Friday, April 06, 2018
The week is over and it was a crazy gonzo time for the stock market. The Dow traveled back down today and lost 572 points on light volume. The advance/declines were almost 4 to 1 negative. The summation index is heading sideways. The employment numbers were light but it didn't matter. The Fed chief gave a speech and it didn't matter. The market is at the mercy of president Trump and his twitter account. It is a headline risk environment and that is difficult to get a handle on. More talk of tariffs on China and the market doesn't know what to expect next. The stock market hates uncertainty. And that's where we're at today and for the foreseeable future. My SPY April calls are dead. Even if we rally 1000 points next week, it will be a big losing trade. Now that's not Trumps fault, it's mine. I'm really going to have to take a step back to reassess what's going on here with my trading. GE was off 1/3 and the volume is still lighter than lately. Gold rose $8 as the US dollar dropped on the light employment data. The XAU and GDX were both little changed and the volume was light. Mentally I'm feeling OK. The S&P 500 has still held on here at the 200 day moving average. But we are getting to the point that there won't be any reason to be a buyer. If we break here it will be ugly. There is a better chance now that will happen. Because if the summation index goes through the zero line, the market will collapse. It won't just be volatile up and down the way it is now. It will just move down. I sincerely hope that doesn't happen but I do think it will at some point in time this year. Perhaps now is the time. Only a sharp sustained turnaround from here can save things for the bulls. But at the rate we're going, that isn't going to happen. All we need is for China to increase its tariffs over the weekend and Monday morning will be a debacle. I'm not saying that will happen but it's out there. Or Trump will say something else that the market doesn't like. It's not an impossible market to trade but it is seemingly beyond my capability at this point. The short term technical indicators have now rolled back over to the downside for the major averages and they've got room to move lower. The market has found some buyers at these levels before but time is running out for some kind of longer than two or three day rally to take effect. Like I said yesterday when all the media is crowing about a double bottom in the S&P 500 it just ain't gonna happen. It's the nature of the game. I'd be wary of what's going to transpire in the market next week. I could be wrong and often am but this time it actually could be different. Europe and Asia were lower with the exception of the Hand Seng. It's Friday afternoon and time for a break.
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