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Friday, August 29, 2014

A pop in the last hour pushed the Dow to a gain of 18 points on light volume.  The advance/declines were a little over 2 to 1 positive.  The summation index continues higher.  Next week all the players will return and we will see which way things go.  Right now everything is pointing to higher prices.  The overall market is much stronger than the Dow.  The advance/decline line continues to make new highs.  My over leveraged September put position is a big loser.  Three weeks to go in the September option cycle.  GE was barely changed and the volume was light.  These September puts that I own are big losers too.  Gold was off a few bucks as the US dollar continued to climb higher.  The XAU was up 1 1/4 as the gold shares out performed the precious metal once again.  That is a bullish sign but with the strength in the dollar, I can't really see any big gains for gold coming.  ABX, GG and NEM all had fractional gains again on light volume.  My October ABX calls are losers, joining the rest of my recent poor trades.  Mentally I'm feeling OK.  We closed out the month with gains and the normal pattern of weakness in the market for this time period is not showing up yet again.  The near term technicals point to even higher prices coming.  I'll probably hold onto my September options until the employment report next Friday.  But unless we see a dramatic turnaround in equities next week, these trades will be losers.  There hasn't been a catalyst for gold and silver despite the continuing geopolitical turmoil.  I don't know what it is going to take to get this market going.  The positive seasonal influence is not happening here as well.  That trade goes out to October, so it still has time to turn positive.  But at the rate things are going there, it will probably just be another loser.  I'll be checking the charts over the long weekend and keeping an eye out on any news that may affect the markets.  For now it's the unofficial last weekend of summer and time for a break.

Thursday, August 28, 2014

Another day of watching paint dry as the Dow fell 42 points on light volume.  The advance/declines were negative.  We sold off fast early and spent the rest of the session coming back.  Buyers arrived on the dip.  The volume is so light here that this will simply be a lost summer week.  Tomorrow should be just as lackluster.  GE was off 1/8 and volume was very light.  Nothing new to report.  Gold found a bid on the futures as they rose seven bucks.  The US dollar was flat on the day.  ABX, GG and NEM all had minor fractional gains on light volume.  Waiting for a catalyst here as well and the summer doldrums continue.  Mentally I'm feeling OK.  We will have to see what kind of mood the traders are in after this weekend.  The summation index continues higher.  We worked off some of the markets overbought condition today.  Right now I'm expecting a positive start to next week.  What happens after that will be the key to my September put trades.  They are all pretty big losers now.  Gold found some buyers at the $1275 level but it certainly isn't convincing.  However gold has held up OK despite a decent break out to the upside in the US dollar.  That is encouraging to the bulls.  We'll close out the trading week tomorrow.

Wednesday, August 27, 2014

The middle of the week and we are simply marking time here.  The Dow gained 15 points on light volume.  The advance/declines were positive.  Nothing has changed from yesterday.  Time premium is being sucked out of any open option positions.  I would expect a quiet rest of this week.  The summation index continues higher.  GE was up 1/8 and the volume was light.  Keep an eye on GE.  Gold lost a buck or so and the US dollar was lower for a change.  We are in a holding pattern now for gold as well.  The XAU was off 1/8.  ABX, GG and NEM were all little changed on light volume.  Nothing new to report.  Mentally I'm feeling OK.  I'm holding on to losing positions and waiting for next week to begin.  It is a lousy strategy but it is all I can do at the moment.  Unless I want to close out with major losses.  Over leveraged to the downside and that was the wrong thing to do.  We'll watch what happens overnight but I would expect more of the summer doldrums for now.

Tuesday, August 26, 2014

Nothing but good news from the economic numbers today and that helped the Dow to a gain of about 30 points on light volume.  The advance/declines were 2 to 1 positive.  The summation index continues to the upside.  No overhead resistance for the major stock indices and daily new all time prices are the norm.  I should have not tried the September OEX put trades but hindsight is always correct.  GE was off almost 20 cents and the volume slightly picked up.  If GE is the leader once again we should start to see some weakness in the indexes.  Hasn't happened yet.  Gold found a bid today as the precious metal futures rose six bucks.  The US dollar was up yet again.  The XAU gained 2 1/8.  ABX, GG and NEM all had fractional gains on light volume.  Still waiting on the positive seasonal factors for gold to kick in.  Mentally I'm feeling OK.  Slow volume continues as we reach the end of summer.  This week is playing out as expected with a move higher to begin the week.  I don't see any bumps in the road yet for this rally.  I'm just hanging on to the losing positions that I own and waiting for next week.  Without a doubt overbought here for the stock indices.  But the market can sometimes stay overbought for long periods of time and we have yet to see any sellers arrive on scene.  Gold is hanging in there so far this week.  However the fundamentals right now are not bullish.  Plenty of time still left on the ABX call trade though.  We'll keep an eye on the foreign action overnight and take it from there.

Monday, August 25, 2014

More of the same as the Dow gained 75 points on light volume.  The advance/declines were positive.  The summation index continues to the upside.  Overbought, staying that way and bullishness remains.  There are no sellers.  It's the last week of summer so I would not expect much action.  My over leveraged September puts are losing money.  This idea is a disaster so far.  I don't know what it will take to turn things around.  At some point, I will have to swallow the loss.  GE was up a nickel and the volume was light.  My September GE puts are losers as well.  Nothing new to report here.  Gold was off a bit on the futures while the US dollar continued higher.  There is no resistance for the dollar here and that is not good news for the gold bulls.  The XAU lost 1 1/3.  ABX, GG and NEM all had fractional losses on light volume.  My October ABX calls are losing as well, keeping with the theme of poor trades at the moment.  Mentally I'm feeling OK.  Some economic data out this week.  However the major players are still out for the summer.  We should get things going next week.  Unfortunately this week will suck out some more of the time premium in the option positions.  It is basically a period to sit and wait.  The short term technicals for the stock indices are very overbought.  The medium term indicators are overbought as well.  I do expect some near term pull back but it hasn't happened yet.  We'll see what tomorrow brings.  

Friday, August 22, 2014

A mixed bag to close out the week as the Dow shed 38 points on very light volume.  The advance/declines were negative.  The small stocks were up on the session and that's bullish going forward.  The summation index continues to rise.  All signs are still pointing to higher prices for stocks despite the overbought condition on the indices.  I'm still over leveraged and holding on to the September OEX puts.  Four weeks remaining for this trade and I've decided to give it another week.  Unfortunately, the major players are still out until Labor day.  This trade is showing a decent loss at the moment.  GE was off 1/4 on light volume.  One day doesn't make a trend.  However there is a possibility that GE is rolling over here.  That would bode well for the September OEX put trades that I have.  The September GE puts that I own are pretty good losers.  Gold was up about five bucks on the futures and made it back to $1280.  It is on the precipice of major trouble though if this level is severely breached.  The US dollar was higher today as well.  The trend is clearly up for the greenback.  The XAU was off 1/4.  ABX, GG and NEM all dropped 1/4 on light volume.  These shares are still in their consolidation channels but at the bottom of them.  Next week could be the key and all signals appear to point to lower prices.  My October ABX calls have lost half of their value.  Mentally I'm feeling OK.  One more week of summer and then I would expect volume to perk up along with volatility.  But who knows?  The past couple of years has seen the beginning of September with nice gains for the stock indexes.  Perhaps it will be three years in a row.  I've decided my course of action and it is to be positioned for a decline.  It appears that this OEX put idea will either make or break my trading year.  No one trade should determine that but it is what it is.  The market will go where it wants.  Overbought, staying there and very light volume any way you slice it.  Gold is oversold as are the gold shares but not completely.  I've commented at length on the favorable seasonal time period for gold.  We are now in it and haven't seen any kind of sustained upside for gold.  There is still time for that to happen but it certainly is late.  As usual I'll be checking the charts out over the weekend.  My thinking right now is that next week will be more of the same.  Quiet, summer like trading with a bias to the upside.  But anything can happen in this game.  For now it's Friday afternoon and time for a break.

Thursday, August 21, 2014

Still moving basically straight up as the Dow gained 60 points on light volume.  The advance/declines were positive.  The summation index continues higher.  The S&P 500 hit a new all time high today.  Overbought and staying that way.  I'm still over leveraged in the September OEX puts.  This idea has done nothing but fail since I started taking positions.  At the rate the market is going, it will be one of my biggest losers.  There is nothing to suggest that the stock market is going to head lower.  Still over four weeks left in this option cycle but the main players won't return until after Labor day.  The things that I thought would cause lower prices are not happening.  GE was up a few cents and the volume was light.  The September puts that I have here are nearly worthless.  Another failed trade for now.  Gold finally got whacked as the futures fell about $20.  We are now below the important $1280 level.  We will have to see how the week closes out tomorrow.  The US dollar was slightly lower today.  The XAU was off 2 1/8.  ABX shed 1/4,   GG down 1/8 and NEM lost 7/8.  Volume picked up to the downside and that is not a good sign for the bulls.  The gold shares haven't broken down out of the nearly two month consolidation yet.  But they do appear to be on the verge of doing so.  I'm still holding on to the October ABX calls although they have lost half of what I paid for them.  My thinking is that sooner or later the positive seasonal factors will kick in.  Looks like later if at all.  Mentally I'm feeling tired, not enough sleep and dental problems.  Stocks are very overbought and I am leveraged to the downside.  This is not a good place to be.  My thinking has been atrocious and my trading tactics have been wrong.  The market does not care.  Perhaps I am just too stubborn in my attempts to trade here.  With the summation index continuing to the upside, the only smart play is to be long.  As always, I will pay for my errors.  Gold broke down today and it appears poised to head even lower.  The gold shares are out performing but in this environment it only means they aren't going down as far.  There are still a couple of months for the ABX trade to work but at this rate it won't.  When everything is going wrong perhaps it is best to take a step back.  I'll consider this overnight.  We'll close out the week tomorrow.