Monday, January 22, 2018
The beat goes on as not even a US government shut down can derail this runaway freight train. The most watched index gained 142 points on average volume for a new closing high.. The advance/declines were just shy of 2 to 1 positive. The summation index is trending sideways. The overall market was stronger than the Dow and hit new highs as well. The market continues higher regardless of the news and that's bullish. I'm still waiting for some type of negative divergence but we aren't seeing any. I'm also still considering the SPY February puts but I'm not in any hurry to put this trade on. Patience is key as we continue to climb higher with no overhead resistance. There is no timetable for a decline as the technical indicators have essentially stopped working. GE again is a laggard as it fell almost a dime and was the most heavily traded stock on the NYSE. I don't know where the bottom is here but it is trying to hold the $16 level. Gold was up a bit and the US dollar was down a bit. The XAU and GDX had slight fractional gains on light volume. Mentally I'm feeling OK. The February option cycle has begun and there is plenty of premium built into the options. That said, I will try and wait for at least some type of signal before attempting the first trade of 2018. It is hard for me to get calls when we're already overbought and have been for weeks. It is a parabolic move in my view and it won't end pretty. But as I've already said, it's impossible to call the top. Shorts have been squeezed to death and any selling has found ready buyers. I'll simply have to watch and wait. It isn't the most exciting proposition but it is my choice for now. Asia was mixed and Europe generally higher overnight. We'll keep an eye on things as earnings season rolls along.
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