Monday, February 25, 2019
The Dow begins the week with a gain of 60 points on good volume. The advance/declines were just about even. The summation index continues to move higher. The US has extended the deadline to get a deal done with China. This was expected but the market did rally over 200 points in the morning. The rest of the day was spent digesting the news. My SPY March puts were stopped out but last night I did place another open order at a higher strike price for the same trade. It got filled before I was stopped out on the earlier trade. So I took a 25% loss on the Friday roll up trade and now I have a better strike price and the trade is showing a small profit. My concern here is that spike in the VIX today and the market moving higher. That usually means that there are more gains ahead. However we are still overbought on the short term, so this trade may actually have a chance to be successful. We'll see. GE climbed 2/3 on extremely heavy volume. It was up almost a point more than that today on news of selling off one of its divisions. There's plenty of overhead resistance for this stock at $12. Gold was off a few bucks and the US dollar was slightly lower. The XAU and GDX had fractional losses on average volume. We are about to enter a seasonally weak period for gold that lasts around a month. I'll be looking for an oversold condition in the gold shares to try the calls again there. Mentally I'm feeling OK. So for now we've got the US/China tariff tiff out of the way. Next up is a couple of days of Fed chairman Powells testimony to congress. I don't expect any surprises there. There's also the Trump/Kim summit in the middle of the week. Trumps old attorney is scheduled to testify before congress on Wednesday as well but that's been postponed before. The first look at 4th quarter GDP is out on Thursday. So there will be some economic news. Right now I'm just day to day with the current trade. The stop loss order is in. The ideal scenario would be a drop tomorrow to roll over the technical indicators. Wishful thinking there. But both RUT and TRAN were lower today but not by much. Europe and Asia were both higher overnight. China roared a head on the tariff news and out performed all the other markets. We'll keep an eye on the overnight developments.
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