Monday, October 31, 2016
We started the week and finished the month of October pretty much flat on the session. The Dow fell 18 points on good volume. The advance/declines were barely positive. The summation index continues lower. We were positive for most of the day and did not really see any decline. I did place an order for the SPY November calls. It wasn't filled but I am leaving it open overnight. We are now short term overbought and should be heading higher from here. A bounce at the least. I can only hope that I'll be able to take advantage of it. The VIX was higher today but there wasn't any volatility or decline. I'm puzzled about that. We've got economic data due this week and a Fed meeting. So there will be plenty of excuses for things to happen. I'm sticking with the buy weakness mantra. I do believe that it will work here. GE was off 1/8 after being higher earlier on heavy volume. Still moving here on the takeover/acquisition talk. Gold didn't do much today and the US dollar was little changed as well. The XAU gained 2 1/8, while GDX added 3/4. Volume was good. Perhaps the gold shares will be leading the precious metal higher. Mentally I'm feeling OK. We'll begin the month of November tomorrow and the seasonality factor will be positive for stocks despite the election for now. Plenty of time in the November option cycle. I'm not sure what the market is waiting for but I do expect positive price action near term. It would be great to see some weakness early tomorrow morning to perhaps fill my option order but that is just wishful thinking. I would be surprised if we were lower on the day tomorrow. The SPY option premiums are too high for my taste at the moment. That said, the time for the calls is now in my opinion. Europe and Asia were slightly lower overnight. We'll see what tomorrow brings.
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