Monday, March 10, 2014
The stock market tried to sell off today but it ended up only being a slight decline. The Dow fell 34 points on light volume. The advance/declines were negative. The foreign markets sold off overnight and the US market opened weak as well. The Dow was off over 100 points during the session. But it came back along with the NASDAQ and the S&P 500. The overall feel is still that of one that wants to go higher despite the chronic overbought condition. That's my take on things at the moment. GE was off a bout a dime on light volume. No trades here for now. Gold was up a few bucks on the futures, coming back from lower levels to begin the day as well. The US dollar was slightly higher. The XAU fell 3/4. ABX, GG and NEM all had fractional losses on light volume. Getting short term oversold for some of the individual gold issues but not on the gold share indexes. We've been going sideways for about a month on the gold share indices. I still like the idea of the gold share calls for April or May. Timing on the entry is the question that needs to be correctly answered. I'm still trying to be patient here. Mentally I'm feeling OK. I was thinking about purchasing some OEX March puts over the weekend. However the price action today has put that idea on hold. Perhaps we'll see a run for the Dow to get to new all time highs in the coming days. That's a guess as usual. I'm still keeping an eye on gold and the gold shares. That will probably be the next trade for me. Sometimes having no position in the markets is actually a position. That is an example of market logic and it doesn't sound logical at all. Patience is taking precedence for me at the moment. Less than two weeks to go in the March option cycle. We'll keep an eye on the overseas action and take it from there.
Friday, March 07, 2014
We got the employment report today but it really didn't move the markets as expected. After an initial small gyration the volatility I expected did not occur. The Dow rose 30 points on average volume. The advance/declines were negative. The small stocks were negative on the session. The jobs numbers were a bit higher than anticipated. The stock indices remain overbought and staying there. We are still overdue for some pullback and it still isn't happening. The summation index is moving higher and the trend remains up. GE lost a dime and the volume was light. The short term technicals are beginning to roll over here. Gold fell over $10 on the futures. The US dollar was slightly higher. The XAU dropped 2 1/2. ABX off 1/2, GG shed 3/4 and NEM fell 1/3. Volume was average. Not a real bad day for the gold shares. I still like this group for the April or May calls. The short term technicals here have rolled over. Perhaps an opportunity will present itself next week. Mentally I'm feeling OK. Two weeks left in the March option cycle. We rallied this week on lighter volume and that is not a positive. The short and medium term technical picture for the stock indexes remains very overbought. Although the trend is up I do not advise chasing things here. We are obviously closer to some kind of top than to some kind of bottom. Perhaps things can hold up through the expiration. Gold seems to continue to find a bid despite bearish news. That is encouraging for the bulls. We are still in a negative seasonality period though. The Bollinger bands on the gold shares are starting to get closer together. That implies some kind of price move in the near future. As always the key question is which way? It feels like a consolidation here for the gold shares before we head higher but that's a guess as usual. The markets always go where they want. My thinking at the moment is to go out to the May option cycle for the calls here. We'll see. Plenty to think about over the weekend. For now it's Friday afternoon and time for a break.
Thursday, March 06, 2014
A mixed bag today as the Dow was higher by 61 points on light volume. The advance/declines were positive. The NASDAQ was lower and the overall market was weaker than the Dow. All eyes will be on tomorrows employment report. The summation index continues higher. The market still has the feel to me that it will go higher regardless of the numbers out tomorrow. We're overbought and have stayed that way for some time. Money needs a home and stocks are still the place where money is going. GE was up 1/4, the volume was OK and we are now above the 50 day moving average. If GE is the precursor for the overall market again then higher prices are coming. Gold rallied today on a weaker US dollar. The precious metal futures rose over 10 bucks. The XAU gained 1 1/4. ABX was flat on the day, while GG and NEM were up 1/3. Volume was light. Gold should get moving tomorrow as well and it remains overbought. Mentally I'm feeling a bit tired. The stock market needs a breather but when that will occur is anybodies guess. We are still in a favorable seasonality period for stocks. That is probably one of the reasons we've stayed overbought for so long. Another is the fact that we are at all time highs for some of the indexes and there is no overhead resistance. Gold has had a good run but is overdue for a rest as well. Ditto for the gold shares. The volume has been pretty light for gold the past 2 sessions, so maybe some weakness is coming. We'll see what the reaction to tomorrows employment report is and go from there.
Wednesday, March 05, 2014
Taking a breather after yesterdays run up. The Dow dropped 35 points today on light volume. The advance/declines were about even. Waiting on Fridays jobs report. The overall market was stronger than the Dow and that's a positive. There wasn't any market noise from the Ukraine today. I'm still looking for higher prices near term. But the market will not stay overbought forever. GE was up 1/4 and the volume was light. Right on the 50 day moving average now for GE. Perhaps the March calls were the proper play here. Too late now. Gold didn't do much today, up a couple bucks on the futures. The US dollar was little changed as well. The XAU did rise 1 1/2 though. Perhaps the gold shares are ready to take the lead again. ABX was flat, while GG and NEM gained 3/8. Volume was light. It's possible that the gold shares are ready to begin another leg up here. However I am going to remain on the sidelines for now with respect to the gold share calls. Mentally I'm feeling OK. I'd not expect much from the stock indices tomorrow ahead of the employment report. Last month the preceding Thursday ahead of the report had a rally and it continued on Friday. I doubt that we'll see a repeat of that. That's a guess as usual. Gold is still due for a rest in my opinion. The gold shares showed some life today but the volume was light. One could make a case that the prior couple of weeks was a consolidation before we move higher in those stocks. Time will tell. We'll follow the overnight action and continue from there tomorrow.
Tuesday, March 04, 2014
The Dow exploded to the upside today as it gained 227 points on good volume. The advance/declines were 5 to 1 positive. The summation index continues higher. Today Russia is not invading the Ukraine. Tomorrow, who knows? Headline driven markets can turn on a dime in either direction. New highs for the S&P 500. The small stocks out performed and that is bullish. Still overbought for the stock indices but there is no overhead resistance. GE turned around and was up 1/2 on better volume. Still below the 50 day moving average here. Gold dropped back by 12 bucks on the futures. The US dollar was a little higher. The XAU was off 1/2. ABX and GG had slight fractional losses, while NEM was up 1/2. Volume was light. Considering the news today, gold held up pretty good. There is still plenty of time left in the month. The short term technicals for the gold shares have rolled over but not dramatically so. Patience is still the theme here for getting some calls. We are right at the up trend line in GG that began the recent rally. We'll see if it holds in here or not. That will be the key to near term direction there. Mentally I'm feeling OK. Volatility has returned the past couple of sessions for the stock indexes. Trading gets a lot tougher in these conditions. I do not have any OEX trades in mind. The employment report on Friday looms large as well. Gold is still due for a rest in my opinion. A one day decline is not enough. Up trend lines in the gold share indexes are not at risk yet. The US dollar is trying to hold above the recent lows and that isn't bullish for gold. The employment report later this week should impact gold as well. We'll see what tomorrow brings.
Monday, March 03, 2014
In like a lion as the Dow fell 153 points on light volume. The advance/declines were 2 to 1 negative. Russia invading the Ukraine will be the excuse. However we were overbought and now the short term technicals have rolled over. I do not think that this is the beginning of a huge move lower but what do I know? We did finish well off of the lows for the day in some stock indices. I don't think that the summation index turned lower today. Perhaps we'll have some backing and filling ahead of Fridays jobs report. GE was off 1/3 and the volume was OK. Gold found buyers on the Russia news and the futures rose almost $30. The US dollar got some flight to safety capital as well and finished the day higher. The XAU was only up 1 3/8. ABX, GG and NEM had fractional gains on average volume. The under performance of the gold shares leads me to believe that the rally today in gold will not be sustainable. That's my guess for now. I will still be looking at buying some gold share calls later this month. Mentally I'm feeling OK. The short term technicals for the stock indexes have rolled over. The rally will be on hold for a while. Whether or not this turns into an all out decline is yet to be seen. We'll see if there is follow through downside tomorrow. To me it appears to simply be an event driven move lower. I could be wrong. Gold had a very nice move higher. But what happens when the Ukraine event ends? Gold remains overbought and it won't stay in that condition forever. It is overdue for a rest and March is the likely time for it to take it. Patience is required to purchase the April/May gold share calls in my humble opinion. We'll see if the foreign markets continue lower overnight and keep a close eye on the headlines as well.
Friday, February 28, 2014
A volatile end to the month as we were up over 100, then turned negative and finally finished the session with a gain of 49 points on good volume. The advance/declines were positive. Interesting price action to be sure. The small stocks were lower today and that is not a positive. There are also some possible negative divergences being set up on some of the indicators. The McClellan oscillator to name one. However as long as price keeps moving higher, I have to remain in the camp for more upside. We are still overbought on the short term technicals on the stock indices. A roll over there will be the warning that lower prices lie ahead. Hasn't happened yet. GE was little changed and the volume was light. No trades for me there. Gold fell $10 on the futures despite a big drop in the US dollar. Not sure about what to make of that. The XAU was off 1/2. Once again ABX, GG and NEM had fractional losses on light volume. The short term technicals have started to roll over here. That is what I'd like to see to set up the next trade for the April or May option cycle. Patience is required. Mentally I'm feeling OK. Volatility today and that sometimes is a warning of a change in trend. We'll have to see how that plays itself out in the coming days. I'm still in the bull camp for the stock indexes for now. Gold is taking a well needed rest and that should continue into the month of March. The large drop in the US dollar today did nothing for gold and that is not the usual inverse relationship that we've seen here lately. The gold shares did hold up pretty good today. I'll most likely be getting some gold share calls in March. Plenty of charts to go over this weekend and perhaps a game plan for the March option cycle. For now it's Friday afternoon and time for a rest.