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Thursday, December 05, 2019

Pretty much a day on hold as we bounced around and ended up with the Dow ahead by 28 points on average volume.  The advance/declines were barely positive.  The summation index is still heading down.  There's still plenty of geo-political turmoil in the background as the market decides what to do next.  We'll get the jobs data tomorrow and that should move things early.  But we are still at the mercy and risk of the next headline and that could drive things either way.  I was thinking that we should test the lows of this week but if we rally tomorrow that probably won't happen.  I considered purchasing the SPY December calls today but didn't.  GE was off a dime and the volume was light.  oversold on the short term here.  Gold was up a buck or so as the US dollar continued to sell off.  The XAU and GDX had fractional gains again on lighter volume.  Mentally I'm feeling OK.  The technical indicators on the VIX are about halfway so we don't have a clear picture there.  If we rally tomorrow I think you can say that the decline is over.  I'll err on the side of caution and stay on the sidelines for now.  However if we do rally tomorrow you can look back at this week as the opportunity to get long the December cycle.  Hasn't happened yet and it may not.  We also have to keep in mind the December 15th date as the next round of China tariffs is due.  If a deal is struck before then, expect the market to approve of that.  If not perhaps the SPY December puts will be back in vogue.  But lets get through the employment report first.  Asia was up, with Europe generally lower.  We'll check out the jobs numbers and finish the trading week tomorrow.

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