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Monday, February 28, 2005

The market lost 75 points today on heavy volume. Advance/declines were not too bad, about 13 to 19. I think the volume perhaps was skewed by the bad news for Biogen and Elan. Maybe the end of the month had something to do with it. I am confused as to which way we go here but I'm leaning towards the downside and might take a position prior to Fridays employment report. Gold was up a little bit and the dollar was slightly weaker. I sold all of my ABX calls. As much as I wanted to hold on, I got out. ABX had good volume today but could not gain any ground. The stochastic has been overbought for a couple weeks and the RSI has been over 80 for a while. I did not get the best price of the day but the profits were good and I'll give an update tomorrow. I even sold the April calls, which have about 7 weeks left on them. My thinking is that I will buy these options back at a lower price and try this trade again. I am considering moving up to the next strike price since the stock has moved so much. Now I could be wrong. Gold has every right to just keep on moving higher. However it has been overbought for a while and I think a pause is due. I might even try something before Friday. It is difficult to sell out here for me. Time is on my side. But I think I'm doing the right thing. The technicals support it for now. Trading is the most difficult game in the world. I cannot stress that enough. Even with profits, I always seem to second guess what I do and try to think of a better way to handle the trade. As much as I know it is impossible to catch the exact high and low of a move, I continue to try and do it. I can sometimes get one of them but never both. The markets are just always moving and I've got to learn to live with that. At any rate, there is a chance I might switch to NEM for the next go round. It has been lagging but perhaps the interest in ABX has waned. For now I'll just have to sit back and watch. Try and come up with a strategy for the next trade. More tomorrow...

Friday, February 25, 2005

Up over 90 points for Friday. Advance/declines were over 3 to 1 positive. That should turn the summation index back up. Volume was OK but nothing spectacular. It is beginning to look more and more like Tuesday was a downside blow-off. We need to get through 580 on the OEX. If we stall here I might buy some puts. Gold didn't move today. The XAU sold off and came back but wasn't up much. ABX was up a tad on lighter volume. I fear I have held on too long for this one. Again, overbought on the dailies and still looks like more room to the upside on the weeklies. The dollar was weaker today and we did not get the corresponding move up in gold. Yes, I'm worried. It's the weekend and we will see what is said before the open on Monday. I am a bit tired today and will continue with this on the weekend, hopefully.

Thursday, February 24, 2005

Up another 75 points on good volume today. Advance/declines 2 to 1 positive. Perhaps Tuesdays decline was the end of a minor correction. Or the beginning of something more to the downside. However usually when we head down we don't get back to back days like the previous two. But the summation index is pointing down. Which brings to mind the fact that there is no perfect indicator. Gold did not move much today but the XAU was off over a point. ABX was down about a dime on good volume. I am worried now about this position. I think I should have gotten out today. Trading isn't easy. The dailies are overbought on this issue. I think I need to book the profits and look for something else. The problem is that the weekly charts suggest higher prices. The best scenario for me would be a sideways movement to work off the overbought condition and then move higher. But the market doesn't care what is best for me. It will move where and when it wants to. The dollar was a bit higher today and everybody seems to have forgotten Tuesdays decline. The weekly charts here too suggest that lower prices are ahead. There are still three weeks left on some of my ABX calls. I still have an open order for some NEM calls. Confusion will cost you money in this game. I will see what tomorrow brings. If ABX heads down it could very well be time to get out. Perhaps it isn't ready to break through the $25 resistance. It is a tough game...

Wednesday, February 23, 2005

We bounced back today. The Dow was up over 60 points on good volume but less than yesterday. Advance/declines were almost 2 to 1 positive. I suppose I will be looking to buy some OEX puts. Maybe a day or two more of bounce. I could be wrong. I need to see where the downtrend line comes into play. The dollar was up a little today after yesterdays drubbing. Gold sold off and came back but did not gain anything. ABX was down a few cents and is stuck below $25. It should take a rest here but I am worried that perhaps the gain is over. The weeklies say otherwise though. NEM was up about a quarter on good volume again and I did put in an order to buy some March calls but the price has moved away from me. Perhaps a pause is due for gold here but I still think the dollar will get weaker and the gold shares will continue to rise. It isn't easy in the game as we all know. Still a couple days left this week so we'll see what happens. The inflation data today was tame. I don't know, perhaps yesterdays sell-off was a climax. I'm not sure but I'm still gonna believe it was the beginning of something bigger. Trading is a solitary pursuit. You must make your choices and live with them. There is nothing else to it than that.

Tuesday, February 22, 2005

We had an interesting day today. The Dow got clobbered, down around 175 points. Advance/declines were over 3 to 1 negative on heavy volume. We are oversold. Due for a bounce but I believe that bounce can be used to initiate short positions. The heavy volume today may have signaled a short term end to the selling. Or not. The summation index has rolled over and the trend is down. Oil rose over $50 a barrel and the markets are nervous. Combine that with some dollar blabber from Korea and you have a jittery market. The dollar lost over a point. The markets did not expect that. Gold rose over $7. The XAU was up over 3 and 1/2 points. ABX was up almost a dollar. The calls are doing very well. Which brings up the problem of when to sell these things. ABX is at resistance of $25. The weekly chart suggests more upside so I am holding them for now. If by chance we get through resistance these calls could bring substantial profits. But who knows? The daily charts are way overbought for all gold issues. But this has the feel of an exceptional short term move. I could be wrong. Things can turn around rather fast in this game also. Inflation report due out tomorrow. It will be closely watched. Trading is difficult, even when making money. You have to be patient and disciplined. You don't want to get out too early on a winning position, thereby missing out on some of the profits. But you also don't want to give up what you have either. I still have a stop loss order in for these calls. I've got March and April strike prices. We have gotten to targets that I thought would take weeks to reach. Instead it has taken days. Perhaps this move is move powerful than I have expected. I don't really know. An interesting game indeed.

Friday, February 18, 2005

Hooray for the 3-day weekend. The Dow gained 30 points today on the back of a favorable ruling for the drug stocks. They provided all of the gains. Volume was good but the advance/declines were not. It was almost 2 to 1 negative. The summation index has rolled over. However we are just about oversold here so I do not expect a steep drop in here. I could be wrong. Gold did nothing today. The dollar did nothing today. You get the picture? ABX sold off early and came all the way back on light volume. It is overbought and I am trying to figure out how long to stick around here. I will check the charts over the weekend but the daily is way overbought. I would not mind seeing a slight pullback on light volume. I can wish, can't I? The calls are in the black and I have moved the stops up so they will not be losers. I'm looking for other opportunities but I need to develop an overall picture of what I think is going on. Perhaps we are going to roll over here. I will try and listen to the technicals and let the market tell me what to do. OEX puts might be the proper play but the timing has got to be solid. My confidence is high after this proper gold call so far. But things can change overnight. I am going to try and relax over the long weekend. Just sort of take it easy but still focus on the task at hand. On Monday even though the market is closed I will try and get back into the mode. Until then I will have to take a break and give my mind a rest.

Thursday, February 17, 2005

An 80 point loss for the Dow today on increased volume. Advance/declines were 2 to 1 negative. Could be expiration related. Or perhaps the start of something bigger. We will have to stay tuned. Greenspan blathered and blabbered in front of Congress again today. I don't think he said anything that roiled the markets. We were short term overbought. Gold was up slightly today and the XAU tacked on another point and a half. ABX announced its earnings and I guess they were better than expected. Up there 60 cents on very good volume. My calls are way in the black and now comes the job of exiting this position. And they have a month or 2 months left. The trend is still up for the weekly charts on this issue but the dailies are overbought. I should probably move up the stop loss order to lock in some profits. I'm going to hold the April calls for at least another month. The March calls are another story. Even with a month left, the RSI is almost to the top. This will be a tough call. We have reached the price target I had set and we got there fast. I might have to revise it upwards. However the point here is that what other good news can come out to push this thing higher? That's a dilemma. The dollar was weaker today and also has more room on the downside, weekly basis. There are no easy trades in this game. Win or lose it is a challenge. You do the best you can and I can live with that I suppose. But you can always improve and you can always get better. These are the things I need to do...

Wednesday, February 16, 2005

Volatility returned too the market today however we only ended up down a couple points. We were down rallied up and then closed basically unchanged. Volume was average and the advance/declines were even. Greenspan spoke and it was shrugged off. Gold shares were volatile also, selling off early, coming back with a rally and then selling off again. Gold itself sold off and came back to be unchanged. The XAU was flat, ABX gained a few cents. ABX reports its earnings tomorrow. I did not take the position in ABX calls because of any earnings expectations, so I will be happy to get that out of the way regardless of what happens. This trade is a dollar play. The dollar was higher early and sold off to end up with a small gain. I'm still believing this trade has some time to go, so I continue to hold the ABX calls. I'm also looking at NEM as a possible trade but it has been lagging here. Don't know. Inflation report out on Friday with a 3-day weekend to follow. We'll see what happens...

Tuesday, February 15, 2005

The Dow moved higher today, gaining over 45 points. Volume picked up and the advance/declines were slightly positive. Not a great day with the breadth. I'm thinking it's an expiration move up. Greenspan will jabber tomorrow and we'll wait for the markets interpretation. Gold was down a bit today as was the XAU and ABX. Volume shrank however and I feel a pause is due. But I still feel the weekly trend is up. I'm holding on to my calls. I am now going to lament a bit about the life of a trader. It is a lonely affair most times. I do my trading by myself because the less interruptions and disturbances, the better. However when the trading day is done it is frustrating that there is nobody to discuss the days events with. Most of my interactions are with people who haven't a clue about the markets. All they want is for me to make them money without them doing any of the work. For the most part people are lazy and go to their hourly pay jobs. They have no clue as to the concepts for making money for themselves, on their own time and terms. They flock like sheep, with no ambition and fairy tale dreams, hoping to win the lotto or something like that. It would be nice if once in a while somebody knew what they were talking about. But such is the life of a trader. It is my calling and I can't expect others to understand that. I know what I'm looking for and I have made my choice. Just felt like complaining a little about it today. It doesn't change anything. I'm still determined and set on reaching my goals, regardless of what others may think or do.

Monday, February 14, 2005

The market went nowhere today as the Dow lost 5 points on light volume. Advance/declines were positive. It looks like a holding pattern until Greenspan speaks on Wednesday and Thursday. That's my guess for the inaction and lack of interest. Gold was up over $4 again today as the dollar weakened. However the XAU did not have a very positive day and was up less than a half. Looks like the rally will stall here. Perhaps Greenspan will try to talk up the dollar again. Regardless, I think the tide has turned for gold here and we will be in a multi-week uptrend. ABX was up fractionally on good volume. My calls are still looking good. But whenever gold rises as it did today and the gold shares don't follow, it's usually time for a rest. Hopefully not a full fledged reversal. I really don't have any other trades in the works right now. I'm trying to focus on what I've got and take it from there. Perhaps the OEX is forming a top here. I am not sure and will be on the sidelines until some type of decent signal appears.

Friday, February 11, 2005

The Dow rose about 45 points to day on good volume. Advance/declines were better than 2 to 1 positive. The underlying tone was much more bullish then the actual price move. We are at new highs for the year. The declines of January have been erased. How much higher can we go here? I don't know but I expect the market at this point will run up into the Friday expiration next week. That will screw whoever is short and owns February puts. Just like the owners of January calls got it. Gold was up another 4 bucks today. The XAU gained a point and three quarters. ABX was up another quarter on good volume again. We are at the overhead downtrend line here. I would expect some pullback or sideways movement. I'm holding on to the calls. I don't think we will just go straight up and you really never know what will happen. But I feel confident that the downside is over for gold here. The dollar was up just a tad today. There is an uptrend line, short-term, that is in force right now for the dollar. I believe it will be taken out within the next 2 weeks. Perhaps we are building a little top here. Time will tell. I now have to decide on an exit strategy for the gold calls. I'm looking at 24 as a price to get out of the ABX trades at this point. I'll have to closely look at the charts over the weekend. It looks like perhaps a bottom is in for gold here. But it's just my opinion and my ideas so far haven't been the greatest. I'll try to keep that in mind going forward. But this particular trade looks like it could be a winner. No OEX thoughts for now. But I'll be keeping an eye on it.

Thursday, February 10, 2005

The Dow rose 85 points today on average volume. Advance/declines were positive but not as much as you would expect for a market up 85. The S&P 500 and the Nasdaq lagged. So I guess the move is not to be trusted just yet. The trade number came out with less of a deficit for the month of December. It was a mover but not in the way one would expect. The dollar sold off and gold rallied. Again, the number itself did not mean anything. Once more the technicals must be the basis for trading decisions. The XAU soared for its best day in months, up 3 1/2 points. All the gold shares were up and ABX gained over 75 cents. All the call options I own are now in the black. My dilemma now is when to dump these things. I think we could have resistance at the 50 day moving average line for ABX at around 23. Perhaps I will get rid of the March calls there. But I think the longer term will result in higher prices and I will hold the April calls and look to add to that position. No other trades but I think a short on the OEX will present itself in the weeks ahead. I'll be looking to March for that. We'll see how the week closes out tomorrow.

Wednesday, February 09, 2005

Movement today as the Dow lost over 60 points on average volume. Advance/declines were almost 2 to 1 negative. No news so there was no reason to buy. Trade number tomorrow. Gold went nowhere today as did the dollar. The XAU was up a point. ABX gained about a quarter. I predict there will be some action tomorrow, however I do not know which way we will go. A possible bullish candlestick pattern has emerged on the gold charts. But it could be negated with a down day tomorrow. The dollar is stalling out at around 85 as I think the resistance is here. So it will be interesting to see what happens. One of the call positions is showing a slight profit, while the other is trying to come back to breakeven. I have over-leveraged this trade and that is not a good thing. But what can you do? It's too late now. Just can't afford to make the same mistake again. We'll just have to wait and see what the trade number is and how the markets react to it.

Tuesday, February 08, 2005

Another nothing day in the market. The Dow was up 8 points with light volume again. Advance/declines were slightly positive. We are marking time. For what, I don't know. At least there is no decline, so the sellers are at bay for now. Not much movement in the dollar, gold or the gold shares. Volume was good in the gold shares though. My call options have not been stopped out yet. Perhaps the trade number on Thursday will be a catalyst. There really is nothing else out there to be reported this week. So here we are, in the midst of winter, trying to make money. February options will wind down next week. The XAU really needs to hold on here or I'm dead. I'm betting that it will. If it doesn't it will be a major shift in the gold market. I expect that the trade number will go down though and that's not going to help the cause. I could be wrong but that is when the recent rise in the dollar started. Anything over 60 billion for the trade deficit would be a plus. Patience.

Monday, February 07, 2005

We didn't do much in the stock market today. The Dow was basically unchanged on light volume. Advance/declines were even. Not much news out this week. I think we have a shot at heading lower soon. Not a big decline, just not going up as we have lately. Gold was unchanged but the dollar moved higher and the gold shares fell. We are now at 85 on the dollar index and this is the level that I feel marks a top. I purchased some more ABX calls today, going out to April. The XAU is at the uptrend line of many weeks. It is now or never. It either holds here or these trades are losers. I should have waited until today to purchase calls but there is nothing I can do about it now. We are at the moment of truth. The volume was good on the gold shares today and my thought is that today was the last of the sellers. Time will tell on this but we are oversold and this is the logical spot to enter the trade. Trade number comes out on Thursday and we could get some movement one way or another off of that. That's about it for today. If I'm wrong on the dollar and gold then I will be stopped out for a loss. I'm surprised it didn't happen today.

Friday, February 04, 2005

A nice rally to close the week. The Dow was up over 120 points on average volume. Advance/declines were 3 to 1 positive. The employment report was weaker than expected. Sold off on that a little early but then roared back all day. The mode is up. Gold sold off another 2 bucks today. Greenspan talked up the dollar today. It rose somewhat. But the bond yield went lower and I think that brought the gold shares back some. The XAU sold off on Greenspans comments but came all the way back to be up slightly. NEM was actually up 50 cents and ABX was unchanged after both had been down early. I think we are looking for a bottom on the gold shares. Perhaps the G-7 meeting over the weekend will spur some movement. GE did not rise as much as the market, so nearterm I think we need a rest next week. My first thought on that only brought a brief downmove. Perhaps the next will be playable. But the trend is up and I don't really want to fight that. Who knows why and where the markets goes when it does? The technicals are the way to go. When they work of course. It is the most difficult and yet interesting game to play. I need to get better. About the game and myself.

Thursday, February 03, 2005

It was a nothing day today. The Dow was down 3 points on average volume. Advance/declines were slightly negative. Waiting for the jobs report. We are overbought. Summation index is pointing up. Wouldn't mind putting on a short here. But I am on the sidelines with regards to the OEX. Gold lost over $4 today and is at a point of no return. We are right at a multi-month uptrend line. If it doesn't hold here then the long term trend will change from up to down. Very important. The XAU lost a point and a third. ABX held up pretty well, only down around a dime. But it is critical to hold here for the long side. The dollar was stronger and is at 84. There is talk of how it is holding up. Tomorrows number may be a dollar mover. There is also a G-7 meeting over the weekend. I don't know how these things will affect the markets, it is a wait and see proposal. My stop-loss is in so there is not much more to do. We will have to see how the events play out.

Wednesday, February 02, 2005

The Dow up another 45 points on average volume. Advance/declines almost 2 to 1 positive. The Fed raised short term rates another quarter point. Ho hum. Nothing unexpected and the markets continue to rise. I would expect a pause here. Either tomorrow in advance of the employment report or on Friday. We are overbought. Gold was flat today. The XAU was up a little over half a point. The dollar was slightly higher. ABX was up about a quarter on light volume. The options I purchased are back to breakeven. The president gives the state of the union speech tonight. Perhaps will have implications for tomorrows action. Not much else, maybe put on a short before Friday. We'll see.

Tuesday, February 01, 2005

The trend is now up. We gained another 60 points on the Dow with 2 to 1 advance/declines. The volume was good. We have broken the downtrend line and the summation index has turned higher. Now I'm not saying it will be a straight line up but the path of least resistance is up now. Gold lost a little over a dollar and the XAU was up fractionally. ABX was down a few cents. The dollar index lost a little ground. The Fed will announce its decision on interest rates tomorrow. Should raise a quarter point again. Anything else will move the market pretty good. Not expecting that. My ABX options are losing money but not to the stop-loss point. At least the volume on the stock picked up today so perhaps interest is coming back. As for the overall market, I don't expect new highs anytime soon but the downtrend has ended. I don't have any other trades in the works for now but if we get too ahead of ourselves, I might consider a short somewhere. Not sure, in doubt and staying out. Gotta have patience and discipline. It's tough but that's the game.