Tuesday, March 31, 2020
Tuesday is to the downside as the Dow fell 410 points on heavy volume. The advance/declines were negative. The summation index is still moving up. The market was up in the morning but fell back after noon. We did close out the month of March and it was quite a month to be sure. We witnessed one of the fastest, steepest declines in market history. We'll be cleaning up after this for a while I assume. The short term technical indicators for the S&P 500 could be stalling here and about to roll over. The pandemic virus remains the main headline as economic data is still taking a back seat. I can't think that the negative jobs data due later this week will be a help for the bulls but they ignored the data last week. We are still in a fragile market environment in my view. GE was up a few cents and the volume remains good. Gold was sold off today in a big way. The futures here lost $45. The US dollar was slightly lower. I have no explanation for the drop in the precious metal. But it does emphasize the kind of uncertainty around all assets that is now the norm. The XAU only fell around 1 1/2, while GDX shed 7/8. Volume was lighter than it has been. Not sure why the gold shares held up as good as they did. They have rolled over in price but not on the indicators as of yet. I have placed orders for the GDX calls in April and May. I'm leaving them out there but could change my mind tomorrow. Mentally I'm feeling OK. The VIX was slightly lower today but the technical indicators are not yet oversold. It's hard for me to gauge what is going on here, with the readings so out of the usual realm. Increased volatility will most likely be the norm though. I suppose the question here is whether the market is taking a small sideways pause here or are we about to roll over? We'll know by the end of the week, I'm pretty sure of that. I'll still wait to see if we go higher before attempting the SPY April puts. We'll see if gold continues to drop tomorrow as well. Normally I'd say that we'll see some beginning of the month money flows. But right now everything is still in question. Asia was generally lower with Europe up in last nights trade. We'll keep an eye on the overnight developments.
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