Wednesday, October 17, 2018
Up and down today as the Dow lost 91 points on light volume. The advance/declines were negative. The summation index is moving lower but not at the rate it was. I do believe that it is trying to turn around here just below the zero line. The Fed minutes caused a brief sell off but nothing more. Two days to go in the October option cycle and I will wait until next week to attempt the next trade. If we stay up until Monday or Tuesday, I'll be trying the SPY November puts. If we drop before then, I'll be looking for a positive divergence in the McClellan oscillator. I'll also consider getting short when and if the VIX gets back to 15. That's the game plan going forward as of today. GE was up almost a dime but off of its best levels of the day. Volume remains heavy. Gold fell a few bucks as the US dollar had a good day. The XAU and GDX showed slight fractional losses on average volume. The gold shares are holding up for a change. Mentally I'm feeling OK. The markets are trying to calm down after last weeks extreme volatility. So far so good. Option premiums for next month are higher than usual due to the volatility. Combine that with the time premium and the timing of the next trade will have to be precise. There most likely be a retest of the recent lows and that will be the trade that I'm looking for. From what level the retest begins is the question that needs to correctly answered. We also have to see if the McClellan oscillator can make it above the zero line in the near future as well. So as usual there are plenty of questions that need to be answered. Asia was higher and Europe lower overnight. We'll keep an eye on tonights overseas market action.
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