Friday, January 11, 2019
A day of hanging around mostly as the Dow tried to sell off again but couldn't. The most watched index fell 6 points on average volume. The advance/declines were positive. The summation index continues higher. Overbought and staying there for the major stock indices. Almost at resistance for the S&P. I did place an order for some SPY January puts but it wasn't filled. I'll go over this idea again on the weekend. The VIX is getting down to the level where it has turned around but we aren't there yet. I suppose the ideal scenario would for the VIX to get to 16 when we reach the declining tops line. That could happen next week if we remain overbought but the market rarely sets up like you want it to. The riskier play is trying the SPY January puts ahead of getting to the declining tops line. Plenty to think about. GE was flat on the session and the volume was lighter than it has been. Gold was up slightly as was the US dollar. The XAU and GDX had slight fractional moves on light volume. Mentally I'm feeling OK. Expiration week coming up with plenty of economic data due out if it comes. The government shutdown could affect the flow of data. The market is overbought. The VIX is oversold and at its lowest point in weeks. We are near or at overhead resistance for all the major averages. The McClellan oscillator remains in the 300's, which it rarely reaches. All signs really point to some kind of downside on tap next week. I will go over the charts this weekend but I do think that if we see any strength on Monday it should be shorted. That is what everything is telling me right now. The question is whether it will be just a short drop for the market to catch its breath or something more towards the retest of the lows that we haven't seen. Right now things look more like a V bottom to me but that could change. As always there's plenty of questions without obvious answers in the game. Plenty to ponder over the weekend. Asia up and Europe down to end the week. It's Friday afternoon and time for a break.
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