The overall market lagged but the Dow managed a gain of 32 points on average volume.  The advance/declines were negative.  The same technical conditions remain.  We are over extended any way you look at it.  The Dow has gone about straight up for two weeks.  There is no telling how long this can last but when the end comes it probably won't be pretty.  We are already in one of the longest bull markets in history.  I can also make a case for this being the last leg up of an A-B-C-E-F pattern or a 5 wave higher move on a multi-year basis.  If that is the case, then this is the final run higher before a bear market sets in.  However that is the bigger picture and we are looking at what to trade in the March option cycle.  GE was off about 20 cents on average volume.  I'm no longer considering a trade here.  Gold finished flat one the session as the US dollar was just a bit lower.  The XAU lost 1 3/4, while GDX shed about 1/3.  Volume picked up to the downside which is not a good sign for the bulls.  Mentally I'm feeling OK.  We saw just a bit of weakness here and there among the major stock indices.  I would like to get some SPY March puts at some point.  However it is hard to try and step in front of this runaway freight train of higher prices.  What I really need to do is try and wait for a negative divergence in the technical indicators.  The battle as always is with myself.  Is it possible that things will run up into the March expiration as happened in February?  Well anything is possible at this point.  Another factor to consider is that the VIX is not correlating to the actual price movement lately.  I don't know exactly what that means but it is puzzling at the moment.  So I will continue to be patient for now as it is a short week as well.  Europe and Asia were generally higher overnight.  We'll see what tomorrow brings.

The rally lives on as the Dow rose another 119 points on average volume.  The advance/declines were better than 2 to 1 positive.  The summation index continues higher.  Overbought to the extreme at this point.  Some of the indicators have the highest readings in the past 5 years.  That doesn't mean that the rally will end right away but some type of pause is way overdue.  As I said before it is probably best to wait for some type of negative divergence on the technical indicators.  I am looking at the SPY March puts.  Trying to be patient though.  GE was up over 1/8 and the volume was a little better.  Gold was off just a bit as the US dollar was higher.  The XAU and GDX had fractional losses on average volume.  I still believe that the fundamentals do not favor gold at this point.  Mentally I'm feeling OK.  We've rolled into the next option cycle and the market continues to defy gravity.  There isn't a lot of economic data out this week.  The VIX has been rising and so has the market.  That defies the usual logic.  What I can say that with the overbought condition that we are seeing today, we're closer to a top than to a bottom.  Once again I am hearing the term animal spirits in the financial media.  I do not know who makes this stuff up but it is completely ridiculous.  There are no sellers.  Money continues to pour into stocks.  Animal spirits?  That is complete fabrication.  Do not get sucked into the rally at this point.  There will be better entry points down the road in my opinion.  For now I'll wait for the negative divergence and try and be patient.  Europe and Asia were generally higher last night.  We'll keep an eye on things overnight. 

The beat goes on as the Dow rose 4 points on about average volume.  The advance/declines were negative.  The overall market was stronger than the Dow.  The summation index is still trending higher.  Quite a week we just saw as the market is severely overbought and needs to take some kind of break in my opinion.  The breadth on the rise hasn't been good and I really do not think that this levitation has much more room on the upside for now.  Some type of consolidation or decline is way overdue.  I'll wait for the next signal before entering the next trade.  A negative divergence at some point would be the ideal scenario.  GE was off a few cents on lighter volume.  Gold was off around $5 on the futures as the US dollar bounced back.  The XAU lost 1 7/8, while GDX shed 3/8.  Volume was a little less than average.  Mentally I'm feeling OK.  A losing trade this week with mistakes both getting in and getting out.  Not much money lost but the mental capital decline is always more important.  I suppose that perhaps I'll just stay away from the short term trades for now.  Looking back on the radar, there is no denying that this has been quite a nice move higher in the past couple of weeks.  The market was able to run up all the way to the end of expiration week.  There were no sellers.  The problem for the bulls going forward is the extreme overbought nature of things today and the poor breadth that accompanied this move higher.  That doesn't mean that we can't go a bit higher in the near term.  However a repeat of the roughly 500 or so point move in the Dow for the past week and a half probably won't be repeated.  I'll be looking at the SPY March puts at some point in the coming days.  Money is flowing into US assets though as the major foreign markets have yet to break out above their near term resistance.  Asia was lower overnight and Europe mixed.  A long holiday weekend is upon us and that will give me plenty of time to come up with some type of game plan for the next trade.  For now it's Friday afternoon and time for a break.

A pause in the run up as the Dow gained 7 points today on average volume.  The advance/declines were negative.  The overall market was weaker than the Dow.  The summation index is still moving up.  We were negative for much of the session.  I sold my SPY February puts for a 65% loss.  My exit today was horrible as well.  I could have cut the loss at least in half had I better tactics.  But it was not to be as this trade was a disaster from the beginning.  A day early on the entry and it never recovered.  The short term trades are just not in my wheel house so it seems.  We're still very overbought any way you look at it and some decline or consolidation is in order.  I'll be looking out to the March option cycle.  GE was up a dime and the volume was light.  Another missed trade here for me.  Gold added $7 on the futures as the US dollar was lower today.  The XAU rose a point and GDX gained 1/4 on light volume.  Mentally I'm feeling disappointed after another losing trade.  Nobody to blame but myself there as the risk was pretty high due to the lack of time remaining.  I should have just passed.  Once again I think that leaving all the money on the table in the previous trade influenced what I did there.  You can't let that happen in the game.  But you move on.  The next trade in my mind will be the SPY puts again but the timing will have to be spot on.  Perhaps waiting for a negative divergence in the indicators would be the best idea for now.  We have had quite a straight line up and that will not last.  It should end sooner rather than later.  Asia was mixed and Europe lower last night.  We'll close out the week tomorrow. 

Overbought to the extreme at this point as the Dow climbed 107 points on good volume.  The advance/declines were positive.  The summation index continues higher.  The positive expiration week bias is in full effect and there is still no overhead resistance as we continue to hit new all time highs day after day.  My SPY February puts are losers and I'll be lucky to get out tomorrow without any further damage.  This was a trade that in retrospect was best let undone.  Not a lot of money but not a low risk trade either.  We are powering ahead like a freight train and you should not try and step in front of that.  There will be better opportunities down the road.  Selling the SPY calls too early was my biggest mistake though.  GE was up a few cents on lighter volume.  Gold rose $8 on the futures as the US dollar was lower.  The XAU was off 7/8, with GDX unchanged.  Volume was very light.  Not a positive for gold to rise and the gold shares lag.  Mentally I'm feeling a bit tired.  The market continues to soar as the shorts get squeezed and there are no sellers.  This should continue into Friday I expect.  After that I would think that things would settle down as the breadth on the rise hasn't been good at all.  You cannot argue with price though.  Taking a losing trade here will not help my confidence level but the trading will go on.  Perhaps I should simply forget about the short term trades since they really are not what I'm successful with.  I think that my wrong tactics on the SPY February call trade contributed to me trying this other SPY put trade.  The battle in this game seems to always be with oneself.  As I've said before the markets can be irrational longer than most can remain solvent.  2 days left in the February option cycle and a long weekend on the way as well.  Europe and Asia were higher overnight.  However none can match the gains in the US stock market lately.  We'll probably continue the overbought ride higher tomorrow.

The rally moves on as the Dow gained 92 points on about average volume.  The advance/declines were slightly positive.  The summation index is moving up.  Overbought, staying that way and no overhead resistance.  We also closed on the high of the session and that's bullish.  I did buy some SPY February puts today and they are already in the red.  I may be a day early on this trade but there isn't any room for error with only 3 days to go in the February option cycle.  So we'll see what happens.  We'll get plenty of economic data to trade off of tomorrow.  Yellen spoke today and the market shrugged.  GE was up 1/4 and the volume was good.  We now have GE and the market moving in tandem and that is a positive as well.  Gold was up a few bucks on the futures and the US dollar was a bit higher as well.  The XAU and GDX had slight fractional losses on average volume.  Mentally I'm feeling OK.  There appears to be no stopping this market as we are setting new all time highs session after session.  Why try the SPY puts here then?  I am getting a signal to get short here.  I do not think that it is the beginning of a huge move down but the indicators do say that we'll see something to the downside and soon.  I'm trying not to be subjective and taking the signals as they come.  I do think that perhaps I want to put on another trade after selling out the SPY February calls way too soon.  That is my risk here.  There is not a lot of money in this trade so to me it was worth taking a shot.  You should go with the signals when they occur but yes, you can use your own discretion.  It would not be a surprise if we're higher tomorrow but this certainly won't last in a straight line up much longer.  Enjoy the ride if you're long.  Asia was lower and Europe mixed last night.  The moves were slight.  We'll see how things go tomorrow.

Powering higher to begin expiration week as the Dow was up 142 points on lighter volume.  The advance/declines were positive.  The summation index is moving higher.  Overbought on all time frames now and the next logical trade would be the SPY puts.  The timing is the issue as usual because things can stay overbought for quite a while.  That is the dilemma we face at the moment.  My thinking is that the SPY February puts will be a winning trade at some point this week.  Trying to determine when will be the task.  GE was up 1/3 on good volume and it appears that the call trade here has been missed.  Maybe we could try it if we get a retest of the recent low.  But I think the opportune time has passed.  Gold fell $10 on the futures as the US dollar was a bit higher.  The XAU and GDX had fractional losses on light volume.  Mentally I'm feeling OK.  Stocks are in rally mode as there is no overhead resistance.  The questions that remain is just how high will they go and how long can this last.  Usually higher and longer than you think.  Only 4 days to go in the February option cycle but I do think that pursuing an option trade on the put side will work at some point this week.  Every time frame is overextended to the upside for the S&P.  I may leave an open order in overnight.  This would be an extremely short term trade and that is usually not my best scenario.  Not to mention that I just left an awful lot of money on the table with my last trade.  I have got to make sure that the SPY February put trade is actually worth taking the risk and not just something to try and get back the missed money.  I don't expect the market to just turn around and start to head convincingly lower but I do expect some kind of short term weakness going forward.  Could we just keep moving higher for the remainder of the week?  We could but the odds suggest something lower at some point this week.  Europe and Asia were higher in overnight trade.  We'll see what tomorrow brings.  

Continuing higher to finish the trading week as the Dow added 96 points on about average volume.  The advance/declines were better than 2 to 1 positive.  The summation index is moving higher.  Short term overbought remains the condition for the Dow and the S&P.  Looking back it would have been better for me to let the SPY February call trade go another day.  That is money left on the table.  Expiration week is upon us and the usual positive bias could be in effect since there really is no overhead resistance here.  However we are due for some type of pause and I'll consider the SPY February puts for a short term trade on Monday.  GE was up 1/8 on light volume.  I'll also considering the March calls here but this issue has been a laggard lately.  Gold was off a couple bucks on the futures.  The US dollar was a bit higher today.  The XAU rose 1 3/8, while GDX added 3/8.  Volume was average.  The gold shares have moved higher since the middle of December but there doesn't seem to be any conviction to the move in my opinion.  Mentally I'm feeling OK.  Kicking myself for not holding on to the SPY call trade another day will get me nowhere.  There was a case to be made for hanging on another day but I took the profit instead.  Holding on could have doubled the gain if the exit was right today.  The thing about this game is that you've got to keep moving on regardless.  With a week to go in the February option cycle, any trade from here will have even more risk than usual.  The case can be made for some weakness early next week.  However we've seen in the past that the market can remain overbought for quite some time.  If the usual positive expiration bias shows up next week, the extended overbought condition will remain.  I'll have to check the technicals over the weekend and decide from there.  Timing. as usual, will be the key.  Europe and Asia were positive overnight.  It's Friday afternoon and time for a break.

Finally the breakout to the upside that we've been waiting for as the Dow rose 118 points on average volume.  The advance/declines were just shy of 2 to 1 positive.  This should turn the summation index back up.  I do think that we could see another day of upside but I had to simply sell my position in the SPY February calls today.  I did not want to take the risk of a down open in the morning and then lose some of the todays profit.  My exit wasn't great but the trade did manage a 55% gain.  We did come off of the highs for the session in the final hour.  I'm still overall positive on things here but we may have to see some downside first before moving higher again.  GE was up over 1/8 on light volume.  Gold lost $7 on the futures as the US dollar was stronger on the day.  The XAU lost 2 3/4, while GDX shed 2/3.  Volume was good.  The gold shares are due for a rest.  Mentally I'm feeling OK.  It was nice to see the work pay off today but I do think that perhaps I could have held on for another day.  We're still short term overbought on the technical indicators for the S&P 500.  I think that if we can get the RUT and NYA to break through resistance that this thing could have legs.  But it hasn't happened yet.  I expect some weakness in the coming days and I do not know if there will be another set up before expiration.  I am still of the thought that the market will be moving higher in the medium term.  Europe and Asia were higher overnight.  We'll close out the week tomorrow.

Another day of listless trading as the Dow fell 35 points on average volume.  The advance/declines were positive.  The summation index is trending sideways.  The overall market was stronger than the Dow.  The market is still trying to make up its mind what to do here.  I did expect strength here and we did not see any.  When the market doesn't do what you expect you have to sit up and take notice.  Perhaps my view on things is wrong here and the resistance won't get broken.  My SPY February calls are still in the red.  This is a trade that needs to be exited by the close on Friday.  GE was off 1/8 on average volume.  GE did break to a fresh low today.  Gold was up a buck on the futures and the US dollar was little changed.  The XAU rose 1 3/8, while GSX added 1/4.  Volume was light.  Mentally I'm feeling OK.  Not much else to say here as we are in a market waiting game.  That doesn't bode well for directional option trading.  I still think that this SPY trade can at least get back to break even if we see some rally in the next couple of days.  The trouble is that the longer we go sideways, the more time premium that gets sucked out of this trade.  There are only seven days left in the February option cycle.  So we'll see.  Europe and Asia were generally higher overnight.  We'll keep an eye on what transpires tonight.

Another day of basically going nowhere as the Dow added 37 points on a little less than average volume.  The advance/declines were negative.  The summation index is trending sideways.  The S&P is trying to break out to new highs but with no success.  I do think that it is going to happen though and sooner rather than later.  I did purchase some SPY February calls today.  They are showing a slight loss.  My entry could have been a lot better but I do think that this is a trade that will work.  GE was off a dime and the volume was light.  Short term oversold for GE and if it can finally get going to the upside, that would bode well for the overall market.  Gold had a slight gain on the futures despite strength in the US dollar again.  The XAU and GDX had fractional losses on average volume.  Mentally I'm feeling a bit tired.  I'm not exactly 100% recovered from my recent cold.  So the next trade is on and it is one that probably shouldn't be held for too long.  In this case, that means getting out before the weekend.  Right now Thursday looks to be the day to sell.  But we'll have to see how it goes tomorrow.  We're still short term overbought for the S&P 500 but I think we'll stay that way.  I could be wrong.  I do expect some upside for this index tomorrow.  How much is the question.  As I have said before, there is no resistance once we pass the 2300 barrier.  If we can get by there on good volume, the trade will work.  Asia was slightly lower and Europe mixed overnight.  We'll see how things go tomorrow.

A quiet start to the week and we were lower for all of the session.  The Dow fell 19 points on light volume.  The advance/declines were negative.  This may put the summation index back in a sideways trend.  There was no follow through to the positive action on Friday and that could be a concern.  I do expect some strength here in the very near term and did place an order for the SPY February calls but wasn't filled again.  If there is weakness tomorrow, I'll probably try this trade idea again.  We are more overbought than oversold at this juncture though.  The potential set up is still there but it isn't as strong as it was last week.  GE was off a few cents and the volume remains light here as well.  I'm laying off the call trade there for now.  Gold continues to hold traders interest as the futures rose $15 despite a rose in the US dollar.  The XAU was higher by 3 1/4, while GDX added 7/8.  Volume was good.  I still think that the fundamentals for gold a re negative though.  Mentally I'm feeling OK.  Less than 2 weeks to go in the February option cycle.  I'm looking at a very short term trade for the SPY this week.  If we are lower at some point tomorrow, I will probably give it a try.  Timing, as usual, is everything.  Not a lot of data to trade off of this week so we will have to see what happens.  February isn't a seasonally good time for stocks either.  But my work is showing that getting long on weakness tomorrow might work for a couple of days.  So we'll see.  Asia was higher and Europe lower overnight.  We'll keep an eye on the overnight developments.

A nice rally today to end the week as the Dow soared 186 points on average volume.  The advance/declines were shy of 4 to 1 positive.  The summation index will be moving back to the upside.  The employment report was better than expected on some counts and we took off from the open.  I'm still considering the SPY February calls because if the S&P 500 can get through 2300, there is no overhead resistance.  I still believe that declines can be bought but the best opportunity passed yesterday in my mind.  If we can get some decline on Monday, that might be the time to take another stab at that trade.  However we will be getting short term overbought here in a hurry.  GE was up a couple cents on average volume but continues to lag.  GE is out of sync with the overall market.  Either the market is ahead of itself or GE needs to play catch up as the overall rally continues.  The technical indicators are oversold on the short term and mid-range medium term for GE.  Perhaps I should try a trade here.  Gold was up a couple bucks despite the decent jobs report.  The US dollar again finished little changed.  The XAU and GDX had slight fractional moves one way or the other on very light volume.  Mentally I'm feeling a bit better but not all the way back yet from having a cold.  I'm trying not to let yesterdays failed attempt at the SPY calls bother me too much.  The basic idea was a correct one and that is a plus.  If I am reading things here correctly, then I think we've got more room to go higher in the February option cycle.  I can make a case for higher prices into the close on the upcoming Wednesday of next week.  However after that, I'm not so sure.  So for the short term the plan is to buy on weakness if we get any Monday and then sell out by the close on Wednesday.  The market rarely cooperates though.  I'll be taking a look at GE over the weekend as well.  Perhaps the March calls will be the play.  Plenty to ponder in the next couple of days.  Asia was mixed and Europe slightly higher overnight.  For now it's Friday afternoon and time for a rest.  

Another lackluster trading session as the Dow fell 6 points on average volume.  The advance/declines were positive.  The summation index is still trending lower.  I once again tried to get the SPY February calls but my order wasn't filled despite adjusting it a couple of times.  Perhaps I should have just tried a market order but you know what happens when you do that.  I'm still a believer in this trade so we'll have to see what happens with the market reaction to the employment report tomorrow.  The short term technical indicators for the S&P 500 remain at mid-range.  GE was off a couple cents and the volume was really light.  Gold rallied $10 on the futures as the US dollar finished little changed.  The XAU was up 1 1/3, while GDX gained 1/2.  Volume was light.  Mentally I'm still not at 100% as I am getting over a cold.  Perhaps that is why I could not think straight when trying to get my order for the SPY calls filled.  With each passing day this is a trade that I want to do.  The set up on one of my indicators is indicating a buy signal for the market.  If we open lower tomorrow I may get the chance.  If not it will most likely be too late for this idea.  At this point the best thing for me to do is to get some rest and see what happens in the morning.  Europe and Asia were generally lower last night.  We'll finish out the trading week tomorrow as all eyes will be on the jobs numbers.

Another day of hanging around to begin the month as the Dow added 26 points on good volume.  The advance/declines were negative.  The NASDAQ continues to out perform and things remain bullish in my mind as long as that is the case.  The summation index is trending lower but by no means does it look like a rout.  I did place an order for the SPY February calls but it wasn't filled.  I'll need to be in this trade before the close on Monday for it to work.  The ideal scenario would be more of the same listless market lack of activity going into there.  We'll see if the market cooperates.  GE was off a penny on light volume.  The potential double bottom is still in place.  Gold was off a touch as the US dollar was a bit higher.  The XAU and GDX ended the day little changed.  Volume was around average.  Mentally I'm tired and not feeling well.  It's hard to trade under these conditions but luckily I already have an idea of what I want to do.  The Fed came and went.  The next event will be the employment report on Friday.  I may leave in an open order for the SPY calls overnight as I need to rest in the morning.  Europe and Asia were higher in last nights trading.  We'll see how it goes tomorrow.

Another mixed market as the Dow shed 107 points on good volume.  The advance/declines were positive.  The NASDAQ was up a point.  The overall market was stronger than the Dow and that's a positive.  The summation index is moving lower but without velocity for now.  My thinking here is that declines tomorrow can be bought.  I'll be looking to purchase the SPY February calls.  We have the beginning of the month tomorrow but more importantly, the Fed.  I'm hoping for some selling on the Fed but the market will go where it wants.  The market has come back in each of the previous two sessions.  Selling has been met with buying.  As long as that pattern holds there is no danger of a bigger decline.  GE was off 1/4 on OK volume.  The potential double bottom is still in place here.  Perhaps today was the ideal time to try the calls.  There is a potential positive divergence on the daily RSI.  Gold rose $17 on the futures as the US dollar was lower.  The XAU added 2 3/4, while GDX was up 3/4.  Volume was about average.  I'm still not a big fan of gold here.  Mentally I'm feeling tired as I have a cold now.  This is affecting my ability to concentrate on the trade.  I again may place an overnight order for the SPY calls but we'll have to see.  I think that perhaps waiting to get the Fed out of the way would be the better course of action.  The short term technical indicators for the S&P have moved back to mid-range.  A turn up from here could lead to a small rally to new highs and make trading the SPY calls a profitable idea.  That's the theory for now.  On the flip side, we could simply decline until the indicators get oversold.  I'm more of a believer in the first mentioned scenario.  Asia was lower with some markets still closed for holiday.  Europe was down as well.  Some of the European index charts have a similar look to them as the US.  Holding in here is key because there just isn't any support if we go much lower in the near term.  It's some thing to keep an eye on.  The DAX in particular.  We'll see what tomorrow brings.

A down day to begin the week as the Dow fell 122 points on average volume.  The advance/declines were over 2 to 1 negative.  This should turn the summation index back down.  It could have been worse as we were off over 200 points in the morning.  Not sure if this is the beginning of something sustained to the downside or just a Monday sell off after the weekend of Trumps tweets.  We'll know more in the coming days.  I did place an order for the SPY February calls but wasn't filled.  I may leave an open order in overnight.  I do think that perhaps Wednesday after the Fed is the ideal time to try this trade but that's a guess as usual.  GE was off a nickel and the volume wasn't anything special.  There is a potential double bottom on the daily chart for GE but it is short term in duration.  I'm considering the March calls here now in order to give the trade a chance to work out.  Gold was up a few bucks on the futures as the US dollar was little changed.  The XAU and GDX had slight fractional losses on light volume.  There just is not a lot of interest in gold at this time.  Mentally I'm feeling OK.  The S&P 500 had a good volume breakout form the recent congestion zone and today we had a snap back to the congestion zone.  Conventional technical analysis implies that we will now trend higher.  I am a believer in that view.  There is a possibility that today was the chance to get long and we will simply move up from here.  My hope is that we'll see some listless trading ahead of the Fed and then perhaps there will be a chance to purchase the SPY February calls.  The short term technical indicators for the S&P 500 did roll over today.  We also saw a spike in the VIX but it did finish well off its highs for the session.  Plenty to think about tonight.  Most Asian markets were closed last night but the NIKK was lower.  Europe was down overnight as well.  We'll close out the month of January tomorrow.

Another mixed day to end the week as the Dow fell 7 points on light volume.  The advance/declines were negative.  The summation index is trending higher.  The NASDAQ was slightly higher today but there wasn't much conviction one way or the other for stocks.  GDP was slightly less than expected but the reaction was slight.  I'm still looking to get some SPY February calls and probably next week.  We do have the Fed next week and that may give me the opportunity for the next trade.  GE was off 1/3 and the volume was light.  Perhaps I'll consider a trade in the GE calls here as well.  I'll be taking a closer look over the weekend.  Gold was little changed on the close.  The US dollar was just a bit higher.  The XAU rose 1 1/3, while GDX added 1/3.  Volume was light.  Mentally I'm feeling OK.  We'll have plenty to trade off of next week as we have the Fed, plenty of economic data and round out the week with the employment report.  Throw in the end of the month with the beginning of February and the chance for a least a pick up in volatility is there.  The short term technical indicators for the major stock indices remain overbought.  At some point this will end but for now the market seems to just want to stay in that territory.  We did just have a solid break above the weeks long resistance so the trend is up.  We could get a snap back to the resistance zone and that would be the ideal spot to purchase the SPY February calls.  We'll see if the market cooperates.  Plenty of time in the February option cycle.  Asia was higher and Europe lower in general last night.  I'll be checking the charts as usual over the weekend.  For now it's Friday afternoon and time for a break.

A mixed session today as the Dow rose 32 points on OK volume.  The advance/declines were slightly negative.  The overall market was weaker than the Dow but it was really just a muted session after the run up from the past couple of days.  I'm still a believer in the SPY February calls on a pullback.  We'll get the first look at 4th quarter GDP tomorrow and it could be a market mover.  However it is a look backward before the election results and the market seems to be looking ahead at the moment.  GE was off a nickel and the volume was light.  I'm also looking at the calls here as well.  Gold dropped almost 10 bucks on the futures as the US dollar was higher.  The XAU shed 2 1/8, while GDX lost almost 2/3.  Volume remains light.  Mentally I'm feeling OK.  Nothing to do now but wait for the next opportunity and I think that it will come in due time.  I'm seeing some potential negative divergences on some of the daily charts for a few of the major stock indices.  But they haven't played out yet and they could be negated with more positive price action.  I do expect the market to continue to trend higher.  So patience is the theme for now and hopefully an opportunity will present itself in the coming days.  Asia was higher and most of Europe a touch lower overnight.  We'll finish out the trading week tomorrow.

Well we made it.  The Dow closed above the 20000 level for the first time in history today.  The most watched index gained 155 points on good volume.  The advance/declines were about 2 to 1 positive.  The summation index is moving higher.  There is no overhead resistance and any declines can be bought in my humble opinion.  I thought that this may have been for real yesterday and now we know.  I'm also just kicking myself for not getting on board which is what I should have done despite the short term overbought condition.  However we now know that calls will be the way to go if and when we see any weakness.  Still plenty of time in the February option cycle but the optimum entry point has passed.  GE was up 1/3 on the same volume as yesterday.  Perhaps the next trade will come here.  Although GE has a reputation for moving sideways for extended periods of time.  Gold fell back $11 and the US dollar was weaker as well.  The XAU lost 1 1/2, while GDX shed 1/3.  Volume was light.  If the dollar remains weak, it should support gold.  In theory anyway.  Mentally I'm a bit frustrated for missing this spike higher.  Every indication yesterday pointed to the fact that it might be happening but I did not pull the trigger.  Even though we are extended here, the path of least resistance is up.  I do still think there will chances to make a winning trade going forward though.  I'll wait for some type of pullback but if we don't get one I will have to change my strategy.  For now I'll have to be patient yet again.  Europe and Asia were higher as money around the globe is now flowing into stocks.  We'll keep an eye on the overnight trading.

A rally springs up form nowhere as the Dow gained 112 points on good volume.  The advance/declines were almost 3 to 1 positive.  This should turn the summation index back up.  The S&P 500 did hit a new all time high.  There is no overhead resistance for the S&P and I am looking at the February calls.  The problem is the technical indicators are short term overbought.  However when we are in rally mode, the indicators can stay overbought for a while.  The Dow is now less than 100 points away form the 20000 level.  So I will consider putting in an open order for the SPY calls tonight.  GE was up 1/4 on average volume.  I'm considering the GE calls here as well.  The technical indicators here are oversold on a short term basis.  Medium term we are in the middle.  Again, this is something that I'll look over tonight.  Gold dropped $6 on the futures as the US dollar was a bit higher.  The XAU and GDX had minor fractional gains on OK volume.  The gold shares did fall back from their intra-day highs.  Mentally I'm feeling OK.  The VIX is pretty low here which is another thing to consider before the next trade.  But I do think that we could also be about to break out to the upside from the recent trading range.  The volume was good to the upside today and that hasn't been seen in a while.  One day doesn't make a trend though.  Perhaps the more prudent course of action would be to wait for the short term indicators to come off of their current overbought levels.  As you can see I'm a bit torn about what to do here.  I guess the question is whether the six week consolidation that we've just seen is a top or not.  If it isn't, we are about to take off to the upside in my opinion.  There will be plenty to think about tonight.  Last night Asia was mixed and Europe was slightly higher.  We'll see what tomorrow brings.

Lower to begin the week as the Dow fell 27 points on light volume.  The advance/declines were positive though.  The summation index is trending lower but not at a rapid pace.  The small stocks are still showing better relative performance but the S&P 500 was the weak link today.  It is a mixed bag of results as we remain in a trading range malaise.  No volume means no interest as the market continues to wait for direction.  GE was off 3/4 on pretty heavy volume again.  GE closed below its 200 day moving average.  If GE is a precursor of things to come, then the overall market will drop down from here to lower prices.  Time will tell.  Gold found a bid and was up $10 on the futures.  The US dollar was lower.  The XAU added 2 1/2, while GDX rose 2/3.  Volume was good.  I still don't believe that gold is about to take off here to the upside.  Mentally I'm doing OK.  Waiting on some kind of signal to enter the next trade.  Plenty of time in the February option cycle.  Some of the major indices have reached the short term oversold level but it is not unanimous.  We also have some indexes perched on their 50 day moving averages, while others remain above.  I still think that the ultimate resolution will be higher prices and I am looking at the SPY February calls.  However the timing of this potential trade is the main question for now.  If things line up properly, I'll attempt the trade.  If not I'll just have to wait.  Asia was mixed but the NIKK dropped hard.  Europe was lower in overnight trade.  We'll keep an eye on the overnight developments.

We ended the week on a positive note as the Dow gained 94 points on average volume.  The advance/declines were a bit short of 2 to 1 positive.  The summation index did turn down yesterday.  The overall market was weaker than the Dow.  The market took off to the upside after the open and with the exception of the Dow, never got back to the early morning levels.  I sold my SPY January calls in the morning for a 25% loss.  I suppose I was lucky just to get that.  Considering this trade was over a 50% loss yesterday, I'll take it.  There never was a chance in todays session to get that trade back to break even.  The market was being held back by something.  If GE could of had a decent day maybe the trade could have been savaged.  But the earnings news there disappointed and GE lost 2/3 on very heavy volume.  The medium term indicators for GE have now rolled over but it is holding at the 50 week moving average for now.  Gold was up $6 on the futures as the US dollar was lower today.  The XAU added 1 1/8, while GDX gained 1/4.  Volume was light.  The fundamentals still do not favor gold at this time.  Mentally I'm feeling OK.  Sideways for six weeks now on the S&P and it is frustrating for directional traders such as myself.  I still think we'll eventually get above the 20000 level on the Dow but the question is when?  Most of the major stock indices remain short term overbought with the exception of the Dow.  I will simply have to wait for what I think is a decent signal and go from there.  We'll roll into the February option cycle on Monday.  The premiums will be high.  Some economic data due next week but nothing that looks market moving at the moment.  I'm still leaning towards the SPY February calls but I'll have to check things out over the weekend.  The market did  not act as I expected this week and that is a cause for concern on my part.  But now that I'm out of the last trade perhaps fresh eyes will be upon things.  Plenty to ponder over the weekend.  Asia was mixed and Europe very slightly higher overnight.  It's Friday afternoon and time for a break.  

Lower today as the Dow fell 72 points on light volume.  The advance/declines were 3 to 1 negative.  This should turn the summation index lower.  Today was the first solid weakness in breadth and must be taken into consideration.  My work indicated that there would be some strength in the past couple of sessions but that did not materialize.  There are no buyers and the market is simply slowly dropping on its own weight.  Volume has dried up.  The usual positive expiration week bias did not appear.  My SPY January calls are solid losers and I'll be taking the loss tomorrow.  I'm disappointed to start the year on a sour note but what can you do?  GE was off a couple cents but the volume was good.  Earnings due before the bell tomorrow and that should influence the market.  Gold was off around $7 on the futures.  The US dollar was up a bit.  The XAU and GDX had slight fractional losses on lighter volume.  Mentally I'm doing OK.  Not happy about taking a loss on the first trade of the year but it looks like I simply held on for too long.  I expected upside this week and it didn't happen.  When the market doesn't do what is technically expected it's time to take notice.  Perhaps the sideways congestion in the S&P 500 is actually a double top.  But I will say that some of my indicators are in a longer term oversold area.  That implies that any downside will not last.  Expiration Friday will be the final day for this trade and nothing short of a 200 point rally will save it.  I'll try and cut the loss as best that I can but it is already too late for that.  Perhaps I'll begin looking at the SPY February calls.  Asia was mixed and Europe slightly lower in overnight trade.  We'll close out the week tomorrow.

A mixed bag today as the Dow fell 22 points on light volume.  The advance/declines were positive.  The summation index is still trying to move up.  The NASDAQ and S&P 500 were higher today.  It appears that the market is in a holding pattern for whatever reasons.  That is certainly unusual for option expiration week.  I'm still of the belief that we are going to head higher.  However with only 2 days to go for the January options, I'm in a very risky position.  My SPY January calls are in the money but in the red as well.  The short term indicators for the S&P 500 remain overbought.  The economic data out provided no surprises and the Feds beige book was met with a collective yawn.  The market is still looking for direction here.  GE was off a few cents and the volume was lighter.  Gold fell 8 bucks today as the US dollar bounced back.  The XAU dropped 1 1/8, while GDX shed 1/3.  Volume was good moving lower today.  Mentally I'm feeling OK.  I had thought that the Dow would have a good rise this week and take us to the promised land of 20000.  At this point it would take quite a 2 day rally to get there.  It doesn't appear to be in the cards for now.  The market is perhaps waiting to see what Trump has to say in his speech on Friday.  I really do not want to hold on to this trade until then but it may be my only shot to get out without too much of a loss.  The S&P 500 did go up 4 points today but I was looking for more than that.  I do think that we'll be higher again tomorrow but it may not be enough to save the trade.  The light volume isn't a positive sign as well.  The longer the inverse head and shoulders pattern on the S&P 500 keeps going sideways, the more the pattern becomes negated.  It may not work at all unless we see a high volume breakout to the upside.  Right now that doesn't seem to be how the market will go from here.  Europe and Asia were generally higher overnight.  We'll keep an eye on the developments in trading tonight around the world.

Weaker to start the shortened trading week as the Dow fell 59 points on about average volume.  The advance/declines were negative.  The summation index is trending upwards but it has a sideways tone to it.  Small stocks were relatively weaker and that is a negative for the bulls.  We did come back in the final hour and that is a plus.  The market was down over 100 at one point.  I'm still a believer based on my work that we'll be higher in the next couple of sessions.  It may not be enough to save my SPY January calls though as they are back solidly in the red.  I've obviously held this trade for too long.  Trump said something about the US dollar today and that sent markets lower.  It appears that he may become a market wild card, one way or the other.  That is something that technical analysis won't help.  GE was off about a dime on average volume.  Gold was up a dozen on the futures as the US dollar got whacked on Trumps comments.  The XAU added 2 points, while GDX rose about 2/3.  Volume was good.  We'll see how long this lasts.  Mentally I'm feeling OK.  I thought if we could get through today without too much damage my SPY January call trade would work out.  The time premium is really getting sucked out here now as there are only 3 days to go in the January option cycle.  I'm still looking at selling out on Thursday but we may not get high enough to make a difference.  I do not really want to hold on until Trumps speech on Friday.  So we'll see.  Lots of bearishness in the media on the stock market today and that is a plus for the bullish cause.  There is some economic data due in the next couple of days and the Feds beige book release tomorrow.  The short term technical indicators for the S&P 500 remain overbought and the reverse head and shoulders pattern on a daily basis is still intact for now.  Asia was mixed and Europe lower overnight.  We'll see what tomorrow brings. 

Quiet trading before the long holiday weekend.  The Dow shed 5 points on light volume.  The advance/declines were positive.  The summation index is still moving up but not at a rapid pace.  The overall market was stronger than the Dow and that is a plus.  I think that if we can make it through Tuesday without a lot of damage we'll be heading to the promised land of 20000 on the Dow next week.  That's my guess at the moment.  I'm still holding the SPY January calls and will until Thursday of next week.  That is the strategy according to my technical work.  I could be wrong.  GE lost a few cents on lighter volume.  Gold was off a couple bucks on the futures and the US dollar was a bit lower as well.  The XAU and GDX had fractional gains on light volume.  Mentally I'm feeling OK.  The economic data was in line with expectations and there were no surprises from the bank earnings.  It would not surprise me if we come back from the weekend to some selling on Tuesday but we should move higher after that.  The inverse small head and shoulders pattern is still valid for now on the S&P 500.  The short term technical indicators still remain overbought but can stay that way during up trends.  Although we have just been going sideways now for 5 weeks.  My SPY January calls are slightly in the black.  This trade has seemed to last forever.  I did have a chance to exit with a decent profit a week ago but decided to hang on.  I still am a believer that this trade is going to work out but the market will go where it wants.  You can make a case for a decline here as well based on the technicals.  But the small stocks continue to show relative outperformance and that is bullish.  However with only 4 days left until expiration the risk going forward is much higher than I normally would accept.  So we'll see how it all plays itself out next week.  An extra day over the weekend to figure out what to do but my mind is pretty much made up.  For now it's Friday afternoon and time for a break.

Weakness as expected today as the Dow fell 63 points on lighter volume.  The advance/declines were negative.  The summation index is still trying to move higher.  It could have been worse as the Dow was off over 175 points in the morning.  There's still bound to be some selling ahead but tomorrow will be important as far as my SPY January call trade goes.  This trade is showing a loss with only 5 days to go before expiration.  We have economic data due tomorrow and it will be the last day to trade before a long holiday weekend in the US.  You can make a case for the market to go either way here.  I knew that if I held the position this long, I'd be holding it into the expiration week.  That is where I find myself today.  I do expect some upside in the middle and towards the end of next week.  But from what level on the S&P is the question.  GE lost a few cents and the volume was a little better.  Gold was flat after being higher during the day.  The US dollar was lower.  The XAU and GDX had slight moves on average volume.  Mentally I'm feeling OK.  I guess Yellens speech isn't until tonight.  It may impact the market but interest should turn to earnings and data by morning.  We've been sideways for about 5 weeks now.  The market is either building a top or getting ready to break out to the promised land of 20000 on the Dow.  I'm thinking that expiration week ahead of the presidential inauguration will tell the tale but that's just a guess.  Technically the S&P 500 is still in the short term overbought zone.  I think that if we can get through the next couple of sessions without any major damage we'll go higher after that.  But the risk really ramps up holding onto the SPY January call trade with each passing day.  The trading is never easy.  But at this juncture I'm basically locked into holding onto the trade until sometime near the end of next week.  We'll see how it goes.  Europe and Asia were generally lower overnight.  We'll close out the week tomorrow. 

We bounced around today during the press conference from the new president Trump but eventually finished the session with a gain of 98 points on the Dow.  The advance/declines were 2 to 1 positive and the volume was average.  The summation index is trying to move higher here.  Perhaps we can make it to the 20000 level by the end of the week but I would not be surprised by some more near term weakness.  The overall market was weaker than the Dow today.  We did close on the high of the day though and that is a positive.  My SPY January calls are back in the black but this trade is in a precarious position.  The volatility of the option premium is high due to the fact that the strike price is so close to being in the money.  Add the fact that the time decay is accelerating as we get closer to expiration and you can see that this isn't an easy trade to monitor and hold.  We'll see how things go from here.  GE was up a dime on light volume.  Some of the short term indicators here are oversold so maybe GE can get something moving to the upside.  That would help the Dow get to the promised land.  Gold was up 5 bucks on the futures today as the US dollar was lower.  The XAU and GDX had slight fractional losses on a bit better than average volume.  The gold shares have not followed gold higher lately and that is not a positive.  Mentally I'm feeling OK.  The Dow turned around today and TRAN is back moving to the upside.  Perhaps the 20000 will be reached this time around.  The S&P 500 also has a chance to move to new all time highs if we can get past the 2275 on good volume.  If we can get things moving higher, there is no overhead resistance.  I would not rule out another bout of weakness first in the near term, if we are lower tomorrow.  The short term technical picture for the major averages is mixed at the moment.  Some are still short term overbought, while others are in the short term oversold area.  Economic data due Friday but we do get a speech by Yellen tomorrow.  That has the potential to be a market mover.  It looks like I'll be holding onto the SPY January call trade longer than anticipated.  The risk increases with each passing day as there are only 6 trading days left in the January option cycle.  Europe and Asia were generally higher overnight.  We'll keep an eye on overnight trading.

Lower for the Dow once again as it lost 31 points on average volume.  The advance/declines were almost 2 to 1 positive.  The summation index is starting to trend sideways.  Once again the NASDAQ was higher in a repeat of yesterdays price action.  However the market has dropped in the final hour of trading in the past couple of sessions and that is not a good sign for the bulls.  We also tried to rally today and lost all of the gains.  To me, the price action looks tired.  My SPY January calls are back to break even.  I still think that we'll get through the 20000 level on the Dow but it may be later rather than sooner.  I also now may have to hold on to this SPY trade longer than I wanted to, which would mean holding it during expiration week.  GE was off about a dime on light volume.  A 3 week down trend in place here.  Gold was up a couple bucks today and the US dollar was a bit higher as well.  The XAU and GDX were up slightly on average volume.  Mentally I'm feeling OK.  No hard economic data due until Friday along with some bank earnings out on that day as well.  We do have the new president Trump in a press conference tomorrow and a speech by Yellen on Thursday.  They both have the potential to be market movers but we will simply have to wait and see.  The price action in RUT was at least positive today and the NASDAQ hit a new all time high.  Once again we have to see the major averages turn back up in a hurry because the short term technical indicators have rolled over.  Todays price action was not positive for the big caps.  That said, there is a potential chance that we are forming a small reverse head and shoulders on the daily charts for the big caps.  If that is the case then the SPY January call trade will work itself out to show a profit sometime next week.  That could simply be wishful thinking on my part.  For now I'll continue to hold the trade knowing that the risk increases with each passing day.  Asia was generally lower and Europe mixed overnight.  We'll see what tomorrow brings.

We began the week with a thud as the Dow fell 76 points on light volume.  The advance/declines were almost 2 to 1 negative.  This could start the summation index to turn sideways.  The short term technical indicators are rolling over here and we'll need to see that change in a hurry or my SPY January call trade will be in jeopardy.  It is now barely showing a profit.  No real news today and there really isn't anything on the radar to boost stocks in the near term.  The VIX is at a range that has produced near term declines in the recent past.  However the NASDAQ was up today and that is a small plus.  But the lack of volume today is another negative sign.  GE was off over 1/8 on light volume.  Gold rose $8 on the futures as the US dollar was lower.  The XAU and GDX barely budged today despite as rise in gold and the drop in the US dollar.  That is not a good sign for the bulls.  We would normally like to see the gold shares leading gold itself.  Mentally I'm feeling OK.  Only 8 days left in the January option cycle.  With todays negative price action, I may have to hold on to this trade longer than I originally planned.  However the technical picture doesn't look near term positive here and it's possible the market will roll over here.  The contraction of the Bollinger bands is another warning sign that something is about to happen.  Positive or negative.  We don't know exactly which way things will go here.  But with the market more overbought than oversold, the odds seem to favor a decline.  We'll see.  There will have to be a catalyst in the next few days to move things higher.  I do not see one on the horizon.  Stocks appear to be following oil lower here.  It's something to keep an eye on in the near term.  Asia was mixed and Europe generally lower overnight.  We'll keep an eye on the overnight developments. 

The Dow almost touched the 20000 promised land today but fell back.  What we're really looking for is a close above that level.  The most watched index gained 64 points on light volume.  The advance/declines were slightly negative.  Low volume and weak breadth are not the conditions you'd like to see for an advance past 20000.  So we will still have to wait.  The summation index is moving higher and that is a plus.  The small stocks are still looking good but the weakness in RUT is a concern.  The employment report had no real surprises and after initial weakness, the stock market moved higher.  My SPY January calls are still in the black.  GE was up a dime on light volume.  Gold gave back $8 after a pretty good week.  The US dollar was up today.  The XAU shed 2 2/3, while GDX lost over 3/4.  Volume was average.  Mentally I'm feeling OK.  The S&P 500 is near term overbought and price is touching the top of the Bollinger bands.  It appears that perhaps a pause is due.  Weak volume on todays rise is another sign of at least short term exhaustion in my view.  I could be wrong.  There are 2 weeks to go in the January option cycle but with one less day due to a holiday.  I'm still a believer in 2300 for the S&P but I don't know if we'll get there before expiration on the 20th.  I may have to exit this SPY call trade next week.  We'll see.  The jobs numbers weren't anything special.  I'm not sure what the next catalyst higher will be.  There are sellers here just short of 20000.  Perhaps when we get them out of the way the market can move higher and the focus won't just be on that particular number.  Hasn't happened yet.  So there will be plenty to think about over the weekend.  I'll be searching for clues in the charts as usual.  Asia was mixed and Europe once again had little price movement overnight.  It's Friday afternoon and time for a break.

A pause before the employment report as the Dow fell 42 points on average volume.  The advance/declines were negative.  The summation index is still moving higher.  A mixed bag today as the NASDAQ was higher.  The major indices are stalling here at the near term resistance.  If we can get through there will be more price gains ahead as there will be no overhead resistance.  I do expect that we'll move higher.  The small stocks continue to be acting relatively better.  My SPY January calls are still in the black.  GE was off about 20 cents on light volume.  Gold found buyers as the futures rose $16 on a much weaker US dollar.  The XAU was up 4 1/2, while GDX climbed 1 1/4.  Volume was good.  The gold share indexes have just broken the daily down trend line that began back in August.  That is a positive.  The fundamentals remain bearish for gold in my opinion but perhaps that is changing.  Mentally I'm feeling OK.  Maybe tomorrows jobs numbers can get things moving higher again.  On the short term we are more overbought than oversold at the moment.  The Bollinger bands are also contracting now which implies some real movement one way or the other in the near future.  We've had a positive start to the year so far and we'll see if that can continue.  Plenty of time left in the January option cycle, with about 2 weeks to go.  Asia was mixed overnight, while Europe had little price change again.  We'll see how the market reacts to tomorrows data.

Continuing higher as the Dow rose 60 points on average volume.  The advance/declines were about 6 to 1 positive.  The summation index is moving up.  Once again the overall market was stronger than the Dow.  Add in the very positive breadth and we have the making of a run past the promised 20000 level.  Perhaps the employment report on Friday will be the catalyst for that.  Just a guess but the technical picture has improved in the first couple of sessions in the new year.  Unless there is some kind of drastic change in the picture, we're going higher.  My SPY January calls are still in the black.  I'm looking for the S&P to reach the 2300 level before expiration.  That's the idea for now.  GE was flat on the session and the volume was very light.  Gold was up a couple bucks which wasn't much considering the decent drop in the US dollar.  The XAU added 1 1/3, while GDX was up almost a 1/4.  Volume was pretty light here though.  Mentally I'm feeling OK.  The economic data combined with the Fed minutes weren't any factor in todays trading.  My thinking is that tomorrow could see some weakness ahead of the jobs report but that's a guess as usual.  The market is acting pretty good here in my opinion but we all know that could change on a dime.  The short term technical indicators are approaching overbought territory but aren't completely there yet.  The small stocks are leading the way here and that's a plus.  If we can get through the 2275 level on the S&P there will be no overhead resistance again.  Hasn't happened yet.  For now the idea is to hold onto the SPY calls until at least next week.  Japan was higher overnight but the rest of Asia and Europe were barely changed.  We'll see how things go tomorrow.

A positive start for the new year but we did fall off of the early highs.  The Dow rose 119 points on average volume.  The advance/declines were 3 to 1 positive.  This should move the summation index higher.  The overall market was stronger than the Dow.  I'm still looking for Dow 20000 in the beginning of the year here.  I don't think that it will be a straight line though.  My SPY January calls are now at a slight profit.  I think that they can be held until next week but we'll have to see how the market goes.  The short term technical indicators are starting to move back up for the S&P 500.  GE was up a few cents on average volume.  Indicators here are starting to move back up as well.  Gold gained $8 on the futures and the US dollar was higher as well.  The XAU added 3 1/8, while GDX was higher by over 3/4.  Volume was good.  Mentally I'm feeling OK.  It looks like we have got some beginning of the month money flows today.  I do expect some near term strength going into Fridays jobs report.  The employment numbers should determine where we go from there.  I think that there's room to move up here but we could go back into a sideways pattern as well.  I do not think that there is a big decline coming for now.  The VIX is coming down off of an overbought condition too.  So I think that the path of least resistance for now is up.  Europe and Asia were generally higher overnight.  We'll see how the 2nd trading day of the year goes tomorrow. 

Drifting lower in an aimless market to close out the year.  The Dow fell 57 points on the usual light volume we've been seeing in this shortened week.  The advance/declines were negative.  We're short term oversold for some of the technical indicators.  It looks like I was a day early for the SPY January calls.  Or perhaps my take on things here is simply wrong.  That trade is now in the red.  What I thought was a consolidation isn't after todays price action.  Things will need to be reversed to the upside in a hurry or this trade is dead.  There is no support to speak of in the S&P 500 until we get to 2210.  GE was off 1/8 and the volume remains light.  Gold dropped $7 on the futures despite a weaker US dollar.  The XAU was off over 3 points and GDX shed 7/8.  Volume was good.  The fundamentals remain bearish for gold.  Mentally I'm feeling OK.  Volatility appears to be short term overbought now and that could lead to some positive price action for stocks at the beginning of the new year.  Maybe.  I also could be reading everything wrong here but some of the indicators that I use show at least some kind of bounce happening soon.  I do think that it could be more than that.  I'm still thinking that 20000 will be reached early in 2017.  The trading was thin in the past week and we could have just seen a downside skew because of that.  But who knows?  We'll find out more next week when all the players return.  My SPY January call trade is now in the red but there is plenty of time left in the January option cycle.  I'll look things over again this extended holiday weekend.  For now it's the final Friday afternoon of 2016 and time for a rest.  Happy and healthy New Year to everyone.

Lackluster is the best way to describe todays market as the Dow fell 13 points on very light volume.  The advance/declines were positive.  The summation index did turn lower yesterday but the action there is better described as sideways for now.  Not a lot of players and not a lot to write about either.  There was some weakness about halfway through the session and I did purchase some SPY January calls.  They are slightly in the black.  This should be a less than 2 week trade time wise.  If and when we move back to short term overbought, that will be the time to exit.  I still think that we'll see Dow 20000 early in the new year.  GE moved up a couple pennies and the volume remains very light.  Gold found some interest on a lower US dollar.  The futures rose $15.  The XAU climbed 4 3/4, while GDX added 1 1/2.  Volume was average.  The gold shares remain in a downward channel but are trying to break it.  Mentally I'm feeling OK.  Just a day to go in 2016 and we will probably end on a quiet note.  I expect even less traders tomorrow as we approach another long holiday weekend.  Things should get going again on Tuesday.  I'm expecting this SPY call trade to work out but the market will go where it wants.  I still view the past couple of weeks as a consolidation and not a top.  I could be wrong.  So we'll see what happens.  Europe and Asia were generally weaker overnight.  We'll finish up the week and the year on Friday.

Well I thought things would be quiet but that was not the case today.  The Dow fell 111 points on very light volume.  The advance/declines were better than 2 to 1 negative.  This could turn the summation index lower.  The short term technical indicators for the major averages have now rolled over.  I do not think that this is the start of something big to the downside.  In fact I think that any weakness tomorrow can be bought.  The lack of volume tends to skew things each way.  Although I thought the next trade would be in the new year, I'll be looking to purchase the SPY January calls tomorrow.  I may be early on this trade but one of my short term tools is oversold at this point.  GE fell almost 1/4 and the volume was light.  Still short term overbought here.  Gold and the US dollar were slightly higher.  The XAU added 1 1/3, while GDX was up 1/3.  Volume was average.  Gold and the gold shares remain in a down trend.  Mentally I'm feeling OK.  Volatility picked up today but it was nothing drastic.  I think we are simply in a light volume void with the major players either out or on the sidelines.  Only 2 trading days left in 2016.  I did not expect todays drop but I really don't think we'll see a repeat tomorrow.  Of course I could be wrong.  One of the issues here is that there is really no support under the Dow and S&P 500 at these levels.  That said, I think what we've seen in the past couple of weeks is a consolidation from the recent run up.  Even if I'm a bit early in this trade, there will be plenty of time for it to work out.  I will re-check everything tonight but I'm pretty sure that if we see lower prices tomorrow, I'll be buying the SPY calls.  Europe and Asia were mixed last night showing little price change with the exception of a rise in the Hang Seng.  We'll keep an eye on the overnight developments and get ready for tomorrow morning. 

Back to work for some as the Dow rose 11 points on extremely light volume.  The advance/declines were positive.  The summation index is trying to move higher.  Still plenty of players on vacation as we look to close out the trading year of 2016.  Nothing has changed as the major stock indexes remain short term overbought.  I'm still waiting for some kind of pullback to get long the SPY January calls.  A short trading week upon us but there is still plenty of time in the January option cycle to make something happen.  GE up a couple pennies on very light volume.  Gold was up $6 on the futures but was higher during the day.  The US dollar barely moved.  The XAU rose 1 3/4, while GDX gained 1/2.  Volume was light.  Mentally I'm feeling OK.  The market took off in the first half hour and steadily eroded from there.  I'm not sure what to make of that but we are in a very thinly traded environment.  Probably the best thing to do here is let this week pass and take it from there.  We should get a bump up in the beginning of the year due to seasonal money flows.  However we all know what happened at the beginning of last year.  So we'll wait for some kind of signal and take it from there.  The market will not remain overbought forever.  Europe was generally higher and Asia generally lower overnight but both suffered from the same lack of interest as seen in the US today.  Perhaps this will be a boring week.  We'll see if we get some more players back tomorrow.

Not much today as expected.  The Dow rose 14 points on extremely light volume.  The advance/declines were positive.  The summation index is starting to go sideways again.  It's holiday time and the stock market doesn't matter for a few days.  I'm hoping for a Christmas present of a chance to get the SPY January calls.  GE was up a nickel with the same lack of volume.  Gold rose a couple bucks and the US dollar was a touch weaker.  The XAU and GDX rose on anemic volume.  Mentally I'm feeling OK.  No real interest in stocks this week which was a bit of surprise to me.  I thought that maybe we'd get to 20000, given the positive seasonal factors.  Perhaps next week.  We're still short term overbought on the major stock indices any way you look at it.  The market takes Monday off for Christmas.  I suppose I don't expect much movement next week as well but you never know.  I'll be looking for clues over the next few days.  For now 's Friday afternoon and time for a rest.  Merry Christmas and Happy Holidays to all. 

Another pause in the climb to 20000 as the Dow fell 23 points on light volume.  The advance/declines were negative.  The overall market was weaker than the Dow.  The summation index is still moving higher.  The economic data came in about where expected.  We still remain overbought on the short term technical indicators for the major indices.  We've been going sideways now for a couple of weeks but remain in a very positive seasonal time period.  I do believe that this will eventually take us to the 20000 promised land.  The light volume indicates that a lot of the players are gone for the holidays early.  We'll need to see a return of better volume to hit the milestone.  GE was off a few cents and the volume was light.  Gold lost a couple bucks and the US dollar finished barely higher.  The XAU and GDX were slightly lower.  Volume was almost average.  Mentally I'm feeling OK.  Not much else to say with the long holiday weekend almost upon us.  I would expect tomorrow to be a very light volume levitation as it should be pretty quiet.  I am still looking at the SPY January calls but the premiums remain expanded due to the time factor.  Perhaps I'll get a shot at them next week.  I do not think that things are rolling over here but I've been wrong before.  Asia was lower and Europe mixed overnight.  However the moves were once again muted as there aren't any players to drive the volume.  We'll finish out the week most likely quietly tomorrow.

A bump in the road on the way to Dow 20000 as the most watched index shed 32 points on very light volume.  The advance/declines were slightly negative.  The summation index is moving up.  Not to worry here as we are in the very favorable seasonal time period.  Plenty of economic data due tomorrow and that should propel us the promised land.  That's my best guess for today.  Not a lot of players here today and that may be the case for the rest of the year.  Still overbought for the major stock indices and that hasn't changed for weeks.  I am looking at the January SPY calls but cannot purchase them unless we see some downside to relieve the overbought condition.  Doubtful.  GE was off 1/8 and the volume was light.  Gold was little changed and the US dollar was a bit lower.  The XAU and GDX had very slight fractional losses on extremely light volume.  Apparently nobody felt like buying or selling today.  Mentally I'm feeling OK.  Two days to go before a long holiday weekend and todays lack of activity tells me that perhaps traders have already packed it in for the week.  This really isn't the kind of market that you like to trade as it is listless at the moment.  Tomorrow could bring the awaited 20000 but it probably won't have much volume behind it.  I'd prefer to see some weakness to get long but it isn't that time of year.  Perhaps if we run to 20000, I can start to look the other way.  But let's not get ahead of ourselves.  More likely it is a time to be patient.  Asia was mixed and Europe higher but the moves were slight either way.  We'll watch the world overnight and see how things go tomorrow.

The march to Dow 20000 continues as it rose 91 points today on light volume.  The advance/declines were almost 2 to 1 positive.  The summation index is tending higher.  Just 25 points away from that magic number and we should make it tomorrow or at least before the end of the week.  Still overbought any way you look at it but it doesn't matter.  What will happen when we get there?  Probably just more buying as nobody is doing any selling with the promise of lower tax rates next year.  The lighter volume as we go higher here is a concern but it is holiday time.  It appears that any option trade to the upside will not happen at this rate.  GE was up 1/3 and the volume remains good.  Overbought here as well.  Gold was flat on the futures session, with the US dollar up just a bit.  The XAU and GDX had slight fractional moves up on light volume.  Certainly no interest in buying gold or the gold shares here.  Mentally I'm feeling OK.  It looks like we're in the holiday period run up for stocks.  No overhead resistance and the technical indicators remain overbought.  I suppose we'll just have to see how high this thing can go.  Usually higher than you think.  No real pullback opportunities to get the SPY January calls.  The high option premiums are also a factor in not just buying something to get in there.  I'm keeping an eye on the daily RSI indicators for the RUT and S&P 500.  If we do get higher highs in the indexes with lower RSI readings, that would be a negative divergence that I'm looking for.  Hasn't happened yet and this is really a bullish time of year.  I'd rather see some selling to get long.  Asia was mixed and Europe higher in the overnight session.  We'll see if they break out the Dow 20000 hats out on Wall street tomorrow.

It feels like the holidays already as the Dow gained 39 points on light volume.  The advance/declines were positive.  The summation index is starting to head back up from a short sideways position.  We began the day higher and went sideways after that.  Plenty of economic data on the 22nd and perhaps that will get us going.  Still short term overbought for the main indices.  I'd like to see some pullback to get the SPY January calls but that is wishful thinking.  GE was up over 1/8 on OK volume.  Gold was up a few bucks on the futures as the US dollar was higher.  The XAU and GDX barely moved.  Volume was light.  I don't see any sustained upside for this group anytime soon.  Mentally I'm feeling a bit tired, did not sleep well.  Overbought has been the theme for weeks now as the rally has taken a multi-day breather.  We're in a good seasonal time frame for stocks, so I'm not looking at the puts now.  That will be something for next year.  The extra week in the January option cycle keeps the premiums above average for now.  There's no rush to trade at the moment.  Volatility has shrunk and Dow 20000 before the end of the year still seems likely to me.  Patience is the way to go for now.  Asia was lower and Europe mixed overnight.  We'll watch what happens in the after hours.

We had a one day reversal to the downside today as we opened higher and closed lower.  The Dow only fell 8 points though on very heavy expiration related volume.  The advance/declines were positive.  The summation index has begun to move sideways.  The overall market was weaker than the Dow.  Still short term overbought for the big cap major stock indices.  We are moving into a very favorable seasonal time frame for stocks, so I do not see any major decline coming up anytime soon.  If we can at least get the technical indicators to get back to mid-range, perhaps there will be an opportunity to purchase some SPY January calls.  Hasn't happened yet.  GE had some positive news and was up 1/2 on very good volume.  The precursor theory that I mentioned yesterday is now thrown out the window.  Gold rose $5 as the US dollar was a bit weaker for a change.  The XAU and GDX were mixed with very slight fractional moves.  Volume was good.  Mentally I'm feeling OK.  Only two weeks left in 2016.  I'd expect the rally to continue.  Most normal trading will take place next week and then we're into holiday mode for the rest of the year.  I do expect the Dow to get to 20000 before the end of the year.  But right now it is a matter of waiting for an opportunity to get the SPY January calls as the next trade.  There is not rush because this option cycle has 5 weeks instead of the normal 4.  Also at the moment I do not see any positive or negative divergences on the technical indicators that I follow.  But there will be plenty of time over the weekend to check on that.  We once again saw the Dow have better relative performance on the week than the other major averages.  As I've said before, this is generally a late stage of the rally occurrence in a longer time frame.  We'll just have to see how far that it can go.  Until we some negative divergences on the weekly charts, the trend remains up regardless.  So we'll do the homework over the weekend and see where that leads us.  For now it's Friday afternoon and time for a rest.

Back up today as the Dow rose 59 points on good volume.  The advance/declines were positive.  The summation index stalled yesterday but should be heading back up today.  The overall market acted better than the Dow.  We were about 100 points higher than the close early on.  However it is expiration week and there is plenty going on behind the scenes.  That fact could skew things tomorrow as it will be a quarterly settlement as well.  We're still pretty much short term overbought after a brief pause yesterday.  I think that we've got a shot at 20000 next week or before the end of the year due to the extremely positive seasonality.  I could be wrong.  GE was off another 1/4 and the volume was good.  If GE is again a precursor of things to come, then perhaps 20000 will have to wait.  We'll see.  Gold got crushed again as the futures were off by about 35 bucks.  The US dollar continues to forge ahead to new highs for the year.  There is nothing in the near term to stop the dollars climb.  The XAU lost 3 1/3, while GDX dropped over 3/4.  Volume was heavy again.  There is no love for gold and the gold shares.  That story has no ending at the moment.  Mentally I'm feeling OK.  I'm still considering the SPY January calls but at the rate things are going, there won't be a decent entry point.  I may have to wait things out and then look to the other side of that trade.  If a negative divergence would pop up here soon, perhaps the SPY puts would be in order.  But it is hard to fight the rally that we've seen here lately.  Money continues to flow into US stocks and that should continue in the beginning of the new year.  Another thing to consider is the extra week during the January option cycle.  Premiums remain high and there isn't a rush to put on a trade, all things considered.  So I'll try to remain patient as usual and look for a good set up.  Asia was mostly lower and Europe higher overnight.  We'll close out the week tomorrow.

Dow 20000 was put on hold today as the most watched index fell 118 points on good volume.  The advance/declines were 4 to 1 negative.  This could put a stop to the summation index moving up.  We can blame the Fed as it signaled more rate hikes to come following todays anticipated move up.  I don't know if this means that the rally is over but perhaps a long overdue pause is beginning to shape up.  One day doesn't make a trend though and we are moving into a very favorable seasonal period for stocks.  I'm still looking out for the SPY January calls.  GE was off 1/4 on heavy volume.  Gold got pummeled by $13 on the futures.  The US dollar broke out to a new recovery high for the year.  The XAU lost 4 1/4, while GDX shed 1 1/8.  Volume was heavy.  Gold is oversold and staying there as the fundamental picture here remains bearish.  Mentally I'm feeling OK.  Everybody was looking for a rise in rates and the market sold off anyway.  I don't think that it's the beginning of a substantial decline.  But I've been wrong often enough before.  Perhaps we can get to an oversold short term technical condition to try those January calls.  We will simply have to wait and see how the next few days play out.  Only a couple of days here for the December option cycle.  There is plenty of time in my mind to look out to January because there is an extra week in the January option cycle.  The short term technical indicators for the major indices have at least rolled over now.  I do still think that the market will run this thing up to the 20000 level for the Dow between now and the January expiration.  I'll simply be looking for an entry point for the SPY calls.  Unless we completely unravel here and I don't expect that.  The recent poor breadth was a warning for something like today.  Whether or not it lasts is the next question.  Europe was lower and Asia mixed last night.  We'll keep an eye on the overnight developments.

Moving right along as the Dow gained 114 points on average volume.  The advance/declines were positive.  The summation index is moving up.  There seems to be no stopping this market.  The technical indicators have been thrown out the window.  We are in a momentum based run higher.  Overbought, staying there and I have written that statement for weeks.  I don't know how long it lasts or what happens when it ends.  My guess is that it won't be pretty but we can enjoy things for now.  Inflation and retail sales data out tomorrow but all ears will be on the Fed statement.  An interest rate rise is already baked into the cake.  GE was off 1/8 and the volume was average.  Gold was down $5 on the futures and the US dollar was a bit higher.  The XAU and GDX had fractional gains.  Volume there was a bit light.  Mentally I'm feeling OK.  No SPY December put trade for me as I cannot step in front of this freight train higher.  I suppose that I'll look out to the January calls if we see some weakness.  But at this rate, selling stocks seems to be a thing of the past.  Interesting times.  I can make a case for this being the 5th leg and final move higher from the lows of 2009 in a 1 through 5 event.  But the last move up can on for quite some time.  That's a guess as usual.  Plus my count and interpretation of things could be wrong.  In the near term you cannot fight the trend up.  Perhaps we'll just keep moving higher into the expiration.  However the weaker breadth moving up shouldn't be ignored.  Eventually the severe overbought technical conditions will come into play.  I just don't know when and will not try and guess the timing.  We'll look for some type of negative divergence before attempting any kind of put trade or short.  Europe and Asia were higher overnight.  We'll see what the Fed has to say on Wednesday and if that propels the Dow to the 20000 level.

The Dow keeps rolling along as it added 39 points today on good volume.  The advance/declines were almost 2 to 1 negative though.  The summation index is still moving up.  The overall market was weaker than the Dow.  That's 2 days in a row of weak internals but the Dow moving up anyway.  That kind of technical action is at least a warning that things could change.  All the short term indicators remain overbought.  I am looking at a short term trade for the SPY December puts but no valid set up has appeared.  With only 4 days to go in the December option cycle, doing this trade would be fraught with risk.  GE gained a few cents on average volume.  Gold finished flat on the session but did come up off of the lows.  The US dollar was weaker today.  The XAU and GDX had very slight fractional gains on average volume.  Mentally I'm feeling OK.  We've got plenty of economic data out this week plus the Fed.  Throw in option expiration and I think we should see some volatility.  The major stock indices remain very overbought despite todays pause for most.  The small stocks got hit today and they can be leaders.  That said, any trade of the SPY puts would have to be a very short term deal.  Not exactly my specialty.  But I'll have to see how things go tomorrow.  Perhaps the wiser idea would be to go out to the SPY January calls.  If we did get some selling this week perhaps that will set up.  For the moment the rally remains intact but the negative breadth is a warning sign.  Europe and Asia were mixed overnight, though Hong Kong had a decent drop.  We'll keep an eye on the overnight developments.

I suppose at this point we can just start calling this a melt-up.  The Dow rose 142 points on good volume.  The advance/declines were barely negative.  The summation index is moving up.  No explanation to this type of price action.  Dow up 142 and the breadth is negative?  Go figure.  Extremely overbought in the near term and still moving higher?  I appears that a run up into the expiration next Friday certainly isn't out of the question.  Hard to attempt a trade when the technical indicators aren't working.  I'm still thinking about the SPY December puts for a short term trade but there is no divergences yet.  It's probably best to just let the December option cycle go by and look to the January calls.  GE was up 1/4 on lighter volume.  Gold dropped a dozen on the futures as the US dollar continues its climb.  The XAU fell 2 1/2, while GDX shed 3/4.  Volume was good.  No positive signs for gold.  Mentally I'm feeling OK.  The rally is overextended by any stretch of the imagination or measurement.  The trouble is that there is no telling just how far up this thing can go.  It defies the normal technical indications to the upside just as it sometimes does on the downside.  So it is hard to say when it will end.  When the indicators stay overbought or oversold for days and weeks, they are of no use.  It simply isn't the normal market environment.  It's tough to trade.  At this rate you could just buy some SPY calls and hope that it continues to go up.  That really isn't a market strategy.  What I will do over the weekend is go over the charts once again and try to figure something out.  It may be dangerous to try and buy the SPY puts next week because that idea just isn't working for those who've tried recently.  However I do think that at some point next week it will.  It is a historically weak time period for the market and perhaps the Fed tightening will bring some sellers.  They have been absent for weeks.  But I'll have to peruse the charts first.  For now it's Friday afternoon and time for a break.

The beat goes on as the Dow added 65 points on good volume.  The advance/declines were positive.  The summation index continues higher.  At this point you have to begin to wonder just how long this will continue.  All the short term technical indicators are very overbought without any relief.  Plus they have stayed that way for weeks.  It's as if the indicators don't matter anymore.  It is simply buy, buy, buy.  Day after day.  Perhaps we'll just keep running up into the option expiration but that isn't until next week.  I'd like to try the SPY December puts for a short term trade but at this rate, there is no way to find the proper entry point.  GE was off a few cents and the volume was average.  Gold was flat on the futures despite a decent gain for the US dollar.  The XAU and GDX were flat on very light volume.  Mentally I'm feeling OK.  The ECB extended its bond purchase program but at a lower rate.  The stock market shrugged.  It is a runaway freight train for US stocks at the moment.  No sellers or overhead resistance.  I certainly don't know how long this will last.  The VIX has risen the past couple of days but stocks have surged anyway.  Part of me wants to just get some SPY calls but there is no technical justification to do so right now.  I can make a case for the SPY puts but only if we get some kind of negative divergence in the indicators.  Hasn't happened yet.  So patience is advised for now.  Europe and Asia were generally higher overnight.  We'll finish out the week tomorrow.

Powering to the upside as the Dow climbed 297 points on heavy volume.  The advance/declines were a bit over 3 to 1 positive.  The summation index is moving higher.  Overbought, staying there and there is no overhead resistance.  Sellers are gone.  I did not get any of the SPY December calls but that idea was valid.  I've asked myself how long can this go on and I guess the answer is longer than you think.  I'm looking for the next trade and perhaps the SPY December puts might be in order for a short term trade on a valid signal.  However the primary trend is up and it usually doesn't pay to go against that.  GE was higher by 3/8 on average volume.  Gold rose $5 on the futures as the US dollar was lower.  The XAU and GDX had slight fractional gains on weak volume.  The fundamentals remain bearish for gold.  Mentally I'm feeling OK.  Quite a run we've had since the election and it appears there is no stopping this bull move.  We'll see profit taking at some point but I do not look for an extended downturn anytime soon.  The latter half of December is generally bullish for stocks.  I will look for a short term top next week and perhaps trade it if we get some kind of negative divergence.  However it is possible that the more prudent trade would be to go out to the SPY January calls.  I do somewhat lament not being able to profit from the current move.  But at least the hypothesis of the market was correct and having a handle on things plays out to the positive in the long run.  Seven days left in the December option cycle.  I have to say after today that the prices are so overextended, some type of consolidation is necessary.  A pause is due and sooner rather than later.  I'll be looking for a short term signal to try the SPY December puts between now and expiration on the 16th.  Europe and Asia were both higher again overnight as money pours into stocks around the world.  We've got the ECB to deal with tomorrow but I don't expect any surprises.  We'll keep an eye on the overnight action.

A drift higher today as the Dow was up 35 points on good volume.  The advance/declines were better than 2 to 1 positive.  The summation index is moving up.  The overall market was stronger than the Dow again and that's bullish.  We're going higher and there isn't anything that I can see on the horizon to derail this trend.  There are no sellers for now.  It does not appear that the SPY December call trade will happen.  I can only remain patient and look for the next opportunity.  Running out of time in the December option cycle and then we have the holidays to contend with.  I suppose that I'll be trying to get long at some point.  GE was up a few cents on pretty light volume.  Still more overbought than oversold here.  Gold was off $6 again on the futures as the US dollar bounced back.  The XAU and GDX had slight fractional losses on extremely light volume.  Mentally I'm feeling OK.  Not much else to report as we continue to move up.  The Dow and the TRAN have remained short term overbought for weeks.  It's hard to trade against that trend.  Major stock indices are moving above near term resistance, so there is no telling how long this will go on.  It has already lasted much longer than normal.  We never did get back to mid-range on the technical indicators for the S&P but we did have a slight decline and now have moved up off of that.  All I can do is wait for some better downside before trying the SPY calls again.  But it really doesn't look like that will occur.  Perhaps there will be a short term trade to try around the Fed meeting but that's not until next week.  Plus I'm not that good at the short term trades.  So it remains a watch and wait time for me.  Europe and Asia were higher overnight.  We'll see what tomorrow brings.