Tuesday, September 16, 2014
Turnaround Tuesday as the Dow gained 100 points on average volume. The advance/declines were 2 to 1 positive. Fed chatter was the reason for todays gains but the oversold nature of the market was the technical clue. The McClellan oscillator was near minus 200 yesterday. We'll get movement on the Fed statement tomorrow. The summation index is still heading lower despite todays gains. My remaining September OEX puts are practically worthless. It's anybodies guess which way we head tomorrow. GE rose over 1/4 on better volume. My September puts here are worthless. Gold was up a buck or so on the futures. The US dollar was lower today. The XAU gained 3/4. ABX and GG were up 1/8, while NEM was flat. Volume was OK here. Gold may move on the Fed tomorrow but the underlying bearish fundamentals will remain. I'm still looking at some January gold share calls eventually. Mentally I'm feeling OK. Tomorrow will tell the story for the stock indices. If we move higher, then most likely new highs will be in the near future. If we give up todays gains, then perhaps the long awaited correction will be underway. Regardless of what is said tomorrow by the Fed, interest rates really have no place to go but up. With rates at zero, what do you expect? Eventually the market will react. Gold remains unloved. All eyes and ears on the Fed tomorrow.
Monday, September 15, 2014
A very mixed market today as the Dow gained 43 points on light volume. The advance/declines were 2 to 1 negative. The NASDAQ got slammed but the big caps held up well. The weaker action in the small stocks isn't bullish. The summation index continues lower. I sold some of my September OEX put position for a 95% loss. I'm still holding the closer to the money puts. I think that despite option expiration we will be heading lower this week. I could be wrong. GE was up a few cents and the volume was very light. It looks like my September GE puts will expire worthless. Inexcusable. Gold was up three bucks on the futures. The US dollar finished the session little changed. Ditto for the XAU. ABX, GG and NEM had fractional moves one way or the other with light volume. I sold the October ABX calls that I had for a 95% loss as well. I'm considering the January gold share calls now. I may attempt that trade if and when gold gets to the $1200 level. Mentally I'm feeling OK. Oversold on the major index short term technicals. Waiting on the Fed which will have their statement out on Wednesday. The fact that the small stocks had such a lousy session is perhaps a clue of things to come. However the market could just as easily turn around tomorrow. It is not an easy game to play. I have a new set of trading rules that perhaps I'll share at the end of the week. Like I've said before, following them with strict discipline will be the key. Otherwise they are worth nothing. At least as I liquidate the losing trades, it will give me a clean slate to perhaps start doing things correctly. Gold remains in a down trend and not interesting to anyone unless they are short. The strong US dollar has taken care of that and the price of oil as well. In fact all of the commodity complex is under pressure. We'll keep an eye on the overnight developments and go from there.
Friday, September 12, 2014
We did not head higher as I expected as the Dow fell 61 points on average volume. The advance/declines were 4 to 1 negative. The overall market was weaker than the Dow. The summation index is heading lower. We did come up from the lows of the day as the market is not falling as rapidly as the advance/declines would suggest. Could be expiration related already. We've got the Fed next week but I don't expect any surprises there. My September puts remain losers. GE was off 1/8 and the volume picked up just a tad. Gold continues to drop as the futures there fell another seven bucks. The US dollar was off a dime or so. The XAU dropped 1 1/3. ABX, GG and NEM all were off 1/3 or more on average volume. I think gold is headed to $1200. If correct we have another $30 to go. But anything can happen in this game. Mentally I'm feeling OK. Some of the weekly technicals have rolled over in the major stock indices. Caution is advised for now. I do not think we will see enough decline next week to save my OEX put trades though. Expiration week usually has a positive bias. But with the summation index pointing down, bullish positions are not favored at this time. That's just my view and my views haven't been right lately. I might try the gold share calls again if we get to $1200 on gold. That is the last major support for the precious metal until $1000. However the fundamentals for gold here are not bullish. The US dollar is in a huge rally but is approaching resistance at the 85 level. Perhaps a wait and see attitude would be best here. If gold cannot rally when it is supposed to seasonally, then maybe it is one of those years that it simply continues downward. I don't know. I'll be setting up my new trading rules over the weekend. The set up is easy. Strictly following them is the hard part. The losses that I will have to take next week make change a necessity. I'll try my best to finish out the trading year on a positive note. For now it's Friday afternoon and time for a break.
Thursday, September 11, 2014
The Dow fell 19 points on light volume. The advance/declines were slightly positive. It was however a one day reversal to the upside for the S&P 500 and the NASDAQ. The market has all the feel of something that is going to go higher. The summation index is heading lower still though. But with expiration week coming up, I wouldn't be surprised if we start to move up tomorrow. Perhaps the retail sales numbers will trigger something. My September OEX puts are dead. Unless we see a drop tomorrow, I'll be booking huge losses. GE was up a few cents and the volume remains light. My September puts are toast here as well. Should dump them tomorrow, if possible. Gold continued to slide, the futures lost another six bucks. We're at the $1240 level and very oversold. The US dollar continued higher today. The XAU turned around for some reason and was up 3/4. ABX, GG and NEM all had fractional gains on OK volume. My October ABX calls are practically worthless as well. No hope for this trade. I did consider going out to the January strike price for some calls here today. But perhaps the sidelines are the best place for me to go at the moment. We'll see. Mentally I'm feeling OK. I'm going to have to revise and change my trading tactics after the recent losses in the options market. I have an idea on what will help but implementing it will be the challenge. It is one thing when the technicals don't work. It is quite another when you can't admit that your ideas were wrong and you simply need to bail out. That is where the problem lies here. The markets are unrelenting and not really interested in your ideas. There are enormous sums of money moving around. As an individual trader you can't expect to have any influence on what transpires in this game. You can do all the work and all the study but the only thing that matters is the bottom line. When you get in and when you get out. The options game is tough as you have not only price and time but volatility to factor in. The rewards can be great. But the losses can be humbling. The short term technicals for the major stock indices are trying to curl back to the upside. The small stocks moved higher today and that is a positive. I'm expecting higher prices tomorrow. Gold is dropping and there seems to be no end in sight. If we can't hold $1240, then I guess the next stop will be $1200. I might try the ABX January calls soon or I might just sit on the sidelines for a while. We'll see what tomorrow brings.
Wednesday, September 10, 2014
Back to the upside today as the Dow gained 54 points on light volume. The advance/declines were slightly positive. We will see if the decline has been contained to what has happened early this week or if it is something for real. The next couple of days will tell the story. The summation index is still heading lower. My September OEX puts are all but dead at this point. GE was up a nickel and the volume remains light. Hanging around the 50 and 200 day moving averages. Gold was down a few bucks again on the futures today as the US dollar was little changed. The XAU fell 1 1/3. ABX, GG and NEM all had fractional losses on light volume. Same story for gold and the gold shares. The trend is down and the fundamentals are negative. Technically oversold and staying there. Mentally I'm feeling tired, did not sleep well again. Seven days to go in the September option cycle. If the stock indices are going to have a decent decline, we'll have to see some downside within the next two days. Otherwise I believe that we will trend up to new highs in expiration week. All of my outstanding option positions are losers. I will have to book the losses soon. We haven't seen much volatility since after Labor day and that wasn't expected by me. The light volume remains troublesome by my standards. However we haven't seen the decline that I expected. The foreign markets didn't really react to yesterdays decline in the Dow. We'll follow the overnight action and take it from there.
Tuesday, September 09, 2014
The Dow fell 97 points today on light volume. The advance/declines were 3 to 1 negative. The overall market was weaker than the Dow and that is bearish. The summation index is now heading lower. I kind of doubt that there will be enough decline in the next eight days to save my September OEX puts but in this game you never know. We were down from the start but got a lift from the AAPL product show. However the gains did not hold and we headed lower for much of the rest of the session. Not oversold yet for the major stock indices but on the way there. The VIX took a bump up but remains below its 200 day moving average. GE was off over 1/8 and the volume was light. The recent candlestick pattern here looks bearish on the daily chart. Gold continued lower, down another five bucks on the futures. The US dollar had a slight drop today as well. The XAU actually gained 7/8. ABX, GG and NEM had fractional gains on average volume. My October ABX calls remain losers and are very far out of the money. Mentally I'm feeling tired, not a good nights sleep. We'll have to see if we follow through to the downside some more tomorrow. That would be a plus for my put positions but the market would really have to move lower to make a difference. Not a lot of market moving data due out. Gold still has to visit the $1240 level in my opinion. We haven't gotten there yet. No love for gold right now and there hasn't been for quite some time. The positive seasonal bullishness for gold did not materialize this year. We'll see if the foreign markets follow the Dow lower and take it from there.
Monday, September 08, 2014
A mixed bag to begin the week as the Dow fell 26 points on light volume. The advance/declines were negative. The NASDAQ showed a gain on the session and that's bullish. The small stocks are out performing and that is not a negative sign. The summation index is trending sideways at the moment. Not a lot of economic reports due out this week. Retail sales on Friday being the biggest. GE was off a couple pennies and the volume was light. Light volume is the general theme for the market right now. Gold continued to move lower. The precious metal futures fell around $13. The US dollar continues to move higher and that is bearish for gold. The XAU lost 2 1/2. ABX off 3/8, while GG and NEM dropped 2/3. Volume is good to the downside for the gold shares. Although my ABX call trade goes out to October, it is practically worthless. Another loser trading the gold shares this year. Mentally I'm feeling OK. Although the market sold off a bit today, there always seems to be plenty of buyers on the sidelines. We've been sideways for about two weeks but at this rate it appears that we will eventually break out to the upside. That is what the small stocks are saying. Perhaps tomorrows AAPL product announcement will be the catalyst for higher prices. Technically on the major stock indices the short term technicals have started to roll over. Gold is headed to $1240 and we'll see what happens when it gets there. The US dollar is overbought, staying there and now moving up in a straight line. That won't last forever but the trend is up until proven otherwise. We'll keep an eye on the overnight action and see what happens tomorrow.