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Thursday, May 09, 2019

Another loser on the day as the Dow fell 139 points on average volume.  The advance/declines were negative.  The summation index is moving down.  We did get a signal on the McClellan oscillator last night for a big move within the next two trading sessions.  Perhaps today was it as the Dow was off around 450 points early on.  The overall market wasn't as weak as the Dow.  The price action today looks like it is setting up for a short term bottom.  That would be my guess as the deadline for the tariffs is tomorrow and I'm pretty sure there will be some kind of last second deal that saves the day.  It is kind of ridiculous but that's the reality that we're in at the moment.  The daily VIX candlesticks chart also point towards some downside movement in that indicator coming up.  So don't be surprised by a huge rally tomorrow.  GE was off 1/8 on light volume.  Gold bounced a few bucks higher on the futures as the US dollar was a bit lower.  The XAU and GDX had very slight fractional losses on pretty light volume.  These stocks are simply out of favor now for whatever reasons.  Mentally I'm feeling OK.  I did look at the May SPY calls today but the premiums were higher than usual due to the recent volatility.  So I didn't try that trade although I think that it will be successful on a short term basis.  The market is currently being held hostage by Trump and China.  You always have the choice not to play the game and I think that is appropriate for now.  Option premiums along with risk have been elevated due to the stand off between these two.  There will be some kind of save face announcement before the tariffs take place and the market will breathe a sigh of relief.  That is what I think will happen.  It would be comical if there weren't so much money involved on a trading and market basis.  Technically speaking, we are more oversold than overbought but that doesn't seem to matter when the headlines take over.  Europe and Asia were lower overnight.  We'll see what happens tonight and finish the trading week tomorrow.

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