Tuesday, February 19, 2019
We came off of the highs today but the Dow managed to finish with a gain of 8 points on average volume. The advance/declines were shy of 2 to 1 positive. The overall market was stronger than the Dow but also came off of the highs for the session in the final hour. I'm still considering the SPY March puts on strength tomorrow or Thursday. We're still short term overbought and that hasn't changed for weeks. It won't last forever. I'd like to see the S&P get to 2800 before trying the puts but don't know if that is in the cards. Trying to stay patient here because the strength of this rally cannot be denied. GE gained a few cent and the volume was light. Gold rallied today as the US dollar was lower. The gold futures gained twenty bucks to start the week. The XAU climbed 3 1/8, while GDX gained 3/4. Volume was very heavy. Money is finding its way into the gold shares. We had a rise and then a flag formation on the gold shares. Today proved that was a continuation pattern as the gold shares broke above the previous high. I would not chase things here. I'll wait for the next consolidation or drop before trying the April GDX calls perhaps. Mentally I'm feeling OK. Nothing has changed for stocks over the weekend. The rally lives on and selling doesn't last for now. We'll get some economic data this week, highlighted by the Fed beige book tomorrow. Of course the market will still turn on any rumor coming out of the US/China tariff talks. So we're still at the mercy of headline risk either way for now. I'm inclined to try the SPY puts if for no other reason than the fact that the market is long overdue for some kind of drop since the beginning of the year. It's now past mid-February. I suppose I'll wait for the reaction to the Fed minutes and go from there. Asia was mixed and Europe generally lower overnight. We'll see how things go tomorrow.
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