Friday, January 30, 2015
Once again back to the downside to close out the week and the month. The Dow fell 252 points on heavy volume. The advance/declines were 2 to 1 negative. We closed below the 2000 level on the S&P 500. We are at the bottom of the trading range for this index again. I did place an order for the SPY February calls during the session but canceled it about an hour later. I'm still feeling sick and cannot trade under this condition. My mind is dull. I will hopefully get better over the weekend. Getting to short term oversold on the stock indices but falling apart again in the final hour is bearish. GE was down about 20 cents and the volume was heavy. Gold found a bid on the market decline with the futures up over $20. The US dollar rose slightly. The XAU came back 2 1/4, while GDX added 3/4. We've basically been sideways for the gold shares the past two weeks. Mentally I'm slow and not feeling well physically. I'm still a believer in the long side for the stock indexes here but that could be way off too. We've either put in a pretty big top on the stock indices or a consolidation zone before heading higher. I tend to agree with the latter choice. The summation index has been moving sideways. I need rest so I am cutting this short again. I don't know how much work that I'll be able to do over the weekend. There's still three weeks to go in the February option cycle. The opportunity for profit is there.
Thursday, January 29, 2015
Back to the upside today as the Dow gained 225 points on heavy volume. The advance/declines were 2 to 1 positive. I have the flu again and did not get out of bed to take advantage of picking up some SPY calls this morning. I did place an overnight order for the SPY calls but it was not filled. That fact that we held at around the 2000 level again in the S&P 500 leads me to believe that calls are in order. However if we were to drop below that level and stay there, I would change my mind. Perhaps there will a chance to buy some calls tomorrow. GE was up 1/4 and the volume was good. Gold fell $30 on the futures as the US dollar was only slightly higher. The gold shares held up batter as the XAU lost only 1 1/3, while GDX fell 1/3. It's possible that the gold long trade is over for now. Mentally I'm feeling OK, physically not so good. I'm going to cut things short today since I am ill. Bottom line, I'm looking for SPY February calls on weakness. I'm going to get some rest and we'll see how things go on the GDP report tomorrow morning.
Wednesday, January 28, 2015
The market had a one day negative reversal today, opening higher and closing lower. The Dow dropped 195 points on heavy volume. The advance/declines were almost 3 to 1 negative. It appears that we are at the moment of truth here for the major stock indices. We are back at 2000 for the S&P 500. Whether or not it holds up here will be the key. The fact that we fell apart in the final hour is bearish. The small stocks have been holding up better here so maybe we can stem the decline. But the short term technical indicators have rolled over. Tomorrow could be pretty important. I'd still like to try the SPY February calls. GE was off 1/2 and the volume was heavy. This does not bode well for the overall market. If GE takes out $23.50 it will probably spell trouble overall. My GE March calls continue to shed premium. Looks like another loser. Gold was off five bucks on the futures as the US dollar bounced back. The gold shares saw selling today. The XAU fell 3 1/2, while GDX lost 7/8. Volume picked up a bit here. A lot of things saw selling today as USO sunk to a new low. Mentally I'm feeling OK. Perhaps the drop in oil today caused the late selling. The Fed statement had nothing different. We still have the GDP report on Friday. I'm not quite sure what to make of the markets price action. The recent breadth has been pretty good but prices have fallen. You could make a case that we've been in a trading range since the start of December and we are now at the bottom of the range. I'll have to check all the indicators later tonight and decide what to do or not do from there. If we have built a top here we are going to head much lower. The jury is still out. Gold didn't find any buyers on the sell off and that may or may not mean something. It along with the gold shares remains overbought. I will have to be patient here to try the long side again. There is a lot to consider overnight. We'll look to see what happens overseas and take it from there.
Tuesday, January 27, 2015
The Dow took a hit today on poor earnings, mostly due to Microsoft. The most watched index fell 291 points on lighter volume. The advance/declines were negative but certainly not by the margin you would expect with the Dow down that much. The summation index is still moving higher. I still am looking at the SPY February calls. I may purchase them tomorrow. Now of course I could be wrong on this idea. Perhaps waiting for the S&P 500 to test 2000 again would be a better plan. So we'll see. The short term technical indicators are move overbought than oversold so perhaps patience still is the best plan for now. GE was off about 1/4 and the volume was average. Indicators are rolling over here as well. Perhaps there is more going on than I can tell but that is usually the case. Gold gained $12 on the futures as the US dollar dropped almost a full point today. The gold shares continue to attract money as the XAU rose 2 1/3, while GDX gained 3/4. Overbought and staying there for the gold shares. I'm not sure how long this can last but it's already been longer than I would have thought. Perhaps the US dollar is going to take a break from its rally. Maybe the tomorrows Fed statement will shed some light on todays price action in the dollar. At least gold acted the way it normally would with the dollar weakness. Mentally I'm feeling OK. Tough trading at the moment as there is really no trend. If the S&P 500 breaks through 2000 and stays there, it would be trouble in my opinion. I'm still looking at the SPY calls if we get down there and the technical are oversold. Plenty of time in the February option cycle. My GE March calls are still in the red. Gold hasn't reached the $1340 measuring objective yet. The gold shares continue to outperform and that is bullish. We'll see if the foreign markets follow the Dow lower and take it from there.
Monday, January 26, 2015
Some upside today as the market is on its version of storm watch. A blizzard is forecast for the tri-state area. The Dow gained 6 points on average volume. The advance/declines were over 2 to 1 positive. The overall market remains stronger than the Dow. I still think that the path of least resistance is up. Sideways perhaps but I could be wrong. If we do see some weakness, I'm probably going to try the SPY February calls. We are short term overbought now on the major stock indices. GE rose 1/8 and the volume was average. Gold was off $13 on the futures and the US dollar was lower today as well. The XAU gained 1 1/4 and GDX added 3/8. Volume was lighter for the gold shares but it is impressive that they continued higher with the sell off in gold. These issues are very overextended here right now. I really do not want to chase them at this point. Mentally I'm feeling OK. Just waiting for some weakness here is about all that I can do. We've got the Fed statement on Wednesday and GDP on Friday as potential market movers. I'll try and remain patient. USO was lower again today. Oil is so blown out to the downside here that I find it hard to believe that it could go any lower. However the markets move where they want. Perhaps gold is about to take a breather here. It certainly is due. There is plenty of time in the February option cycle to find something to profit from. Waiting for a decent set up will be the key. I have an idea for the SPY but we will have to see if the market cooperates. We'll keep an eye on the overseas market action and get ready for tomorrow.
Friday, January 23, 2015
A down day to end the week as the Dow fell 141 points on average volume. The advance/declines were negative but not as much as a down 141 market would suggest. The NASDAQ was higher on the session in a mixed market. The summation index is now moving up. I'm still leaning bullish here as we just got to short term overbought before today. If we continue to pullback from here, I may try the SPY February calls. The fact that the small stocks acted well here is bullish. GE was up almost another 1/4 on the earnings and the volume was heavy. GE was higher during the session. It's a positive that GE showed a gain on a down day overall for stocks. My GE March calls are still in the red though. Gold dropped $8 on the futures as the US dollar continues to move straight up. I really think that gold needs a breather as its rise along with the dollar cannot continue indefinitely. The XAU fell 2 3/4, with GDX off 2/3. Volume was light and that is a positive for the bulls. USO dropped to a fresh new low. Mentally I'm feeling OK. I'm waiting for a good trade set up at the moment. Although I think we are going to be moving higher, nothing is set in stone. Plenty of time in the February option cycle as we just completed the extra week there. The short term technical indicators for the stock indices have moved up. Some economic data out next week, with GDP probably the most anticipated. There isn't any rush to do anything. GE had a good week and we will have to see if it builds on that. Gold and the gold shares were higher but we are both short and medium term overbought there. Earnings here are due next month. So it is probably a time to be patient in my mind. I'll be checking the charts out over the weekend as usual. For now it's Friday afternoon and time for a break.
Thursday, January 22, 2015
And there we have it. The Dow climbed 259 points on heavy volume. The advance/declines were over 3 to 1 positive. The summation index will be turning up after todays action. The European central bank had its say and the market responded. This is the rally that I expected to take place in the beginning of the year. We will see new all time highs soon in my humble opinion. Not getting the SPY February calls on Tuesday was once again a missed opportunity. Trust me, it is frustrating but at least my ideas are moving in the right direction. GE was up another 1/4 and the volume was good. I get the feeling that the earnings will be well received tomorrow at this rate. My GE March calls are still in the red though. Gold was up $7 on the futures despite the US dollar having a huge upside advance. The rally in the dollar has been non stop since last summer. That fact that gold continues to rise in the face of a strong dollar is confounding. Gold and the gold shares are very overbought now as well. The XAU and GDX had very small fractional losses on the session. A sell the news event for the gold shares on the ECB announcement. I'll consider the gold shares if we get a pullback. Mentally I'm feeling OK despite missing the SPY call trade. What can you do? When confidence gets shot during a losing streak, you tend to hesitate on the next trade attempt. That is why the trading itself is what really matters and not the money. I'll just keep looking for other trades as we move along in the February option cycle. Calls will be the way to go on the stock indexes if we see any weakness. I'm not one to chase strength usually but that should have been done in gold and the gold shares. Patience is what will be required now. We'll wait to see what GE has to report tomorrow and finish up the trading week.