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Wednesday, June 12, 2019

The pause continues as the Dow fell 43 points on light volume.  The advance/declines were slightly negative.  The summation index is moving up.  Not a broad decline here so I think things favor the bulls for now.  This has the feel of just a stop on the way to higher prices.  As long as we don't see a huge decline near term, we're probably heading higher.  GE was up over 1/8 on average volume.  Gold was up five bucks and the US dollar was higher as well.  The XAU added almost a point, while GDX rose 1/3.  Volume was average.  The gold shares are overbought and staying that way which is what occurs in up trends.  My GDX June calls are still in the black with seven days to go.  23.5 remains the target and hopefully I won't get too greedy if we get there.  Mentally I'm feeling OK.  No tariff headlines or anything else to derail the process here this week.  That could all change tomorrow of course but we'll stick with what we've got.  Short term overbought or getting there for most of the major stock averages.  I'm expecting a run up into option expiration next week.  Not sure if it will take us to new all time highs on the S&P but it could.  We'll have the Fed to deal with in a week.  Should be a dovish statement and supportive to stocks.  But that's a week away.  The VIX continues sideways and it gives me a feeling that a big move there is coming up.  Which direction is the question.  The contracting Bollinger bands there also supports the big move theory.  But we can only guess at this point if it's up or down.  I do think something will happen before expiration though because it's almost time for summer vacations and players will be taking off.  Europe and Asia were generally lower overnight.  We'll see what tomorrow brings. 

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