Thursday, June 06, 2019
Continuing to build on this weeks gains as the Dow added 181 points on average volume. The advance/declines were positive. The summation index is trying to turn back up. We got a signal from the McClellan oscillator last night for a big move within the next two sessions. Today fulfills that. It doesn't appear that we'll see a pullback to try the SPY June calls at this rate. Tariffs yes, tariffs no and that seems to be what's driving things at the moment. We're at the mercy of the news spin and that isn't exactly how we like to do it. Technically speaking the major averages still have room to go higher on the short term indicators. GE was up three cents on light volume. Gold rose almost five bucks as the US dollar was lower. The XAU and GDX had fractional gains on OK volume. Overbought here to be sure and I did consider selling my GDX June calls today. But with still two weeks to go in the June cycle, I'm hanging on for more gain. Not trying to be greedy here, I'd just like to make the most of the trade. Mentally I'm feeling OK. With all of the tariff talk let's not forget we've got the employment report due out tomorrow. Not sure what we'll see there but there should be some market movement off of that. Unless we get a tariff headline and then the jobs report won't matter as much. RUT hasn't participated in the last couple of sessions and we'll need to see some upside there soon to confirm the move higher in the Dow. That's my view on things here. TRAN was lower today as well so we don't have all hands on deck for the rally at the moment. The breadth certainly hasn't been good with the exception of Monday. I do still believe the move higher is for real though and will look for 2900 on the S&P 500 as the first line of resistance. A pullback before then will have me taking a look at the SPY June calls. Gold is overbought here and perhaps it will stay that way. I'd welcome a sideways consolidation for a few days before moving higher in the ideal scenario department. Asia was mixed and Europe lower overnight. We'll close out the week tomorrow.
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