Wednesday, January 31, 2007
The Dow gained 98 points today on average volume. Advance/declines were about 2 to 1 positive. The Feds statement was seen as bullish and that led to todays rise. The economic data came in mixed. The GDP was actually higher than expected and my guess there was wrong. However gold did rise over $7 today as the dollar lost ground. The XAU was up almost 2 points but the volume wasn't that great. I sold my ABX calls. It was around a 100% gain. I just didn't like the action in the gold shares today. With gold up good and a strong market rally, I would have expected to see a nice rise in the gold shares. It didn't happen so I bailed out. I would like to buy some calls again but at a better price. We are somewhat overbought here on the gold shares and I will be purchasing some more calls if we get a pullback. We are also overbought short term on the overall market but I'm not looking to get any puts right now. That could change when I check things later tonight. I suppose that the next event will be the employment report on Friday. I have no specific thoughts there. Mentally I am feeling OK. I am hoping that I did the right thing today. You might think that a 100% gain is good but it isn't when it could have been more. However I will put this trade behind me and move on. It is really what you have to do. It will be interesting to see where we go from here. I will be looking to get some calls in ABX or NEM before the earnings are reported near the end of February. Perhaps next week or the week after. That's all for now.
Tuesday, January 30, 2007
The Dow was up 32 points on average volume. Advance/declines were 2 to 1 positive. The overall market was much higher than the Dow, with the S&P 500 up over 8 points. That's the biggest divergence that I've seen in a while. Lots of economic data and the Fed tomorrow. Gold was up a buck and the XAU gained almost 2 points. The dollar was little changed. My calls are back in the black as ABX rose around 40 cents. The volume wasn't all that great though. I'm still a believer that the GDP will be weaker than expected, the dollar will drop and gold will rise. Hopefully the Fed won't be too hawkish. But anything can and will happen. Oil was up almost $3 today, which is huge. I think that maybe gold was just following that. Tomorrow should be a big day and I will have to think about bailing out of these calls and look to buy them cheaper down the road. That's the ideal scenario, we all know reality is usually much different. I do think the dollar will get weaker here for various reasons. We'll see. Mentally I'm doing what is necessary to try and keep control of my market emotions. I'm doing the after hours work required and I think that I will do a much better job trading from here. Easier said than done as always.
Monday, January 29, 2007
The Dow gained 3 points on average volume. Advance/declines were positive. The S&P 500 was negative but the NASDAQ was positive. It was a mixed day and really we are just waiting for the Fed on Wednesday. Gold lost a couple bucks but the XAU dropped 2 and 1/2 points. ABX lost about a dime which wasn't bad considering. The volume was light. However the chart isn't looking so good now. Oil lost over a buck and that probably contributed to the drop in gold. The dollar was weaker today. So it was a mixed picture in the precious metal as well. My calls are a bit over break even. I'm surprised that they have held up as well as they did. I suppose this week will be make or break for this trade. I have nothing else on the horizon at the moment. We are approaching short term oversold but I do not think I will be playing the bounce. The market isn't acting too good here. That could all change after the Fed but we'll have to just wait and see. Mentally I'm unsure of what to do here. I probably need to be thinking about dumping these calls. But my thought is that we will be getting a move lower in interest rates after the GDP is reported on Wednesday. That should support a rally in gold. But it's just a guess. Right now the volume is telling me to look for higher prices in ABX. I'm going to stick with that.
Friday, January 26, 2007
The Dow lost 15 points on light volume. Advance/declines were positive. The market had sold off more for most of the day. We could be on a holding pattern until the Fed on Wednesday. Gold lost around 4 bucks and the XAU was basically unchanged. ABX lost about 30 cents on light volume. The calls are still showing a small profit. The dollar was higher today but not as much as you would expect given the strong data that came out. We are right at the all important level of 85 and that I feel is the key to gold at the moment. The consensus here is for continued higher rates and that would support the dollar. There is a lot of data coming out next week and the Fed, so it will be a make or break time for this trade. I'm not feeling good about it at the moment but the volume did come in on the upside this week. Hopefully we'll get another pop to the upside and perhaps I'll exit. Mentally I'm doing what I can to stay focused and do the work required. I'll check the charts over the weekend and take it from there.
Thursday, January 25, 2007
The Dow got clobbered today and lost about 120 points. Advance/declines were 3 to 1 negative and the volume was heavy. I don't know where this came from but you can't say that it is good for the bulls. It is being blamed on higher interest rates. Microsoft reports after the bell and that will carry over into tomorrow. Gold lost a couple bucks and the XAU shed about a point and three quarters. ABX was down around 30 cents on average volume. The calls are still in the black. I'm sticking with this trade for a bit longer. However the dollar was stronger today and looks to break the 85 level which is key in the short term. I can't see gold moving up with the dollar. A couple economic reports are out tomorrow and we'll see what they say. I don't know what to make of todays stock market action. But it can't just be dismissed. People wanted out of stocks, for whatever reason. Perhaps it will lead to a flight to gold down the road if it continues. Let me say this. I'm not a gold bug. I am just trying to make some money. Mentally I'm a bit confused after todays action. It looks very bearish on a daily chart. I had thought we would continue with strength in the stock market until the end of the month. It looks like I'm wrong. We'll see how we end up the week.
Wednesday, January 24, 2007
The Dow rose 88 points on average volume. Advance/declines were over 2 to 1 positive. The summation index should now be heading higher. We should see strength going into the end of the month. After that it could change. No OEX trades for now. Gold was up a couple bucks today and the XAU rose over 2 points. Money seems to be flowing this way even thought the dollar was stronger today. ABX was up over 30 cents on good volume. The calls are doing well so far. I would like to add some more calls in NEM or perhaps go out to March. I'm waiting for a slight pullback. It's tricky though. I don't know if this is the beginning of a multi-week move but I suspect that it is and I will trade it accordingly until further notice. It's also possible that gold is just moving up with oil as big money piles in again. Tough call. Mentally I'm a bit tired as I did not sleep well. But things are looking good with this trade so far and hopefully I won't repeat the mistakes of the past. But ya never know. Otherwise there is nothing else on the radar screen. Earnings for the gold shares come out in the March option cycle. They should be good but that doesn't mean anything as we learned with GE. Sure wish I could do that trade over again.
Tuesday, January 23, 2007
The Dow rose 56 points on good volume. Advance/declines were almost 2 to 1 positive. Tech earnings are out after the bell and that should get things started tomorrow. No OEX trades for now. Gold moved up $11 today as the dollar was a bit weaker. ABX was up almost a dollar and my calls are in the black. Volume was heavy in the gold shares as the XAU had its best day in quite a while, up almost 6 points. Perhaps the money is flowing back into commodities as oil had a good day too. Or it could be just a bounce. Of course I now wish I had bought more calls and went out to March but I'll take what I've got. Timing is everything sometimes. Getting out will be the challenge now. However longer term the gold shares were oversold so this could be the beginning of a longer term move. The dollar was pushed back from the weekly downtrend line also for now. It could just be a consolidation or it may be the start of a new leg down. Time will tell. Mentally I'm fine for now but I can't be feeling too good. Trading is very fickle. I need to keep an eye on things and hopefully do this trade right. It's a process. I can't forget that. Otherwise I think the stock market will rally into the end of January and then we'll see what happens after that. Perhaps February OEX puts will be the play.
Monday, January 22, 2007
The blog is early today as I have other commitments and will be leaving at the close. It's a downside day as we have been off over 100 points on the Dow at times. Advance/declines are about 2 to 1 negative with about an hour to go. The summation index is pointing down again. We'll see how we close. I bought some February ABX calls this morning. Gold is down a touch today as is the XAU and ABX. The technicals are oversold on a daily and weekly basis for ABX. We are right at support and I expect it to hold. The calls were pretty cheap. I am expecting to manage this trade better than the last one. We'll see. I have finally come to the realization that trading is a process and not an end result. This is an epiphany. As for gold itself, it has been rising lately but the gold stocks haven't. This isn't a good sign however we are getting close to the .2 ratio for the XAU and the price of gold and that is a longer term buy signal. I would really like to go out to March on some gold share calls also but not just yet. We'll see how this trade goes. Mentally I've put last week behind me and I'm moving on. It's all you can do and what you must do. I've been getting enough sleep and doing the work necessary to give myself a chance to be successful. We'll see what happens...
Friday, January 19, 2007
The Dow was down 2 points on good volume for options expiration. Advance/declines were over 2 to 1 positive. GE earnings came out. They were good. It didn't matter. The stock lost over a point on heavy volume and my calls got killed. The loss was substantial, over 90%. I blew it once again. I suppose I should have never canceled the stop-loss order. But that's what you get when you take chances. I had a few chances to get out of this thing with a profit during the week and did not take advantage of them. I went for the big trade. It was stupid. This trade never panned out early as I had expected. It was a warning sign that I did not listen too. I knew I should have bailed out earlier this week and I didn't. I got what I deserved, I suppose. I will be starting out the year in the hole again. It sucks. My trading is pathetic. There is no discipline. I treat each trade as if it's the last trade on earth. As if I have to be right on every trade. Like every trade is going to be a blockbuster winner. They rarely are. It was foolish. I should have gotten out and moved on. I will have to put this latest mistake behind me and move on. I have no choice. Times like these stink but you bring them on yourself. As always the biggest enemy is myself. It's a bad feeling but there is no escaping it. I failed miserably once again. I begin to wonder how much more of this that I can take. The years and years of disappointments. The botched trades and bad decisions. It is the toughest game in the world. And more so when you're stubborn and stupid. Gold was up over 8 dollars today. The XAU barely gained 2 points. NEM acted better than ABX. I would like to make a trade here but the gold shares just haven't been moving with gold lately. The last time this happened it led to a big decline. We are at critical support for ABX and it needs to hold here. If not, then a bigger decline should be in the cards. I'll check things over the weekend. That's about it for today. There isn't much else to say...
Thursday, January 18, 2007
The Dow lost 9 points on good volume. Advance/declines were negative. The market had a small rally early and then sold off. There was a sell signal on the McClellan oscillator last night. We were also overbought and we still are on an intermediate term basis. GE was down on heavy volume today. It sold off hard and I would have been stopped out but I canceled the stop-loss order. I wanted to wait for the earnings tomorrow. GE somehow rallied back some but was still down on the day. The calls had very heavy volume. I don't know what it means but tomorrow morning it will all work itself out one way or the other. I will try and sell out quickly if there is good or bad news. Tech has been selling off here and IBM just announced after the bell and it is down. My hope is that all the selling in GE took place today. We'll see. Gold lost $5 today and the XAU shed 2 1/2. ABX was down on good volume and is approaching a very important trendline. My thought at this point is that it will break it. Although I might take a chance and get some calls here. Oil continues to fall and was below $50 briefly today. Commodities are taking a hit but I don't think that will last forever. Perhaps some of the tech money will find its way there. Just a thought. Mentally I'm not happy with the way this GE trade has gone. I should have been out long ago. Short term trades are not supposed to last 3 weeks. I only have myself to blame. I'm hoping I can salvage not getting killed in this thing tomorrow. But that is a possibility also. At this point, all I can do is wait...
Wednesday, January 17, 2007
Computer problems again today so this will be short. The Dow was down 5 points on average volume. Advance/declines were positive. GE was down on good volume. The calls I own are right where I bought them. This has been a dumb trade that I should have been out of long ago. I'll wait for the earnings on Friday. Gold was up 7 bucks today but the XAU was barely up a point. I'm going to wait there. Mentally this computer is really starting to get on my nerves and I think it is time to just go get a new one. The machine needs to be reliable and this one just isn't. It is a pain in the ass that I don't need. Trading is hard enough. I don't need to make things harder.
Tuesday, January 16, 2007
The Dow rose 26 points on a bit light volume. Advance/declines were even. We are remaining overbought and I expect a down day tomorrow or the next day. GE was higher a touch today on heavy volume. I probably should have just sold out here today but I didn't. I am thinking at this point that we will break out to new highs on the earnings Friday. That is probably more hope than anything else but the technicals aren't completely blown out to the upside and there is a chance. If we hit my target before then, I'm gone. As I said before, I have been in this trade way too long. Gold was off a buck today and the XAU lost 1 3/4. The volume was light here. I am thinking of getting some February calls on ABX or NEM. However Freeport reported its earnings today and they weren't as good as expected, which could spill over into the gold shares. The dollar was higher today also. I'm probably going to let this week go by before doing anything but you never know. Inflation data out tomorrow and will be a market mover. Also earnings are coming in this week from some big names. It will be interesting but I am going to stay bullish here for now. Oil continues to fall and the next stop is $50. We'll see what happens when it gets there. For now I will continue to focus on GE and gold.
Saturday, January 13, 2007
OK, I was pressed for time yesterday. Gold had a big move, up $13. The volume on the gold shares wasn't spectacular but it looks like a possible bottom is forming. This week will be key as candlestick dojis have formed on the weekly charts. The dollar is also coming up against some downtrend lines. So perhaps the next trade will be gold. Otherwise the market is overbought here and a pullback is in order. It is a short option expiration week, with a holiday on Monday. I really don't want to wait for the GE earnings on Friday but I might have to if we don't get any upside before then. This issue is overbought also. It's a tough call in a tough game. Mentally I'm trying to stay focused and do the right thing, the smart thing. But it isn't easy. This trade has lasted way too long for what it will bring, one way or the other. My discipline isn't where it needs to be yet. Sure, I have other things on my mind but the trading must come first in order to be successful. There are no shortcuts or excuses.
Friday, January 12, 2007
The Dow rose 41 points on average volume. Advance/declines were positive. The market did pretty good for itself really. But now we are short term overbought and moving to longer term overbought. GE was down a few cents today and did not participate. That isn't exactly what I needed to see. GE is overbought too. I have hung around this trade for way too long. The calls are worth what I paid for them and it looks like I'll be around for the earnings next Friday. That wasn't the plan or my intention. Running late here today and will try and continue this blog over the weekend. Gold had a good day.
Thursday, January 11, 2007
The Dow rose 73 points today on average volume. Advance/declines were 2 to 1 positive. There was a buy signal on the McClellan oscillator last night and it was valid with todays action. There isn't a breakout just yet and we are getting short term overbought. So we'll see what happens. There is a long weekend ahead and tomorrows action should be interesting. GE rose around 40 cents on good volume. The calls are back in the black. If we can get some follow through tomorrow on good volume than this trade will be a winner. I am encouraged by todays action but we'll just have to wait and see. The ideal situation would be a breakout to the upside but that remains to be seen. The relative strength with GE lately has been the key to me holding on to this thing. Gold didn't do much today but the XAU was up almost a point. Probably in sympathy with the overall rise in equities. The dollar again was stronger today but we are getting close to some downtrend lines there on a daily and weekly basis. We'll have to wait and see what happens. Could be the time to get long some gold shares for February. Oil continues to fall and $50 is the next key level. All support there has been broken so it will be interesting. Could help the stock market if it continues to fall although it hasn't helped much yet. Mentally I'm feeling a bit better with the positive action in GE but what to do next is the question that needs to be answered correctly. I might just have to bail out before the weekend. Depends on tomorrow I guess. Otherwise I am getting over the cold I had and am feeling better physically as well. Trading is difficult and I would like this first trade to be a winner to set the tone for 2007. Time will tell.
Wednesday, January 10, 2007
The Dow was up 25 points on average volume. Advance/declines were even. The market is just not going anywhere. It's sloppy and there is no conviction one way or the other. It is a tough trading environment. We need to do something here soon. It hasn't sold off as bad as it could have so maybe we can get a rally going. GE didn't end much changed after today. My calls are losing money. I haven't been stopped out yet. Looks like perhaps that I will have to hold'em until the earnings announcement. I sure hope not. The president will speak tonight and that could affect the opening tomorrow. Gold was off a couple bucks today and the XAU lost over a point. The dollar was stronger and has been for a few weeks. Oil is losing ground and is now below $54. Is this a sign that the worldwide economy is contracting? Time will tell. Tech seems to be the only area lately that is seeing any buying interest. Mentally I'm tired and still feeling the effects of fighting off a cold. This GE trade has taken way too long and is very frustrating. But I'm sticking with it for now, looking for it to break out one way or the other.
Tuesday, January 09, 2007
The Dow closed off about 7 points on good volume. Advance/declines were positive. We were up, we were down and ended up basically unchanged. The market is trying to make up its mind which way to go. GE was up and down like the overall market and was unchanged on the day. My calls are where I bought them. The longer this trade goes on, I think the less chance this thing has to work. But I could be wrong and perhaps there will be an upside breakout. At this point I feel as though I'll be stopped out but I don't want that to happen. Gold was up $5 today. The XAU sold off early but came back late. It still ended down 3/4 of a point. However it looks like the gold shares are trying to put in a bottom here. Trade report is out tomorrow. I'm not feeling well as I have caught a cold. I am trying to not let it affect what I need to do here. Mentally, the trading year has not started as I expected so I'm a bit baffled as to what to do at the moment. I'll stick with the GE trade for a while longer. Earnings come out on the last day of expiration. I certainly don't want to hold on that long but who knows?
Monday, January 08, 2007
The Dow gained 25 points on average volume. Advance/declines were positive. We were oversold and entitled to bounce. Just what happens next here is important. The summation index is pointing down and that could lead to further weakness. Or we could turn things around and go on to new highs. I think the next couple of days are key to what todays action was. It means everything to my GE calls also. GE did nothing today by the close. We sold off early and came back to unchanged. The calls are right where I bought them but that won't last forever. I'm not feeling good about this trade unless tomorrow brings some positive action. We'll see. Gold ended up a couple bucks today and the XAU was basically unchanged at the close. ABX is acting much better than NEM and that is what I will trade when the next gold play happens. At least that's the way I see things at the moment. Mentally I'm trying to concentrate and do the right thing here. This was supposed to be a quick trade but my target was never hit and I'm still there. I'm not saying it won't work out but it better get going fast. If not, it'll be a loss and I'll move on.
Friday, January 05, 2007
The Dow lost about 83 points on good volume again. Advance/declines were 3 to 1 negative. It could have been worse. However we are short term oversold here. I would expect a bounce but I'm not sure that it will go anywhere. GE was down another 1/4 and my calls are right where I bought them. I am really beginning to think that I just need to get out of this trade and try something else. 2 weeks left on the options with one less day due to a holiday. The volume on GE was lighter than yesterday. I'll check the charts over the weekend but it looks like it's time to go. I can always buy them back. Gold got clobbered today and was down almost $20. The XAU held up pretty good though and was only off about a point and a quarter. I don't think it's time to buy the gold shares here but it might be close. The dollar was higher on the strong employment report. I think that this week does some real damage to the longer term gold chart but I'll have to check to be sure. It was a short first week for the markets due to the extra day off for former president Gerald Fords death. The week did not go as expected in my view. I thought we would begin the new year to the upside. I will have to reassess things from here. Mentally I'm not feeling good about the GE trade. I should have played it very short term and taken the small profit that I had. It could still work out but I'm not so sure. I really don't see any good set-ups here just yet. Patience is key I suppose. Time to relax for a day or so and then check the charts for next week.
Thursday, January 04, 2007
The Dow rose 6 points on heavy volume. Advance/declines were even. We were down early, came back for a good gain and then fell back again. The market action is very sloppy here. I don't like it. The employment report is out tomorrow. We'll see what happens. GE lost about a quarter point on good volume. The calls are still profitable but I might just dump these things tomorrow. The scenario I had in mind just isn't panning out. Gold lost around 4 bucks and the XAU shed another 2 1/2 points. Volume was OK there. I'm staying away for now. Oil has been weak the first couple days this year and so have commodities. This leads me to believe that a worldwide slowdown in economic activity is at hand. I had already thought this earlier, in the US especially, due to the inverted yield curve. When copper broke through $3 last month, that confirmed it for me. I'm thinking that eventually it will lead to lower interest rates here and a weaker dollar. That in turn will cause gold to rise. But it isn't happening just yet. Mentally I'm trying to figure out this GE trade. I'll have to let the market do what it will and take it from there I guess. However it would be good to start the new year out with a winning trade. I usually don't.
Wednesday, January 03, 2007
It was a crazy day to start the new year. The Dow ended up 11 points on very heavy volume. Advance/declines were slightly positive. We were up over a hundred and fell hard to over 50 points down. The culprit was the release of the Fed minutes. I did not like todays action. I expected us to end up much higher on the day. The fact that the summation index is pointing down doesn't help the bullish cause. I was lucky. GE rose over 70 cents on good volume. Somehow and I certainly don't know how. My calls are in the black. I was looking for these things to double and I don't know if that will happen given todays action. My thinking is to get out somehow with a profit but that may not happen either. Trading is tough, no matter which way it goes. You've always got to be thinking on the fly. Gold was down over 8 bucks today and the XAU got slammed, off over 5 points. The volume there was good. The dollar was stronger today and I don't know the reason or excuse. I'm staying away from gold for now but and keeping an eye on it because I will want to get long in a big way there at some point this year. But for now it is GE as my main focus. Of course I would like to start the new year on a positive note. We'll see. Mentally I am not feeling good about todays market. Tomorrow will be important. If we follow through to the downside, it will say a lot about where we are going near term. I still think the money flow should be positive right now so I'm sticking with the calls. The relative strength on GE is really pretty good. I can't say that I'll hold on until the end of the expiration cycle or even until the end of the week. But it was a very interesting day and we'll see where we go from here.