Wednesday, October 31, 2007
It was a wild Halloween ride on Wall Street today with the Fed. We were up over 100, then went negative and came back to be up 137 points. Advance/declines were over 2 to 1 positive but the volume was extremely light. So much so that I will need to check and see if the totals that I have are correct. We should get some beginning of the month follow-thru tomorrow. I am thinking of getting some puts before the employment report for a short term trade. We'll see. My gold theory would not have worked as we rose about $8. The gold shares did have great earnings and the XAU was up over 7 points. There seems to be no end in sight. ABX was up 2 bucks on heavy volume and NEM soared over 4 points on extremely heavy volume. I did put in an order for ABX puts but it wasn't filled. I'm now thinking that perhaps that isn't the best course of action here but it does look interesting to me. However the gold shares show no signs of slowing down. They have been overbought for weeks. I might just stick to the OEX for a short trade here. But the trend is up. GE rose around 70 cents on OK volume. It looks like the $40 level is where GE wants to hold for now. We'll see going forward. BA was up 1 1/4 on average volume. I'd expect some weakness here soon as the market takes a breather but I think we are going higher and I suppose I'll be holding on until expiration at this point. Mentally I'm feeling fine. Got a good nights sleep and seem to be thinking clearly. I think we will drop on the employment report and that should be the next play. Maybe. So maybe I'm not thinking clearly. I suppose preservation of capital should come into the mix at some point. I'm still holding the BA trade, it's showing a profit. However if the volume figures are as low as they seem, I'll be looking to get some OEX puts tomorrow. I do not trust light volume rallies. Just got a recap on the volume. It wasn't light as previously reported. It was a heavy volume day. I will have to reassess the gameplan.
Tuesday, October 30, 2007
The Dow lost 77 points today on average volume. Advance/declines were negative. The question is if there's more to come. Probably. I don't know what the Fed will do or how the market will react but there is more to go on the downside at some point this week. I'm guessing they will lower the funds rate by a quarter point. What the market does, who knows? Even if we drop it will set up for higher prices down the road I think. Gold lost $5 today and the gold shares sold off on good volume. Looks like I could be too late there. We'll see with the earnings tomorrow. ABX was down over 1 1/2 and NEM lost 1 1/4. Perhaps we'll get a rally in the gold shares tomorrow, the earnings premium will disappear and I'll be able to get some puts cheap. Wishful thinking most likely. BA was up around 30 cents in a down market, which is encouraging. We were up there over a dollar higher and sold off, which is not. The volume was good. Perhaps today was the sell day and then buy them cheaper in a few days. Looks like I'll be holding them for a while now. We'll see. GE didn't do much on light volume. That's the trouble with GE. A lot of the time it just goes nowhere. It's worth trading if you are in it when it moves but otherwise it sits around a lot. I still like the longer term calls there. Mentally I'm OK. The market is acting as I expect for the time being. I didn't sleep all that well again. What the market does after the Fed tomorrow might provide some clues as to where we go from here. Or it may not. Also have end of month window dressing. So I would expect some volatility. It will be a day to keep an eye on things...
Monday, October 29, 2007
The Dow rose 63 points today on average volume. Advance/declines were positive. We are overbought. We could stay there however at some point this week there will be a decline in my opinion. Perhaps after the Fed announcement or possibly after the employment report. I don't think that it will last long but it could be tradeable. I do think it will happen. The summation index should turn up today but a decline is in the offing this week. We'll see. Gold continues to defy gravity and rose over $5 today. We are almost at $800. The XAU tacked on another 3 points. ABX was up a buck on heavy volume and NEM barely moved. I would like to short the gold shares. This rally cannot go on forever. My thoughts now are to get some puts after the earnings announcements on Wednesday but before the Fed announcement later in the day. It's a risky play but how much longer can we stay extremely overbought? Not much in my opinion. Boeing announced a share buyback and was up a buck on heavy volume. I can get out of that trade with a small profit now. We are overbought here but the indicators have further to go. What other good news can drive this stock? If we decline this week as expected, BA will go with it. Perhaps the options can be bought back cheaper. Or you just hold on until expiration, expecting the overall uptrend in these shares to continue. These are the questions that you face. I'm holding on for now but that could change at any time. GE was up a bit on light volume. Nothing new to report there, a waiting game for the time being. Mentally, I did not sleep well. I'm at a crossroads here where I think we will get a decline soon but the overall trend will resume to the upside. How to play that is the question. There is still plenty of time left in this option cycle. At this point I just might let the Fed meeting pass and go from there. But I am thinking about some OEX puts. Tomorrow should be a waiting game and that is probably the best course of inaction at the moment.
Friday, October 26, 2007
The Dow rose 135 points today on heavy volume. Advance/declines were about 3 to 1 positive. The financials made a comeback and Microsoft was up about 10% on great earnings. The summation index should return to the upside after todays action. We are slightly overbought at this point. I do think we will get some type of decline at some point next week. So we'll see. Boeing didn't move and that isn't the best news with a market up over a hundred points. The weekly chart looks OK for now though. The problem is that we could just get sideways action. That will kill the calls. Gold soared over $16 today. It wasn't so much the dollar as it was international tensions. I think Turkey bombed Northern Iraq. The XAU was up over 5 points. ABX was up 3/4 and NEM had a very good day up almost 1 1/2. The volume wasn't anything special but these issues continue higher. They've been overbought for weeks and the earnings are out on Wednesday. I don't know, maybe there is still time to get some calls but it's risky. My thinking is that I'll have to think about it over the weekend. GE was up about 20 cents on light volume. I still want to get long there but not yet. The best case scenario is for GE to move back to its up trend line. We'll see if that happens. Mentally I'm doing OK. Next week will be interesting with the Fed and the employment report. I do expect a downturn at some point but then I feel that it will be up and away. But that is subject to change. The best I can do at this point is to go over everything during the weekend and come up with a game plan for next week. First a little break until Sunday and go from there...
Thursday, October 25, 2007
The Dow lost 3 points today on very heavy volume again. Advance/declines were slightly negative. The market sold off again today after opening higher and then came all the way back. I don't know what to make of it but buyers are coming in from somewhere. Tomorrow should be interesting. Gold was up another $5 and the XAU rose 1 1/4. ABX and NEM were both up a bit but the volume was light. I did notice a lot of volume on the ABX puts for whatever reason. The gold shares march higher still. Perhaps I should just buy the calls. GE was a touch lower on average volume. It too sold off and came back again. Perhaps it is making a stand here and will not go lower. That's just a guess. Boeing was up 1 3/4 on good volume. This issue can get pretty volatile intra-day. I've just begun to watch it recently and it really moves around. The option prices don't always move with the underlying here, which is puzzling. But it looks good on the weekly if it can close around here tomorrow, so I'll continue to hold it for now. Also Microsoft reported after the bell and it is higher on good volume which should bode well for the overall market tomorrow. Mentally, I slept good and am well rested. It looks like the market will hold up here but looking ahead I would expect some weakness towards the end of next week. But you never know. We have the Fed next Wednesday along with the employment report on Friday. Also ABX and NEM report on Wednesday. So there will be lots of opportunities going forward.
Wednesday, October 24, 2007
A wild day on Wall Street as we road the roller coaster down and then back up. The Dow ended down a point on very heavy volume. Advance/declines were negative. We were off over 200 at one point. Volatility has returned. I still do not expect an extended downturn in the markets here but I suppose anything can happen. The overall market was weaker then the Dow. Gold was up a couple bucks and the XAU was up around a point. NEM and ABX were both up about 1/4 on light volume. The gold shares remain resilient. They continue to attract money. Perhaps I should just buy the calls and forget about it. Boeing had its earnings but I don't think it mattered on a day like today. It was up early and down big during the day. It ended off about 65 cents. I'm going to hold it until Friday and go from there. It moved around a lot today but the option price didn't do much. The earnings premium was sucked out of the options on the open and that is something that I forgot about. Thankfully this is my smallest trade of the year so there isn't much at risk. I want to see the weekly close. GE lost 33 cents on average volume. This issue came back as well after early losses. Perhaps the $40 is the spot to get long. I'm going to give it some more time however to build a possible base here. I could be wrong. Mentally I'm doing OK. Wildfires still going on. You've just got to try and focus. Do the best you can and go from there. I'll check things tonight and go from there. Today was sort of a one day reversal but I'm not completely sold on it. I think we will go sideways at best here for a while. Fed next week along with the gold share earnings. So there is plenty to think about.
Tuesday, October 23, 2007
The Dow jumped 109 points today on good volume. Advance/declines were 2 to 1 positive. We started the day higher, sold off and came all the way back. I doubt we will move in a straight line up here. However I'm not expecting a catastrophic drop as we saw last Friday. I did end up getting some Boeing calls before the earnings tomorrow. It closed unchanged today after moving both up and down. That isn't a good sign with the market up over 100. Technically it looks like a buy so we'll see what happens. I haven't traded this issue before so I may just get out tomorrow one way or the other. Gold was up $3 and the XAU had a good day, up over 5 points. The gold shares really haven't sold off that much but they are trying to. Money continues to flow into this area. ABX was up over 1 1/4 on OK volume. NEM was up over 3/4. The earnings are out in a week. Perhaps I'll try some calls here as well. GE rose 23 cents on light volume. It looks like the $40 level is trying to hold here and perhaps it will. I'm still going to wait on this one though. Mentally I slept pretty good but am still getting distractions from the recent wildfires. Not much I can do about that. You've just got to keep going. We'll see how Boeing reacts to its earnings and take it from there.
Monday, October 22, 2007
The Dow bounced back 45 points today on heavy volume. Advance/declines were positive. We are still pretty oversold. I am expecting more near term upside. After that, who knows? I am really not expecting a dramatic down side move. I think the worst is over but I could be wrong. Gold lost over $8 as the dollar was stronger. The XAU lost over 4 points but came off the lows. ABX was down about 1 1/4 on average volume. NEM was a loser also. The gold shares have been due to drop for quite a while. They finally are. I think it will be a buying opportunity eventually. Earnings are out next week and perhaps I'll get some calls before then. I do believe the earnings will be good if not great. So we'll see. GE was up a touch on light volume. It, along with the overall market, was down early and came back. That is encouraging for the bulls. I am looking at Boeing, BA. The earnings are due Wednesday. It was up over 1 1/2 today on good volume. It is oversold technically. The options did not move that much today, which is puzzling. Also it was right at the longer term weekly up trend line this morning. If it holds, it should move higher. I'm thinking of getting the November calls. Mentally I'm not as focused as I should be. There are wildfires in the city today and I'm not able to concentrate so well. I slept OK but with smoke in the air it's hard to just focus on the stock market. But the market won't wait for me or anyone else. So I'll do the best I can.
Friday, October 19, 2007
Well, so much for buying OEX calls. I didn't, fortunately and it reinforces why you really don't want to try things the day before expiration. Anything can happen. The Dow got clobbered today, losing 367 points and closing on the low of the day. Advance/declines were 5 to 1 negative and the volume was heavy. There was no good reason to try the puts there either since we were already oversold. An expiration related sell-off? Recession fears? Collapse of the dollar? Who knows? These things just don't happen in one day. The daily up trend lines in the indices have been broken. We'll see what happens when we get to the weeklies. I would not be surprised to see an up day on Monday but... Gold held up well again. It barely moved. The XAU lost 3 1/2 points. ABX and NEM were both off around 50 cents on OK volume. Considering the overall market action, the gold shares held up rather well. I'm now thinking that you have just got to own some calls here before the earnings come out. However we are so overbought that it is dangerous. However it seems that money is just flocking to gold and you can't fight that. GE didn't do too bad today, off 75 cents on good volume. It is near one of the weekly trend lines at around 39.75. If that doesn't hold then it's down to 37 and that would be the ideal time to get some calls. That's what I'm waiting for at this point unless price movement dictates otherwise. Mentally I feel fine, got a good nights sleep. The battle here is with oneself, as always. Self control and discipline cannot be over emphasized. The market is a tough game in itself, you don't need to make it any tougher. What went on today, I don't know. I don't think that it will be a repeat of August but I don't know. Perhaps there is something going on again that the market knows but we do not. Next week should be interesting. I think we'll bounce early in the week but that's just a guess. For now it's the weekend and time for a break...
Thursday, October 18, 2007
The Dow lost 3 points on good volume. Advance/declines were about even again. One day before expiration. I really wanted to get some OEX calls for tomorrow but the risk isn't worth it, unless it works of course. We are oversold short term and I expect an up move in the averages either tomorrow or Monday. Who knows, maybe I'll buy some calls on the open tomorrow but I doubt it. We are holding the daily up trend line for now. We were down for most of the day in a sideways channel for the OEX. So we'll see. Gold just continues higher, up over $6 as the dollar hit fresh new lows. The XAU came back over 4 1/2 points and ABX rose around a dollar forty. The volume was good. NEM was up but the volume was lighter. The move here in gold is remarkable. We are overbought and have been for quite some time. I'm about to just get some calls and forget about it. The pullbacks never last. Technically, gold and the gold shares should have corrected by now. They don't and you can't argue with the market. It is always right. GE lost 20 cents on OK volume. I don't anticipate any trades there in the near term unless it really drops. GE is usually a slow mover. If that changes then you know you're on to something. Mentally I'm tired. No good sleep and the work involved here lately has been a lot. But that is no secret and it has to be done to even have a chance. On to expiration.
Wednesday, October 17, 2007
It was a volatile day on Wall Street and we ended down 20 points. The Dow opened strong, up around 80 points. That eroded however and we were eventually down over 100. The daily up trend line was broken for a time. But then the market came back. I did have my eye on some OEX calls at one point but the price did not reach my target. The overall market was stronger then the Dow. Advance/declines were about even and the volume was good. I think we will go higher into the expiration from here. Gold was little changed again but the XAU dropped 3 1/2. I had an overnight order in for some ABX puts but it wasn't filled. ABX lost about a buck and a quarter on heavy volume. NEM was weaker as well on good volume, down over 1.80. The gold shares need a rest and have needed one for quite some time. ABX got more overbought then I've ever seen it and should drop or consolidate for a while. But I could be wrong. GE was up about a quarter on average volume. I'm not expecting much from GE in the near term. However longer term the trend is still up. Mentally I'm doing OK. Did not sleep as good as I would have liked. I suppose I will still be looking at the ABX puts if we get a snap back in the near term. Hard to say with the earnings on tap in 2 weeks. They should be stellar. The consumer prices came in a touch stronger today but the housing numbers were still in the tank. The data suggests that the Fed could cut rates again at the end of the month. We'll see. The summation index is still pointing down but I wouldn't be surprised if we get some kind of snap back after todays action. 2 days before expiration. No need to take any short term chances...
Tuesday, October 16, 2007
We lost another 72 points on the Dow today. Volume was good and the advance/declines were over 2 to 1 negative again. Inflation data tomorrow and we are oversold. So it could get interesting. The summation index is firmly pointing down after today but that doesn't mean we can't snap back. I am looking for a higher then expected reading on the consumer side for inflation but that's just a guess. I actually wanted to buy some OEX calls today since we are about at the daily up trend line that began in mid-August. I expect that line to hold for now. Gold didn't do much today but the XAU lost over 3 1/2 points. ABX was down around 90 cents on OK volume. I would like to get short gold again here as it has had quite a run. It's not going to be easy though. Perhaps the prudent thing to do would be to let it correct and then get long as the trend is clearly up. We'll see. ABX has its earnings report in 2 weeks and that must be considered in the mix as well. Plus the Fed meeting 2 weeks from tomorrow. A lot to digest there for a trade. GE lost a nickel on average volume. There isn't much to do there now except wait for an entry point to buy calls. We'll have to see how weak the market gets here. I'm not expecting much but you never know. Mentally I'm doing OK, slept better last night. I'm trying not to do anything stupid here with 3 days before expiration but you know how that can go. There are conflicting indicators at the moment, so perhaps a change is in the works. I don't know. It could be the so called "sub-prime" dilemma again. Or maybe just bad earnings. So we'll see what tomorrow brings.
Monday, October 15, 2007
The Dow lost 108 points today on good volume. Advance/declines were over 2 to 1 negative. We were down 180 at one point, getting close to the multi-week up trend line. Not sure of the cause but it might turn the summation index lower. We are short term oversold though. Gold was up over $8 today but the XAU only gained 3/4. Regardless I had to dump my ABX puts at a loss as that issue continued stronger, up around 70 cents on good volume. I still want to short this thing but will have to move to a different strike price. Gold itself is moving higher on lower volume and that is never good for the upside in the long run. That said it has been an amazing move in gold over the past 2 months. It's due for a rest but the timing is key. GE lost 20 cents on good volume and it looks as though this one has rolled over for now. I would wait until it gets back to the weekly uptrend line to look at the calls again. It could bounce around this week but it looks to me like the trend is now down for GE. Mentally I'm a bit tired, did not get a good nights sleep. I would have liked to have seen another weak upside day today to get some OEX puts but it didn't happen. I'd like to try something this week but now I'm not so sure. Inflation data on Wednesday, should be a mover. I'll check things over again tonight and take it from there...
Friday, October 12, 2007
The Dow added 78 points today. Advance/declines were positive but the volume was surprisingly light. My thinking is that the bias will be to the upside early next week. But I could be wrong. Gold was down a couple bucks but the XAU rose over 2 points. My ABX puts are under water and I probably should have dumped them today. It's a cut the loss mode at this point. Perhaps I will roll over to November on those. GE had great earnings and sold off around 50 cents at the close. It was down over a dollar early. The volume was heavy. I think that waiting for GE to return to the weekly up trend line and then getting long would be the right strategy at this point. Mentally I'm feeling good. We got the inflation data and the retail sales today. They really didn't seem to matter much. We got a pop on the open and then just hung around all day. Technically, a light volume rally isn't the best thing to see for the bullish case. I might look to buy some OEX puts early in the week before the inflation data on Wednesday. I'll have to check things over the weekend. There are a ton of earnings coming out next week, so there will be opportunities to make money. Getting back to the overall market, the summation index continues higher. It's hard to fight that. There was a chance for it to roll over today but we continued to the upside. Yesterdays one day reversal may not pan out to the downside. So we'll see. It's the weekend and time for a break.
Thursday, October 11, 2007
It was an interesting day on Wall Street with the Dow losing 63 points on heavy volume. Advance/declines were negative. We were up over 100 at one point and then just started to drop. We were down over 100 too. It's a one day reversal which usually means lower prices to come. I have no idea why it happened. Perhaps the inflation data tomorrow will be higher then expected. But it is all just a guess. Perhaps it means nothing and we will continue on our merry way. Gold soared over $10. The trade deficit was lower but the dollar didn't rally and in fact went lower. ABX was higher early but fell back with the overall market and then made a comeback. It was that kind of day. The volume there was huge and ABX lost a dime. The XAU was up over 5 points but ended up only a quarter. I really think we are making some kind of top in the gold shares here. But I've been wrong before. GE lost 40 cents on average volume. I almost bought some calls when it dropped but decided against it. There is a lot of premium left in the options due to the earnings announcement tomorrow. Once that happens the premium will be sucked out of both the calls and the puts. Mentally I'm feeling OK. I actually like it better when the market is volatile. There are more opportunities. Tomorrow should be interesting. We'll see what today was all about. Whether it was a one day wonder or if there is something brewing again. We have the usual positive bias for expiration week upon us, plus earnings. So things could get interesting.
Wednesday, October 10, 2007
The Dow dropped 85 points today on average volume. Advance/declines were barely negative. The overall market was much stronger then the Dow, implying higher prices going forward. We were down around 150 at one point but buying the dips is the mantra for now. Gold was up $3 and the XAU rose 3 points. ABX was up 15 cents on heavy volume as we churned around in that issue today. My puts are under water but I think today would have been the proper day to buy them. Timing is everything. My scenario is that the trade deficit will be better then expected tomorrow and the dollar will rally. If that occurs it should drive the gold shares lower. I am seeing a valid sell signal on the RSI for the XAU here. We'll see. GE lost 20 cents and the volume was light again. It's a waiting game until Friday there. A lot of volume in the $42.50 calls for GE. I'm staying out for now but who knows about tomorrow? I'm not getting a legitimate signal from anything on the charts right now and it looks like it could go either way. The daily up trend is holding for now though. Mentally I'm feeling OK, got a good nights sleep. It seems as though the market just wants to go higher regardless of earnings or anything else. We do get inflation data on Friday, that could be a mover. And we have expiration week coming up. So I think the volatility will pick up here in the near term. I would still be leaning to the long side unless we get weakness in all the indices at the same time. There is still money looking for a place to be invested.
Tuesday, October 09, 2007
The Dow went to new highs again, up 120 points on good volume. Advance/declines were over 2 to 1 positive. The trend is up and staying there. It doesn't seem to matter how overbought we get. The Fed minutes were viewed as a positive so off we go. Enjoy the ride. Gold was up around $5 and the XAU rose almost 5 points. ABX was up over a dollar and my order for puts was filled. The volume in ABX was good. This trade already has the feel of one that isn't going to work. I'm thinking that we have consolidated in ABX and could break out. We'll know more tomorrow. Like the overall market, the gold shares have remained overbought for quite some time. So we'll see. GE tacked on 50 cents but the volume was light. There was a lot of volume in the calls though, so perhaps somebody knows something about the earnings due out on Friday. I'm thinking of getting some calls for that event myself. Mentally I'm a bit apprehensive about this ABX trade. It's my first fill in a while and I'm not feeling good about it. I really think that if ABX continues higher tomorrow, I'm dead. We'll see. Otherwise the overall market looks good. Every minor setback has been met with buying. Perhaps it will just continue to run up into the expiration. The summation index continues higher. Perhaps GE calls are the play for Friday. Time will tell.
Monday, October 08, 2007
It was a partial holiday today for Columbus and the Dow dropped 22 points. The volume was very light and the advance/declines were almost 2 to 1 negative. So you can't take much out of todays action most likely. Gold lost almost $9 and the XAU declined 2 3/4. ABX wasn't down much and the volume was light. I did have an overnight order in for some puts again but it wasn't filled. We could just be moving sideways here but I am still favoring the downside. However this issue, along with the overall market seems to be wanting to go higher. But you can never be completely sure. GE lost 20 cents on light volume. GE seems to just be marking time until the earnings on Friday. I might try something there, we'll see. Mentally I'm tired and did not sleep well last night. We have less than 2 weeks in this option cycle and I would like to take some profits somewhere. The Fed minutes will be released tomorrow and that will be a mover I think. So I will have to be positioned before then, if possible. But you never know. I looked at things over the weekend and believe that shorting gold at this point is the thing to do. The stock market is overbought but staying there and looking like it wants more upside. There are no easy trades out there at the moment...
Friday, October 05, 2007
The Dow rose 91 points today on average volume. Advance/declines were 3 to 1 positive. We were up around 150 on the Dow and got some profit taking late in the day. The employment number was in line with expectations and we rallied. It could have been any number and we would rally because the trend is up. The OEX calls were higher but not that much considering the up move. So on to next week. We should see some follow through early in the week. Gold rose another $4 today and the XAU was up almost 3 points. I'm beginning to think that we are simply consolidating before moving higher here but I'm not sure. The volume continues to come into the gold shares but we are overbought. ABX was up a third on good volume and NEM was up a half. There was heavy volume in the NEM calls. I am still considering the ABX puts and will check the charts over the weekend. It isn't as clear as it was a week ago. GE really did not participate in todays rally and that is not a good sign. It was up 7 cents on light volume. Perhaps it is taking a rest before the earnings next week. You'd really like to see GE up in line with the overall market. So something is going on here. Either the rally isn't to be trusted at this point or GE will not have the earnings that are expected next Friday. It's all a guess. Mentally I'm feeling OK. I have a couple of ideas for the two weeks remaining on Octobers options. Can't feel too confident without going over everything this weekend. I'll try and come up with some type of game plan and take it from there. The summation index continues higher and there really hasn't been any reasons to sell. It's hard to fight that. I think the release of the Fed minutes on Tuesday could be the next real market mover. We'll see...
Thursday, October 04, 2007
The Dow was up 6 points on light volume. Advance/declines were positive. It's a waiting game for tomorrow. The overall market was stronger then the Dow. It has the feel of a market that wants to go higher. The OEX calls are more expensive then the comparable puts. So we'll see. Gold was up $8 and the XAU rose 3 points. ABX was up over a buck on good volume. Perhaps I am wrong and we will just get sideways action in gold instead of a decline. But I'm still thinking if the ABX puts get a bit cheaper that I am going to buy some. NEM was slightly higher on light volume. GE was up just a touch on very light volume. It looks like GE wants to roll over here and the market won't rally much without GE. The earnings are out in a week. Mentally I'm feeling OK. The market is waiting for the employment report and as I said before, I just don't have a good feel for it this month. The ideal scenario for me would be a decline in the market tomorrow into Monday and then get some calls for the OEX. But it's all just a guess at this point as the market will do what it will. I would like to make a trade but at the same time you've got to be patient and wait for a decent signal. It isn't easy to do but that's what must be done. Tomorrows number and the markets reaction to it should provide some near term direction.
Wednesday, October 03, 2007
The Dow dropped about 80 points today on average volume. Advance/declines were negative. Is it the start of something big? I doubt it but you never know. At this point I will probably wait for the employment report and take it from there. If we continue to the downside, I will look to get some OEX calls. Gold was little changed but looks to be selling off a bit in the aftermarket. The XAU lost 2 points. Gold and the gold shares should be taking a rest here. It could last a while. ABX was up a touch today and the volume was good. I don't know what to make of that but I would like to still get the puts there if it rallies a little. GE was down over 50 cents on light volume. Again, it's due to take a rest as the technicals are overbought. So that is where we are at for the moment. There hasn't been any surprises one way or the other here. The market is working off the overbought condition and then I think we are heading higher. Mentally I'm feeling OK, slept pretty good. It's basically a waiting game until Friday and then we go from there. The ideal situation would be for the OEX to come back to the up trend line but that is a best case scenario. Still plenty of time on the options so there is no rush to do anything. I expect tomorrow will be a slow moving, light volume affair. we'll see...
Tuesday, October 02, 2007
The Dow lost 40 points today on average volume. Advance/declines were positive and the overall market was stronger then the Dow. Which implies that we are going higher and I do believe that we are. It's back to buying the dips for now. Gold got clobbered today and was off $17. The signs were there. The XAU shed over 5 1/2 points. ABX was down almost $2. My open order for the ABX puts didn't get filled and I canceled it. There's still a possibility that I'll get some puts here depending on the action from here. But it looks like the divergence in the RSI was for real. GE was pretty much flat on light volume. I still haven't gotten the earnings date there but it's overbought and I'll have to check the charts again. Hard to get the puts there in a market like this. Mentally I'm a bit tired without a good nights sleep. The focus this week seems to be on the employment report coming out on Friday. I don't have a good feel for it like I did the last time. Perhaps I'll wait for it to come out and take it from there but you never know. As always there is no rush to do anything at the moment. I'll check things overnight and take it from there...
Monday, October 01, 2007
A new month and a new all-time high in the Dow. We rose 191 points today on good volume. Advance/declines were 3 to 1 positive. We never got a break to buy some OEX calls at reasonable prices. And so it goes. We are going higher. The summation index continues to the upside. Beginning of the month and quarter money flows are evident. Any pullback can be bought. Gold was up 4 bucks and the XAU rose over 4 points. ABX and NEM were both higher. I do have an open order in for some ABX puts. I do believe the run in gold here is about to take a rest. The technicals are overblown to the upside and have been for a while. It could continue this way but the odds are against it. So we'll see. The dollar won't drop forever either but it could continue lower a bit more in the near term. GE was up 60 cents on heavy volume. This issue too, is very overbought and has been for a while. I don't want to short it though and would look to buy weakness. The earnings are due out at some point in October. Mentally I'm feeling OK, got a good nights sleep. I have no doubts that the trend is higher for US equities. At some point we will take a break and that will give the chance to purchase some OEX calls. I think it will happen this month before expiration but you never know. The premiums are still too high for me at the moment. That will change at some point. In the meantime, patience is the key.