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Thursday, December 19, 2019

We got some upside today as the Dow rolled ahead 137 points on heavy volume.  The advance/declines remain positive.  The summation index is moving up.  Money is looking for a place to go and stocks seem to be it.  No news to explain the rally except that Trump was impeached.  The market obviously doesn't care.  Plenty overbought here any way that you look at it.  I'm waiting for my sell signal to take hold and that may take some time.  Too late in my mind to try the SPY calls here.  In retrospect the December calls were the way to go.  Triple witching tomorrow and that should skew the volume higher.  Holiday mode after that.  GE was up a few cent and the volume was light.  Gold was up $5 on the futures.  The US dollar finished little changed.  The XAU and GDX finished little changed as well on light volume.  Mentally I'm feeling OK.  The VIX remains oversold and that condition could persist.  No overhead resistance for stocks and that's a plus for the bulls.  In rallies the overbought condition can last for quite a while.  That is the position that we find ourselves in today.  I do not expect a sell off with the holidays upon us but I could be wrong.  Business trading for the most part will finish for the year tomorrow as many players will be home for the holidays.  My hope is that things set up for a decline in the beginning of January, which would be the best possible scenario for my ideas.  The February option cycle has an extra month in it and that will make the SPY puts pricey if the signal sets up for that time frame.  We'll simply have to watch and wait.  Many of the negatives for the market are out of the way so we'll also have to see how high things can go here in the near term.  We haven't even reached the days for the Santa Claus rally yet which will begin on the 24th.  Asia was lower and Europe higher overnight.  We'll close out the trading week tomorrow.

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