Monday, May 20, 2019
Lower to begin the week as the Dow fell 84 points on about average volume. The advance/declines were 2 to 1 negative. The overall market was much weaker than the Dow. The summation index is moving lower. We'll take our cues from that. I'd like to get some SPY June puts if we get some kind of a set up. But it may be that the market simply heads lower from here. I looked things over this weekend and that is the strategy that I've determined. Breadth is starting to weaken here on a consistent basis which is the opposite of what had been happening. You can blame it on the tariff wars or whatever you'd like. I'm hoping we'll move sideways here to take out some of the option premium as the prices are really high. The extra week in the June cycle doesn't help on that front. Headline risk seems to be taking a back seat here in the near term. GE was off 1/8 on light volume. Gold and the US dollar finished little changed. Ditto for the XAU and GDX. Mentally I'm feeling OK. There's a potential head and shoulders top forming on the Dow daily chart. The NASDAQ had a gap down today on the open. RUT continues lower. Most of the short term technical indicators for the major averages are oversold. But we're not seeing the usual bounce up from there and that is why I'm leaning towards the bearish side here. Negative seasonality is another factor. I'd like to see things move sideways for a week or so and then attempt to purchase some SPY June puts. But the market usually doesn't cooperate with my wishes. Like I said, we may just head down from here. We'll have to see how the week goes. Asia was mixed and Europe lower in last nights trading action. We'll see how things go tomorrow.
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