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Tuesday, October 31, 2006

The Dow lost 5 points on good volume. Advance/declines were about even. We were higher and lower for the last day of the month. No real direction. I expect some money flow for the beginning of next month. Gold was little changed but the XAU rose 3 and 1/2 points. Again, I have missed out. NEM and ABX were both higher, although the volume on ABX wasn't that hot. NEM reports tomorrow. I canceled my open order for calls. Never got close to being filled. I might think about re-entering it if NEM goes down on the earnings but I doubt it. ABX earnings on Thursday. These issues are overbought but that means nothing lately as the overall market has proved lately. We'll see what happens but I am not happy about missing out on gold. But what can you do? You just have to move on. It is a very frustrating game at times. You somehow have got to keep going. Losses and misses. You might even begin to question why you are even in the game. Perseverance is the key in times like these. You've got to stick to it. There will be other opportunities but at the moment it doesn't matter. Mentally it's tough to go on. They say missed money is better than lost money but it sure feels the same. It's a crazy game. Well, I guess we'll see how the earnings come out.

Monday, October 30, 2006

The Dow lost 3 points on light volume. Advance/declines were slightly positive. No news or events to drive the market today. Employment report this week and that's about it. End of quarter tomorrow. Gold was up around 6 bucks today. The XAU rose less than a point. Don't really know what to make of that. I still have the open order for NEM calls but I will cancel it if it doesn't get filled tomorrow with the earnings now out on Wednesday. Suppose I'll just have to wait for something else. Perhaps I can do ABX if NEM doesn't have a good report. Or I can wait. The technicals are overbought for the XAU right now so buying calls here may not be the smartest thing to do. I don't have any good ideas right now. Perhaps will look to short this thing at some point in this option cycle. But you never know. Mentally I'm looking forward to the gold share earnings and the markets reaction. I could stay on the sidelines. I'm thinking now that perhaps they ran up in anticipation of the good news to come. But that's just a guess. Not much else to say here...

Friday, October 27, 2006

The Dow actually went down 73 points today on average volume. This is the first legitimate down day in quite some time. Advance/declines were negative. Does it mean anything? Probably not but we'll see. GDP came in weaker than expected. So the so-called soft landing now is suspect. I've given my economic forecast before. Inverted yield curve will lead to a recession and the tip-off will be when copper goes below $3. That's my guess. Gold was up a buck to around $600 but the XAU was down a point. The dollar was weaker here too. I adjusted the NEM trade down a notch but left the order open. Both ABX and NEM were down on average volume. I'm still sticking with the higher price theory here. Earnings for both on Thursday. I don't like the fact that the technicals are at the high end of the range but that could be worked off early next week. Honestly, you never know how the market will react to the earnings. But the way the open interest expanded for NEM, that will probably be the play. Hopefully there will be a sell-off there early next week for portfolio adjustment but that is just a hope. Mentally I'm feeling good and am ready for the next trade. Perhaps there will be a chance to eventually short this thing in November after all. But that's a dicey proposition at this point. For now it's the weekend and time to take a break...

Thursday, October 26, 2006

The Dow up 29 points on good volume again. Advance/declines over 2 to 1 positive. It's a broken record. Will nothing derail this thing? Overall market stronger than the Dow. What can I say? We're on a momentum run and there is no stopping it at this point. I'm thankful that I have stopped trying to short it. But still, this is insane. We've seen it before but I certainly had no idea that it would happen now. Gold was up over 9 dollars and the XAU was off fractionally. The opposite of Monday when gold was down big and the XAU rose. Perhaps we will cool off here for a bit on the XAU. I still have an open order for NEM calls. Might switch to ABX if it drops enough but that may not happen. Earnings a week from today on both issues. Open interest expanded more on NEM during this rise so I'm leaning that way. But who knows? Microsoft announced after the bell and has sold off just a touch. GDP tomorrow and my hope is that it is stronger than expected and the dollar firms leading gold lower. The Dollar was lower today. The XAU is overbought here so I need a pullback to pick up some calls. Even so, this trade may not work but I am going to give it a try. Mentally not much to say today. Just waiting for an opening on the gold long side. Trying to stay positive and do what is necessary. Just have to keep going here...

Wednesday, October 25, 2006

The Dow was up 6 points on heavy volume. Advance/declines were almost 2 to 1 positive. Nothing seems to be able to keep this market down. The Fed left rates unchanged. My prognosis was wrong. There was no hawkish statement. Still overbought and staying there. It just goes on and on. There is nothing else to do but watch. Gold was up around 3 bucks and the XAU rose almost 4 points. There is no pullback. I have an open order for some NEM calls but it probably won't get filled. I might try and just get something before the earnings next week because the volume says this move is for real. Gold moves dramatically sometimes and in both directions. I expect the earnings to be good but I haven't been right about anything in quite some time. We'll see what happens. Probably should have been buying calls on Monday. It is always easy to look back. Mentally what can I say? It is no fun being wrong all the time. The heavy losses I sustained before have now caused me to it on my hands when I should have been trading. That is the problem. You get gun shy and end up not doing anything when you should be trading. That's why losses are killers. You lose your confidence. And there is no place to go. You have to somehow forget about your past mistakes and move on. It isn't easy. Discipline is not to be taken for granted. The markets are unrelenting. If it was easy, everybody would be successful. Tough game.

Tuesday, October 24, 2006

The Dow was up 11 points on good volume. Advance/declines were positive. Overbought again and what else is new? Fed announcement tomorrow. The market just continues to go higher. Until there is a change, there is nothing else to say. Gold came back around 5 bucks and the XAU was fractionally higher. I'm still looking to get some calls here if we have a pullback. If not then I'll be on the sidelines. I might switch to NEM calls if the price gets low enough. Earnings for both ABX and NEM are next week on Thursday, so I'd like to be positioned before then. But the market knows this so I'm not the only one looking at things here. Sun Healthcare continues higher but as I said before that will be a long term holding and not a trade. Earnings there next week I believe. So today the overall market was weaker than the Dow again. I now see the volume was heavy. So maybe we fall a bit tomorrow. I'm looking for the Fed to come out with a hawkish statement with bonds and stocks to fall. That should support the dollar and send gold lower. That is my guess. And a guess is all it is because regardless of what everyone says, nobody really knows. Mentally I'm a bit stressed with computer problems this morning that required outside technical help and delayed my access to market information. These things happen and fortunately it was a slow day trading for me personally. So I'm a little drained and will end this blog.

Monday, October 23, 2006

The market was up 114 points on good volume. Advance/declines were positive but not by a lot. How long can this go on? Nobody knows. But the internals are starting to get weaker on the advance. The McClellan oscillator has another non-conformation. Eventually there will be a decent decline. I have tried to pick it and now I have stopped. The market is not functioning under normal circumstances. It is a momentum run and they never finish good. Something will trigger the inevitable reverse. Perhaps the Fed on Wednesday. But it is all just a guess. Gold was down over $13 and the XAU rose a point and a half? Try and figure that out. The gold shares had good volume. It makes no sense. I would still like to get some ABX calls but I won't overpay for them. This too, is not the conventional movement given the change in the underlying. What am I to do I ask myself? Sit tight for now I suppose. Mentally I'm confused and so I must wait for better times I guess. But we all know how that goes. Most of all I must protect myself from myself and what a difficult challenge that always is. So it goes with trading. Perhaps tomorrow will shed some light on things.

Friday, October 20, 2006

The Dow lost 9 points today on good volume. Advance/declines were negative. I was able to make it through the day without doing any stupid trades. On to the November cycle. I am disappointed about missing out on Sun Healthcare. I have been wanting to buy that stock on a pullback for some time as a long term holding. But a pullback has never came and now it is going to the moon. It announced some type of takeover today and was up over 10%. I will have to look for another low priced issue in this area. These are long term ideas and do not involve trading. Gold was off around 6 bucks and the XAU lost over 2 points. Volume was light though and I'm a buyer of ABX calls on this pullback. Hopefully sometime next week. I just hope I'm good enough to pull it off. We'll see what happens. And who knows, I could be wrong of course. But that will be the next play. Mentally there isn't much to say. Trying to forget the huge losses this month. Trying not to be down about missing SUNH. You somehow have to put things behind you and go on. I've made mistakes before and I will again. I just can't let that stop me from going forward in the future. Trading is tough. There are no excuses. You're either good enough or you're not. These past few months haven't been my best. But I will try and put it behind me and continue. I'll check the charts over the weekend and get ready for next week...

Thursday, October 19, 2006

The Dow was up another 19 points on good volume to close above 12000 for the first time. Advance/declines were positive. Got a sell signal on the McClellan oscillator last night and I had to fight myself not to buy any puts today. Expiration tomorrow. I will be pleased if I can stop myself from doing something stupid. The sell signals lately have just not worked and it doesn't look like that one will either but we'll see. It's a momentum market and the usual things just won't work. Gold was up $10 today and the XAU rose over 4 points. Volume was good. It looks like I have missed the boat here. But that's what happens when you've had so many bad trades. You just get into a funk and you really need some thing to break out of it. ABX moved much higher and the calls have gotten away from me. There is a slight possibility that I might move to a higher strike price but that remains to be seen. There is a ton of premium in the calls so I think that everybody knows that they will work. Perhaps it has to do with the upcoming earnings. I don't know but I am going to keep an eye on them and if I get the chance that will be the next trade. Mentally I'm not in a good place missing out on the gold. However I may get a chance there and might switch to NEM. The relative strength is with Barrick though and that really should be the play. Not much else on the radar. Fed next wednesday. We will probably be in a holding pattern until then after tomorrow. Google after the bell and it looks like it's in a rally. However Sandisk looks like it's getting killed. Who knows?

Wednesday, October 18, 2006

The Dow rose 42 points on heavy volume. Advance/declines were positive. The overall market was weaker. The NASDAQ was down and the S&P was only up a point or so. The inflation data was benign. I think we are approaching a top here. I may try and short this thing before expiration. We'll see. Perhaps I should hold off and I will let the action dictate what I do. Very risky. Gold was little changed, down a little. The XAU lost over 2 points and the volume picked up a bit. I am still looking to get long ABX calls for November at some point. Earnings on November 2nd. We'll see. I think that is the next play. Volatility is returning to the overall market. That could bode well for the puts. Or not. Earnings continue to come out decent so far. They will probably be good next quarter as well with the sell-off in energy. Oil broke $58 today. Mentally I'm feeling fine, trying not to do anything stupid between now and the end of the week. The Fed meets next week and I expect no change. Otherwise it's a waiting game now, watching gold and the gold shares.

Tuesday, October 17, 2006

The Dow lost 30 points on average volume. Advance/declines were negative. We were off 90 points early but then came back. Is this the beginning of the long awaited downturn? Who knows? Tech earnings are coming out after the bell and they are mixed so far. Inflation data tomorrow morning also. I almost bought some puts after the bell but did not. As usual the battle lies within myself. Gold was off about $5. The XAU sold off early but then came back to be off just a touch. ABX came back too and the volume was good again. I am still looking to get some calls here but will not chase it. I may have missed it, time will tell. I would really like to make some money this week. I need a good trade because it has been quite a while since I've had one. Mentally I'm doing what I can to stay positive after the recent heavy losses. It isn't easy. You've got to just keep on going in the game. I have at least finally learned that cutting losses is just as important as making money. It is imperative. My best teachers are losing trades. However if that was the case, I'd have a PhD by now and be teaching the class.

Monday, October 16, 2006

The Dow was up another 20 points today on average volume. Nothing can stop it from 12000 so it seems. Advance/declines were over 2 to 1 positive. It implies even higher prices. I will have to fight myself not to short this thing sometime this week. We'll see. Gold was up a few bucks and the XAU was higher too. Volume is coming into the gold shares here for whatever reason. I am going to get some ABX calls if there is a pullback. We have inflation data out the next couple of days. They are potential market movers along with some tech earnings. Right now we are on a momentum swing. As long as we keep going higher, money will continue to flow into this market. I certainly don't want to try and fight that. The question is what happens when it ends? That will be interesting. For now there is no end in sight. We are overbought and have been for weeks. I may get a short term sell signal later in the week but that remains to be seen. Mentally I'm doing as good as can be expected, considering how much money I have lost recently. It has to be forgotten and the next trade must take center stage. It is the only way to go on. Not much else to say. It is Monday of expiration week. The will be opportunity here but I think I will prefer to go out to November. Time will tell.

Friday, October 13, 2006

The Dow was up another 12 points today. Volume was a bit lighter than lately however the advance/declines were positive. The overall market was higher. I had to fight myself not to buy some puts today. The trend is up and I cannot fight that. Every time I try I get burned. Yet there is something that tells me that when it starts to drop, it's going to be big. I need to fight that though because it hasn't worked yet and it is foolish to try and pick the top. That said, who knows what will happen next week? Gold was up $12 and the XAU rose over 3 points. ABX was up on good volume. I suppose I will be looking for a light volume pullback to get long here. That really should be my next trade. Money is flowing back into gold here, for whatever reason. I'll need to check the charts this weekend but that looks like the next thing. However you just never know there either but I think enough people have lost money there now. It is off the radar screen and I have had some decent gold trades in the past. I'll go out to December if necessary but will try November also. Mentally I'm feeling pretty good today and I don't know why. Perhaps because I didn't do anything stupid today. Maybe it's the pre-weekend high. At any rate expiration week looms and I'm sure that I will try some type of trade next week. We'll see.

Thursday, October 12, 2006

The Dow was up 95 points on good volume. Advance/declines were over 3 to 1 positive. I lost on the puts again and got stopped out. It was a dumb trade. I already knew it yesterday. It was a trade for the sake of trading. It lost about 35%. I guess I need to step back and take a break. I haven't had a winning trade in months. It's as if I'm starting out all over again. Last years good profits are like they never happened. I'm in a bad way. Nothing I'm doing is working and I am either wrong or missing something. This market is on a momentum feed and nothing will stop it at this point. The money just keeps going in on the upside. I've seen it before but I did not expect it now. There is nothing to do but watch and wait at this point. Gold was up a few bucks and the XAU rose over 3 points. I'd like to get some ABX calls but may have missed out here too. I was also thinking about some GE puts with the earnings coming out tomorrow. But when I'm in such a funk as I am now, it's probably better if I just sit it out. Mentally I'm in a bad way. I'm losing money, have had my worst month ever and don't have a clue. It's not a good place to be. I must somehow persevere in this negative environment. I have got to somehow snap out of it. We'll see what happens...

Wednesday, October 11, 2006

The Dow lost 15 points on increased volume. Advance/declines were negative. I bought some OEX puts. I have already put in the stop-loss order. This is probably another dumb trade but the market cannot go up forever. The money risk is minimal. I'm just guessing the top is here as I did before. We'll see. Gold didn't move much today but the XAU lost over 2 points. ABX was down good on heavy volume. I'm looking here but the market seems to say it wants to go down here. People are still just selling off commodities. I am looking to November here but it might be a bit early. Not sure so I'm staying on the sidelines for now. Mentally I'm afraid that perhaps I did this trade for the sake of trading. It happens. I don't have a clear signal but the McClellan oscillator did flash a sell signal yesterday. However today could have been it for the decline. We'll know more tomorrow. Trading isn't easy. It really is tough sometimes. I'm trying my best here and feel good about the fact that I am at least exercising some risk control. But the bottom line is profit and I'm down for the year after my latest fiasco. We'll see what happens with this trade...

Tuesday, October 10, 2006

The Dow picked up 9 points on average volume. Advance/declines were positive. Not much movement today. No trades on the horizon there. Gold was down around 5 bucks but the XAU rose over a point. I'm looking to do something on the long side there. But I am waiting for the bottom if I can find it. Earnings are starting to come out and Alcoa missed after the bell. I don't know how that will affect the overall market tomorrow. It still has the feel of a market that wants to go higher. I haven't gotten a decent technical signal in a while. Mentally I'm just hanging out and waiting. Sometimes that is the hardest thing to do. I would like to try another trade before expiration but I'll need to get a decent signal first. Not sure that is going to happen. Otherwise, it's a waiting game.

Monday, October 09, 2006

The Dow was up 7 points on light volume. Advance/declines were positive. It still seems like the market wants to go higher. Rising oil, North Korea problems and still the market wants to go up. Nothing is sending it into a sell-off. How long can this go on? I would like to try and get short again. Gold was up $5 but the XAU lost some ground. Volume was light there also. I'm looking at getting long for November gold. Just a thought at this point but I'm leaning that way. If there is another sell-off in the gold shares, I'm going to give it a try. Otherwise there is really nothing on my horizon. Less than 2 weeks until expiration so I'd like to try and do something. Mentally I'm just trying to wait for a good signal, follow the rules and not trade just for tradings sake. It isn't an easy task but nothing is in this game.

Friday, October 06, 2006

The Dow lost 16 points on average volume. Advance/declines were about 2 to 1 negative. The overall market was weaker than the Dow but we have seen this before. It seems like nothing can drive this market down. It is up, up and away. I feel like just putting the money in my mutual funds and forgetting about it. But we all know better than that. Just when you think the market can't go down, it will. Harder and faster than most will believe. I have been very wrong lately but the next trade could be another good one. Gold was up a touch and the XAU was little changed. I'm looking here again for a trade. I need to check the charts. This week could be the end of the decline. Mentally I'm doing OK considering how much money in losses I booked this week. I have vowed to never let that happen again and this time it's for real. I might have some medical issues coming up since I have to go to the doctor again next week but nothing will deter me from my ultimate goal of successful trading. I was having a good year and then just blew it out like a fool. However I will be making a comeback. That's the plan. The employment report took the bond market down but the stock market seems to be shrugging it off. Earnings begin next week and we'll see where we go from there.

Thursday, October 05, 2006

Market up 16 points on good volume. Advance/declines 2 to 1 positive. Gold and the XAU up. Short blog due to doctors appointment.

Wednesday, October 04, 2006

The Dow continues higher, up 123 points today. Volume was heavy and the advance/declines were 3 to 1 positive. I had put in another overnight order for puts. It was filled and then I was stopped out for a small loss. I finally followed the rules. That is the only saving grace from the substantial losses that just occurred. I will always follow the rules from now on. I dumped the other puts at heavy losses today. It was way beyond the time to do so. I was stupid and I paid for it. But I finally learned an important lesson that I hope I don't soon forget. The big loser was 90% of the trade and the other was 60%. These are killers and I am now down on the year. I will never lose that much on a trade again. Never. It won't happen. Stop-loss orders will be placed as soon as the trades are filled. This is something that I have known for some time but I have been too stubborn to do because I think my trades will always be winners. That is lunacy. My trades are usually losers so I will now protect myself from myself. The volume has told the story here as we continue higher. I just did not want to listen to it. That was dumb. The market has gone up regardless of the news and that should tell you something. The news doesn't matter right now. Money is simply flowing out of oil, gold and other commodities and into the stock and bond markets. I don't know how long that will last but there is no sense in trying to fight it. I need to also remember to keep a sane and open mind when I have a position. Because I usually just try and fit things into the trades that I take. Objectivity must be maintained. It has to. The recent losses have put a lot of things in perspective. How I trade from here will be interesting. There is still plenty of time this year to turn things back around. We'll see what happens. I'm out of time today.

Tuesday, October 03, 2006

The Dow was up 57 points to a new all time high. Volume was good. Advance/declines were slightly positive. That is the problem here. The overall market is not confirming the move in the Dow at all. That is why I bought puts and the situation hasn't changed. This market will fall but my timing was off. The indicators just remained overbought as they are now. But it will happen. Gold got pounded today, down over $20. The XAU lost over 8 points. Volume was heavy as money continues to pour out of commodities and into the stock market. Oil was down big too. I think a recession is coming but the market doesn't think so. Mentally I'm sitting tight, waiting to take my big losses. It's only Tuesday so we will have to see how the week closes out. Employment report on Friday. The market continues to defy the indicators. Just how long can that go on?

Monday, October 02, 2006

The Dow closed down 8 points in light volume trading. Advance/declines were negative. The overall market was much weaker with the S&P500 down over 4 points and the Nasdaq down 20. The OEX didn't move much and the puts are still big losers. I'll need quite a down move to salvage the losses and that isn't in the cards at the moment. I expect one more move to the upside and then maybe a decent downdraft. But that is a guess as usual. Gold was down a couple bucks and the XAU was up a little. Not much else to say on a Monday. Mentally I'm getting it together in a way that I hope will bring success. Discipline will be the key.