Perhaps today was a delayed reaction to yesterdays news but whatever the case the Dow took off to the upside.  The most watched index gained 218 points on light volume.  The advance/declines were 5 to 1 positive.  The summation index continues strong to the upside.  A new high for the rally and we're at the 200 day moving average for the S&P 500.  This should provide some resistance considering how long that we've remained overbought.  But it is option expiration week coming up and so far it looks like the classic run up for maximum index option call value.  It looks like any trades that I had in mind will have to wait.  The next idea will be the SPY April puts if we get to the 2050 level on the S&P 500.  GE was up 3/8 and the volume was average for lately.  I'm not looking to do any trades here at the moment.  Gold fell over $20 on the futures.  The US dollar was only slightly higher.  I'm still waiting for gold to take an extended rest.  The XAU lost 1 1/8, while GDX shed 3/8.  Volume was average.  Mentally I'm feeling OK.  It now appears yesterdays sell off was the set up opportunity for the expiration week SPY calls.  However the daily technical indicators were not sold off enough for me to try that trade.  You won't catch them all.  I'll be looking for some puts if we get to the 2050 level on the S&P.  Can we simply keep going up and hit new all time highs?  It is a possibility.  There is no mention of it in the news as yet so it is possible.  There is still some bearishness out there despite this rally of 4 weeks or so.  I'll be keeping a close eye on the volume going forward as it seems to be slowing down.  Any light volume rallies into the resistance can be shorted in my opinion.  But we probably need to get through expiration week first.  We've got the Fed nest week as well.  I'll try and remain patient.  I'll be going over the charts this weekend as usual but the best idea will be to stay on the sidelines next week.  That's my thought for now.  It's Friday afternoon and time for a rest.

We bounced around a lot today but the Dow ended only down 5 points on a little less than average volume.  The advance/declines were negative.  The summation index is still moving up.  We were up and down over 100 points during the session.  The ECB statement came out and that was the given reason for the volatility.  It makes for tough trading here because there really is no solid signal at this time.  With only 6 days to go in the March option cycle the trading risk is high.  The technical indicators for the S&P 500 are still more overbought than oversold.  They started to roll over today but then the market made a comeback.  I don't see any decent trades here at the moment.  GE was off 1/8 and the volume was average.  Gold rallied $15 on the futures as the US dollar dropped about a point.  The XAU was up 2 2/3, while GDX added 7/8.  Volume was lighter than lately.  I still think this group needs to take a rest but it isn't listening to me.  Mentally I'm feeling OK.  Smaller stocks were weaker today and that is not a bullish sign.  But I can't rule out higher prices in the near term due to the expiration week coming upon us.  It usually has a bullish bias.  I can maybe make a case for the SPY March calls if we are weaker into Monday.  Otherwise I'll probably just have to sit it out.  The currency action today was confusing.  More accommodation from the ECB was met with euro buying and dollar selling.  A normal response to this would be just the opposite.  But the market always knows more than we do.  It makes for tough trading for sure.  Now we'll move on to the Fed next week and see how the market responds to whatever comes out of that.  Really without a clear trading signal right now the best course of action should be to stay on the sidelines.  Perhaps I can at least accomplish that.  Europe was lower overnight after the ECB, while Asia finished mixed.  We'll keep an eye on what happens tonight and close out the trading week tomorrow.

The middle of the week and a middle of the road kind of day.  The Dow rose 36 points on light volume.  The advance/declines were better than 2 to 1 positive.  The summation index continues higher.  The overall market was stronger than the Dow.  Not much to report about todays session.  Waiting on the latest from the ECB tomorrow.  GE was flat on the day and the volume was light.  Gold was down over $10 on the futures.  The US dollar finished little changed.  The gold shares sold off early but came back with fractional gains for the XAU and GDX.  Volume was average.  Gold is hoping for more stimulus from the ECB as is the overall stock market.  Mentally I'm doing OK.  I'm still looking for higher prices for the S&P 500 before the March option expiration.  Whether or not there is a trade there is the question.  I'd like to see a lower entry point as the technical indicators remain more overbought than oversold.  That's for the call side.  For the puts, I'll need to see at least the 2025 level on the S&P before considering a trade there.  With only seven days to go in the March cycle it really isn't looking promising at the moment.  Gold and the gold shares really need a rest and perhaps we are seeing the beginning of that now.  We'll see what the ECB has to say tomorrow and see how the markets trade off of that.

Lower today as the Dow fell 109 points on average volume.  The advance/declines were 3 to 1 negative.  Overdue for some downside but one day doesn't make a trend.  I still feel that we will see new highs in the S&P 500 for this move higher that began in February.  I could be wrong.  The summation index continues up.  We had to work off the extremely high readings in the McClellan oscillator and today is the beginning of that.  Although I'm not completely sure of what technical set up to look for here, I'm going back to seeking the SPY March calls.  The put trade that I was looking at yesterday will now be moot.  We needed to get up to 2025 for that.  GE was off 1/4 and the volume was average.  Perhaps if we trade back down to $29.50 I can try the March calls here as well.  It probably won't be a perfect technical set up though.  Gold didn't do much on the futures today as the US dollar was a bit higher.  The dollar is resting on its 200 day moving average.  It is something to keep an eye on.  The XAU lost 3 points, while GDX shed a point.  Volume was heavy.  The decline in the gold shares is not positive for gold.  Mentally I'm feeling tired as I have just returned from the dentist.  Once again outside influences are affecting my concentration here.  I think that if we continue weaker into the end of the week that I'll try the SPY March calls.  It won't be the perfect set up but some of the indicators could reach a short term buy spot.  It was a decidedly negative session with the small stocks and overall market weaker than the Dow.  The TRAN took a pretty good drop as well.  I do not think that this is the beginning of a new leg down for the stock market.  The technical indicators for the major averages have turned down but I don't think that they will get all the way down to an oversold reading.  But they could.  The market goes where it wants.  There is a chance that this is the beginning of building a top before we head back lower with a lot more steam.  But building a decent top will take time and one day of decline after a huge run up doesn't really mean anything yet.  The foreign markets were generally lower overnight.  We'll see if we get any downside follow through tomorrow.

Back and forth we went today with the Dow finishing with a gain of 67 points on good volume.  The advance/declines were 2 to 1 positive.  The summation index continues higher.  The overall market was weaker than the Dow, with the small stocks negative.  Certainly we are due for a rest here but regardless, the trend remains up.  Plenty of resistance coming up with the 200 day moving average and the longer term downtrend line.  I'm thinking that the 2025-2030 level on the S&P 500 would be a good place to attempt the SPY puts for a short term trade.  We'll see if the market cooperates.  Not a lot of economic data due this week but we do have an announcement coming later in the week from the ECB.  GE was off 1/8 on light volume.  I'm still looking for new yearly highs here soon although we do remain short term overbought.  The short term uptrend line remains intact.  Gold was off a couple bucks on the futures and the US dollar was lower as well.  The XAU was up a couple points and GDX rose 2/3.  Volume was good.  We remain overbought for an extended period for the gold shares and gold as well.  This cannot go on indefinitely.  Mentally I'm feeling OK.  The rally in stocks cannot go on forever.  We have been overbought for an extended period of time.  The McClellan oscillator is at its highest reading in years.  We are bumping up against some pretty strong resistance.  The plan will be to look at the SPY March puts if we get to the 2025 level on the S&P 500 for a short term trade.  9 days left in the March option cycle.  So there will be plenty of risk out there if this trade is attempted.  We will simply have to keep an eye on things and see what the market does here.  Oil had another good day and it appears that decline is over.  It did not help stocks that much so maybe that relationship has run its course.  I do think that gold needs to take a rest.  Given that March is historically the weakest month for the precious metal, I'd expect some type of decline there to begin sooner rather than later.  The foreign stock markets were slightly weaker overnight.  We'll be watching developments overnight and get ready for Tuesday. 

Still moving higher as the Dow rose 62 points on very heavy volume.  The advance/declines were 2 to 1 positive.  The summation index continues to roll on higher.  We are starting to run into the first resistance for the S&P 500 but at this rate it doesn't look like that will matter.  The employment number was strong but like I stated yesterday, it wouldn't matter either way.  The market is in rally mode.  Overbought, staying there and that is becoming a broken record.  Small caps, big caps, all the stocks are rising.  I did miss out on this great run but we'll have to look at what to do from here.  2 weeks to go in the March option cycle.  GE was up 1/4 on average volume.  I'm expecting new 52 week highs before the March expiration.  Gold was up a few bucks on the futures.  The US dollar was weaker again despite the good jobs numbers.  Not sure what to make of that.  The XAU and GDX were both off 1/8 on heavy volume.  They both also came well off of their highs for the session.  The daily candlestick charts are now showing an evening star topping pattern.  We'll see if that is what unfolds.  Mentally I'm feeling OK.  Quite a nice run here for stocks.  I think the next trade will be some SPY puts but the timing is in question.  I do believe that it will take time to build a top but we are not done moving up in my opinion.  Perhaps I can try a short term trade in the next couple of weeks but it will have to be a solid set up.  As soon as everyone believes that we are going higher, that will be the time to try the puts.  It has been an extended amount of time to be overbought.  However we can not guess when it will end, we'll have to wait for the market to give some clues.  I don't see any right now.  In my view the solid resistance for the S&P 500 is at the 2050 level.  That is where I'll be looking to try the short side.  There are no guarantees though, as the strength that we're seeing now could simply continue.  So as usual it's a tough game to play.  I would not go chasing things here to the upside though, unless we get a short term oversold condition.  And that is something we've been waiting for that hasn't happened.  I'll be going over the charts this weekend to try and come up with something.  For now it's Friday afternoon and time for a rest. 

The rally continues as the Dow gained 44 points on heavy volume.  The advance/declines were 3 to 1 positive.  The summation index is roaring to the upside.  Overbought and staying there for an extended period of time.  How long will it last?  Probably longer than you think.  Getting near the overhead resistance but not there yet.  Money continues to flow into stocks.  It is a shame to miss such a strong move but it is way too late now to do anything about it.  GE was little changed and the volume was lighter.  Gold rallied on a weaker US dollar.  The precious metal futures gained over $20.  The XAU was up 2 7/8, while GDX added another 3/4.  Volume was good.  The gold shares are overextended just like the overall stock market.  There doesn't seem to be any pause for them as well.  I'm not certain what is going on but the technical indicators show no signs of breaking down at the moment.  Mentally I'm feeling OK.  Strong readings on the McClellan oscillator say this rally will continue to have legs.  I'm still thinking that it will run up into the March expiration and then we'll have to see what happens after that.  The mainstream media has yet to endorse the move higher, so there is probably more room to the upside.  I doubt that the employment numbers will throw any cold water on this parade.  We can start looking at the SPY puts when we get to the resistance.  However we have to let the market build a top and that could take some time.  Plus there's a chance that we just continue to power higher as most are actually looking for a decline at resistance.  Never an easy trade in this game.  We will simply have to keep an eye on things and be ready if the opportunity for a trades arises.  Foreign markets were mixed overnight.  We'll close out the week with the jobs report tomorrow. 

Nowhere to go but up as the Dow gained 34 points on good volume.  The advance/declines were 2 to 1 positive.  The summation index continues higher.  Rally mode, overbought and staying there.  The market will probably trend up into the March expiration and there is still over 2 weeks to go.  Declines can be bought but they have been shallow so far.  I'm still looking for 2000 on the S&P 500 and then perhaps to the 200 day moving average at 2025.  The data that comes out doesn't seem to matter as the bulls are in control.  Seasonality favors long positions as well.  The employment report on Friday will most likely continue the trend.  GE was up 1/3 on average volume.  At this rate we'll be hitting a new 52 week high here soon.  Perhaps the calls here will still work for March.  I'll check the specifics tonight.  Gold was up $10 on the futures.  The US dollar was slightly lower today.  Metals are finding buyers again for whatever reason.  FCX has doubled in a little over a month.  I haven't mentioned this stock before but I was looking to put it in a longer term account but by the time I started to pay attention it was too late.  Simply another missed opportunity.  The XAU was up almost 2 1/2, while GDX added 1/2.  Volume was good.  I still think the gold shares need to take a break.  Mentally I'm feeling OK.  All signs point to higher prices as money flows into stocks around the world.  Oil has stopped going down and perhaps that is seen as a plus for now.  There are weekly down trend lines for the major averages that remain in place.  We are approaching them but are not there yet.  That should be the moment of truth for this rally.  At that point we can try the SPY puts but we have to wait until we get there.  You could look at yesterdays price action as the short covering for those attempts at the 1950 resistance level on the S&P 500.  Just a guess there as usual.  So with over 2 weeks left in the March option cycle patience is still required.  Global markets are in rally mode as well.  We'll watch the overnight action and go from there.

A blast off to the upside to begin the month of March.  The Dow jumped 348 points on good volume.  The advance/declines were about 5 to 1 positive.  The summation index is heading up.  It was a broad based rally and there is still room to go.  We have now moved above the 50 day moving average and the 1950 level on the S&P 500.  Next stop 2000.  We will get there and probably in the March option cycle.  It doers not appear that a trade in the SPY March calls is going to happen for me.  This was simply another missed opportunity.  This is a move that I should have chased.  Retrospect is never wrong.  GE was up 3/4 on average volume.  Comfortably above the 50 day moving average here now as well.  Gold fell a couple bucks on the futures as the US dollar was slightly higher.  The XAU fell 2 1/3, while GDX shed 3/4.  Volume was above average.  Perhaps this is the beginning of a pause for the gold shares that we've been looking for.  We'll see.  It is long overdue.  Mentally I'm feeling OK.  It looks like we might have to wait for the April or May SPY puts for the next trade.  The key will be from what level do we attempt that.  There's a chance that we could go all the way back to 2050 in the coming weeks.  The McClellan oscillator continues to be at a very high level in the +200s, that usually leads to extended advances for the major averages.  There is still plenty of time in the March option cycle but I do not think that price is going to accommodate us.  Declines are being bought rather quickly, so I don't think the chance to get some March calls is going to happen.  I could be wrong.  We don't make any money sitting on the sidelines but obviously the best time to purchase the calls has passed.  Foreign markets moved higher as well overnight but not to the extent of what we saw in the US today.  I do expect to see a worldwide rally overnight though.  We'll be watching as usual.

Weaker to end the month of February as the Dow fell 123 points on average volume.  The advance/declines were positive though.  The summation index continues to the upside.  Trying to get above the 50 day moving average for many of the major stock indices.  Some downside is expected as we remain overbought on a short term basis.  The McClellan oscillator is also very extended to the upside.  If we do remain lower into Thursday, perhaps we'll get a chance for the SPY March calls after all.  Lots of trading before then though.  GE was off 1/4 and the volume was average.  Gold was up around $14 on the futures.  The US dollar finished little changed.  The XAU rose 2 points, while GDX added 2/3.  Volume was good.  I still think that the gold shares need to take a rest as they have been over extended for weeks now.  Money has flowed into this sector for whatever reason.  I'd wait for an oversold reading before chasing this group.  Both short and medium term overbought.  Mentally I'm feeling OK.  Some more decline this week would set up the reverse head and shoulders pattern that may emerge in some of the major stock indexes.  That looks to be the set up worth trading if it occurs.  However I would expect to see some beginning of the month money flows in the next couple of days as well.  Never an easy trade in this game.  I'm still a believer that we are not about to see any major decline in the near term.  I could be wrong but the technical indicators in my mind are not set up for any carnage at the moment.  As always, things could change as we go forward.  Foreign markets were mixed overnight, with weakness in Asia followed by a holding pattern for Europe.  Oil rose today but it didn't seem to help the US equity market.  As usual we'll keep an eye on overnight developments.  Patience for now but we'll look for those SPY March calls towards the end of the week if things play out accordingly.

A pause for the Dow today as it fell 57 points on average volume.  The advance/declines were positive though.  The summation index continues to the upside.  the overall market was stronger than the Dow.  The small stocks continue to be leaders.  The trend remains up.  Still overbought and staying that way.  This can go on for a while.  Declines can be bought.  It doesn't appear that we will get a chance to partake in any of the gains at this point.  Although there is still plenty of time in the March option cycle, the odds of being able to purchase some index calls at a reasonable price diminishes with each passing day.  GE was up over 1/8 on light volume.  We have now barely made it above the 50 day moving average here.  Ditto for the S&P 500.  Gold was off $15 on the futures as the US dollar had a strong session.  The XAU shed 1 2/3, while GDX lost about 3/4.  Volume was heavy.  Perhaps this is the beginning of a rest for gold and the gold shares.  Mentally I'm feeling OK.  All indications are that the stock indices will continue to head higher.  Perhaps the next trade will be the SPY puts when we get to resistance at 2000 on the S&P 500.  Unless we get a multi-day pullback and a short term oversold condition, it probably isn't worth it to chase the index calls here.  Still three weeks to go in the March option cycle so there is time for a trade but my feeling is the optimum chance for the calls has passed.  We will have to see how next week plays out.  Monday will be the end of the month and Friday brings the all important employment report.  I think that it would be best to not force anything and wait for a decent signal.  Patience is required at the moment.  I'll be checking the charts over the weekend as usual.  for now it's Friday afternoon and time for a break.

Up we go as the Dow gained 212 points on OK volume.  The advance/declines were almost 3 to 1 positive.  The summation index is moving up.  Overbought and staying there for the S&P 500.  It appears that the low made yesterday was the chance to own some SPY March calls.  We are now getting above the 50 day moving average in the S&P.  The next stop should be the 2000 level unless we see a complete turnaround here.  I do not think that will happen.  GE was up 1/2 on average volume.  Getting above the 50 day moving average here as well.  Gold was off $5 on the futures as the US dollar slipped a bit as well.  The XAU added 2/3, while GDX gained 1/4.  Volume was lighter.  We still need a pause in these stocks.  Mentally I'm feeling OK.  It appears that the SPY March call trade has been missed.  I'll simply have to stay on the sidelines until we get a decent set up.  Maybe the puts will be the next trade.  We are overbought but can stay that way for a while in up trends.  There is still plenty of time left in the March option cycle.  However I can't force a trade to happen.  The Dow is the leader here and that usually turns out to not be a good thing.  But time will tell.  For now we'll sit patiently and await the next move.  Most foreign markets were higher overnight with the exception of China which got whacked.  It did not affect trading here.  Oil was higher again and perhaps the market is taking its cues from there.  We'll get a GDP revision tomorrow and close out the trading week.

A one day reversal to the upside today as the Dow opened lower and closed higher.  The most watched index gained 53 points on average volume.  The advance/declines were almost 2 to 1 positive.  We were off over 250 early and it was quite a comeback.  Needless to say this isn't the type of market action you see in a decline.  The trend remains up for now.  The summation index is moving higher.  If you were nimble and brave enough, it looks like today was the day to purchase some March SPY calls.  My ideal scenario for the timing purchase is not going to happen.  GE was off 1/4 but also was much lower during the trading session.  Still below the 50 day moving average here.  Gold was up over $15 on the futures on the early fear factor.  It dropped in the aftermarket.  The US dollar bounced around but finished little changed.  The XAU was up 1/2, while GDX added an 1/8 or so.  Volume was pretty good.  The gold shares finished well off of their highs and I still say they need to take a rest.  Mentally I'm feeling OK.  Volatility ruled the day but it was quite a comeback for stocks.  The small stocks continue to show relative strength and that is a positive moving forward.  Oil moved around again it seemed the market is once again taking its cues from the crude price.  But tomorrow is another day.  We're still short term overbought but trying to stay there even with yesterdays decline.  I'm going to have to wait it out for a decent signal and I do not see one coming right away.  We'll have to see if we get some follow through upside tomorrow.  Asian shares were mixed overnight, while Europe was mostly lower.  The major US stock averages are potentially building reverse head and shoulders patterns.  If that is true, we could rally back up to the higher resistance at the 200 day moving averages.  Hasn't happened yet but we'll have to keep an eye on it.  We'll see what tomorrow brings.  

Back to the downside today as the Dow fell 188 points on light volume.  The advance/declines were 2 to 1 negative.  The summation index is still moving up.  Fears about oil and the banks resurfaced today but I don't think this is the beginning of anything meaningful lower.  We were short term overbought and some pullback is expected.  Perhaps it will be enough to get the SPY March calls.  The S&P 500 remains in a range between 1950 and 1820 approximately.  I do think that we will get through to the upside in the March option cycle.  That is the idea for now.  GE was off about 20 cents and the volume was light.  Gold found buyers on the stock market decline as the futures rose $15.  The US dollar was slightly higher.  The XAU added 7/8, while GDX gained 1/3.  Volume was average.  I still think we need to take a rest here or at least trade sideways for a while.  Gold and the gold shares remain overbought.  Mentally I'm feeling OK.  The advance/declines today were not as bad as a down almost 200 market would suggest.  The small stocks did not have a leading roll today as well.  The TRAN was not as bad as it could have been either.  Putting it all together, I think that this action is simply going to relieve the overbought condition before we move higher again.  It may take a few days.  The ideal scenario for me would be weakness into Monday and that would be when to try the SPY March calls.  So we'll see.  There is no rush as option premiums are high.  Foreign markets stalled as well but there is plenty of room to move to the upside on those daily charts.  We'll watch the overnight developments and go from there.

Taking off to the upside to begin the week as the Dow climbed 228 points on lighter volume.  The advance/declines were over 3 to 1 positive.  The summation index continues higher.  Short term overbought and staying there for the major stock averages.  At this rate it doesn't appear as though we will get a chance for the SPY March calls.  Resistance is at 1950 for the S&P 500 but I don't think that it will contain the rally.  Sellers have disappeared.  GE was up over 1/3 and the volume was average for lately.  I am looking at the March calls here as well while we battle the 50 day moving average.  Might be too late though.  Gold was off over $20 on the futures as the US dollar rallied.  The XAU was up about a point, while GDX added 1/8.  Divergence with the metal here but the volume was pretty light.  A pause is due here to be sure.  Mentally I'm feeling OK.  We've rolled into the March option cycle and all signs point to higher equity prices.  A pullback may not occur.  What I'm hearing in the media is that the rally may not be for real.  That is a sure sign that it is.  Most agree with my scenario of some type of move higher and then we move back down lower.  But once again, if everyone agrees on some thing in this game, it isn't going to happen.  What I'm not hearing is that we run higher from here to new all time highs.  Some of the longer term technical indicators had pretty decent oversold levels from the recent lows.  These readings usually led to a more extended gain for the major stock averages.  It is something to consider.  The option premiums are high at the moment and I would at least like to see a short term oversold condition before attempting the March calls.  May not happen.  However I do not want to chase anything here.  So patience is the name of the game for now.  Europe and Asia have rallied along with the US in the past couple of weeks.  We'll keep an eye on things overnight and see if the rally continues tomorrow.

A day of balancing the books it seemed as the Dow fell 21 points on light volume.  The advance/declines were about even again.  The overall market was a bit stronger than the Dow.  The summation index continues higher.  We sold off early and came all the way back.  Nothing has changed my view of the overall scenario.  I still think that we're heading higher for the March option cycle.  I'll be looking for some weakness next week to attempt the SPY March calls.  GE was off a few cents and the volume was light.  The 50 day moving average continues to contain things here.  Gold was up just a bit on the futures as the US dollar was down just a bit as well.  The XAU fell a point and GDX shed 1/4.  Volume was light.  Things need to pull back or pause in the precious metals complex.  Still overbought here.  Mentally I'm feeling OK.  Not my best week of trading despite the gain in the SPY February call trade.  Moving on, I'll try and remain patient for the next set up.  I do think we're going to move up here for the major stock indices, despite the overall bearish picture.  One of my worries is that this hypothesis seems to be the general consensus among the talking heads in the financial media.  If everybody has the same point of view, you are guaranteed that it is wrong.  So we'll see.  Plenty of time for the March option cycle, so I really shouldn't be in any hurry.  I'll be checking the charts over the weekend as usual.  For now it's Friday afternoon and time for a break.   

A bit lower today as the Dow fell 40 points on average volume.  The advance/declines were just about even.  The summation index continues higher.  We did break the down trend line that has been in effect since the beginning of the year this week in the S&P 500.  The next expectation would be a pullback towards that line, perhaps to the 1875 level.  That would give us a set up for the March calls.  Of course that would be the ideal scenario and the market rarely cooperates in the trading game.  We're approaching short term overbought in many of the technical indicators for the major averages.  Patience for now.  GE was off 1/4 and the volume was light.  The 50 day moving average has contained things to the upside here for now.  Gold found buyers as the futures rose almost $25.  The US dollar was little changed again.  The XAU gained 2 7/8, while GDX added a bit over a point.  Volume was good.  I still think that gold and the gold shares need a rest here.  Mentally I'm feeling OK.  The major US stock indices have broken their short term down trend lines.  That isn't the case for the other major global stock markets.  We will need to see the foreign markets climb higher if this rally in the US is going to have some legs.  I do believe that will happen.  But patience is advised for now as we are just about to begin the March option cycle.  Anything goes tomorrow as it will be option expiration.  We'll keep an eye on developments overnight and close out the trading week tomorrow.

The rally continues as the Dow tacked on another 257 points on good volume.  The advance/declines were 5 to 1 positive.  The summation index is now moving higher with some steam.  The trend is up.  I'll be looking for a pullback to purchase some SPY March calls.  Of course it would have been nice to have held on to the February calls another day as the profit would have doubled.  Had I been willing to take a bit more risk with another day of holding, it would have paid off.  Hindsight is never wrong.  GE was up 1/2 on average volume.  At the top of the channel now, up against the 50 day moving average.  Gold was up a bit on the session.  The US dollar didn't have much of a change.  The XAU rose 1 1/2 and GDX was up about 2/3.  Volume was average.  Certainly due for a rest here.  Mentally I'm feeling somewhat disappointed for selling the SPY February calls yesterday.  But what can you do?  You have to keep moving forward.  Two days left for the February option cycle.  One thing to remember is that the longer term trend is lower now.  All rallies must be viewed in that context for now.  The short term trend is up.  Foreign markets continue higher as well as things are moving in tandem globally.  Oil is still bouncing around but doesn't seem to have the same effect that it recently has.  We'll keep an eye on what transpires overnight.   

Continuing higher after the long weekend as the Dow gained 222 points on average volume.  The advance/declines were 4 to 1 positive.  This should move the summation index back to the upside.  Markets rallied around the globe for the past two trading sessions.  The US market followed.  The decline is over for now in my opinion.  I did get rid of my SPY February calls today for a 95% profit.  Of course I could have done even better as my exit wasn't all that good.  With only three days left for the February cycle I simply got out.  However I would not be surprised if we continue higher and these options gain even more.  I really think that the selling is done for now.  GE was up 5/8 and the volume was OK.  Back into the trading range here with the boundaries consisting of the 50 and 200 day moving averages.  Gold got slammed recently as the stock market slide has come to a halt.  In the past two sessions the precious metal futures have lost over $40 as the US dollar has gained strength.  The XAU shed 3 3/8, while GDX fell 1 2/3.  Volume was heavy.  The drop comes as no surprise as the technical indicators were extremely overbought and gold had started to move straight up.  At a minimum we'll see consolidation here if not an outright decline.  Mentally I'm a bit distracted as I had to go to the dentist again.  But that can't be an excuse for my poor exit today.  This trade had a terrible entry combined with a poor exit and still managed an almost 100% gain.  That is why we play the game.  Improvement on my part would have resulted in even more profit.  Again, one of the keys is believing in your work and never giving up.  Now that trade is history and we need to find the next opportunity.  I'm looking at the March SPY calls since I believe that the decline has run its course.  I do not think we'll simply go straight up from here but if we do get some pullback, calls are in order.  Unfortunately the premiums are still pretty high with over fours weeks to go in the March option cycle.  So I'll be keeping an eye on things.  It is kind of a light week for economic data but we will see news on inflation.  Make no mistake about the overall picture though.  We'll probably see lower prices eventually as we move through the year.  In Japan, the NIKK rose over 1000 points on Monday.  That is incredible.  However in bear markets rallies tend to spring up out of nowhere.  I think Monday in Japan certainly qualifies for that.  For the S&P 500, it appears the key level will be around the 1820 level.  As long as that holds, we shouldn't see a major decline.  But when that level is breached, you'll want to own some index puts.  We'll keep an eye on things overnight and see what happens tomorrow.    

The bounce finally arrived as the Dow rose 313 points on average volume.  The advance/declines were 4 to 1 positive.  The summation index is still heading lower but may be trying to turn around here.  Retail sales were ignored as the stock market has a life of its own at the moment.  The SPY February calls that I bought yesterday now have a slight gain.  Poor entry timing on this trade is really working against me.  The rally today was not exactly what I had in mind as it was orderly and not the short covering burst that I would have liked to see.  I am holding this position over the long weekend.  GE came back and gained over 3/4 on OK volume.  We've held the 200 day moving average for now.  Gold was off almost $10 on the futures while the US dollar was higher.  The XAU gained 1 7/8, while GDX added 1/2.  Volume was lighter than it has been.  I do think that gold is going to run out of steam here.  Very overbought and if the overall market starts to hold up, the reason to buy gold will evaporate.  Time will tell.  Mentally I'm feeling OK.  One day doesn't make a trend but at least we stopped going straight down.  If the positive divergence in the McClellan oscillator is for real, then the decline has ended.  I do believe that is the case for now.  My SPY February call trade is strictly short term and I will need to get out if we see some upside follow through on Tuesday.  The short term indicators have turned up for the major stock indices.  My thinking is that we will see some rally on Monday for the world markets and perhaps that will carry over into the US open on Tuesday.  That is my thinking for now.  Of course things could change over the weekend.  I am also going to start looking out for the SPY March calls.  If the summation index turns around here, the medium term picture will start to look positive as well.  Hasn't happened yet but my guess is that it will.  On the other hand, gold and the gold shares are due for a rest.  They've had a nice run but are now getting some media exposure and that is usually a sign that the end is near.  I'm not saying they won't go higher later.  But right now it appears that the bulk of the gains are behind us.  Plenty of time over this long weekend to check the charts and come up with some type of game plan for a shortened expiration week.  4 days to go, the risk is high and there are always other trades down the road.  It's Friday afternoon and time for a break.  

Still a crazy market as the Dow fell 254 points on heavy volume.  The advance/declines were over 4 to 1 negative.  The summation index continues lower.  I'm still not exactly sure as to what is going on here.  We did come back from the abyss when the Dow was down over 400 points.  The S&P 500 is trying to hang on at around the 1820 level.  If we fail here things will get out of hand rapidly.  I do not think that will happen this time around but perhaps later in the year.  I could be wrong.  I did buy some SPY February calls today but my timing was off.  They are already showing a loss.  My work says tomorrow will be an upside day.  We'll see.  GE fell 7/8 on heavy volume.  We've broken below the trading range and are now trying to hold at the 200 day moving average.  If GE is any indication of things to come, the market will be in even more trouble.  Gold took off like a rocket as the futures soared over $50.  That is the biggest move in quite a while.  I will say that it is unsustainable to say the least.  But what do I know?  The US dollar was lower again.  The XAU rose 3 1/3, while GDX gained 1 1/4.  Volume was extremely heavy.  Overbought and staying that way but I still believe the gold shares and gold are overdue for a rest.  The flight to gold is impressive.  Mentally I'm feeling a bit tired.  Yellen spoke for a couple of days but she really took a back seat to market forces.  Perhaps the focus returned to oil today as it hit new recent lows.  The market did have quite a bounce intra-day when it was off by 400 points.  There is now a possible positive divergence on the McClellan oscillator.  However unless we see some upside soon, this divergence will be negated.  Interesting times.  My SPY call trade is for a bounce in the next couple of sessions, if we see one.  A short covering rally will do the trick.  We'll have to see how traders want to be positioned before the holiday weekend.  There are only five days remaining in the February option cycle.  It is possible that the retail sales number tomorrow will be ignored as well.  Markets are still falling around the globe.  I do feel confident in my own work here though and that is why I took the risk today.  But in a market environment like this, anything goes.  We'll keep an eye on the overnight action and close out the trading week tomorrow.  

A mixed bag today as the market tried to rally but failed.  The Dow fell 99 points on lighter volume.  The advance/declines were slightly positive.  The small stocks managed a slight gain and the overall market was stronger than the Dow.  The summation index is still heading lower.  I'm not sure what to make of the situation.  For some reason I'd still like to try the SPY February calls if we see weakness tomorrow.  But it is a tricky situation.  Getting oversold on some of the short term technical indicators.  However today was a one day reversal to the downside for the Dow.  I'll ponder the trade overnight.  GE was flat on the session and came off of its highs.  Volume was light.  Gold was off a couple bucks on the futures and the US dollar was a bit lower as well.  The XAU gained a point, while GDX rose 1/3.  Volume was lighter than lately.  Gold and the gold shares are due for a rest in my opinion.  Mentally I'm feeling OK.  Make no mistake that this is a very difficult market environment to trade.  With only six days left in the February option cycle, the risk is high.  The timing will really have to be right on to attempt something here.  If we get some weakness tomorrow, I will probably try the SPY calls.  I do believe that we will rally on Friday according to some of my technical indicators.  But I could be wrong.  I again tried to get some of the February SPY calls today but canceled the order.  Japan was weak again last night but the European markets were generally positive.  Oil is dropping again but isn't the headline that it was.  I still think that debt is the problem but that is just my view and not a fact.  The equity markets are certainly acting in a strange fashion right now.  Perhaps it would be best to simply stay on the sidelines.  That will be something to think about overnight as well. 

Up and down again today as the Dow fell 12 points on good volume.  The advance/declines were slightly over 2 to 1 negative.  Plenty of volatility here as the market is trying to make up its mind.  The summation index is heading lower.  We opened down, eventually were up 100 points and then fell back to basically unchanged.  We've got Yellen tomorrow and that should move things one way or the other.  I did place an order for the SPY February calls but later canceled it.  Tomorrow is the ideal day to get these if this trade is going to work.  Any weakness tomorrow can be bought for a short term bounce trade.  That is my best guess at the moment.  GE was up 1/8 on light volume.  No trades here for now.  Gold dropped $8 on the futures despite a weaker US dollar.  The XAU fell 2 1/2, while GDX shed 3/4.  Volume was heavy here.  Very overbought on the gold shares and due for some drop or consolidation.  Mentally I'm feeling OK.  Crazy market conditions right now but I do want to try the SPY February call trade tomorrow if what I perceive are the proper conditions are present.  If we get down to around the 1830 level on the S&P, I'll probably give it a shot.  Risk is high here and time is running out in the February option cycle.  With the summation index heading down we could simply keep falling.  The game is never easy.  Once again, there is something going on underneath the surface.  We'll find out about it eventually but the market always knows more than we do.  Japan got absolutely crushed overnight and the European markets declined as well.  Interesting times.  We'll see how it goes tomorrow and whether I can pull off this SPY call trade or not. 

Just another crazy day in the markets as the Dow fell 178 points on very heavy volume.  The advance/declines were 4 to 1 negative.  This should turn the summation index back lower.  It could have been worse as at one point we were off 400 points.  Only a last hour comeback saved the day this time.  We are short term oversold on some of the indicators but not all of them.  I did place an order for some SPY February calls but later canceled it.  I'm looking for a bounce trade here but probably missed it today.  Obviously there is something going on under the surface that I am not privy to.  GE was off just over 1/3 on lighter volume.  Still in a trading range here.  Gold soared during the session as the futures were up over $30, which also included the aftermarket rise on Friday.  The US dollar was lower today.  The XAU was up 1 1/2, while GDX added 3/8.  Volume was good here again.  However the gold shares finished well off of their highs and it looks like this run upwards is over.  I could be wrong but the technical indicators are blown out to the upside and there is only one way to go from there.  Mentally I'm feeling OK.  I still may try a bounce trade this week if we head back down.  My guess is that we got some short covering late today.  My guess is the underlying problem here for the market lies in debt.  The banks are getting crushed here and I believe that they are holding a lot of what will be worthless oil and gas paper.  That's my theory for today.  But that doesn't explain the drop in the small stocks and the tech shares.  It could be a case of selling whatever you have to meet margin calls.  This is all speculation on my part.  The only real question is where is the market going and how can I make some profit from it.  A bit more downside would put the short term technicals in a better spot to try something long.  But there is no guarantee that we just don't keep going down here either.  The game is never easy.  Plus we have Yellen blabbering for a couple of days on capital hill.  Perhaps simply sitting things out here is a more prudent course of action.  However if we do get oversold this week before Friday, I am probably going to try the SPY February calls.  The European markets plunged last night and I don't see any turnaround there tonight.  Parts of Asia are closed this week for a holiday but we'll see how Japan reacts overnight.  We'll see what tomorrow brings. 

Still moving back and forth here as the Dow fell 211 points on good volume.  The advance/declines were 3 to 1 negative.  The summation index is still moving up though.  The employment report headline number was lighter than anticipated but the market chose to focus on the stronger details.  The reaction to the numbers is always more important than the numbers themselves.  The overall market was weaker than the Dow and the small stocks got slammed.  I expected higher prices today and we got just the opposite.  Now I am not sure what to make of things.  1875 or thereabouts has held things for the S&P 500 lately.  We are just about there now.  The short term technical indicators have rolled over for the most major stock indexes.  GE was off 2/3 on good volume.  Right back into the trading channel for GE.  Gold was up a bit on the futures but soared higher in the aftermarket.  The US dollar bounced back today.  The XAU rose 2 2/3, while GDX added 7/8.  Volume was heavy again.  Money is flowing into gold but there is plenty of resistance at 1175-1180.  We are almost there.  Not to mention a pretty solid down trend line on the weekly chart that spans 2 years at those levels.  So the odds favor gold at least taking a breather soon.  Mentally I'm feeling OK.  9 days to go in the February option cycle as expiration week is cut short by a day due to the presidents day holiday.  The picture is now mixed in my mind for the overall stock market.  I will have to check everything over the weekend to be sure.  The action in most stocks today was negative and if we take out 1875 on the S&P 500, lower prices will follow.  Whatever trades you make here have to be very short term due to the back and forth nature of the environment.  I don't see a clear signal right now but that could change after some research in the next couple of days.  It is a tougher than usual market to trade right now.  Once again the sidelines isn't the worst place to be right now.  But you don't make any money there.  Perhaps 1875 will hold things up for the S&P but that would be a guess and not really supported by the technicals at the moment.  There's plenty of work to do over the weekend.  There isn't much economic data next week until retail sales on Friday.  I'll try and relax for the next couple of days and be ready for next week.  Right now it's time for a break.   

More bouncing around today as the Dow rose 80 points on good volume.  The advance/declines were positive.  The summation index continues higher.  Oil is still a topic but it was lower and the stock market higher.  However the Dow was stronger than the overall market and that is not a plus.  But on the plus side, the TRAN soared and that could bode well for tomorrow.  I don't have any idea how the employment report will be received or what it will say.  The market reaction will be the key.  I still think this market is going higher.  GE was up 1/2 on good volume and is once again trying to break out of the top of its trading range.  If GE is a precursor, then tomorrow should be an up session or stocks.  Gold was up another $15 on the futures and is now above $1150.  Another good drop in the US dollar today.  Perhaps the dollar is telling us to look out for a weak jobs report tomorrow.  The XAU was up 2 1/2, while GDX gained 3/4.  Volume was heavy again.  Price and volume tell the story and that means that the rise in the gold shares is for real.  That said, the short term technical indicators here are extremely overbought and a pause is overdue.  Mentally I'm feeling OK.  The major stock indices are short term overbought but that doesn't mean that they can't continue that way for a while.  I still do not have a decent signal to trade off of though.  If we see some decline, I'd be willing to attempt the SPY February calls.  But time is running out and there will be only 9 trading days left in the February option cycle after tomorrow.  So we'll see.  The signs today are pointing towards higher prices tomorrow but the market as usual will go where it wants.  I've remained patient so far so there is no reason to rush into a trade here.  Foreign markets were mixed overnight but leaning to the positive side.  All eyes on the employment report tomorrow.

Up, down and all around as volatility ruled the day.  The Dow finished up 183 points on heavy volume.  The advance/declines were positive.  The small stocks were lower on the day though.  The summation index is still heading up.  Not sure what to make of todays action except that is almost impossible to trade off of it.  We were off almost 200 points early on and then bounced around before coming all the way back and then some.  Perhaps this morning was the chance to get some SPY February calls but it was impossible to know that at the time.  There is no clear technical signal at the moment.  Oil made a comeback and that market is gyrating out of control as well.  So the market atmosphere is turbulent to say the least.  Fridays jobs report should provide some more excitement.  GE was up 3/8 and the volume was average.  Still in a trading range here.  Gold found buyers as the futures here rose $15.  The US dollar got crushed today for its worst session in quite some time.  The XAU soared 3 3/4, while GDX gained over a point.  Volume was very heavy.  Oil and gold rose in tandem for a change.  Overbought for gold and the gold shares now.  Mentally I'm feeling a bit tired.  Trying to figure out exactly what is going on here is a headache.  Today could have been the day to buy the index calls but the short term technical indicators are still overbought.  I am still trying to remain patient and wait for a decent signal.  It seems the trading is becoming more compressed and is traveling at a speed that is not matching up with my techniques.  Or perhaps I am simply not up to the task at the moment.  The Dow was much stringer than the overall market today and that is not a plus.  Oil and currencies are bouncing around violently.  The environment is pretty tricky right here and now.  There is nothing wrong with heading to the sidelines until things sort themselves out.  We'll see how things go overnight and tomorrow as the markets set up for Fridays employment report.

Lower today as the Dow shed 295 points on average volume.  The advance/declines were 4 to 1 negative.  The summation index is still moving higher.  We are right at the short term rising trend line for most major stock indices.  What happens next will be the key as to if we will get a chance for a SPY February call trade.  If the line doesn't hold we can wait for an oversold signal to get long.  The short term technical indicators here have begun to roll over.  I'm still a believer in the calls at some point here.  But I don't want to be early.  If the short term line holds then this idea is off.  GE was off 3/8 and the volume was average for lately.  Gold and the US dollar ended the day basically flat on the session.  The XAU was down 1 1/8, while GDX dropped 1/3.  Volume picked up to the downside.  I think that the gold shares simply followed the overall market lower.  Mentally I'm not 100% as I had to go to the dentist and have a tooth pulled today.  Needless to say, that is a distraction.  But as always, the market doesn't care.  I don't think that today is the beginning of anything big to the downside.  I am going to try and remain patient for a good signal to try the SPY calls.  If for some reason things fall apart here, then my prognosis on things here is wrong.  There is still plenty of time in the February option cycle for things to get short term oversold and a call trade to be put on.  Obviously we did not see any beginning of the month money flows today.  Foreign markets were generally lower yesterday.  It seems as though oil is back on center stage for some reason.  We'll see how long that lasts.

A day to digest the huge gains of Friday as the Dow was off 17 points on light volume.  The advance/declines were barely negative.  The summation index is moving higher.  The trend is up.  Any declines can be bought.  If we get some weakness this week perhaps the SPY February calls will be back in play.  The employment report on Friday will be the focus for the week.  Plenty of time left in the February option cycle but we will have to wait for a solid set up.  GE was down almost 1/2 on lighter volume.  We're still in a range here of 28-29.  Sideways for a while now and that is the problem sometimes when trading the GE options.  Gold was up $13 on the futures as the US dollar fell back today.  The XAU rose 1 3/8, while GDX gained around 1/3.  Volume was light.  Todays gains were probably a reflection of the weaker dollar.  That's my guess at least because nothing has changed when it comes to gold.  Mentally I'm feeling OK.  I suppose that I'll keep an eye on things ahead of Friday to see if anything interesting develops.  The short term technical indicators for the major indices are now overbought.  But I don't think there is some big decline coming up.  With the turnaround in the summation index, the market has the all clear for higher prices going forward.  The weekly charts are looking bullish, with plenty of room to move up on the technicals.  We will simply have to wait and see if we get enough pullback in order to get long before the February expiration.  That is the idea at the moment.  We'll keep an eye on the overnight developments and go from there. 

Markets around the world rallied on a surprise easing move by the Japanese.  The Dow took off like a rocket and did not look back.  It climbed almost 400 points on very heavy volume.  The advance/declines were 8 to 1 positive.  The summation index has turned around.  All signs point to higher prices.  Todays GDP report was pushed into the background.  There was no retest of the recent low and the SPY February calls were the right trade.  Unfortunately the premiums never made it back to where I was comfortable to purchase them.  Another missed opportunity.  We still have three weeks in the February option cycle but the best time has passed.  I do not think that we'll get another decent set up but you never know.  Declines can be bought.  GE rallied as well, up 7/8 on good volume.  Just above $29 now as it tries to break through the $28-$29 channel that it has been in.  Gold was up a couple bucks on the futures despite a huge rise in the US dollar.  The XAU up another 1 1/4, while GDX added 1/3.  Volume was lighter today.  Mentally I'm feeling frustrated once again as I have missed out on this good move higher.  The day we went down 600 intra-day was the opportunity to be aware of.  Perhaps my busy schedule the prior week had me not at the top of my game.  But there are no excuses in this endeavor.  The market doesn't care as usual.  The short term technical indicators are overbought but not by much.  There is no overhead resistance until we get to 2000 on the S&P 500.  So perhaps there will be a trade before expiration but the ideal time has passed.  We should be positive early next week with beginning of the month money flows.  Maybe a SPY put trade will present itself but it will be against the tide now.  Plenty to think about over the weekend and I'll have to try and regroup.  At least my ideas are back on the right track at the moment.  I'll check all the charts and try and come up with something for next week.  For now it's Friday afternoon and time for a break.

Back and forth we go as the Dow gained 125 points on average volume.  The advance/declines were 2 to 1 positive.  The summation index is still trying to turn around here and I do believe that it will.  The short term technical indicators are now mid-range for the major stock averages.  I'm hoping for some weakness to get the SPY February calls but the market isn't cooperating at the moment.  It may simply be too late for this trade.  GDP tomorrow should provide the excuse for some movement.  The small stocks are acting better here and that's a positive.  GE was up about 1/4 on average volume.  Basically sideways for three weeks for GE.  Gold was off a couple bucks on the futures and the US dollar was lower yet again.  The XAU was off a point and GDX shed 1/3.  Volume was average.  Gold itself is now short term overbought.  Mentally I'm feeling OK.  I'm still trying to get long here but the market just isn't helping me out.  It has been a whipsaw kind of week so far.  We do have the end of the month tomorrow, which could make things even more interesting.  It could go either way.  It looks like I'll have to wait until next week to put on a position regardless of what happens tomorrow.  There really isn't a clear signal at the moment.  I am sticking with the theory that things will work out to the upside though.  Asia was mixed and the European markets were lower last night.  Oil has made a slight comeback this week.  We'll keep an eye on things overnight and finish off the week and month tomorrow.

A decline after the Fed as the Dow lost 222 points on good volume.  The advance/declines were not even 2 to 1 negative.  The breadth is starting to improve and that tells me that the SPY February calls are still the game plan.  The summation index is also still trying to turn around here.  However the small stocks are showing relative weakness at the moment.  So we have plenty of crosscurrents.  Oil went up today but stocks dropped anyway.  So perhaps that inverse price relationship is over.  Time will tell on that.  Another down day tomorrow would roll over the short term technical indicators.  GDP on Friday should be the next market mover.  GE was off 1/3 and the volume was OK.  Gold futures rose $10 today as the US dollar was down for the third day in a row.  The XAU rose 1 1/4, while GDX added 1/4.  Volume was average.  The gold shares have gone straight up the past 6 days and that will not last forever.  I don't know why.  There really aren't any fundamental reasons for money to be flowing that way.  Markets always go where they want to.  Mentally I'm feeling a bit tired.  Perhaps we are going to test the recent lows and if so that would be the ideal opportunity to purchase the SPY February calls.  We will probably need to go down there in a hurry though.  Sideways here is a possibility as well.  I would like to wait for the GDP report before taking a position but if we are weak tomorrow, I might just do it then.  Of course my hypothesis could be wrong and we simply continue down to fresh new lows.  Always plenty of questions in trading.  But I am pretty convinced that the turnaround from the 600 point intra-day downside last Wednesday was the bottom for now.  We'll see if the foreign markets follow the US lead lower overnight.  

Back to the upside as the Dow gained 282 points on what now passes for average volume.  The advance/declines were 5 to 1 positive.  The summation index should be trying to turn around again.  I did place an overnight order for the SPY February calls but the weakness in the overnight futures did not carry through to the open.  The order wasn't filled.  It appears that the chance for the SPY calls has passed as the summation index is in an area that should provide some stability.  We'll get the Fed tomorrow and GDP on Friday.  There is still plenty of time to attempt the SPY February call trade but unless we see some weakness it will simply be another missed opportunity.  I would not chase it here.  GE was up 1/4 and the volume was light.  No trades here for now.  Gold was up $15 on the futures as the US dollar was weaker today.  The XAU was up 2 1/3, while GDX climbed almost 2/3.  Volume was good.  Overbought now short term on the gold shares.  Mentally I'm feeling OK.  The stock market seems to be following the price of oil right now.  I will say that once this relationship is well known, it will probably cease to exist.  The markets reaction to the Fed statement will be more important in my opinion.  Also the summation index moving to the upside will be another clue that calls for February will be the way to go.  Technically for the S&P 500, the short term indicators have moved off of their oversold condition and are about mid-range.  At the moment it doesn't appear that the recent lows will be retested.  But as usual anything can happen in this game.  Asian markets were weak again last night as the Shanghai broke to fresh new lows.  We'll see if there is follow through tonight.  The European markets held up though.  Interesting times.  We'll wait for the Fed tomorrow and see if we get a chance for a trade.

We began the week with a thud as the Dow fell 208 points on lighter volume.  The advance/declines were 5 to 1 negative.  The summation index tried to turn around but after todays action it will be heading back down.  A move lower here is what we'd like to see as it will give us a chance to purchase some SPY February calls.  I don't know if we'll make it all the way back to the 1820 level on the S&P 500 but anything close to that would be good.  We've got the Fed on Wednesday and it is probably a good idea to let that happen before taking any positions.  The lighter volume today could be a sign that the selling is petering out.  GE was off 20 cents on light volume.  I'm not in a hurry to trade GE anymore as it is an issue that moves sideways for an extended period sometimes.  I'm guessing that we are now in one of those time frames.  Gold was up a dozen on the futures as the US dollar was a bit lower.  The XAU added 1 1/8, while GDX rose 1/3.  Volume was average.  There are still no compelling reasons to buy gold.  There has however been some interest in ABX as it is up over 50% from its low of $6 last September.  Mentally I'm feeling OK.  Now the hard part comes as we have to try and figure out how low we go this week.  I don't think that the ideal scenario of lower prices with a higher McClellan oscillator will play out.  The oscillator almost made it back to the zero line but has been turned back as of today.  The breadth was pretty negative today, so I'm expecting lower prices going forward into this week.  So we'll see.  I do believe at some point this week I'll be getting some SPY February calls.  The Fed should provide some movement this week as well as the GDP report on Friday.  Hopefully I'm up to the task.  We'll keep an eye on the foreign markets tonight and go from there.     

A strong move to the upside as the Dow gained 210 points on good volume.  The advance/declines were 8 to 1 positive.  We can now say with certainty that the decline has ended.  The summation index is trying to stop moving down and turn around.  It appears that the chance to purchase the SPY February calls was missed however declines can now be bought.  If we get some weakness in the next four weeks, there may still be an opportunity to do that trade.  I would not chase things here though.  You really had to be on top of things Wednesday to make that trade work and I wasn't up to the task.  We'll see if there is another chance.  GE fell 1/3 on heavy volume.  It did come off of its lows though.  Earnings were not celebrated.  Now there was a case of saving some money by not doing the trade.  I had been looking at getting some calls before the earnings report.  Which once again shows the risk of trading ahead of the earnings.  Even though the technical indicators were oversold, buying the calls would not have worked today.  Gold was off a couple bucks on the futures.  The US dollar was higher today.  The XAU and GDX had slight fractional gains on very light volume.  Mentally I'm feeling OK.  Markets around the world rallied overnight as things were really extremely oversold.  The Japanese stock market rallied over 900 points in one session.  That is incredible.  However I must warn you that in down markets, rallies appear out of nowhere.  I believe that to be the case for the events going on at this time.  I do not see markets going back to challenge the old highs anytime soon.  I do expect more weakness as the year goes on.  But for now the decline in the S&P 500 has run its course.  If we get some downside next week, I'll be looking at the SPY calls.  We've got the Fed next week and that could be a market mover one way or the other.  The first look at 4th quarter GDP will be on tap as well.  Plus the end of the month maneuvering.  So we'll see what happens.  For now everyone will breath a sigh of relief as the downside has stopped for now.  As I said yesterday, we now have bullish hammers on most of the weekly major index candlestick charts.  Perhaps if I'm patient, there will be a shot at making a trade in the February option cycle.  I'll be checking the charts over the weekend to come up with the game plan for next week.  For now it's Friday afternoon and time for a break.

The Dow rose 115 points today on heavy volume.  The advance/declines were 2 to 1 positive.  The summation index is still moving lower.  The overall market was weaker than the Dow.  I still think that we're moving higher from here.  I'm hoping for another move lower to purchase some SPY February calls.  I did have an order in today bit it wasn't filled.  I do think that the market is trying to stabilize here.  The ideal scenario would be a lower print on the S&P 500 combined with a higher McClellan oscillator reading.  I don't think that's going to happen.  So perhaps the opportunity has passed but time will tell on that.  GE was up over 1/2 on good volume.  The earnings will drive this issue tomorrow and perhaps the overall market as well.  I did not get the calls here as I had wanted.  The premiums are higher than normal due to the volatility.  We'll see what happens tomorrow.  Gold was off about $5 on the futures.  The US dollar was off a bit but was higher early.  The XAU was up 1/2 and GDX was barely higher.  Volume was pretty light.  Mentally I'm feeling a bit tired.  It has been a pretty wild week in the market so far.  How we finish things tomorrow will be important.  The weekly charts for the major stock indices appear to be putting in hammer candlestick patterns.  That would be bullish going forward, which would fit in with my end of the decline scenario.  So we'll have to see how it goes.  The foreign markets are still going down.  Especially Asia.  Some stability there would also bolster the bullish cause here.  Although the summation index is still heading lower we are getting to the point where it will need to turn around.  Perhaps we are approaching that level.  Now I don't think that things will simply go straight up once we get turned around.  But there should be opportunities to own calls and make profits.  There is still a lot of time left in the February option cycle.  Do be aware that if the volatility declines, that will also start to erode some of the option premium.  So timing as always will be key along with paying close attention to what is going on.  I would not chase strength tomorrow but if we sell off early, it may provide the chance to get long.  We'll see.  Hopefully the foreign markets stop falling overnight but the markets, as usual, will go where they want.   

A crazy day as the Dow fell over 500 points, then recovered most of that only to drop back in the final half hour.  We finished the session with a loss of 249 points on extremely heavy volume.  The advance/declines were shy of 3 to 1 negative.  The summation index continues lower.  Early on the carnage was significant as global markets were clobbered overnight.  There seems to be a global liquidity squeeze that just won't let up.  Todays intra-day comeback was impressive though.  Whether it was short covering or investors stepping in, it looked like something that you would see at the end of a decline.  The small stocks led the way back and that is positive.  I now do think that the decline has ended and will be looking to purchase some SPY February calls on weakness tomorrow.  I could be wrong but I don't think so.  GE was off 1/2 on very heavy volume.  I canceled my open order for the February calls here.  I will reconsider this trade overnight.  It has to be done ahead of the earnings on Friday if I'm going to attempt it.  Gold found a bid on the sell off in the stock market.  The futures were higher by around $15.  The US dollar finished the day little changed.  The XAU rose 1 1/4, while GDX was up 1/3.  Volume was good.  I doubt that this is the beginning of an extended up trend.  One the stock market settles down gold will probably drift.  Mentally I'm feeling OK.  Quite a day in the markets as it looked like at one point the possible crash scenario may have been a day late.  However with such a dramatic comeback beginning at mid-day, that did not happen.  To me, that was a game changer.  I'll be looking to buy some SPY February calls tomorrow.  The McClellan oscillator is also very oversold and due to turn around.  The only thing that would change my view would be another collapse tomorrow with no comeback.  I do not think that will happen.  Whether or not I try a GE call trade as well will be determined by me tonight.  Again, the risk here is higher because it's an earnings play.  But GE is very oversold as well and could help turn around the overall market if the report is viewed favorably.  But that's a lot of ifs.  We'll see if the foreign markets can hold up tonight as the worldwide sell off continues.  Once again we are in a zone that I have no idea of the reasons for the market action.  We've been oversold and haven't been able to break out of that condition.  But I do think that the end of the decline is near if it wasn't today.  It will be another challenging day tomorrow.  Hopefully I'll be up to the task.

A volatile start to the week as the Dow bounced around and finished the day with a gain of 27 points on heavy volume.  The advance/declines were 2 to 1 negative.  The summation index continues lower.  We tried to rally today off of the short term positive divergence in the McClellan oscillator but could not hold on.  My check of the charts over the weekend revealed that there is a chance that we could have one more final wash out before we get going to the upside.  The odds do favor that the decline has ended though.  However we have to look at all possibilities and with continued poor breadth it's possible for one more down draft.  So the puzzle still remains unsolved for now.  We did not crash today and that's a plus.  If we get a nice rally tomorrow, the lows are probably in.  GE was flat on the day on average volume.  I did place an order for the February calls here but it wasn't filled.  I'm leaving an open order in overnight.  Earnings due Friday and I would like to have a long position before then.  Gold was off a couple bucks on the futures as the US dollar was slightly higher.  The XAU fell 2 1/2, while GDX shed 2/3.  Volume was good.  The drop in the gold shares does not bode well for gold.  Gold and the gold shares are dead money.  It looks like the gold shares are as low as they could possibly go and still nobody wants them.  Mentally I'm feeling OK.  I'm back to the normal schedule.  I do believe that this week is the key as to where we are going for the February option cycle.  Getting calls will be the proper choice.  The timing will be the overall challenge.  If we do move higher from here, waiting for a pullback will be required.  If we get some high volume washout to the downside, getting in near the bottom will be the strategy.  We are going to have to let the market dictate the trade in the SPY.  There is also an extra week in the February option cycle to factor in.  So as usual it won't be easy.  I'd like to own GE calls before Friday as it is oversold and good news on the earnings front should be rewarded.  However it is a risky ordeal as the earnings can cut both ways.  So we'll see.  The market did shrug off bad news from China and that is a plus.  We'll keep an eye on the overnight action as always and go from there.

Expiration Friday and the Dow got clobbered.  The most watched index fell 390 points on extremely heavy volume.  The advance/declines were 5 to 1 negative.  The summation index continues lower.  But didn't I just declare the market decline over just yesterday?  I did.  I also said that there could be another near term low with possible divergences setting up.  That's what I think today was.  We did get a lower intra-day low in the S&P 500 but the McClellan oscillator reading was higher.  That's a short term positive divergence.  Now I could be completely wrong in my prognosis.  If the stock market crashes on Tuesday or continues with another day like today, my end of the decline hypothesis is incorrect.  That said, I could be looking at buying some SPY February calls on Tuesday.  GE lost 1/2 on good volume.  There's still a point and a half here until we get to $27.  Gold saw some interest as the futures rose $15.  The US dollar was slightly lower at the close.  The XAU and GDX had slight fractional losses on light volume.  The gold shares still have no interest and the fundamentals remain negative in my opinion.  Mentally I'm feeling very tired after a long, busy week.  I will not be spreading myself thin like I did this week again anytime soon.  Full attention must be paid to the market.  Earlier this week I alluded to the fact that the powers that be may try to influence the game this week because it was expiration week.  I believe todays price action was a reflection of that.  Running things down allowed the major players to exit their January option positions at the best prices.  It is something that cuts both ways depending on the market slant.  You cannot fight big money.  You can though observe and try to piggyback if you can.  There is obviously something going on here behind the scene that we are not privy to.  I'm sticking with the technical indicators and they say that the decline is now behind us unless we crash on Tuesday.  The crash scenario only can happen technically when we go through the zero line on the summation index and we just did.  So it is a possibility but I am banking on the extreme oversold condition of stocks here to stage a turnaround.  I could be wrong but it will sort itself out next week.  That, I am pretty sure of.  There will be much work to do over the weekend.  Charts must be studied and the trade for Tuesday must be set up.  So there will be plenty to ponder.  There will be an extra day to think about things with the Monday holiday.  For now it's Friday night and time for some rest.

Todays bounce was more like it as the Dow gained 227 points on very heavy volume.  The advance/declines were 2 to 1 positive.  The summation index is still heading lower but the McClellan oscillator did turn around.  We've gone through the zero line on the summation index but I now believe that the decline has ended.  Now we may close marginally lower than todays low in the days to come but this down draft is done in my opinion.  My technical indicators have reached oversold levels that aren't usually seen and ones that do mark the end of declines.  We'll probably go lower as the year wears on.  However for now I'll be looking at calls going forward.  GE gained over 3/4 and the volume was good.  If it heads back down, the February calls could be the next trade.  Gold dropped almost $15 and the US dollar was a bit higher.  The XAU lost 1 1/2, while GDX fell 1/2.  Volume was average.  Gold just can never get going.  Mentally I'm tired.  There is only so much you can do at a time.  So my guess is that the decline stops here.  I do think that it will prove to be the correct choice.  If we do have new near term lows there should be some positive divergences that set up.  That will be the opportunity to purchase some SPY February calls.  That could be my next trade as well.  We'll have to wait and see how things play out.  We'll see if the foreign markets can rally after the Dow overnight.

Heading down as we go through the zero line on the summation index.  The Dow fell 364 points on extremely heavy volume.  The advance/declines were almost 8 to 1 negative.  The bounce was weak yesterday and the breadth numbers didn't lie.  We are getting near the 1880 level on the S&P 500 where I thought that perhaps things would hold up.  But we are on dangerous turf.  The technical indicators are very oversold and there isn't any upside from those oversold levels.  Collapse is a term that would best describe the environment.  Some readings are getting off the charts.  We should see a washout at some point but I'm not going to try and guess when that will be.  Caution advised.  GE was off 3/8 and the volume was good.  Maybe we will get down to $27 here and I can try the February calls.  Earnings due a week from Friday.  Gold gained back what it lost yesterday as the US dollar was flat.  The gold shares didn't follow as both the XAU and GDX barely moved.  Volume was light.  Still no love for the gold shares.  Mentally I'm still overbooked this week and feeling tired.  My guess here is the powers that be will look for the best expiration level for the market to take profits.  So Fridays close could get interesting.  But I would not try any trades right now because we are in a zone of no return.  We could go 500 points either way in a hurry when things get like this.  It is a rare time indeed.  If you have a long term view on things, you can start looking for bargains.  But be aware that things could get even lower as the year goes on.  So we'll see.  I wish that I could be of more help but my focus isn't all there right now due to external circumstances.  My January prognosis for higher prices to begin the new year was wrong anyway.  So hold on to your seats.  It will be interesting to see what happens around the world tonight.  Stay tuned.

We bounced around and ended the day higher as the Dow gained 117 points on very heavy volume.  The advance/declines were negative though.  Not sure what to make of it but the breadth hasn't been positive lately.  The summation index is still heading lower.  The jury is still out on what will happen here.  I'm still cautious due to the close proximity to the zero line for the summation index.  GE was up a few cents and volume was average.  Gold was off around $8 on the futures as the US dollar was little changed.  The XAU dropped another 1 1/2 and GDX shed 1/3.  Volume was average for lately.  It appears that the rush to gold is over.  Mentally I'm feeling tired as I have a busy schedule this week and it is taking its toll.  You can only do so much.  I think that the bounce that we have seen so far is anemic.  It doesn't bode well if you're looking for a bullish future in the medium term.  We need to see some stronger upside soon or I believe this market will simply roll over again.  Time will tell on that.  It looks like Europe is following the US lead, with the Asian markets still moving down.  We'll keep an eye on the overnight developments as usual.

A mixed bag today as the Dow gained 52 points on heavy volume.  The advance/declines were 2 to 1 negative though.  The small stocks were lower.  The summation index continues strong to the downside.  Getting even more oversold each day and some kind of decent bounce is long overdue.  It is expiration week and expect some more volatility.  I would expect a 200+ point upside move for some day this week, considering the extremes in the short term indicators.  That's my best guess at the moment.  GE was up 1/8 but finished well off the highs.  Volume was good.  Gold was off around $10 on the futures as the US dollar rebounded.  The XAU fell 2 3/4, while GDX shed 1/3.  Volume was a bit above average.  Mentally I'm feeling tired as I did not sleep enough and have many non market commitments this week.  It takes a toll.  You really need to devote yourself to the game if you want a realistic chance for profit.  Nothing less than your best effort is required and expected.  It is another reason why I will wait to roll into the February option cycle for the next trade.  I'm looking for a bounce and sooner rather than later.  The only trouble will be the zero line in the summation index.  It spells market melt down is we swiftly travel through it.  We are there right now.  The only outcomes will be for things to stop and turn around or crash.  So now is a time to really keep an eye on things.  It's a danger zone.  Even if we get the bounce that I'm expecting things could turn right back around and get ugly.  The sidelines offer safety as usual.  We'll see what happens overnight and take it from there. 

The market tried to bounce today but it just didn't happen.  The Dow fell 167 points on heavy volume.  The advance/declines were 2 to 1 negative.  The jobs number was better than expected and we began the day higher.  But the selling came in immediately and continued.  The summation index is heading down.  At this rate we will be heading for the zero line here again and things could get worse.  Oversold, staying there and that is a problem.  I'm still looking at the 1880 level on the S&P 500 as a major area.  If that doesn't hold we'll be dropping in a hurry.  Expiration week coming up and hold on to your seats.  I don't know what is worse.  Continuing to drop or trying to rally and failing.  Something is happening under the surface that I don't know once again.  I'm still advising caution.  GE got sold off again, down 3/8 but with lighter volume than yesterday.  Oversold here as well.  I'll consider the February calls over the weekend.  Gold was off $4 on the futures, while the US dollar was only slightly higher.  The XAU was off 1 1/3 and GDX fell 1/3.  Volume was lighter.  Gold should retreat once we get a bounce in the overall market.  Mentally I'm feeling OK.  Quite a negative week to begin the new year.  It's ominous in my opinion.  We are overdue for a short term bounce as any rally attempt is being sold.  Like I said, I don't know what is going on here.  Things could get worse if we go through the zero line on the summation index.  We are getting close.  Monday should be interesting.  My advice is that the sidelines are best for now unless you want to try and pick a bottom.  If that's the case, I'd look for some calls at the 1880 level on the S&P if we get there.  For me, after already starting the year with a loss, I'm going to wait until the February option cycle.  Considering that China held up overnight and we still fell pretty good today tells me that something is wrong somewhere else as well.  Where that is, I don't know.  It will all come out eventually.  The time to buy is when everybody is selling.  But I don't know if the selling is completed.  I wish I could be of more help.  The stock market is in a free fall.  Tread lightly.  I'll be checking the charts over the weekend as usual.  For now it's Friday afternoon and time for a break.

Continuing to fall and picking up speed as the Dow dropped 392 points on extremely heavy volume.  The advance/declines were 7 to 1 negative.  The summation index is heading down.  Oversold and staying there.  How much further can this go?  The recent lows are at around 1880 for the S&P 500.  That would be a good place to start to look for some support.  This is beginning to look like a repeat of the markets drop back in August caused by the Chinese yuan manipulation.  Same thing here.  It's too late to get short but there will be quite a bounce at some point.  I don't know when that point might be.  Employment data due tomorrow and I suppose anything goes with the market reaction to that.  We'll have to get through tonight first.  GE got clobbered and fell 1 1/4 on very heavy volume.  Getting oversold here in a hurry.  I might have to try the February calls here next week.  However the next support is at $27 with the 200 day moving average and we are still a couple points away from that.  It's something to consider.  Gold found buyers on the fear factor.  The futures here rose about another $15.  Back above $1100 but not a lot of noise about it.  I'd expect gold to lose steam once the markets settle down.  The US dollar lost a point today as well to support the rise in gold.  The XAU added 1 2/3, while GDX gained 2/3.  Volume perked up.  I myself would have to see a lot more gains before I believe that gold has turned around.  Mentally I'm feeling OK.  The TRAN is still weak and the small stocks are getting pummeled.  Quite a bearish beginning to the new year.  The Chinese stock market is in free fall and trading has been halted a couple times in the past few days.  That is a problem.  I thought maybe we would see some kind of bounce here because some of the short term indicators are at extremes.  That is dangerous but it is where we are.  Even if we get a bounce I'm not sure how long it would last.  There are no buyers at the moment.  So we'll see.  Caution is still advised and the sidelines are a safe place as always.  Of course you don't make any gains there but you don't lose anything either.  We'll brace ourselves for what comes out of China overnight and see how the market reacts to the employment data tomorrow.   

Continuing lower as the Dow dropped 252 points on good volume.  The advance/declines were about 3 to 1 negative.  The summation index is heading lower.  Oversold, staying there and the market is in trouble.  I have no idea why.  The Fed minutes today were basically a non event.  Employment news due Friday.  I can't say that I have a good feeling about how the year has begun.  I sold my SPY January calls for a 99% loss.  One of my goals for the year was to limit the big losses and my first trade violated that.  I'm certainly not happy about the outcome.  Poor entry and just as poor exit.  It doesn't get any worse than that.  My bullish view of a Santa Claus rally and beginning of the new year strength was dead wrong.  GE dropped today as well, off 1/2 on good volume.  We're back to the 50 day moving average here and it will be important to hold on.  Gold found some interest as the futures gained $15.  The US dollar was off slightly on the day.  Perhaps gold as a safe haven is coming into play here.  We'll need to see more upside to believe that this is anything more than a short term blip.  The XAU and GDX had small fractional gains on light volume.  The gold shares are not leading the way higher and that is usually not a sign of strength.  Mentally I'm feeling frustrated as a big loss to start off the year isn't what I had in mind.  I should have exited this trade as soon as the technical indicators started to roll over.  But I was firm in my belief that a rally would occur.  Always stick with the technicals.  So where do we go from here?  We are short term oversold so a bounce would not be out of the question.  In the short term the odds favor calls at the moment.  But with the summation index starting to head lower it appears a decline is in progress.  The TRAN hitting fresh recent lows today isn't a positive either.  Caution is probably the best way to describe how to go forward from here.  Weakness in China is being blamed for the decline but there is probably something going on besides that.  Lower commodity prices are also given as a reason.  What we do know is that money is leaving stocks whatever the reasons.  2016 is getting off to a rough start and I don't think this will be a good year for the bulls.  The January options expire next week so I will probably remain on the sidelines and wait for the February cycle.  We'll see if the overseas markets follow the Dow lower and go from there. 

A mixed bag today as the Dow gained 9 points on average volume.  The advance/declines were positive.  The small stocks were weaker on the day, not a good sign.  It was pretty much a meandering session.  At least we didn't have downside follow through to yesterdays debacle.  Getting short term oversold on the technical indicators but a case can be made for further downside.  My SPY January calls remain on life support, with the only question of whether they will expire worthless or not.  GE was pretty much flat at the close.  The indicators have rolled over here as well with room to go lower.  Gold was up a couple bucks on the futures.  The US dollar had a strong day to the up[side.  the XAU and GDX had slight fractional moves lower on light volume.  Mentally I'm feeling a bit tired, did not sleep well.  Santa Claus failed to appear this year for the stock market.  That is not a good sign in my book.  It never is when the usual bullish seasonal patterns don't show up.  So I will have to keep that in mind going forward with the trades.  The summation index did turn back down yesterday but not by much.  I think that the price action tomorrow will be important for the short term picture.  If we can hold up then perhaps we'll get some traction higher going forward.  If not, the bears will be in control.  So stay tuned.  The foreign markets were mixed but they too did not collapse after Mondays down draft.  Needless to say I don't have a firm grasp of what exactly is taking place here.  We'll get the Fed minutes tomorrow and that has the potential to be a market mover.  Then Fridays employment report.  So there will be reasons for the market to move.  As usual the direction is the question.  Unfortunately I don't have a good answer at the moment. 

The market got clobbered to begin the 2016 trading year.  The Dow fell 276 points on heavy volume.  The advance/declines were 2 to 1 negative.  We were off over 400 during the session.  Todays action should turn the summation index back down.  However the breadth once again was not as bad as a down 276 market would suggest.  Bad news from China was the excuse.  The Santa Claus rally didn't show up this year and that usually is not good news for the stock market.  My SPY January calls are dead.  It isn't the way I wanted to start the year.  I'll hold onto them until we get a reflex rally, if that happens.  GE was off 3/8 and the volume was good.  I'm still considering getting some calls here but we'll need to see the indicators oversold on at least a daily basis.  Gold found buyers on a flight to safety as there were some negative weekend headlines from the Middle East.  Precious metal futures rose $13 and the US dollar gained 1/3 as well.  The XAU rose 1 1/8, while GDX added 1/3.  Volume was OK here.  Probably just a one day affair for this sector.  Mentally I'm feeling OK.  The comeback in the final hour was a positive for equities after the previous two days saw just the opposite.  I don't think that it is the beginning of a rally though.  But who knows?  I could be wrong.  But the short term technical indicators haven't gotten completely oversold yet.  Plus we are at risk for another negative headline at any time.  However that particular risk is present all the time.  The technicals say there is more work to do to the downside.  The only thing that would negate that would be a 200 plus point move to the upside tomorrow.  I suppose today is a happy new year for the bears.  Plenty of economic data out this week, capped off with Fridays employment numbers.  We'll see how things shape up overnight as all the major stock exchanges were lower yesterday.  Could be a wild ride.