Friday, February 21, 2020
Virus fears prevailed again as the Dow lost 227 points on good volume. The advance/declines were 2 to 1 negative. This should move the summation index lower. The overall market was weaker than the Dow and that should be noted. The short term technical indicators have rolled over and this has the feel of more than just a brief decline. This could be the beginning of a more protracted move lower. I may be looking at buying some SPY March puts early next week. GE was off 1/4 and the volume was light. Getting short term oversold here. Gold continues to shine and the futures rose $25. It has been quite a week for the precious metal. The US dollar dropped today. The XAU added 3 1/8 while GDX climbed 7/8. Volume was heavy. I still may chase this move if we see some weakness early next week because it has been a high volume breakout for sure. You can also be sure that the decline from this rise will be just as swift when it happens. Traders pile in and they pile out of this trading vehicle. In retrospect I should have just jumped on board after my open order on Tuesday wasn't filled. Mentally I'm feeling OK. The VIX jumped today and made it to the 18 level. There's still room for the short term indicators to move higher there. The NASDAQ is now leading the way down and that's bearish. Since the decline is news driven, it will trade on any reports coming out about the virus be it negative or positive. So it won't be an easy market to trade. But as you can see from the activity during this week, there are opportunities to take advantage of. I'll have to go over things again this weekend and decide what to do next week. It won't be easy since my confidence isn't where it needs to be. That said, I could remain on the sidelines if I'm not up to the task. I'll see what stands out to me over the weekend and take it from there. Europe and Asia were lower overnight but it isn't a bloodbath just yet. It's Friday afternoon and time for a break.
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