Wednesday, February 05, 2020
The Dow continued its climb and added 483 points today on heavy volume. The advance/declines were 3 to 1 positive. This will move the summation index sideways as it tries to turn around. The S&P 500 closed at a new all time high. My SPY February puts were stopped out for a 33% loss. I then tried this idea once again at a higher strike price but it appears this was a wrong move as well. It should get stopped out for another loss tomorrow morning. The market is simply moving higher regardless of the news. The small decline that we received last week looks to be done. Unless there is some kind of negative turnaround overnight, the usually reliable signal that I received for lower prices has failed. The short term technical indicators for the S&P have more room to move up and it appears that they will. Perhaps my under the weather condition is affecting my brain but there are no excuses. Stepping aside was an option that I did not take. The overall market was not as strong as the Dow today. GE was up 1/4 on average volume. Gold was up around $5 on the futures and the US dollar was higher as well. The XAU was up 1/2, while GDX was unchanged. Volume was about average. The gold shares are now in the oversold zone but the US dollar has broken out above its down trend line. I'm still in the bullish camp for the gold shares linger term. Mentally I'm feeling tired as I am not up to speed just yet. The VIX is at the moment of truth as it has closed right at the 200 day moving average. The short term technical indicators for the VIX are mid-range, so it could go either way. I must admit though with the powerful move up that we've seen since the beginning of the week, the odds favor a move lower for the VIX with higher equity prices the result. I will simply have to take my losses and move on. Most likely to the sidelines until I'm feeling better. Asia and Europe were higher in last nights trade. It looks like all signs point to higher prices with the China virus not a concern anymore and the US impeachment will be in the rear view mirror. We'll see what tomorrow brings.
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