Friday, May 22, 2015
Lower today as we were for much of the session as the Dow fell 52 points on very light volume. The advance declines were negative. We bounced around and then dropped in the final half hour to close with a loss. You can't read too much into todays action because the market was certainly in holiday mode. The Yellen speech came and went. The short term technical indicators for most of the major averages are still in the overbought zone. The summation index is moving sideways. GE was off a few cents, the volume very light. Overbought here as well. Gold was flat despite a higher US dollar. The XAU and GDX had fractional losses. Volume was very light. Mentally I'm feeling OK. So we got what was expected today in the marketplace. Listless, light volume activity. Not sure what to expect next week but I'll try and figure that out over the weekend. It really was a week to just let pass by and I'm glad I did. Next week perhaps the 1st quarter GDP revision will be the mover on Friday. That's a guess as usual. The gold share indices are breaking down from their ascending trend channel. Not quite oversold there yet on a short term basis. Not mush else to say about today. I'll be checking the charts this weekend as usual. Perhaps I'll be able to come up with a trade for the June option cycle. For now it's Friday afternoon and time for a break.
Thursday, May 21, 2015
Still trying to figure out which way to go here as the Dow barely changed today on light volume. The advance/declines were slightly positive again. The overall market was stronger than the Dow. Maybe we're going higher, maybe lower and I just don't know. So I had better wait until things clear up. I'm going to let tomorrow go by and consider scenarios over the long weekend. I suspect tomorrow will be another light volume affair unless Janet Yellen says something noteworthy. GE up another 8 cents on good volume. The relative strength of GE is very good here. If we do see a pullback, calls will be in order. The gold futures were off few bucks and the US dollar was lower as well. The XAU and GDX had slight fractional losses on light volume. Patience advised here for the gold share calls. Mentally I'm doing OK. Yesterday the McClellan oscillator gave a signal for a big move forecast for today or tomorrow. We'll see if that pans out. Direction is not part of the signal. I'm going to hold off on any SPY options until next week. The technicals for gold have rolled over. Expect lower prices there. We'll close out the trading week tomorrow.
Wednesday, May 20, 2015
It seems as though the market is still trying to make up its mind here. The Dow fell 27 points on light volume. The advance/declines were slightly positive. The Fed minutes arrived and the stock indices had a small rally only to give it all back. The TRAN had a very negative day. If that is the leader here, we are about to roll over. It has that feel. The summation index is starting to go sideways. The short term technical indicators for the major stock indexes are overbought. I'm moving my stance to cautious here. GE on the other hand was up over 1/3 on good volume. If GE is a precursor for the overall market, than we should be moving higher. But I'm not thinking that is the case this time around. Gold was up a couple bucks on the futures. The US dollar was higher but not as much as the past two days. The XAU and GDX had very slight fractional gains. Volume was light. For whatever reason, NEM is out performing here. Mentally I'm feeling OK. A couple of days to go this week before a long holiday weekend in the US. I think the logical course of action would be to let this week complete and go from there. Maybe try some June SPY puts if we continue to just drift higher on light volume. The market has tried to break out and the volume hasn't been there. The TRAN breakdown is not a positive. The small cap stocks have now made lower highs. Unless we get some huge upside rally out of nowhere, be wary. Perhaps the Yellen speech on Friday will help the market make up its mind. The gold share indices remain in an upward channel. But one more negative session will break down out of it. Stay tuned. We'll see what transpires in the overnight action and go from there.
Tuesday, May 19, 2015
An up and down day with not a lot of conviction either way. The Dow gained 13 points on average volume. The advance/declines were negative. Waiting for something to get a trend going but nothing just yet. The major stock indices are short term overbought. Not much to do here but watch and wait. Of course, you don't make any money that way but you don't lose any either. Perhaps if we continue the light volume levitation, I'll try some June SPY puts. But the better idea in my mind is waiting for a pullback to get long. GE was up a few cents and the volume remains light. Patience here. Gold took a fall today finally on the stronger US dollar. A delayed reaction I suppose. The precious metal futures dropped twenty bucks as the dollar gained a full point. The XAU shed 2 7/8, while GDX dropped 3/4. I did put in an overnight order for some ABX June puts but it wasn't filled. I was a day late and it is frustrating. I'm looking for more downside for the gold shares. Mentally I'm doing OK with the exception of missing this gold share trade. I probably should have done more work over the weekend but this idea just occurred to me yesterday. Had I been paying better attention, perhaps I would have seen it over the weekend. The overall market was weaker than the Dow today which was the opposite of yesterday. The TRAN also reversed course. The big caps are hitting new highs but the small stocks are not. That is not the scenario for an extended rally in my view. This type of price action usually happens towards the end of an up move. So we'll see. The volume has been weak and that isn't a positive either. But the summation index is still pointing up and as I've said before, there is no overhead resistance. Plenty of time in the June option cycle, so we'll see how things play out. I believe that gold is about to begin an extended decline. The gold shares are overbought both short and medium term. Puts there are advised but they are already more expensive than yesterday. We'll watch the foreign markets overnight and see what the Fed has to report tomorrow.
Monday, May 18, 2015
Meandering higher today as the Dow gained 26 points on light volume. The advance/declines were positive. The summation index is heading up. The overall market was stronger than the Dow. The major stock indices are overbought and staying there. The TRAN had a good session. There is no reason to not believe that higher prices are coming. The only drawback here is the light volume. However there is no overhead resistance. We've got the Fed minutes on Wednesday and Janet Yellen with a speech on Friday. GE was up a few cents and the volume was light. Just waiting for an oversold reading to get some June or July calls here. Gold was up a couple bucks on the futures despite a strong session for the US dollar. There are some rumblings about Greece again which perhaps is leading to a flight to safety play. The XAU was slightly lower, while GDX was flat. Overbought for the gold shares on a short and medium term basis. I'm now thinking about perhaps some June puts here. There was some media hype over the weekend about now being the time to buy some gold. Usually when something gets popular in the media, it pays to go the other way. The volume for gold and the gold shares remains low. Mentally I'm feeling OK. I guess at this point I'd like to see stocks pull back a little in order to purchase some June SPY calls. I'm wary of the low volume here but there isn't any doubt that the trend is up. An extra week in this option cycle makes things expensive for now. I suppose I'll just be patient and keep an eye on things for now. Gold is at resistance and most likely depending on the Fed this week will determine if we break through or not. That's a guess as usual. I'm looking at the ABX June puts. We'll keep an eye on the overnight developments and go from there.
Friday, May 15, 2015
An uneventful expiration as the Dow gained 20 points on light volume. the advance/declines were positive. We were lower for most of the session in a narrow trading range. Some of the big cap averages hit new all time highs today. But we haven't seen a high volume breakout to the upside just yet. I do think that it's coming but I certainly don't know when. The summation index is now heading higher. However the small caps, most notably RUT, are lagging here. I'm still a believer in higher prices going forward. I just need to time the purchase of some SPY calls at the right time. GE was off 1/8 on light volume. I'm leaning towards the July calls here. Gold was flat on the session and the US dollar lost a bit more. The XAU and GDX had slight fractional losses on very light volume. Still oversold here on a medium term basis. Mentally I'm feeling OK. On now to the June option cycle which has an extra week in it. The premiums will be priced as such and will be more expensive to start. We'll also have a holiday week thrown in a s well. We'll get the Fed minutes in the middle of next week. The SPY is getting short term overbought. I'll be looking at what to do over the weekend but I'm pretty sure that I want to own calls here reasonably soon. If the stock indices do break out to the upside, there is no overhead resistance. I'm considering the July calls for GE because this stock sometimes goes sideways for quite a while, as is the case for the past few weeks. The ideal entry point would be around $26.50. Gold and the gold shares are short term overbought here and at 200 day resistance. Although this is a seasonally weak period for the precious metal, it has held up pretty well. I'm not sure what that means going forward. There is certainly not a lot of interest in the precious metals at this time. Patience is probably the best course of action here. Plenty to ponder over the weekend. For now it's Friday afternoon and time for a break.
Thursday, May 14, 2015
The market surged higher today and some of the major stock indices closed at all time highs. The Dow gained 191 points on light volume. The advance/declines were 3 to 1 positive. This may move the summation index back to the upside. Perhaps this is the beginning of a sustained move to the upside that I have been looking for. But that has yet to be seen. However I'm still a believer in higher prices going forward. Looks like the May SPY calls this week would have worked out. GE was up another 20 cents on light volume. If the overall market goes up, GE should go along for a ride. It may be too late for the calls here. Gold was up another $7 on the futures as the US dollar was a bit lower again. The gold shares didn't go along as the XAU and GDX only had slight fractional gains. Volume was average. Mentally I'm feeling OK. It will be interesting to see if we can really get out of this protracted trading range. If we continue higher with some volume, that will be the key. Once it gets going, it usually goes higher than everybody expects. So we'll see. The gold shares are stalling at the 200 day moving average. The medium term picture here is overbought. I'm waiting for a decline here before attempting the next long trade here. The September or October calls for ABX or GDX perhaps. But patience is needed. GE looks like it wants to break through the upper Bollinger band now. That would be a positive for higher prices going forward. The TRAN continues to lag. We'll see how the expiration goes tomorrow.