Tuesday, December 13, 2016
Moving right along as the Dow gained 114 points on average volume. The advance/declines were positive. The summation index is moving up. There seems to be no stopping this market. The technical indicators have been thrown out the window. We are in a momentum based run higher. Overbought, staying there and I have written that statement for weeks. I don't know how long it lasts or what happens when it ends. My guess is that it won't be pretty but we can enjoy things for now. Inflation and retail sales data out tomorrow but all ears will be on the Fed statement. An interest rate rise is already baked into the cake. GE was off 1/8 and the volume was average. Gold was down $5 on the futures and the US dollar was a bit higher. The XAU and GDX had fractional gains. Volume there was a bit light. Mentally I'm feeling OK. No SPY December put trade for me as I cannot step in front of this freight train higher. I suppose that I'll look out to the January calls if we see some weakness. But at this rate, selling stocks seems to be a thing of the past. Interesting times. I can make a case for this being the 5th leg and final move higher from the lows of 2009 in a 1 through 5 event. But the last move up can on for quite some time. That's a guess as usual. Plus my count and interpretation of things could be wrong. In the near term you cannot fight the trend up. Perhaps we'll just keep moving higher into the expiration. However the weaker breadth moving up shouldn't be ignored. Eventually the severe overbought technical conditions will come into play. I just don't know when and will not try and guess the timing. We'll look for some type of negative divergence before attempting any kind of put trade or short. Europe and Asia were higher overnight. We'll see what the Fed has to say on Wednesday and if that propels the Dow to the 20000 level.
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