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Monday, March 02, 2015

We begin the month of March on a positive note as the Dow gained 156 points on average volume.  The advance/declines were positive.  The trend remains up and we should find our way higher going forward.  No opportunity for purchasing the SPY March calls today.  It appears that this trade isn't going to happen at this rate.  However the advance/declines today were less than what you would expect for a market up over 150.  So the rally is losing internal strength at the moment.  That doesn't mean that we won't go higher though.  We worked off the near term overbought condition for stocks and now have moved up.  GE was up 1/8 and the volume was lighter.  Very overbought on a daily basis here but I have a target price in mind but we are not there yet.  The GE March calls I own are doing fine.  Gold fell $5 on the futures and the US dollar was little changed.  The XAU dropped 1 2/3, while GDX fell 1/2.  Volume picked up a little on the downside.  March is historically the worst month for the price of gold.  So at some point this month there should be a good entry point for the April or May gold share calls in my opinion.  That is a trade on the horizon.  It will take some time for the gold shares to get oversold.  There is no rush here.  Mentally I'm feeling OK.  The small stocks continue to lead the way higher and that is bullish.  This rally seems to be getting long in the tooth but there is no top yet.  There is no overhead resistance as well.  So we have to keep looking for trades on the long side for now.  Fridays employment report should be the next market catalyst.  Todays gains goes to show that there is still money out there looking for a place to go.  The GE March call trade continues to work but I really need to think about an exit.  Gold is a waiting game for now.  We'll keep an eye on overnight developments and be ready to go tomorrow morning.  

Friday, February 27, 2015

Selling today as the Dow lost 82 points on average volume.  The advance/declines were about even.  I don't expect that this is the beginning of any substantial down trend.  We are working off the short term overbought condition in my opinion.  The small stocks were also weak today and that is a change.  But the advance/declines were not negative for the market.  I think this is more of an end of the month thing than anything else.  I could be wrong.  But perhaps there will be an opportunity next week to get some SPY March calls.  We'll see.  GE was up a dime on good volume.  We finished well off of the highs for the session though and that isn't a good sign.  Still, there are 3 weeks to go in the March option cycle and the GE calls that I own are solidly in the black.  Gold was up a few bucks on the futures as the US dollar finished the day little changed.  The XAU rose 1 1/8, while GDX gained 1/3.  Volume was light here.  I think the gold shares have simply come off of oversold levels this week.  I do not think that this is the beginning of a multi-week uptrend.  I'm still considering the April gold share calls at some point next month.  Mentally I'm feeling OK.  After such a huge move higher for the stock indexes in the February option cycle, you cannot expect a repeat here for the March cycle.  I do believe calls are in order for March but the gains will not be as robust as they just were.  Perhaps a doubling of option premium if the timing on the SPY calls is correct.  That's a guess as usual.  I certainly don't have a crystal ball.  I can say that last months set up was much better than what we have so far here.  GE had a good week and has put that trade in the black.  The weekly chart has a bit more room to run but on the daily chart, not so much.  The short term technical indicators for GE remain overbought.  I'll have to plan some type of exit strategy for that trade over the weekend.  I don't have any other new ideas right now.  I'll be checking the charts over the weekend and be back here on Monday to begin the month of March.  For now it's Friday afternoon and time for a break. 

Thursday, February 26, 2015

More churn and grind and going nowhere fast.  The Dow fell 10 points on average volume.  The advance/declines were slightly negative.  We will end the trading month of February tomorrow.  Probably some more selling but I don't expect anything major.  We are working off the short term overbought condition before moving higher in my opinion.  The trend remains up until proven otherwise.  If I'm lucky we'll get more of a pullback and a chance for the SPY March calls.  If not, I'll look for another trade elsewhere.  GE was flat on the session with average volume.  The daily chart is very overbought but I did not sell the March calls that I own.  The weekly chart shows that there is more room to go on the upside for GE.  With 3 weeks to go in the March option cycle, I've decided to hold on for a bit longer.  This may or may not be the right decision.  Gold was up 8 bucks on the futures despite huge gains in the US dollar.  That is bullish for the precious metal.  The XAU and GDX only had fractional gains.  I'm going to remain patient here for now.  Mentally I'm feeling OK.  The stock indices have tried to sell off on a daily basis only to come back each time.  This is a positive going forward.  The small stocks continue to move up and outperform.  This is bullish as well.  I'm not saying this is going to go on indefinitely but until it changes we have to stick with the trend.  Perhaps we will see some beginning of the month money flow in March.  But that's a guess as usual.  So we'll continue to monitor what happens overnight and close out the week and month tomorrow.

Wednesday, February 25, 2015

It's getting a little sloppy here as the Dow gained 15 points on average volume.  The advance/declines were positive.  The overall market was weaker than the Dow.  The very overbought short and medium term condition cannot last forever.  We really need to see some pullback.  If and when that occurs should give the opportunity to try the SPY March calls.  Getting back to the 50 day average would be a great set up but I don't think that's in the cards.  GE exploded to the upside on heavy volume.  It gained 1/2, which is a big move for this stock.  My March GE calls are now solidly in the black.  The technical indicators are also very overbought here so I may just dump the calls tomorrow if we get some follow through.  GE moving higher does bode well for the overall market.  Gold was up around $5 on the futures and the US dollar was lower.  The XAU gained 1 3/8, while GDX rose 1/3.  Volume was good here.  I'm still advocating patience for the gold shares at this juncture.  I think the April calls can be purchased in March as a potential trade down the road.  Mentally I'm feeling OK.  2 days to go in February and I guess the question is will we see some of the gains for the month taken here?  It wouldn't be a surprise.  Plenty of time in the March option cycle for a successful trade.  I cannot explain the move up today for GE.  The news out was nothing special.  Why it decided to move today is beyond my scope of knowledge.  GE is getting pretty far from its 50 day moving average.  I'll ponder what to do here tonight.  We'll watch the overseas action tonight and see what happens tomorrow. 

Tuesday, February 24, 2015

Trending higher as the Dow gained 92 points on light volume.  The advance/declines were positive.  The rally is getting thinner as the overall market was weaker than the Dow.  Yellen spoke but didn't really say anything.  So there were no surprises for the market to deal with.  The summation index continues higher.  Both short and medium term overbought for the major stock indices.  That condition can continue but the risk to get long increases as each day passes.  So I've got to be patient for now.  GE was up over 20 cents and the volume was average.  My GE March calls are now showing a slight profit.  GE is also above the 200 day moving average now.  Gold and the US dollar were both slightly weaker.  The XAU and GDX had fractional losses.  Nothing doing here for now.  The game plan remains to wait until March to attempt any gold share trades.  Mentally I'm feeling OK.  We could be in for just a slow grind higher for the stock indexes and that will not provide a good trading entry point.  With the current overbought conditions the prudent course of action is to wait for some type of pullback.  Simply buying the index calls at this point is not a good idea.  The environment is different from when this rally began.  I do expect higher prices though.  However the stock indices are pretty far above both the 50 and 200 day moving averages.  The near term upside could be limited.  On the plus side there is no overhead resistance.  It is a time to be patient in my opinion.  The market goes where it wants.  We'll see what tomorrow brings.   

Monday, February 23, 2015

A waiting game today as the Dow shed 23 points on light volume.  The advance/declines were even.  The Fed chief Janet Yellen is speaking before Congress on Tuesday and Wednesday.  Market players will listen to what she has to offer and decide whether it is bullish or bearish.  This is the world that we live in.  Technically, the major stock indices are still short term overbought.  I'm hoping for a pullback to get some SPY March calls.  However the daily pattern remains that same.  Selling early and then then buying for the rest of the trading day.  GE was down a nickel and the volume was light.  My GE March calls are at break even.  Gold didn't do much today but the US dollar was a bit higher.  The XAU and GDX were little changed.  Seems like all the markets basically took the day off.  Asian markets including China were closed today.  Mentally I'm feeling OK.  I'm still a believer of higher stock prices going forward.  The small stocks continue to perform well and that is bullish.  I don't think that we'll see the magnitude of gains in the March option cycle that we just saw in February.  However there should still be profitable trades out there.  Gold remains on the back burner for now.  We'll watch the overnight action and see what transpires from the Fed testimony tomorrow.

Friday, February 20, 2015

And away we go.  The Dow climbed 154 points today on news of another deal to save Greece.  The advance/declines were 2 to 1 positive but the volume appears to be light.  We've gotten above the 2100 level in the S&P 500 and there is no overhead resistance.  Todays intra-day market pattern was the same as all week.  A sell off to start the day and then buying for the remainder.  We are going higher it is simply a matter of how much.  At this rate a pullback to purchase March calls doesn't appear in the cards.  But you never know.  GE was up 18 cents on average volume.  Right at the 200 day moving average now.  My GE March calls are back to break even.  4 weeks to go in this trade.  Looks like it might actually show a profit at some point.  Gold was off a couple bucks on the futures and a few more in the aftermarket.  A deal for Greece won't help the price of gold.  The US dollar was little changed.  The XAU and GDX were off fractionally.  NEM was up over a buck on its earnings today.  Perhaps on the next gold share trade NEM and ABX will show the most single stock potential.  They rose on their earnings reports while the previous leader GG fell.  Just a thought.  Mentally I'm feeling OK.  The short term technical indicators for the major stock indices remain overbought.  But we are breaking out to the upside here and that cannot be ignored.  The measuring objective for the S&P 500 on the weekly chart is 2200 from here at the minimum.  Now I don't know if we will get there in the March option cycle but we'll get there eventually some time this year.  I still expect this to be a very good year for the stock market.  We'll have to wait and see if next week gives us a chance to buy some SPY calls.  Gold is unloved now and patience is required to try another long trade in the gold shares.  April calls will be the target but purchase will have to wait until some point next month.  I'll be checking the charts this weekend in hopes of coming up with some new ideas.  For now it's Friday afternoon and time for a break.