Friday, March 30, 2007
The Dow gained 5 points on lighter volume. Advance/declines were slightly positive. Considering we were down over 100 at one point, it wasn't too bad. But I'm not convinced this is going anywhere. That said I think we will see some strength within the first part of next week and Wednesday at the latest due to the beginning of the month factor. There was some trade tariff noise with China during the day. Gold was up a buck and a half today but the XAU was unchanged. ABX lost over 30 cents and that trade is going to be a loser. I probably should have just dumped it today and I did put in a limit order at the end of the day. It wasn't filled. I don't know why I'm still holding this except that it is oversold and we may get a bounce. With that, I'm gone. I'm just trying to salvage the smallest loss at this point. There are 3 weeks left but the indicators are rolling over. I'm hoping that a rise in the overall market next week will take the gold shares with it. However my prognosis of sideways activity seems to be the case. With that type of action it will be impossible to get any gains buying options. So I might have to sit it out for a bit and wait for a decent signal. Mentally I'm feeling OK, got a good nights sleep last night. However being stuck in a losing trade drains the mental capital. I really need to cut it loose and get going with something else. I have no ideas on the horizon though. Much of the data today came out stronger than expected. The dollar was weaker. Mixed signals really. I'll check the charts over the weekend and get ready to go on Monday.
Thursday, March 29, 2007
The Dow gained 48 points on average volume. Advance/declines were positive. It was an up and down day. It wasn't a broad based advance and the NASDAQ barely got positive. The market came back in the last hour though and that is sometimes a good sign. But I'm not convinced we are going anywhere with this. I think we are in a trading range at the moment. Last day of the month tomorrow. Gold was down 5 bucks today and the XAU dropped a third. The gold shares came back in the last hour also. I seriously considered dumping the ABX calls at a loss today but we came back. This has the feel of a trade that isn't going to work so I am looking to cut the loss at this point. The calls are under water. ABX is going to have to have a pretty good day tomorrow for me to consider hanging on. But I will probably wait until next week. The news has all been bullish for gold lately with the Iran/British crisis going on. But gold hasn't done much and that isn't a good sign. It seems the gold shares are just trading with the market lately and that really doesn't bode well for the future. So I've got some hard thinking to do and next week is a short one also. We are a bit oversold on the gold shares but not so much that you'd think a major rally is about to begin. Mentally I'm doing a s well as can be expected. Not a good nights sleep last night but you've got to move forward. Some economic data out tomorrow but nothing really important. The GDP number was revised upwards today and that was a surprise. The dollar didn't move much. On to the end of the week, the month and the quarter.
Wednesday, March 28, 2007
The Dow lost 97 points on increased volume. Advance/declines were 2 to 1 negative. We are now oversold and the summation index will be pointing down. The market didn't like Big Bens testimony today. I don't expect any giant declines from here but I certainly don't know. I'm expecting some buying for the end of the month. Gold was up $4 or so today but the XAU didn't move. ABX was flat. These aren't good signs considering we were overbought and the indicators have stayed there without upward movement. It is probably about time to roll over unless we start to move up tomorrow. My thinking is that the overall market has held back the gold shares here. That's just a guess. But we need to start moving higher here and soon or I will have to bail out of this trade with a loss. It could be that the April option cycle will just be a sideways affair. That is a distinct possibility. Mentally I'm trying to keep an open mind about things here. GDP number revision tomorrow could be a mover. That's about it on the economic front. I'm starting to feel that this ABX trade isn't going to pan out regardless of how much time is left. But I could be wrong. The volume pattern still suggests higher prices at the moment. We'll see.
Tuesday, March 27, 2007
The Dow lost 72 points on lighter volume. Advance/declines were 2 to 1 negative. We'll probably see some follow through tomorrow. Big Ben is speaking on the hill tomorrow also. That could possibly be a mover. I'm on the sidelines for the OEX for now. Gold lost around a buck today and the XAU shed a point and a half. ABX held up OK and was down on light volume. The options aren't moving. Plenty of time but I would like to see this start to move up already. My hope is that it is consolidating before going higher. If not it's trouble. But there is a lot of time left. Nothing really has changed as far as the gameplan. Mentally I didn't sleep well last night so I'm a bit tired. Volatility has slowed down so it's not a problem at the moment. End of the month coming up and that's about it.
Monday, March 26, 2007
The Dow was down 12 points on average volume today. Advance/declines were slightly negative. We were down over 100 at one point. At any rate, we are still overbought and I would expect some weakness near term. Gold was up around $7 but the XAU only gained a point and a half. Most of that was due to FCX. ABX was basically unchanged and the options didn't move. There was a lot of volume in the ABX options as well as NEM. I'm sure most of you have heard of volume and open interest studies. It has been my experience that volume and open interest don't have much of a predictive value. I have seen them both expand and the stock and options do nothing. I have seen them contract and the stocks and options move a lot. So it has been my experience to not let them dictate my trading tactics. That said I wasn't happy that the gold shares couldn't gain any ground with a $7 rise in the metal. We are overbought here as well. I'm still holding on to the ABX calls for now. Mentally I'm feeling fine. No big trades on the horizon and we still have 4 weeks left in the option cycle. Not a whole lot of data this week, new home sales were down and that sent us down 100 points earlier. A shortened holiday week next week. So I'll be looking for some overall weakness in the stock market and hope that the gold shares can hold up in the face of that.
Friday, March 23, 2007
The Dow was up 20 points on light volume. Advance/declines were positive. We are overbought. I am not looking at buying any puts here though. I have no OEX trades for the near term. That could change. Option premiums are still high. Gold lost $7 today but the XAU was basically unchanged. That is the opposite of yesterdays action and constructive for now. ABX didn't move either and my calls are right where I bought them. I'll have to check the charts over the weekend. I still might want to get out now and buy them back later. We'll see. There are never any hard and fast rules for a trade. The adjustments have to be made on a constant basis. As new information comes in, strategies unfold. I think this will be a winning trade but I'm not sure and you never really can be. At any rate, the dollar came back later in the week and that wasn't supportive of the gold price. I also need to check the economic calendar for next week. Mentally I'm looking forward to the weekend for a little break. End of the month next week and we will have to see how that plays into things. A short week after that. See you next week...
Thursday, March 22, 2007
The Dow was up 14 points on good volume. Advance/declines were positive. We need to take a rest here. Nothing goes straight up forever. I would expect weakness between now and Wednesday according to some indicators I'm looking at. No trades for now on the OEX. Gold was up $4 today and the XAU lost a point. That isn't a good sign for the gold shares usually. My ABX calls are still showing a small profit but perhaps today was the day to dump them. I did want to give this trade some time but we are overbought here and perhaps if I sell the calls I can buy them back in a few days. But I will probably just hang on to them, given that fact that there is still 4 weeks left. I need to see what reports are due out next week. Mentally I'm a bit tired today. Not much else to say here. Kind of a nothing day in the markets. After all the volatility of the recent weeks, sometimes you expect the markets to behave like that all of the time. However times like those are the exceptions really. So we trudge on, waiting for the next idea to take shape. We'll see how we close out the week.
Wednesday, March 21, 2007
The Dow rallied on the Fed, up 160 points on heavy volume. Advance/declines were 5 to 1 positive. The Fed said nothing special but removed the tightening bias. At least that was the consensus of what came out. We are overbought. I do not think getting short is appropriate. My thoughts now are that the seasonal positive money flow will continue into May. But that's a guess. Gold was up a buck but then rallied in the aftermarket post Fed. The XAU rose 3 points on OK volume. ABX was up a half and my options are now in the black. The dollar fell today and I'm thinking that is what is driving gold at the moment. We are overbought here as well. I was thinking of getting out early in this trade but I am now thinking of holding on for a while. That could change. Mentally I'm feeling better with a good nights sleep. I'm doing what is necessary for clear thoughts while trading and that should help the bottom line. Marketwise I'm going to sit tight here for a while. The extra week in the options dictates the strategy for now. There is a chance that I could get in and out of this gold trade but we'll see.
Tuesday, March 20, 2007
The Dow was up 62 points on what used to be average volume. Advance/declines were 2 to 1 positive. No real selling lately but that could change with the Fed tomorrow. The summation index is pointing up. No trades on the OEX for now. Closer to a short term sell signal though. Gold was up about 5 bucks today but the XAU didn't do much. This usually isn't a good sign for the gold shares. ABX was up slightly and the calls I own didn't move. There is time and like I said before I'm willing to give it a couple of weeks. But I would have liked to see some positive movement today. Volume isn't all that great here either. Mentally I'm doing good after a nice getaway yesterday to the mountains. The market has seemed to quiet down also. The vix is back around 13 again as volatility has shrank. But that won't last forever as we all know. Nothing else on the horizon at the moment. Looking a bit at GE again but that issue usually burns me. Just waiting on the Fed for now.
Monday, March 19, 2007
The Dow rose 115 points on lighter than lately volume. Advance/declines were 3 to 1 positive. Sometimes the Monday after expiration you get a move in the opposite direction of the expiration. If that is the case than todays means nothing and we will head lower from here. All eyes and ears will be on the Fed for the next 2 days. I have no trades in the works here. Gold was just up a touch today and the XAU rose over a point and a half. Volume wasn't anything special. ABX was up around 40 cents but the options I have didn't move. I plan on holding this for a couple of weeks unless something drastic happens. Gold itself is still above the uptrend line of several weeks. Not much else to say, late post...
Friday, March 16, 2007
The Dow lost about 50 points on heavy volume. Advance/declines were negative. The inflation report came out a bit strong but the market did not tank. Options have expired so I expect the market action to slow down. I do not see any trend for April at the moment. As I said before I think we are in for sideways action. I'll simply wait for a decent signal if one appears and take it from there. Gold was up over 6 bucks but the XAU couldn't even manage a gain of a point. Volume was heavy in some of the gold shares. ABX didn't move and my options are where I purchased them. I'm going to keep these for a little while. I think that I'll know within a couple of weeks if these will be winners or not. The dollar was weaker today despite the inflation data. So there are some crosscurrents at the moment. Mentally I'm feeling fine. I learned some things this week that will benefit me down the road. There is no doubt that my experience in the markets will have positive effects on my trading. My ideas have been pretty good recently even if my trading hasn't been up to snuff. Knowledge is more important than capital. The money will come and I will be a much better trader as time goes on. My discipline has improved but there is still a long way to go. The weekend is here and it is welcome for a little break. The Fed meeting next week will take center stage and we'll see where we go from there.
Thursday, March 15, 2007
The Dow gained 26 points today on lighter volume. Advance/declines were 2 to 1 positive. Perhaps we are just working off the oversold condition but more likely todays action dealt with the expiration. The news on inflation was bad but we still moved higher and that doesn't make any sense, really. I had an order in for some OEX puts again. My thinking is tomorrow the inflation data will be bad as well. But I canceled the order and will stay on the sidelines with expiration manipulation in progress. Gold was up over $4 and the XAU gained almost 3 points. ABX was up a half and the calls I own are back to even. Perhaps this trade will work out but it's early. Gold has held the uptrend line so far and that is encouraging. But with wholesale selling of assets that we've seen lately, anything can happen. Mentally I'm a bit tired today without a full nights sleep. Otherwise I'm doing fine considering that I missed that OEX trade earlier this week. But you have to persevere and move on. An extra week in the April options and also a holiday thrown in there. Could make for some slow trading. I might be out of this gold trade sooner rather than later. We'll see how the week closes out.
Wednesday, March 14, 2007
The Dow rocked and rolled today. We were down over 125 at one point but came roaring back to finish up 57. Advance/declines were positive and volume was extremely heavy again. The OEX bounced where it was supposed to and the markets are moving fast. Inflation data out the next couple of days. I might try the puts if we get some strength in the OEX tomorrow. We'll see. Risk is high but the movement implies profit opportunities. Gold was down over $7 today but the XAU rose a little over a point. I almost bought some more ABX calls but I didn't. ABX finished up a touch with good volume. The calls I've got are under water. I'm thinking that if they come back I might just get out. April sometimes tends to be a sideways affair. With the recent market action I don't think we will get any decent trend going for a while. I could be wrong though. Mentally I'm feeling better with a good nights sleep. I'm looking to do something before the close on Friday and I'm prepared for the outcome one way or the other. Volatility has returned for now.
Tuesday, March 13, 2007
The market got slammed today, down 242 on very heavy volume. Advance/declines were 5 to 1 negative. I missed out on the puts. I had an order in again and it did not get filled. I adjusted it down when I should have adjusted it up. Now I had a couple of days to get something done and I didn't which is frustrating. However there is still a chance with 3 days left to do something, so we'll see. I have been tired lately and that may have contributed to my lack of conviction. I knew we were going to test the lows. That said there is nothing I can do about it now. Gold wasn't down much in todays trade but the XAU got slammed as well, down over 5 points. My ABX calls were filled and now I don't even want them. We'll have to see how the week closes but this trade doesn't look good. Volume was heavy in the gold shares also. When the selling begins, it takes everything down with it. That seems to be the case with this decline. The market is nervous again and rallies will be sold. Tomorrow could get interesting. Mentally I'm feeling down again for missing out on the OEX puts. I really needed to just make my mind up and buy something. It is worse than losing money. I really hate to miss opportunities and this was one of them. Perhaps looking back the gold trade will pan out but it doesn't matter. It is a tough game and I need to sharpen up. My analysis is fine but my trading tactics need work. It's something that will need to be addressed. I will go on though because win or lose, that's all you can do...
Late post today as I had other commitments. The Dow rose 42 points on lighter than lately volume. Advance/declines were positive. The volume is tough to call here since it expanded so much in the blowout. Anyway, I still want to own some OEX puts before the inflation data Thursday and Friday. Perhaps tomorrow, if not Wednesday for sure. The summation index is turning to the upside here but I think it will be short lived. Gold was down a buck or so today and the XAU rose a point and three quarters. My open order for ABX calls is still out there. I'm not sure that it is a wise decision but I'm sticking with it for now. There are 4 days left before expiration. I feel that there will be a retest of the lows in the major indices. I don't know when but we are now somewhat overbought and if we get any strength tomorrow that should be the time to get some puts. The risk is high due to the timeframe. I am going to give it a shot. We'll see what happens.
Friday, March 09, 2007
The Dow ended up 15 points today on lighter volume. Advance/declines were positive. We were up 60, down 30. I did put in an order for some OEX puts but they never got filled. The risk is really going up with only 5 days left. I still want to be short going into the inflation numbers but they aren't until the end of the week. It is a tough game to play right now. I'll look things over this weekend and take it from there. Gold was down a few bucks today and the XAU lost about a half. ABX was little changed and my order remains GTC there. Volume was lighter than it has been. I think this will get filled next week but I might adjust it down again. There isn't any interest in gold at the moment and the dollar has been stronger. But this trade goes out to April so I think it is something that I will do. Mentally I am definitely tired because it was a very long day. I was up with the employment report and it really just came out as expected. Trading can take a lot out of you some days and today was one of those days for me. I'm glad it's the weekend and I can relax for a couple of days. I will check the charts over the weekend and come up with a gameplan for next week.
Thursday, March 08, 2007
The Dow gained 68 points today on still pretty heavy volume. Advance/declines were 3 to 1 positive. I did put in an order for OEX puts but it was not filled. We were up over 100 at one point. We reached the 1st retracement level today and sold off. Which means that could be it for the bounce. I sure hope not as I really want to own some puts before we retest the low. I think that is going to happen before expiration. But now all eyes will be on the employment report tomorrow. I don't have any ideas about this and will look to see how the market reacts. Gold gained a couple bucks and the XAU was basically unchanged. Volume was lighter than lately. I adjusted my ABX calls order down again. I don't see any real movement into gold or any strength here. I do want to be long gold however before the inflation reports at the end of next week. Mentally I'm being patient but I'm not sure this is the time to be. Tomorrow will tell a lot. I'm hoping for an early rally but I don't know. I'm a bit tired from not sleeping well but I don't think that affected anything that I did today. So it's time to just sit tight and wait for the morning...
Wednesday, March 07, 2007
The Dow lost 15 points today on heavy volume. Advance/declines were about even. We were up for a good portion of the day and fell off in the last hour. We haven't even met the minimum retracement here yet so I did not get any OEX puts. Perhaps we will just drop from here, I don't know. But I'm going to try and be patient. I will wait for a better retracement and if it doesn't happen then this idea won't fly. Gold was up around $6 today but the XAU was down over a half. Volume here was light. I still have a GTC order in for some ABX April calls. May not be the best idea but the charts say otherwise at this point. The uptrend line in gold itself is still intact. Now if that fails then I'll have to rethink things here. So I'm in a waiting game at the moment. I think that I will let the employment number come out on Friday and see how things react from there. It's probably the prudent thing to do. Mentally I'm feeling OK for now. I would like to try and make some money before the expiration next week. I do have a couple of ideas. But the markets don't wait for anybody and they certainly don't care about what I'm planning. So we'll see what transpires...
Tuesday, March 06, 2007
We finally got a bounce today with the Dow up 157 points on extremely heavy volume. Advance/declines were 5 to 1 positive. I have picked out some targets for the retracement and will buy some puts when we hit them. I'm not sure how far and how long we will bounce. The employment report is out on Friday. I probably want to own some puts before then. But we'll see. It could very well end up being an up week and then down from there. I am pretty sure that I want to get some puts though. There usually is a test of the low. So I have an idea of what I'd like to do here. Gold rallied $7 and the XAU was up 4 points. The volume in the gold shares was lighter than it's been but it was respectable. ABX was up a half and the options I wanted barely moved. I still have a GTC order in there but adjusted it lower again. It may take some time to build a bottom here in gold or perhaps it will even just keep heading lower. There is an uptrend line in gold itself that is still intact so I'm going to lean towards the calls until that breaks. Mentally I'm doing fine, just trying to be patient here. You never really know what the markets will do. You have to keep adjusting as you go along. I don't think the decline is over but it very may well be. So you've got to take all things into consideration. I'll keep the retracements I have in mind and short it from there. If it proves wrong, I will have to have stop-loss orders in place. Inflation data come out next week at the end of the week. I would like to be short before those numbers come out also. But that's next week...
Monday, March 05, 2007
The market continues lower as the Dow lost another 63 points. Advance/declines were almost 5 to 1 negative and volume was extremely heavy again. We closed on the low again, just like Friday. I am waiting for some kind of bounce to get short but it just isn't happening and that does not bode well going forward. The worldwide liquidation continues. Tomorrow will be interesting. If we keep dropping I might try and play the bounce later in the week when the McClellan oscillator gets past -300. It could happen. Gold lost around $4 and the XAU shed another 3 points. I did put in an order for some ABX April calls a couple of times but was not filled. It looks like we are at support there but in this market who knows? I left a GTC order in overnight but I might just cancel that as well. We'll see. Volume continues very heavy in the gold shares as well. And so on it goes. It could be that we just keep selling off without a bounce for a while but it has already been a while. There isn't much more I can say. The technicals are blown out. There is nothing to go on except past experience. That tells me there will be a bounce at some point and that is when you can get short for the retest. Other than that I just don't know. Mentally I'm a bit tired as markets like these tend to take a bit more out of you. There is money to be made on the option cycle for sure it just isn't going to be easy. I'll check things tonight and go from there.
Friday, March 02, 2007
The Dow lost another 120 points today on extremely heavy volume again. Advance/declines were 3 to 1 negative. We closed near the low of the week which isn't a good thing. The worldwide liquidation of assets continues. It will be interesting to see what the culprit actually is. I almost bought some OEX calls today but stayed out. There will be a bounce but it will be hard to know when. Sometime next week is my guess but who knows. Gold was dumped again today, down over $20. The XAU lost over 4 points as it is just about sold out here I would think. Volume was heavy. I would like to get some ABX April calls soon. We are approaching long term uptrend lines and if they hold then this will be the spot to buy. If not then the gold market is in for much more trouble. I will check things over the weekend and develop a plan for what to do next week. The real question is how long will the selling last in assets? Just how much has to be sold to take care of whatever is happening in the markets? These are questions that I don't have answers to. The technicals of the markets are completely blown out after Tuesdays action. Something is going on but I certainly don't know what. I am on the sidelines for now but that will change and perhaps next week. It's a tough envirornment. Mentally I'm trying to do the right thing which right now could mean doing nothing. I will try and take it easy from now until Sunday night so that I'm ready for Monday morning. It will be another crazy week I think.
Thursday, March 01, 2007
The Dow shed 34 points on very heavy volume again. Advance/declines were negative. There is massive liquidation of stocks going on here. I don't know why. Something has happened somewhere and it will all come out eventually. I'd really like to get some calls here for a short term play but we were down around 200 points on the open. Hard to say what will happen here and I have no idea when the selling will work itself out. I am seeing some readings that I have never seen before. Gold was down $7 today and the XAU lost 3 points. I would really like to get long gold but need to be patient. Volume was heavy again in the gold shares. We are nearing uptrend lines that need to hold if calls are going to work here. I'm sitting tight for now. I think that going out to April will be the thing to do. We'll see. It's a tough environment to trade at the moment. Perhaps the best thing to do is just wait it out at this point. Mentally I'm doing OK. I'm trying not to take any big risks here given the uncertainty. But I will take a position sooner or later since there is also some money to be made here if it is played properly. We'll see how it closes tomorrow.