Friday, January 19, 2018
Record highs for some of the major stock indices but not the Dow today. The Dow did gain 53 points on good volume. The advance/declines were 2 to 1 positive. The summation index is back to trending sideways. The overall market was stronger than the Dow. RUT managed to turn around as well so the negative sign we were getting there is abating. The short term indicators on the VIX have turned back down as well. It looks like we have more gains to come as the S&P 500 has broken above the short term resistance. I'm still considering the SPY February puts though but will try and wait for a negative divergence. GE didn't participate again as the earnings report was announced. It fell another 1/2 on the extremely heavy volume that we've seen all week. Oversold on the short term here but this stock has really fallen out of favor. If not for its negative action the Dow would be that much higher. Gold and the US dollar both had slight gains. The XAU and GDX were little changed on light volume. Mentally I'm feeling OK. The week did have some selling for a change but we finished near the highs for the week on the broader major averages. Back to short term overbought again. We'll get some economic data mid to late next week to possibly trade off of. We're back to no overhead resistance for the S&P. Can anything derail the market? At some point, yes but we certainly don't know when that point will be. I still say that it's parabolic and dangerous but that doesn't mean that we can't go higher. The technical indicators still don't work for sell signals and we aren't getting buy signals when we simply remain overbought. I'm going to go over everything again this weekend to try and figure out some kind of game plan going forward. It won't be easy. Europe and Asia were higher overnight. It's Friday afternoon and time for a break.
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Even on a good day, GE is weak in an extended expansion cycle. With the recent negative news and a clawback, I expect GE to go much lower. GE might experience a dead cat bounce before hitting bottom.
Right now GE have two profit potential from an investor perspective:
- Investors can play short term trades to skim some gains from severe price movements due to headlines.
- Or, Investors can wait until the dust settles. Wait for the news to forget about GE various issues. Wait until the tax charge issue is built into the price. Wait until there's a positive change within management direction. That when GE is worth buying for a long-term hold.
I expect GE will be a solid buy only after a nice market correction and investors flocks over to a defensive and cheap stock.
At the minimum, GE need to ensure that the recent events do not impact their long term dividend payouts. As of right now, even dividend seekers would not buy GE stocks without a signal.
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