Wednesday, March 15, 2017
Expecting a rally today and we got it as the Dow rose 112 points on good volume. The advance/declines were 6 to 1 positive. The summation index is still heading lower but appears to be in the process of turning around. The Fed raised rates as expected and the market took off. We did finish off of the highs for the session though. I did sell the SPY March calls that I purchased yesterday but probably could have held on for more gain. But with only 2 days left in this option cycle, I got out. The gain was 150% but it could have been a bit better. Not sure what the next trade will be. GE was up almost 1/4 and the volume was a bit light. I don't see any trades here in the near term. Gold was up over $15 on the futures as the US dollar fell pretty good despite the rate hike. Evidently it was already baked into prices. It was not the reaction that I expected but I suppose traders were happy that there still may only be 2 more rate hikes this year. It's all really just a guessing game when it comes to the Fed. The XAU jumped 5 3/4, while GDX added 1 2/3. Volume was heavy. We'll see if this has legs or was just a one day wonder. Mentally I'm feeling OK. So that was a trade that worked and I expected it to. That is why you put in the time and effort every day and do the work. It is also why trading options can be a pretty lucrative game as opposed to the time involved trading stocks for similar capital appreciation. But it is riskier and certainly isn't an easy game. The technical expectations will come through for you more than not. That trade lined up in plenty of time before it happened. It isn't always that easy but the numbers don't lie. It's possible that we could see new all time highs before Fridays close but we could stall here just a bit as well. I didn't get greedy but maybe I should have. However there are no perfect trades. The short term technical indicators for the S&P 500 have now turned back up. A high volume breakout above 2400 would be the most bullish scenario. But if and when that happens is the question. I'll be looking out to the April option cycle now and there is an extra week for that time frame. Asia was generally mixed and Europe slightly higher. We'll see how they react to the Feds decision tonight.
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