Thursday, May 31, 2018
Back and forth as the Dow fell 252 points on heavy volume to end the month of May. The advance/declines were shy of 2 to 1 negative. This should move the summation index back to sideways. The overall market was not as weak as the Dow and that is a plus. Geo-political concerns returned along with some tariffs for Europe and North America. The VIX is back above 15 and we'll take our cues from there. We'll get some movement off of the jobs report tomorrow. Which way as always is anybody's guess. My SPY June puts are actually showing a small profit. But that could all change tomorrow. GE dropped almost a dime on average volume. Gold was off a couple bucks while the US dollar finished little changed. The XAU and GDX had slight fractional losses on light volume. I'd expect gold to move on the employment report as well. Mentally I'm feeling OK. The market is trying to make up its mind where to go here. There was no follow through to both good up and down days this week so far. Tomorrow will tell the story I believe. The short term technical indicators for the S&P 500 are mid-range so things could go either way. The recent breadth along with the out performance of the small stocks seems to be pointing towards higher prices. But we are at the risk of headline events at the moment, so anything goes. If we get a confirmation that the US will be meeting with North Korea, the market should rally. Perhaps the opposite if there is no meeting. Or the market may ignore that and focus on something else. Tomorrow the key will be the reaction to the jobs report so we'll take it from there. Asia was higher and Europe lower in overnight trade. We'll begin the month of June tomorrow along with the end of the trading week.
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