Monday, April 27, 2020
A nice burst higher to begin the week as the Dow climbed 358 points on heavy volume. The advance/declines were shy of 4 to 1 positive. The summation index is moving higher. Not sure why we had a rally today as none of the news has changed. I did place an open order for some SPY May puts as we are just about at the final frontier on the retracement of 291. I'm not sure the price I have will get filled so I may have to adjust things tomorrow. I'd like to own the puts ahead of the 1st quarter GDX report due on Wednesday. What was interesting about these options today was that the price didn't move when when the index went up. Still short term overbought for SPY. GE was up over 1/8 and the volume was good. Gold lost around $10 on the futures while the US dollar was lower as well. The XAU and GDX had fractional moves one way or the other on light volume. The gold shares have buying no matter what and they are in a confirmed up trend. Every attempt to go lower is met with buyers. I do still have an open order out there for the GDX May calls. I think about just buying some without regards for the technical indicators but I simply can't do that. These stocks have to take some kind of break soon after such an extended run up don't they? Mentally I'm feeling tired. The VIX is at 33 and just about to touch its lower Bollinger band at around 31. To me that's an obvious spot to try the SPY outs. Oversold here on the technical indicators as well. I think it's worth a shot and I'll probably try and buy something tomorrow. Plenty of earnings due out this week but my focus is on the 1st quarter GDP and the market reaction to that. I think it will be negative. We also have the Fed meeting and announcement this week. However the Fed in my mind has done about all it can do at this point. I think they will be a non event this time around. I could be wrong. Some states are having limited openings of business throughout the country but most remain in lockdown mode. The pandemic virus isn't going away anytime soon and the US economy is not about to come roaring back. I think that the market is getting ahead of itself here but that's just my view. This hasn't been a broad rally by any means, with just a few big tech names driving things higher. So we'll see where things go from here. Europe and Asia were higher as money is heading into stocks around the world. We'll keep an eye on the overnight headlines.
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