Wednesday, October 03, 2018
We had some good gains early on but the market dropped in the final couple of hours. The Dow did manage a gain of 54 points on average volume. The advance/declines were slightly negative. The summation index continues lower. Not exactly sure what is going on here. No doubt due for some upside in my opinion and on my work but we aren't seeing any. RUT had some upside but we're still pretty oversold there. I adjusted my open order for the SPY October puts again. If we see some strength tomorrow, I may just purchase them. If not I'll wait for the employment report and go from there. The market is acting kind of strange here in my opinion. I get the feeling that it could fall off of a cliff. The weak breadth, narrow Dow leadership and lack of being able to hold on to any gains intra-day is a concern. I could also make a case that the S&P 500 could hit new all time highs in the next few days as well despite all the negatives. Interesting times. GE was up over 1/8 and the volume was good. Gold dropped a few bucks on the futures as the US dollar was stronger today. The XAU and GDX had fractional losses on good volume. Mentally I'm feeling OK. Interest rates ticked up today and perhaps that was the reason that the Dow sold off from an early 175 point gain. We now have a potential negative RSI divergence on the daily Dow chart. My work called for some rally here but the market just cannot hold on to any of its gains. The summation index is heading lower but we haven't seen that reflected in price with the exception of RUT. So I'm in kind of a quandary as to what to do next. All signs to me really point to lower prices here eventually, so I'll probably just stick to my SPY put plan. Over two weeks to go in the October option cycle so even if I am a bit early by purchasing them tomorrow it should work out if we indeed do drop. But we've had plenty of chances already to fall. Never easy in this game. Asia was a bit lower and Europe higher last night. We'll keep an eye on the overnight developments.
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