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Monday, April 30, 2007

The Dow dropped 58 points today on good volume. Advance/declines were over 2 to 1 negative. It was the last day of the month which could be a reason for some of the selling. The summation index has rolled over and I am now looking to buy some puts on any type of rally this week. I think the momentum is over. We had bad breadth before yet continued higher. This time the market went to the downside as it should have. Nothing is set in stone though. Gold was up a couple bucks today however the XAU lost over 2 and a half points. It's possible that one of the buy signals will be triggered here soon but with the market getting weaker it isn't a sure thing. The dollar should bounce here soon also as I've said before. So gold at the moment isn't looking like a place to go long just yet. It is never easy. Mentally I'm feeling OK. I checked things out over the weekend and yes, the market is overbought. The big caps have been holding this thing up lately. The OEX did not drop as well in tandem with the SPX. I'm thinking that SPX puts might be the way to go this time. We'll see. GE remains strong and that is worrisome short term for the downside. Employment report on Friday. Was today a one day wonder or the beginning of something bigger? Right now I'm leaning towards the latter...

Friday, April 27, 2007

The Dow rose 15 points today on light volume. Advance/declines were negative. Another pause before a rise? Like the last time this happened a few days ago? Who knows? But we just cannot go on like this forever, can we? The GDP was weaker than anticipated. However nothing really seems to bother the market these days. Most of todays gains were due to GE and Microsoft. Usually when the market advances due to just a stock or two, it isn't a healthy sign. Gold was up over $4 today and the XAU rose half a point. Lackluster really as I think this market senses lower prices ahead. The dollar was weaker but nobody is rushing to purchase the gold shares. In fact the dollar has dropped quite a bit in the past few weeks and the gold shares really didn't do as much as you would think. I'm going to purchase some calls here the next buy signal that I receive. However there is no timeline for when that will occur. Mentally I'm feeling fine with a good nights sleep last night. I'm doing the work necessary for a chance at profits. Perhaps there will be some opportunities in May. The weekend is here and I will check the charts...

Thursday, April 26, 2007

The Dow was up 15 points today on heavy volume. Advance/declines were slightly negative. The momentum run continues. We are now at one of the most overbought conditions in some time. I don't know what it means but time will tell. No need to get in the way here, tradingwise. I should have been long something. I should have recognized the high volume breakout. I should have noticed the sector rotation. You've always got to be paying attention in this game. There are no excuses. That is why it is so difficult sometimes. Gold lost around $10 today and the XAU dropped three and a half points. Kind of saw that coming but did not trade it. The question is just how far this move will go. The technicals are rolling over on the weeklies. There still might be a chance to make some money to the downside here on a bounce. Also there is an important uptrend line on gold itself that has to hold for me to remain bullish overall. I'll check on its level tonight. Mentally I'm doing OK. Not a good nights sleep last night but I have no trades in the works anyway. End of the month on Monday. 1st quarter GDP tomorrow. That could be interesting. I have no solid idea there. Not much else to say for now.

Wednesday, April 25, 2007

The Dow plowed higher into record territory, up 136 points on heavy volume. Advance/declines were 2 to 1 positive. We are on a momentum run. The news doesn't matter it is just up, up and away. Other indices are looking at new recovery highs or all-time highs as well. So sit back and enjoy it. We are overbought and staying there. I have no trades at the moment and will not chase the move. Not yet at least. Gold was little changed but the XAU rose a point and three quarters in sympathy with the overall market. Volume was light in the gold shares though. I will perhaps short this market but nothing doing yet. And so it goes. There is no telling how high we will go here but I can't expect this to last forever. 1st quarter GDP tomorrow. We'll see how the market reacts to that but nothing seems to phase it at the moment. GE was up good on heavy volume today as well. You can't fight the tape. It is a losing battle. The only way to go here is long until this run plays itself out. And there is no telling how long that will be. Mentally I'm OK. Feeling a bit sorry that I'm not long something but that will get me nowhere...

Tuesday, April 24, 2007

The Dow rose 34 points today on heavy volume. Advance/declines were negative and the overall market was weaker. I think we are going to move lower here. A lot of media attention has been given to Dow 13000. Recently the overall market just isn't moving with the Dow. One of my intermediate term indicators is overbought. We'll see what happens. The economic data today was weak. Gold lost over $6 and the XAU shed a point and three quarters. I'm not looking to get long there at the moment and think that it is too late to short it. But you never know. Mentally I'm feeling OK. I need to get back into the routine of studying my notes and concentrating on making money. The weather has turned nicer here and my thoughts wander sometimes to just taking it easy. The discipline required for success is always necessary. The work always needs to be done if you want to have a chance. The choice is always up to you but if you're going to play, you've got to do the work and keep on top of things. It's not the summer just yet. I have no trades in the works but will need to find some. More economic data will be released this week and I'll take it from there...

Monday, April 23, 2007

The Dow lost 42 points today on average volume. Advance/declines were slightly negative. The overall market was stronger than the Dow, implying higher prices to come. We'll see. I have no trades in the works here. Gold lost a bit over a dollar and the XAU dropped around a point. Not sure what to do here as well but I'm leaning towards the short side. We have begun a new options cycle and the premiums are high. So I'm on the sidelines for now. We have the Fed minutes coming out later in the week and the 1st quarter GDP. I have no good feeling about how any of that will come out and affect the markets. I'm kind of in an indecisive stage right here. Mentally I'm not feeling all that confident with the recent losses that I've suffered. Technically there isn't a clear signal one way or the other here. So putting that all together there is no reason to take any risks at the moment. I've been seeing a lot of press and media attention given to gold lately and that is one of the reasons I'm not bullish there at the moment. Seasonally we are entering the period of under performance for the stock market. The "Sell in May and go away" theory. Which actually works out pretty well usually. However it didn't work last year. So we'll see. Not much else for today...

Friday, April 20, 2007

The Dow soared 153 points on expiration today. Volume was heavy and the advance/declines were 3 to 1 positive. The media is now talking about a melt-up. And who can argue that when we've been overbought and just continue to get more overbought. Thankfully I sat on the sidelines today and did not try any OEX puts. How long can it last? We'll see. Gold bounced back over $7 but the XAU could only gain a point and three quarters. The volume in the gold shares was nothing special. The XAU should be breaking out here with a strong market backdrop and the price of gold continuing to rise. I can't figure it out but I think we will be in for lower prices on the XAU going forward. Time will tell. The dollar was basically unchanged today but gold rose. So we have some crosscurrents going on in this market. Mentally I'm feeling fine. I did lose some money over the past week but it's not the end of the world and you've got to keep moving on. I don't have any short term trades on the horizon but will be checking the charts over the weekend. Right now it looks like the only way for the market to go is up. That can't last forever. We are breaking out to new highs on the Dow and new recovery highs on other indices. That fact, cannot be denied. Momentum is to the upside and makes the earlier drop this year seem like long ago. It's time for the weekend.

Thursday, April 19, 2007

The Dow gained 4 points on average volume. Advance/declines were negative again. We sold off big in the beginning of the day and came all the way back. However the breadth has been bad the past three days and I don't think we can keep going up with that kind of backdrop. One more day until expiration and again, I'd like to try the puts but the risk is high. However the market has been propped up all week and tomorrow could be no exception. Gold lost $5 and the XAU got slammed, off almost 4 points. I think we will be trading lower in gold now for a while. The dollar is due to bounce because it is way oversold. I will look to get long gold later this year at some point. Anyway the overall market was weaker once again and I am wondering if this is the prelude to a decline or just working off the overbought condition of the market. The 6 month favorable period for the market is about up however that indicator didn't work last year. I won't be looking to put any long term money to work until autumn. Mentally I didn't get a full nights sleep but I'm not feeling tired. I will perhaps try and make some money tomorrow but I doubt it. I don't have any other ideas in line at the moment. Once earnings are out we should be in a lull for a while but that will take a couple of weeks. NEM does report next week but I don't have any thoughts on that at the moment. I guess it's just a matter of waiting for the next opportunity. Sometimes patience is the best thing you can do.

Wednesday, April 18, 2007

The Dow was up 30 points today on average volume. Advance/declines were negative. I did not do any trades today but perhaps I will buy some puts tomorrow. We are overbought. The overall market has been weaker the past 2 days. There are only 2 days left in this expiration cycle. The risk is high. None the less I might give it a shot. Gold was little changed as the dollar continued weaker. The XAU lost a point and a quarter but the volume was lighter. I think we are due for a rest in the gold market. However I am not looking to short it at the moment. Mentally all is well but the post is short today due to the switching over of this blog to a Google account. Whatever that means. Google must have bought out Blogger. Regardless, I hope it doesn't interrupt my continuing blog. Otherwise, the Dow hit a new high today and the other markets didn't follow again. My belief is that it will lead to lower prices at some point. We'll see.

Tuesday, April 17, 2007

The Dow gained 52 points today on average volume. Advance/declines were negative though and the overall market was weaker. The data came in goldilocks form and we traded higher. I dumped the SPX puts for another loss, around 50%. Not a lot of money in this trade but I have been on a losing streak. 3 days before expiration and I'll do my best to just sit it out. We'll see. Gold was down a couple bucks and the XAU lost over a point. Volume was lighter than lately there so I still think the trend is up. The dollar keeps falling and I would have thought it would lead to a better move in the gold shares. But that hasn't been the case for a while now. As usual the battle in the market is with myself. I tried to press things here the past few days and I paid for it. Sometimes you have to be patient and listen to what the market is telling you. Usually, I can do this. For some reason lately, I haven't been able to and it cost me. I will regroup and return. Mentally, I'm frustrated. Losing money is not what I'm here for. However it is part of the game. You've got to be able to put it behind you and move on to the next trade. I don't have any new ideas at the moment. Perhaps I'll put on another trade before the week is out but I probably shouldn't. Earnings looked good after the bell so perhaps we'll get another shot to the upside tomorrow.

Monday, April 16, 2007

We have 20 minutes to go in the trading session as the blog has to be early today due to other commitments. The Dow is up over 100 at the moment and the volume is strong. Advance/declines are over 2 to 1 positive. It has the feel of a breakout. I did something stupid last night and put in an overnight order for SPX puts. I priced it so that I really didn't think it would get filled. My idea was to adjust it in the morning. It was filled immediately at the open and is losing money as I write. I'm waiting for the data tomorrow on inflation. I might be able to break even on it perhaps. There isn't much money in this trade but still I'd like to not show a loss. Gold continued higher today as the dollar fell again. It was up around $5 and the XAU is gaining over a point. The options on ABX and NEM aren't moving much and the shares are each up around 40 cents. I have had thoughts of getting long here even though they have run up but I'm laying off for now. Mentally I'm feeling OK, even with the stupid trade today. Anything can happen tomorrow as any day I suppose. The battle always lies with yourself. For all I know we could be heading for record highs too. So we'll see what transpires...

Friday, April 13, 2007

The Dow rose 59 points on lighter volume. Advance/declines were positive. The inflation data was viewed as benign although it was up a percentage point. The market barely sold off in the first hour. My OEX puts got stopped out eventually for a 50% loss. So I was wrong again. I might try again before the consumer prices on Tuesday but I'll have to look at things over the weekend. It will be option expiration week and the positive bias will be in effect. Tough to go against that but we'll see. Gold soared $10 and the XAU finally had a good day up 3 and a half. The volume was good there as well. NEM was up over a dollar for its biggest gain in quite a while. ABX had heavy volume as well but only rose 40 cents. Those calls that I sold yesterday didn't do much. The dollar hit new lows against the foreign currencies. But still, the gold stocks really haven't followed the price of gold in this move. And that killed the ABX trade for me. Sometimes you can be right on the fundamentals but the prices don't correlate. It happens. However it doesn't happen a lot or else it wouldn't be worth keeping an eye on things. As for the trading this week, it was horrible. My worst week in quite a while. I'll regroup over the weekend and perhaps try again next week. I don't want to do anything stupid again so perhaps I'll sit it out but you never know. Mentally I'm tired and didn't sleep that well this week. That did not contribute to the losses in my opinion. It's a difficult game and times like these leave you discouraged. But you have to move on and remember losses are part of the game. They are going to happen. You just have to give it your best and keep on going...

Thursday, April 12, 2007

The Dow rose 68 points today on average volume. Advance/declines were almost 2 to 1 positive. We sold off early and then went straight up. We are right back at the highs and we will either take them out tomorrow or there will be a double top. I bought some OEX puts at some point today. I did want to be short ahead of the inflation number. I am a bit worried about the advance today because if it is as strong as it seems, the inflation data may not matter. The puts are losing a bit at the moment. The stop-loss order is in so some risk control is in place. Gold lost a couple bucks and the XAU was up a touch. I dumped the ABX calls at a substantial loss, about 80%. I didn't have a lot of money in this trade but I really should have been out last week. ABX didn't do much today and the volume was pretty good there. That trade was terrible. When gold moves higher and the XAU doesn't go along with it, there's trouble being long gold shares. I know this but was stupid once again. Like I have said before regarding volume and open interest on options, it usually doesn't mean anything. When I purchased the ABX calls, volume and open interest expanded. It didn't mean a thing. I am glad to be out of that trade and have moved on to the OEX. This could very well be a loser too depending on tomorrow. But the loss will be contained and I will simply move on. Mentally I'm somewhat tired, not getting much sleep last night. Of course if I had known how the market was going to act today I would have slept in. So now it's a matter of waiting for tomorrow and I'll take it from there. However todays action wasn't constructive for the short side and unless we get some big producer inflation number, the puts are dead. That said, I do think producer and consumer prices surged last month, it's just a matter of how the markets react to it.

Wednesday, April 11, 2007

The Dow lost 89 points on increased volume. Not a good sign for the bulls. Advance/declines were negative. My order for OEX puts wasn't filled. Obviously I'm not happy. I still think we have more to go on the downside here and might buy some puts tomorrow. But the timing has been missed, again. I'm not sure how long this drop will last but I don't expect anything like last month. And I think there will be a buy play next week. Gold was little changed today. The XAU ran up early again and faded again. This has been the pattern for the last 3 days. ABX was weaker with the overall market and my options are dead. It will take a miracle to not lose everything, again. This trade should have been exited last week and I am an idiot to still be in it. The signs to leave were all there but as usual I was stubborn. That is not a good trait to have in a game where you must be flexible. However, you have to somehow go on in the face of frustration. I did put in a limit order to sell but it wasn't hit. The dollar didn't do much today. The overall market action was dictated by the Fed minutes which were interpreted as bearish. No doubt, I should have gotten the puts yesterday. Like I said I could still get some before the inflation report on Friday. We'll see. Mentally of course I'm a bit discouraged at this point but there is plenty of time before expiration for a decent trade. What I don't want to do, is do something stupid to make up for the ABX loss. Tough game.

Tuesday, April 10, 2007

The Dow rose points today on light volume again. Advance/declines were positive. We have remained overbought but I don't think it can last much longer. I have an overnight order in for some OEX puts in case we get a rise early in the morning. The Fed minutes will be out at 11 PST. There is no doubt in my mind really, that we will have a decline sometime this week. The timing, as always, is the thing. Gold was up over $4 today and the gold shares just couldn't get going. The XAU was up over a point again but mainly due to FCX. ABX rallied early but fell back and did nothing. Volume remains light here as well. I don't know what is keeping me from selling this position. It is a loser and I don't see it turning around at this rate. Gold continues higher and the gold shares draw no interest. That is never a good sign. I really should just take the loss and move on to the OEX, which really requires a lot of attention when trading it. For some reason I still believe ABX will break above $30 before the expiration. The technicals are leaning overbought. Perhaps I am just reluctant to book the loss. That is sometimes a problem. There is only a week and a half left on these things. The dollar was weaker today and that supported gold itself. But the gold shares are stuck. If my prognosis for a downturn here occurs, it will probably take the gold shares with it. We'll see about tomorrow. Mentally I was up early but I am feeling OK. My mind is confused by what is happening in the gold market but maybe I should just take it for what it is and move on. There is always next month and other trades. There is still time to make some money again this month before expiration. I will give it a shot and see what transpires...

Monday, April 09, 2007

The Dow was up 9 points today on light volume. Advance/declines were slightly negative. We are overbought. There will be a decline this week. My guess is after the Fed minutes are released or on Fridays inflation data. I would like to get some OEX puts and I am looking at them. Gold was down 2 and a half bucks today. The XAU was unchanged because FCX had a good day. The gold shares were down on light volume. The light volume was the only thing that kept me holding on to ABX. This trade is going nowhere and will most likely be a loser. Gold is overbought here too and it seems the fundamentals for the dollar have changed recently. Gold seems like it has to head lower with the recent strength in the dollar. Interest rates in the US have risen giving support for the dollar. If the inflation data is strong as I suspect it would further strengthen the dollar. So I really need to bail out of this ABX trade and look towards something else with now less than 2 weeks left in this option cycle. Unless traders flock to gold on stronger inflation, which they did at some point last month. As I stated before the weekly chart on ABX looks good for the upside and that keeps me in at this point also. But time is running thin. Mentally I'm doing good after a nice relaxing weekend. I do have a gameplan for the OEX this week and will look to the puts. GE continues lower here and it sometimes is a proxy for the overall market. But it's all just a guess at this point. The ideal scenario is to meander higher into the release of the Fed minutes and get short before then. But it's not a perfect world. We'll see what happens...

Thursday, April 05, 2007

The Dow was up 30 points today on light volume. Advance/declines were positive. I never trust light volume rallies but it could just be a case of pre-holiday getaway. The employment report is out tomorrow with the market closed. I guess we'll have to wait and see what happens. We are overbought and I am expecting weakness and am surprised it didn't happen today. Gold was up a couple bucks and the XAU lost a half a point. This was not good. The gold shares, including ABX, opened higher and closed lower. So we got a one day reversal. There was a point today where the calls I own got back to what I paid for them but then fell back to be in the red again. There are 2 weeks left and the weekly charts look constructive. That is the only thing keeping me in this trade at the moment. Because the daily chart is overbought and todays action wasn't positive. I think that perhaps this was too long of an option trade. We'll see what happens next week. Mentally I'm looking forward to having a 3 day weekend. Once the employment number is out, that should shed some light on the short term and I can go from there. Looking ahead to next week, I will be looking for a spot to purchase some OEX puts. The Fed minutes are out in the middle of the week and the producer inflation will come out on Friday. That's it for now and it's on to the weekend.

Wednesday, April 04, 2007

The Dow gained 20 points today on kind of light volume. Advance/declines were slightly positive. The economic data today was a bit weaker than expected. We should take a little rest here. I expect tomorrow to be slow considering the long weekend ahead. The employment report is out Friday with the markets closed. That should mute the response on Monday perhaps. GE was down and I'm still looking at it but am not sure of a trade there. Gold was up $8 today but the XAU didn't even gain 2 points. ABX gained about a quarter on good volume but you would expect better gains given the rise in gold itself. I probably should have dumped the calls I own today at a small loss. The trouble is that the recent small rise gives me hope that perhaps I can squeeze a gain out of this. That is most likely just wishful thinking though. I do expect the overall market to pull back next week as we are overbought short term. My thought at this point is that perhaps we'll see a little more strength early next week and I can get rid of the ABX calls there. It's just a guess. I'd also like to get some OEX puts before the inflation data is released. Mentally I'm a bit tired as I did not sleep well last night. I'm also kind of in holiday mode already. I don't anticipate doing any trades tomorrow and with the market slowing down for the holiday, action will be thin. I'll keep an eye on things but I don't expect any big moves and I would probably like to see us down a bit to relieve some of the overbought condition. But who knows?

Tuesday, April 03, 2007

The Dow rose 128 points today on average volume. Advance/declines were about 3 to 1 positive. My thinking is that this wasn't the strongest rally that I've seen for up over 100. I'm just not believing that it is off to the races. Oil was down today and the economic reports came in a bit stronger than anticipated. I'm looking for a spot to buy OEX puts sometime next week. Gold lost a couple dollars today but the XAU rose almost 2 points in sympathy with the overall market. The volume was nothing great. ABX was up but sold off at the close to gain around 30 cents. I am still holding the options. The trouble now is that with a couple of up days it makes it seem like this trade can actually work. If we close higher for the week it might but there are no sure things and the technicals are back in overbought territory. I'm going to have to think real hard about closing this trade and taking the loss. That is probably the thing to do, especially if I think we are going to head down sometime next week. Mentally I'm feeling well, got a good nights sleep. I did stay away from GE and it barely moved today even with the market doing so well. My thoughts are pretty clear on staying away from marginal trades, as that one would have been. But that could change with the ongoing battle with myself. Don't really know what to make of tomorrow but we probably need a little rest. We'll see.

Monday, April 02, 2007

The Dow was up 28 points on average volume. Advance/declines were positive. I think we will be going higher here in the short term, perhaps to challenge the recent highs. I don't think this is the start of anything other than that. As I have said before I think we are in a trading range and that sideways is the best we can hope for here. Gold was moving all over today and ended up a couple bucks. The XAU gained over 2 points which was encouraging. But ABX was only up a quarter and gold is selling off in the aftermarket. I really think I need to dump those options at a loss this week and preferably before Thursday. Unless we get some type of rally before the long weekend. But that's just wishful thinking. Mentally I'm feeling OK. This losing trade is weighing me down somewhat. I just need to do the right thing and move on. I was looking at some GE calls today. I'm thinking we will be going higher and GE will join in. But the technicals aren't in the ideal situation for going long so I'll probably just sit it out until next week. But you never know...