Friday, January 18, 2019
Powering higher as the Dow gained 336 points on heavy volume. The advance/declines were 3 to 1 positive. The summation index is moving higher. Perhaps today was what the McClellan oscillator was signaling. Overhead resistance? No problem as the S&P 500 is plowing ahead. Next up, the declining tops line at the 2700 level. It's only 30 points away. That would be the logical spot to try the SPY puts again but I don't know if I want to step in front of this freight train. The thaw in the US/China tariff war is the excuse for the rally. The fact that it just happens to occur during options expiration week is just a coincidence. Sure. Overbought but we've been that way for days. The VIX is making its way back to the 200 day moving average at 16.5. That will be the moment of truth and I will try the SPY February puts there. GE was off a bit on good volume. Gold fell $11 and the US dollar was higher. The XAU dropped 1 1/8, while GDX fell 1/3. Volume was a bit above average. No need for gold if the market continues to rally as the fear trades will unwind. Mentally I'm feeling OK. Not a good week for me as I booked a couple more losing trades. In retrospect waiting expiration week out would have been a better idea. But you go with what you know at the time. The rally seems like it has no end. If the US government shutdown ends, that would provide another reason to buy. Right now it appears that the market is ignoring any bad news and there are no sellers. A V bottom is in place and I don't know how much longer we can simply go straight up. Usually it's longer than you think. Europe and Asia were both higher as money is pouring back into stocks around the world. I'll check the charts over the weekend but it looks at this point that the rally will never end. We know better than that. It's Friday afternoon and time for a break.
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