were in positive territory for most of the session.  I did place an order for the SPY March puts and it somehow got filled near the highs for the session.  They are already showing a profit.  Depending on how things go in the next couple of days will determine how long I hold on to this position.  I should be out by the close on Friday or sometime on Monday at the latest.  I don't think that this is the beginning of something big to the downside but I certainly don't know.  Weakness was to be expected this week and we are certainly seeing that's the case so far.  GE fell another 1/4 on heavier volume.  The March calls keep getting cheaper here and that looks like it could be my next trade after the SPY puts.  Gold was off $5 as the US dollar was higher.  The XAU and GDX had slight fractional losses on light volume.  Mentally I'm feeling a bit tired.  An interesting session as we did open higher and close lower for a one day reversal.  The market was humming along and had a brief spike higher after the Fed minutes.  But things pretty much fell apart in the final hour and a half.  Technically the short term indicators are mid-range, so we could go either way here.  I am looking for further weakness though and it's not just because I own the puts.  My work says that we should see some more selling before the end of the week.  We'll see if that actually comes to pass.  The timing on the entry here looks to be pretty good.  Now all that matters is the exit.  I think that I'm going to let tomorrow pass regardless of the price movement and wait to sell the puts on Friday or Monday.  That is the game plan at the moment.  Subject to change as always depending on market conditions.  I think that this trade has a chance to be a winner but it is a matter of managing it properly from here.  Asia was generally higher in last nights trade but a lot of markets were closed.  Europe was mixed.  We'll see what tomorrow brings. 

Lower today and that was to be expected as the Dow fell 254 points on average volume.  The advance/declines were 2 to 1 negative.  This may stall the summation index.  The overall market was stronger than the Dow.  We were short term overbought, so some selling should and did come in.  It may not be the beginning of anything big to the downside though, with the small stocks acting relatively well.  If we can hold up here until Thursday, I'll be inclined to give the SPY March puts a try.  If we simply go lower from here, that trade will be nullified.  The premiums on the SPY options remain high.  However weakness is expected this week and this may simply be the beginning.  GE lost 1/3 and the volume was good.  The March calls are still in play here for me if I decide to take on that trade.  Overall weakness in the market should take GE with it.  That is happening as of today.  I'm not looking for some kind of huge rally for GE but it the entry timing is good there will be opportunity for profit.  Gold fell $16 on the futures as the US dollar continues to rise.  This is the normal relationship between those two.  The XAU dropped about 2 1/2, while GDX shed 2/3.  Volume was average.  Mentally I'm feeling OK.  I had a long weekend to digest what's going on and came up with getting the SPY March puts if the market cooperates or the GE March calls if we drop all week.  I'm really hoping that the market holds up here for me in the next two sessions because that is a trade that would work rather quickly.  The SPY moves faster but that can work to your advantage as well.  The only drawback at this point is the expensive option premiums.  The GE trade would have to be held for a longer period of time and may simply turn into a sideways affair.  As always there are pluses and minuses to every idea.  We'll see if we get downside follow through tomorrow and try to figure out things from there.  Asia was lower last night, with China on a holiday.  Europe was higher.  We'll keep an eye on tonights market action.    

The day was mostly positive as the Dow rose 19 points on average volume.  The advance/declines were positive.  The summation index has turned back up.  The NASDAQ was lower though.  I sold my SPY February puts for an 85% loss.  This was a dumb trade as with less than two days to go when I entered it required that things practically had to go perfect for it to work.  That never happens in the trading game.  I don't know what I was thinking because before the trade was executed, I thought numerous times to just cancel the order.  But I didn't and I paid the price.  I do think that next week will have some weakness and I can almost guarantee it.  We're short term overbought.  The premiums on the SPY March calls are still pretty high since we are just rolling into that months options.  I'm not saying that we are going to see another collapse but I do think that we'll be lower in the coming days.  GE gained 20 cents and the short term indicators here have turned up.  I am still considering the March calls here.  If we do see weakness in the overall market it will probably take GE with it.  That would be the time to try this idea.  Gold lost $5 on the futures as the US dollar was higher.  The XAU fell 2 1/4, while GDX dropped 1/2.  Volume was average.  Mentally I'm feeling OK.  I'm hoping that I won't lose any confidence after the latest losing trade.  Actually both trades that I've attempted so far this year haven't been the greatest ideas in the world.  The fact that one of them was a winner was probably more luck than actual good tactics.  The battle for me is always with myself in this game.  The market is there for the taking if you are good enough.  My view here is that we'll be heading lower at some point next week.  Whether or not we go back and test the lows remains to be seen.  I do not think that we will be heading back up to new all time highs.  I'm hearing in the media that this was a normal 10% correction and that the bull market remains in place.  It's possible that could be the case.  No major up trend lines have been violated.  However I'm more of the view that a top is being put in place and the long bull market is over.  I could be wrong.  Just because that is my view doesn't mean that we go straight down from here.  And it doesn't mean that trying the calls is out of the question either.  The market goes where it wants.  After seeing the market go straight up, we saw it go straight down.  Going out from here isn't going to have the same dynamic that we just witnessed.  I'm going to try and take the signals as they come and hopefully not engage in the dumb action that I just did over the past couple of days.  I should have sat it out and remained patient.  But I'm going to try and not dwell on that mistake over the weekend.  I'll need to find the next trade.  Europe and Asia were again positive overnight.  It's a long weekend in the US.  Plenty of time to figure out what to do going forward.  For now it's Friday afternoon and time for a break.

The market continues to climb higher as the Dow gained 306 points on average volume.  The advance/declines were 2 to 1 positive.  This should turn the summation index back up.  We're now short term overbought but that condition can last for a while as we saw before the recent decline.  I did buy some SPY February puts today and they are showing a loss.  With only one day left for this trade it is already in the cut the loss stage.  My only hope would be a sharp decline on the open and that really isn't expected.  I should have let this trade simply pass because the timing had to spot on and there isn't any time for this trade to work.  Perhaps I was bored or just greedy or perhaps feeling invincible after making money on the previous trade.  I had an open order and thought about canceling it throughout the session.  But then is got filled and now I'm stuck with it.  Not good trading tactics here today.  GE was off a nickel on lighter volume.  I'm still considering the March calls here.  Gold was off a couple bucks as the US dollar was lower.  The XAU and GDX were little changed but did come off of their lows for the session.  Volume was light.  Mentally I'm feeling a little tired.  A long weekend is coming up in the US as Monday is a holiday.  It looks like I'll have all that time to stew over a stupid trade.  I do expect some near term weakness but it probably won't come in time to save me.  I also believe that weakness can be bought next week for a SPY March call trade but I don't think that we'll be going to new all time highs again soon.  I could be wrong.  We do have option expiration tomorrow, so anything can happen.  But like I said, unless there is a gap down at the open, my trade is dead.  There is nobody to blame but myself.  The economic data came in mixed today and it really wasn't a factor.  The market is giving the impression that the selling is now over and it's full speed ahead again.  We'll see about that.  At this point all that I can do is wait to see what happens at the open tomorrow.  Europe and Asia were higher overnight.  We'll close out the week tomorrow.

Moving higher as the Dow gained 253 points on good volume.  The advance/declines were 2 to 1 positive.  The summation index is trying to turn around.  Is the decline over?  At least it is for now.  I would like to try the SPY February puts on any strength tomorrow but with only two days to go in the option cycle the risk is way too high.  But getting the puts when we hit the 50 day moving average at about 271 would be the play.  I do think that last Fridays lows need to be tested but I certainly don't know when.  The summation index is heading near the zero line and that would imply that the market is about to fall apart.  However I do think that we will hold up here for now.  Perhaps if we see some more weakness before the end of the month, we'll get a set up for the SPY March calls.  That is the next idea unless I somehow try the SPY February puts.  Almost getting to short term overbought for the SPY.  GE was up about 1/4 on good volume.  Perhaps today was the day for the March calls but if we roll back down there will be a better opportunity in my mind.  And there's still the fact that GE is a slow mover.  But I do think that the idea has a chance to work.  Gold rallied today on what was perceived as a strong inflation number.  The precious metal futures added over $20 as the US dollar got whacked.  The XAU climbed 4 1/4, while GDX gained a full point.  Volume was good.  We now have a bottom in the gold shares.  The 200 day moving average was support for the gold shares indices.  It appears weakness can be bought there.  Mentally I'm feeling OK.  My choices here are to try a SPY very short term put trade or wait for the SPY March calls on any weakness in the coming days.  Plus the GE March calls if we see some pullback there in the near future.  So there are some ideas for profit out there.  The VIX is coming back down and there appears to be room to move lower there.  This implies a longer term move back up in my view but I could be wrong.  Regardless, I do think that a long term top is in.  I'll consider whether to try the short term trade overnight.  Europe and Asia were higher last night with the exception of Japan.  We'll keep an eye on the overnight developments.

Still trying to slug our way higher here as the Dow rose 39 points on lighter than lately volume.  The advance/declines were positive.  The summation index is heading lower.  Running out of time for another SPY trade in the February option cycle.  I'm looking at the puts here on a very short term basis.  But the prudent move would be no move at all here because time is not on your side.  The short term technical indicators have started to move up here for the SPY.  I think that I'm going to wait for an actual signal though.  We don't have one yet.  We'll get inflation data tomorrow but one number isn't a trend.  However there is a chance the market will be fixated on it.  GE was off over 1/8 and the volume remains pretty good.  I would like to try the March calls here and now is as good a time as any.  But for some reason I'm holding off.  I think that the overall market will head lower in the coming days and take GE with it.  Then I might try the March calls here if the premiums get low enough for me.  Gold was up $5 on the futures as the US dollar was lower.  The XAU and GDX were little changed on very light volume.  Mentally I'm feeling OK.  Three days in a row higher for the overall market and we haven't seen that for a couple of weeks.  But we'll have to get through expiration week before a long holiday weekend.  I'll expect a rollover here at some point before the end of the week.  I'll also be looking at a test of the recent lows to set up the March calls.  That is potentially my next SPY trade as well.  There won't be any rush to do anything because there really isn't a decent signal one way or the other just yet.  So I think that patience will be your friend here.  Asia was mostly higher with the exception of NIKK.  Europe was down.  We'll keep an eye on the developments overnight.

Continuing higher to begin the week as the Dow climbed 410 points on good volume.  The advance/declines were better than 2 to 1 positive.  The summation index is heading lower.  The decline is over for now as far as I'm concerned.  We had a five wave move down and we will now form a bottom or simply continue higher from here.  The short term technical indicators for the SPY have turned up.  I'll be looking for a retest of the lows of last week at some point.  That would be the ideal situation.  If they hold then calls are to be purchased.  If they don't, then we'll be going a lot lower rather quickly.  I do not expect that to happen.  Only 4 days to go in the February option cycle.  I do not think that I'll be trying a trade with the SPY here but you never know.  I'll be looking at the calls unless we are up for the next 3 days.  I then may try the puts for expiration.  But the short term trades are full of risk.  GE was off 1/8 and the volume was heavy.  I am looking at the March calls here.  The only problem for me is that GE is a slow moving equity.  It could simply trend sideways for the next five weeks.  However if the options get cheap enough, I may attempt a trade.  Gold was up $10 on the futures.  The US dollar was slightly lower.  The XAU rose 2 3/4, while GDX gained 1/3.  Volume was very heavy.  Perhaps we'll put in a bottom here on the gold shares.  They are oversold and have had a nice 2 day pattern on the daily candlestick chart.  There's a potential hammer bottom.  Mentally I'm feeling OK.  We got some follow through to Friday gains and I think the selling is washed up for now.  I could be wrong.  It is expiration week in front of a holiday weekend.  The VIX indicators are mid-range but trending lower.  The McClellan oscillator is trying to recover as well.  I don't really have a short term signal here yet but my gut wants to go with the long side for the immediate future and into March.  I think that we've raised enough fear to keep people guessing.  There won't be any straight up moves form here in my opinion.  Waiting for the right opportunity will be my challenge.  We'll keep an eye on things.  Europe and Asia were higher in last nights trade.  We'll see how it goes tomorrow.

The Dow held up today for a change and rose 330 points on extremely heavy volume.  The advance/declines were positive.  The summation index continues lower.  Did we hit bottom today?  Could be for the short term in my mind.  But this is a crazy time in the markets and we do have option expiration week coming up.  It was another 1000 point range day for the Dow and we certainly aren't used to that.  5 days left in the February option cycle and the premiums remain very elevated.  The risk is also because if your timing isn't spot on here there won't be enough time to recover.  I'm going to have to look things over this weekend and make a decision as to what to do.  GE was up 1/2 and the volume remains extremely heavy.  Perhaps I could go out to the March calls here.  That would at least give the trade some time to work.  I'll look at it over the next couple of days.  Gold and the US dollar were both little changed.  The XAU fell 1 1/2, while GDX dropped 1/3.  Volume was very heavy here.  The gold shares have been falling for three straight weeks.  Mentally I'm feeling OK.  It appears that we have a positive divergence for the short term with the McClellan oscillator.  We've hit lower prices with a higher oscillator reading this week.  It also looks like we have potential double bottoms on some of the short term technical indicators for the SPY.  Along with another potential completion of an A-B-C-D-E wave down on a very short term basis.  That's what it looks like to me here.  The February SPY calls are very pricey though, with the abnormal volatility that we've seen this week.  I am going to have to look things over carefully this weekend and determine if a trade is worth it.  I also should keep in mind that I usually don't perform well with the short term trades.  Going out to March with GE may be the better idea but I'll decide that over the weekend.  It was quite a week in the markets and there were plenty of opportunities for profit.  Next week should prove the same.  Asia and Europe were both lower but Europe not as much.  There will be plenty to ponder over the next two days.  But right now it's Friday afternoon and time for a much needed break.

The Dow got clobbered again and lost over 1000 points for the second time this week.  The most watched index fell 1033 points on extremely heavy volume.  The advance/declines were 8 to 1 negative.  The summation index is heading lower.  At this rate we are moving into the potential crash zone for the summation index.  We're not there yet but if the decline continues we could get there soon.  Volatility remains elevated and the trading is tricky as premiums are sky high for the SPY options.  That said, the retest of the early week lows has already failed.  Where we go from here is a guessing game.  I guess 2500 on the S&P 500 would be a good spot to have the decline take a breather.  It's a nice round number and it is below the 200 day moving average.  But looking at the daily chart, there's support that comes in right where we are now, give or take a few points.  And a few points here means about 25 or 50.  We've now had a 10% correction but the market is in crazy mode.  Tomorrow will be interesting.  GE lost 3/4 and the volume is still heavy.  New lows for this move lower in GE.  Gold was up over $5 on the futures as the US dollar finished little changed.  The XAU and GDX had fractional losses on good volume.  Not exactly a flight to safety for gold and the dollar.  Mentally I'm feeling OK.  Short the rallies is about all I can say here.  If there are any rallies.  We did have a bounce but it died rapidly yesterday.  I might consider the SPY February calls again if we get to 250 there.  There's better support at 245 though.  It is all in a state of flux at the moment.  On a very short term basis this could be the 5th wave down of the move lower that began on January 29th.  That's my best guess for now.  Trying a trade here would be very risky.  After somehow getting away with the last trade, it may be better to just sit on the sidelines for now.  I'll consider the alternatives overnight.  What we are seeing is the result of the parabolic move higher in January.  This is how those moves end.  The trip down can be just as fast or even faster as we are witnessing right now.  There will be opportunities though if you are good enough to find and take advantage of them.  We'll continue to keep looking.  Asia was higher and Europe lower overnight.  We'll finish out this volatile week tomorrow.

Bouncing around today as the market is trying to make up its mind on where to go.  The Dow lost 19 points on very heavy volume.  The advance/declines were slightly positive.  The summation index is heading lower.  The overall market was much weaker than the Dow.  The Dow was up almost 400 points during the day.  So you can see that the intra-day volatility remains.  I was considering the SPY February puts at one point but the premiums are still out of whack.  I may look to try the calls again if we retest the lows before expiration.  A run back to the 275 level on the SPY will have me attempting the puts.  As you can see the situation remains fluid.  I am going to try not to be in any kind of rush and consider myself fortunate to have gotten out of the previous trade unscathed.  GE lost a couple cents and the volume is still heavy.  Gold dropped over $10 as the US dollar was higher.  The XAU fell 1 1/2, while GDX shed 1/3.  Volume here remains good.  Mentally I'm feeling OK.  We've basically had a short term collapse and now we are in the aftermath.  The option premiums are still all over the place and that makes for difficult trading.  But as the days pass on the way to expiration, the volatility premium will evaporate.  If I do attempt another trade in the February cycle, it will be at the price that I want and nothing else.  Getting a signal would be the ideal situation but if we get to the levels that I explained before it may very well be worth a shot.  You can forget the economic data for now and simply focus on the market movement itself.  Earnings have suddenly taken a back seat but that's what happens when you get a trading environment like this.  Risk is higher than normal but the rewards have the potential to be higher as well.  Most likely quicker too but that makes for tougher trading.  You can always simply stay on the sidelines and wait for things to settle down.  I'll be keeping an eye on things and hopefully the market will cooperate for another profitable trade before the 16th.  Asia was mixed and Europe higher in last nights trade.  We'll see what tomorrow brings. 

Just another crazy day on Wall Street as the Dow got the bounce we were looking for and rose 567 points on heavier volume than yesterday.  The advance/declines were over 2 to 1 positive.  The summation index is still heading lower.  I'd like to see some follow through tomorrow but in this environment you take what you can get.  We were down over 500 points early and the days range was over 1000 points again.  The volatility here has gone off the charts.  My SPY February calls were all over the place.  They showed a profit at one point early.  Then they were at an over 50% loss.  They once again came back and I got out with a better than 50% profit.  However the market kept going and it looks like holding on until tomorrow would have been a better idea.  But with the way things are going now, I'll take getting out today.  This trade was going to be a big loser.  I'm not sure what the next trade will be but I can tell you this.  You've got to be quick on the execution because the pricing is looking pretty squirrelly during the trading session.  The decline may be done for now but that doesn't mean that we won't go back to retest todays low.  I'll have to pour over things tonight to develop the next idea.  I don't think that we are going to be going straight back up.  GE was up 1/3 and the volume is still very heavy.  Gold lost $10 on the futures, while the US dollar finished little changed.  The XAU lost a point and GDX dropped almost 2/3.  Volume was heavy.  US interest rates came down today but the dollar didn't move.  The fundamentals for gold here are bearish in my opinion.  Mentally I'm feeling a bit exhausted due to the increased volatility.  There are opportunities to be sure.  On an intra-day basis no less.  But the risk is extremely high and you've got to be nimble and not fall in love with your trades.  I'd like to try something else before the expiration but I'm not exactly sure what to do right at the moment.  You can throw out any economic data due out this week as the market has taken on a life of its own.  The last fibonacci retracement level for the SPY on a snap back basis is around 275.  That could be the spot to try the puts again.  We are at 269.  I may be willing to take a chance there.  If we somehow go lower from here, I might want to try the calls again at around the 260 level.  The only thing that I can say for sure is that we are in a very fluid situation that requires a skill level that I may not possess.  But that won't stop me from trying.  Again, don't fall in love with anything and take your profits when you can.  The market conditions that we are experiencing now won't continue forever.  The trading will get back to normal eventually.  But we saw a parabolic rise to the top and now we've seen the inevitable collapse of that.  Where we go from here is all that matters.  But don't expect any new all time highs anytime soon.  Foreign markets were crushed overnight.  We'll see how things go overnight and I'll try to come up with the next trading idea before the February expiration. 

The market simply collapsed today as the Dow dropped over a thousand points.  The most watched index shed 1175 points on extremely heavy volume.  The advance/declines were over 8 to 1 negative.  The summation index is in a free fall.  I thought support was at 2700 for the S&P 500 but we just knifed through there.  The market goes where it wants.  Volatility is off the charts.  The market goes down faster than is goes up.  We've wiped out the gains for the year in just over a week.  I made the mistake of getting some SPY February calls to try and play a bounce that I thought would happen.  That trade is getting crushed and I doubt it will come back.  The volatility is keeping the premiums up.  So if I can hang around for the snap back bounce, I may be able to salvage a workable loss.  Otherwise it's just kiss it goodbye.  We're in extreme market conditions here, so anything goes.  It looks like there's more support for the S&P at 2600 but there are no guarantees there.  Well, at least I was right about the rally being over.  Those February puts would have been quite profitable if you got them and held on.  GE lost 3/4 and the volume was very heavy.  Who knows where we're going here.  Gold was up $6 but nobody noticed.  The US dollar rose in a flight to safety.  The XAU and GDX had fractional losses on good volume.  Mentally I'm feeling OK.  I suppose you could call today a mini-crash since we did drop over 1000.  It was off even more than that at one point late in the day.  I do think that it is a bit overdone at this point but what do I know?  We are due to bounce but we were due this morning as well.  The McClellan oscillator is even more oversold now and it won't stay that way for long.  At least usually it doesn't.  For me I'm now in the hoping stage and that is no way to trade.  I'll be looking to see how much I can cut the loss.  Where does the market go from here.  Even after todays sell off, I still  see in the media that this is nothing to worry about and stocks will come back.  That tells me that there is still a lot of complacency out there.  So we probably have lower to go.  There is no doubt in my mind that this is the beginning of a bear market.  The long bull market has come to an end.  I don't know how long the bear will last but in my view the rally since 2009 is now over.  There's nine days to go in the February option cycle.  If I hadn't gotten filled on the SPY calls today, I would be sitting the rest of this option cycle out.  The market is moving fast right now and I don't know if I'm up to the task.  Like I've already said, this has to be a cut the loss trade now because the strike price is so far out of the money.  We'd need to see a 1000 point rise for this thing to work.  That is highly unlikely.  Stay tuned to this game because it has really gotten interesting.  Europe and Asia were both lower and they will get creamed overnight.  We'll see if this thing can at least stabilize tomorrow but anything can and will happen.  

And so it goes.  The Dow got clobbered today and fell 665 on extremely heavy volume.  The advance/declines were almost 9 to 1 negative.  The summation index is heading down.  What can I say?  Another opportunity lost.  The employment report didn't really matter.  Yesterday the McClellan oscillator gave a signal for a big move and we got it today.  All parabolic moves end ugly and here is your proof from the markets extraordinary rise since the beginning of January.  I'm not sure how low we go here but all rallies can be shorted from here on out.  The long running bull market is over.  I had pegged 273 on the SPY for the extent of this decline, which equated to 5%.  We may go further.  I'm looking for follow through selling Monday morning but that will be the opportunity to get long for a short term bounce if you so desire.  We are now extremely short term oversold and upside is coming.  The tricky part will be trying to figure out where to buy the SPY February puts to hold until expiration Friday.  That seems to me to be the better trading idea in the days to come next week.  I just wasn't quick enough to recognize the opportunity this week.  Again.  But on the plus side at least my ideas are looking better and it is only a matter of time before the winning trades start rolling in.  GE was off over 1/3 and broke $16.  Volume remains very heavy here.  I don't have any ideas for GE right now.  Gold dropped around $15 as the US dollar was higher.  Interest rates have taken off and that finally was reflected in gold and the dollar.  The XAU shed 3 3/4, while GDX lost 3/4.  Volume was pretty heavy.  The gold shares were overbought and due for a decline.  We're seeing that now.  Mentally I'm feeling a but frustrated as the market drops and I'm not taking advantage of it.  Perhaps the speed of the SPY is too much for me, since I haven't really traded it sine last October.  There's also the chance that I'm too risk averse since the last few trades that I did in the SPY were losers.  I'm going to have to try and sort things out in my head over the weekend because the market is certainly not going to wait around for me to get my act together.  Usually what happens after a drop like this is that you will get a huge upside day out of the blue.  Then everyone thinks that things are back to normal.  That will be the time to look to try the SPY puts again.  I don't know if it will work on the first bounce or not because what we have seen this week is extreme.  But I do know we'll see some kind of big upside day at some point next week.  How the market does after that will tell you a lot about where we are heading.  Europe and Asia were generally lower but I expect Monday morning overseas to be ugly.  There's a couple weeks left in the February option cycle, so there is still time to tackle a trade.  I'll be checking the charts over the weekend as usual.  If you are nimble enough the SPY calls purchased on Monday weakness should work for a short term trade.  If not, I'd look to short any two to three day rally next week.  It's Friday afternoon and time for a break.

Somewhat of a holding pattern today but we did bounce around a lot.  The Dow rose 37 points on good volume.  The advance/declines were negative.  The summation index continues lower.  The overall market was weaker than the Dow.  There isn't any doubt in my mind that we're heading lower but near term strength is expected.  Some of my indicators are indicating that we are short term oversold.  Even if we are lower tomorrow, I expect some type of rise at the beginning of next week.  If we're up tomorrow I may have to change that prognosis.  I've got an open order in for some SPY February puts but it will take a rally for the order to get filled.  Anybody who is paying attention can see the change that we have in market action recently.  The days of simply heading higher everyday are over in my opinion.  I do think that the February index puts will work.  GE was off over 1/8 on good volume but less than we have seen lately.  The $16 continues to hold for now.  Gold was up over $10 on the futures as the US dollar was lower.  This occurred despite a rise in US interest rates.  I'm not sure this inverse relationship can last forever and I certainly don't know why it is happening.  The XAU and GDX finished the session flat on light volume.  Mentally I'm feeling OK.  Still a little over two weeks to go in the February option cycle.  Attempting a trade here will be tricky because the nature of things has changed.  Volatility has returned and the trading must be done in a faster mode that I haven't done in a while.  I'll take my cues here from the summation index and it is pointing towards lower prices.  At the rate things are going at this point, I won't be entering a trade until next week.  We've got AAPL after the bell and the jobs report tomorrow morning.  Ideally we'll see a rally that carries over into Monday.  If we just head down tomorrow, I may have to rethink the February SPY puts because we will have already moved too low perhaps.  As usual it's a fluid situation.  But I do still believe that rallies can be shorted for now.  Asia was closed or lower while Europe was down.  Looks like Apple missed estimates.  We'll see what tomorrow brings.