Monday, April 08, 2019
Another mixed bag to start the week as the Dow fell 84 points on light volume. The advance/declines were barely positive. The summation index continues up. The overall market was stronger than the Dow with the NASDAQ and the S&P 500 showing gains. All the markets opened lower and then continued to find buyers throughout the session as has been the case for quite a while now. We're still short term overbought and staying there. I think for a short term trade that strength tomorrow can be sold and I will be looking at the SPY April puts. The idea will be to be out by the end of the week if I do make a purchase. It's a strictly short term idea, as the trend is up and perhaps waiting for a slight pullback to get long into expiration is the better play. We'll see. GE fell 1/2 on very heavy volume. There was an analyst downgrade of GE early in the morning. Gold gained $7 on the futures as the US dollar was lower. The XAU added a point, while GDX rose 1/4. Volume was average. We're in a good seasonal zone for gold at the moment. I'm still hoping and waiting for a dip back below 22 on GDX but the short term technical indicators have already turned back up here. Mentally I'm feeling OK. Earnings season will be back in session starting on Friday with the potential to drive things either way. We'll get some inflation data and the Fed minutes this week. However the trend is up until proven otherwise. There just doesn't seem to be any sellers out there or a catalyst to drive things lower. Why try the SPY puts then? There is something to be said about complacency. The VIX is oversold and continues that way. The general tone in the media these days is that the market can only go higher. Even minor sell offs are quickly bought. At some point, that won't happen. My thinking is that will happen this week. If we do rally tomorrow, I'm going to try the SPY puts unless there is some dramatic news out overnight. That's the game plan for now. Asia was mixed and Europe generally lower overnight. Brexit is still in the headlines but another extension of the deadline appears to be on tap again. We'll see how it goes tomorrow.
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