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Wednesday, December 27, 2017

Daily update 12/27

A general malaise on the part of the buyers today.

So far the much talked about Santa rally has not done so well.  Technology is still a drag after the APPL news yesterday.  Breadth was +53%.  New highs dropped a bit to 130.  New lows were stable at 23.  Many money managers on vacation by the looks of the volume.

The futures closed below the 20 SMA, but they have not confirmed a break yet. 

The green and red lines crossed.  This will sometimes bring out the buyers.  Whether anybody is around to buy is the question.

Art Cashin was looking a little disappointed in the Santa rally today.  I think there is still a little bit of rotation going on even though the volume is low.  Pretty hard to make moves this time of year.  Maybe the retail crowd is too busy buying bitcoins instead of stocks.  Things may pick up over the next two days.  There still might be a new high for SPX to close out the year.

Here is a look at the January SPY option configuration.

Last month SPY pushed up through some call overhead resistance.  January shows an interestingly large number of both puts and calls at the 266 strike (that would be a good place for SPY to be at next expiration).  The 265 strike also has a lot of options as well.  If SPY gets beneath those levels delta hedging may come into play to send SPY down towards the next support at 260.  Overhead resistance could come into play at the 270 strike.


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