Monday, July 23, 2018
The Dow fell 13 points today in lackluster trading. Volume was light. The advance/declines were negative. The summation index continues its sideways action. The S&P 500 along with the NASDAQ did have one day reversals to the upside. So the overall market is acting better than the Dow. Plenty of earnings due out this week to get things going one way or the other. So we'll see. The S&P did close above the 2800 level. GE was off 1/8 and the volume was heavy. No love for GE here. Gold fell $7 on the futures as the US dollar was a bit higher. The XAU dropped 1 1/2 and GDX shed 1/2 on good volume. The gold shares fared worse than gold itself and that's bearish going forward. The seasonal strength in gold hasn't surfaced yet. My September GDX calls are now firmly in the red and I may just have to get rid if them even with over two months to go in this trade. The fundamentals for gold remain poor here with the rise in US interest rates. Although the gold shares are both short and medium term oversold it appears that they are simply staying that way. Mentally I'm feeling OK. The VIX remains low and I do think that we'll see higher prices for stocks this week. My thinking now is that I'll wait and see if the S&P 500 can make it back up to 2850 and try the SPY puts there. We've seen somewhat of a summer rally since the end of June. Perhaps it can keep going to hit my price target for the puts. We do remain short term overbought on the S&P. There's still a potential positive RSI divergence on the daily gold chart. But if the action of the gold shares today is any indication, this divergence will not pan out as planned. We'll have to see how the rest of the week shapes up. Europe and Asia were generally lower overnight. We'll see how it goes tomorrow.
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