Thursday, March 03, 2016
The rally continues as the Dow gained 44 points on heavy volume. The advance/declines were 3 to 1 positive. The summation index is roaring to the upside. Overbought and staying there for an extended period of time. How long will it last? Probably longer than you think. Getting near the overhead resistance but not there yet. Money continues to flow into stocks. It is a shame to miss such a strong move but it is way too late now to do anything about it. GE was little changed and the volume was lighter. Gold rallied on a weaker US dollar. The precious metal futures gained over $20. The XAU was up 2 7/8, while GDX added another 3/4. Volume was good. The gold shares are overextended just like the overall stock market. There doesn't seem to be any pause for them as well. I'm not certain what is going on but the technical indicators show no signs of breaking down at the moment. Mentally I'm feeling OK. Strong readings on the McClellan oscillator say this rally will continue to have legs. I'm still thinking that it will run up into the March expiration and then we'll have to see what happens after that. The mainstream media has yet to endorse the move higher, so there is probably more room to the upside. I doubt that the employment numbers will throw any cold water on this parade. We can start looking at the SPY puts when we get to the resistance. However we have to let the market build a top and that could take some time. Plus there's a chance that we just continue to power higher as most are actually looking for a decline at resistance. Never an easy trade in this game. We will simply have to keep an eye on things and be ready if the opportunity for a trades arises. Foreign markets were mixed overnight. We'll close out the week with the jobs report tomorrow.
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