Thursday, February 07, 2019
Finally saw some downside today as the Dow fell 220 points on good volume. The advance/declines were 2 to 1 negative. The summation index is still moving up but not with the same gusto as before. The market did finish well off of its lows for the session. I don't think that this is the beginning of some huge downside move to retest the lows of December. I did try to get some puts beforehand in the past few days but to no avail. My next idea is to try the SPY February calls if things go according to plan. I would not purchase them until the beginning of next week if we do simply move sideways here or trade a little lower. The US/China tariffs reared their ugly head today and that was the excuse for the decline. GE lost 3/8 on the now usual heavy volume. Gold finished little changed but the US dollar continued its rise. The XAU and GDX had fractional losses on light volume. I think that I'll wait for gold to get oversold again before trying something there. Mentally I'm feeling OK. The VIX spiked today but finished well off of the worst levels. The Dow was off about 390 at one point. The fact that things didn't completely fall apart is a plus. There's still plenty of money to go around it seems. Now there could be another headline tonight and we could drop 500 points in a flash but I don't thank that is going to happen. The internals of the summation index are very positive. That usually means that any weakness that's seen won't amount to much. We've got option expiration week coming and its usual positive bias. If we can hang around for the next couple of days, I'll be looking at the SPY February calls on Tuesday. I expect to see some strength in equities after that. However we all know that the market rarely cooperates. Japan was lower overnight but the rest of Asia that was open fared better. Europe was lower led by the DAX. We'll close out the week tomorrow.
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