Monday, October 07, 2019
We begin the week on a down note, with the Doe falling 95 points on light volume. The advance/declines were short of 2 to 1 negative. The summation index continues lower. We tried to get some upside follow through to Fridays huge gains but the market started to roll over in the final two hours. I did place an order for the SPY October puts but it wasn't filled. I still may try this idea if we get back to the resistance at around 296 on the SPY. Inflation data due out this week along with the beige book on Wednesday. We've got trade talks between the US and China starting on Thursday. So it could be a headline event situation at some point this week. In my mind the market could go either way but I will favor the SPY puts if we get some advance in the next couple of sessions. GE finished flat on the session and the volume was light. Gold fell almost $15 today as the US dollar was a bit higher. The gold shares didn't follow as much with the XAU and GDX showing fractional losses on little volume. I'm keeping my open order for the GDX January calls out there. Mentally I'm feeling OK. The VIX remains above the 16 level and above both the 50 and 200 day moving averages. I'm hoping that we get back to 16 there before a real decline takes place. But hope is not a good trading strategy. As long as the summation index continues going down, I'm going to stay with a short side bias. Whether the market cooperates with me being able to make a trade is what will concern me going forward. Only nine days to go in the October option cycle. Probably a good idea to be nimble here and not fall in love with any particular idea. The lack of volume lately certainly isn't a positive. We'll see if it picks up one way or the other. Asia was mixed and Europe higher overnight. Chine opens again tonight after being on holiday for a week. We'll keep an eye on the overnight developments.
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