Thursday, January 31, 2019
The Dow was off a bit but the overall market soared higher. The most watched index dropped 15 points on very heavy end of the month volume. The advance/declines were 2 to 1 positive. The summation index is moving up. The S&P 500 was up over 20 and the NASDAQ gained close to 100. It appears that the S&P is breaking through the down trend line on good volume. That would be bullish and it appears that is the case. Overbought and staying that way in the rally. After the bell Amazon reported good earnings so it looks like we'll go even higher tomorrow. But we do have the jobs report to contend with but it may simply be a non event in this ride. I did purchase some SPY February puts today. SPY got to the level of 270 that I was looking for. The VIX also made it down to the 16.5 level and its 200 day moving average. So this would be the area for the VIX to bounce if what I'm looking for is correct. If not, we'll move higher and the put trade will be a loss. It's looking like that's the case at the moment. If so I'll take the loss and move on. GE rallied on the earnings report today and rose a little over a buck on extremely heavy volume. Gold moved higher again as well with the futures up almost $10. The US dollar had a slight gain. The XAU rose 1 3/4, while GDX added 1/2. Volume was good. Overbought and staying that way for the gold shares as well. Obviously I should have held on at least another day on the GDX call trade. Money left on the table there and it looks like the rally will continue. There is plenty of overhead resistance here for the gold shares but we are cutting right through it at the moment. Mentally I'm feeling OK. Not much news coming out of the US/China talks the past couple of days. We'll see if we get anything overnight. It looks like the past week or so was a consolidation flag for the S&P as we have broken out above it on good volume. The 200 day moving average would be the next logical area of resistance at 2740 for the S&P and around 272 on the SPY. At the rate that we're going we'll get there tomorrow. I'll keep an eye on the overnight headlines but it looks like I'll get stopped out of the SPY February put trade tomorrow morning. Europe and Asia followed the US higher overnight. We'll see what the jobs report has to say and finish out the trading week tomorrow.
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