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Monday, October 01, 2018

We had a big rally early but it faded during the day.  The Dow did manage a nice gain of 192 points on about average volume.  The advance/declines were negative though, with the NASDAQ posting a loss.  The summation index continues lower.  RUT sank below its 50 day moving average.  The VIX remains oversold.  My work indicates some upside this week but I did place an order that I left open for the SPY October puts.  I will have to adjust this overnight.  I'm not exactly sure what's going on with the market right here.  The Dow in the lead is usually a late in the uptrend event.  The breakdown in the RUT is troubling as it is usually the leader.  The breadth has been terrible lately and certainly not what you would normally see today with a rise in the Dow of almost 200 points.  So I'm cautious at the moment.  GE was up over 3/4 on the heaviest volume that I've seen there.  The CEO got fired today and the market enjoyed that.  Gold lost a couple bucks while the US dollar was slightly higher.  The XAU and GDX finished little changed on light volume.  Mentally I'm feeling OK.  Here we are in the month of October.  It's known for some wild events and we'll have to see if we see that again this time around.  It's also a good time to put money to work longer term.  The seasonality turns positive for the market in this month.  As you know we've got the jobs report this Friday and that will be the focus eventually this week.  The rally today was based on a deal for NAFTA.  I don't know if that will have any market staying power.  Todays price action was a one day reversal to the downside for the NASDAQ.  The fact that the S&P 500 couldn't hold on to its gains as well isn't a good sign for the bulls.  I do think that we'll see some more upside at some point this week though.  That's what my work is indicating.  But there's no guarantees in this business.  I'll look things over again tonight.  Asia was mixed with some markets closed last night.  Europe was higher.  We'll keep an eye on the overnight developments. 

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