Monday, March 12, 2018
We had a one day reversal to the downside today as the Dow opened higher and closed lower. The most watched index closed 157 points lower on light volume. The advance/declines were positive though. Once again the overall market was stronger than the Dow, with the small stocks showing gains. As long as that condition persists the trend shall remain up. The summation index is moving higher as well. No trades for me here as there are only 4 days left in the March option cycle. I do expect some weakness at some point this week because we are short term overbought on one of my indicators and have been for a couple of days. There is some economic data out this week that could affect the market such as the CPI and retail sales. GE was up over 1/8 and the volume was good. GE has a seven day rally going for it at the moment. Gold finished little changed and the US dollar was lower. The XAU and GDX had fractional gains on about average volume. I still think that the fundamentals here for gold are bearish. Mentally I'm feeling OK. The weekend has passed and I had plenty of time to forget about the losing trade on Friday. The thing about this game is that you've just got to keep moving on. Win or lose the game keeps going forward. Although I expect some weakness this week I also would not be surprised if we close out higher as well. The internals still seem to favor higher prices for now. Next week could be different as we'll have the Fed to deal with. Bur for now my overall point of view is that higher prices are coming and perhaps some more new all time highs for some of the major stock indices. There is a potential negative RSI divergence in a couple of the small stock indices including the NASDAQ. But whether that actually means anything remains to be seen. Mt take on things lately has been wrong. Hence a trip to the sidelines is where I am. Europe and Asia were higher last night with the exception of the FTSE. We'll keep an eye on the overnight developments.
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