Monday, December 31, 2007
We ended the year on a downer with the Dow losing 101 points. Advance/declines were negative but not as much as you would expect with a down 100 market. Volume was light. I would like to get some OEX calls here. We are moving to oversold. I expect a New Years rally on Wednesday. But I haven't been right about much lately. If we sell off on Wednesday, I'll get the calls. But more than likely, I've missed it. Gold lost about $5 and the XAU was off 3 points. ABX and NEM were both down on light volume. Gold calls? I'm thinking about it but I think the OEX might be a better trade. We'll see. GE lost 30 cents on light volume. I dumped the calls for another loss which simply added on to the horrible trading year that I've had. Better to start the new year flat with no 2007 hangover trades. Mentally I feel fine although I am not totally sure about the market here. We should have had some type of rally here and we haven't. It is unusual and I don't know what it means really. I do think OEX calls will work here near term. But I'm not 100% sure. When in doubt, stay out? Maybe. It's been a terrible trading year for me but things can't get any worse. It'll be back to the basics and smaller trading size until I can get into a positive trading mode. Focus and discipline must return. I for one am glad to put the 2007 trading year to rest. Time to look forward to 2008. Happy New Year!
Friday, December 28, 2007
Another day of not much as the Dow gained 6 points on light volume. Advance/declines were positive. We are working off the overbought condition. One trading day left in the year. At least there was no follow through to yesterdays downside action. Gold rallied $10 and the XAU gained over 5 points. ABX soared over 2 1/2 on good volume. Who would have figured? Well there was a signal a few days ago and I didn't act on it. I was busy being stuck in a losing GE trade. And that is one of the things that must be corrected in 2008. Losing trades must be dumped. They take away too much attention to what is going on. NEM gained a buck also. The relative strength is in Barrick though and has been at the beginning of the gold share moves. GE was up a dime and I have an order in to sell the calls at a loss. If it isn't filled Monday morning, I'll dump them at the market. Mentally I'm a bit tired. Did not sleep as much as usual. Of course I'm disappointed for missing the move in gold but it's a broken record. You've got to move when the signal appears. There are no excuses. I will still try and make some money on this but have to wait for some type of pullback first. May not come. But that about sums up the terrible year of trading for 2007. I lost roughly 25% of my trading capital and that is a lot. Haven't had a year that bad in quite a while but it happened and you've got to move on. The focus and discipline necessary have to be obtained or it just doesn't work out. It isn't easy but it's not impossible either. It just takes a lot of work and you have to put the time in. There are no short cuts. You really need to stick to the trading plan with no exceptions. I'm going to take it easy this weekend and get ready for next year. It will be better...
Thursday, December 27, 2007
Well it isn't a quiet holiday week as the Dow got clobbered and lost 192 points. Volume was light and the advance/declines were 3 t0 1 negative. Negative moves such as this are not common for this time of year. There were some outside influences as there was an assassination in Pakistan. But still, the market action wasn't typical for a holiday week. Gold was up a couple of bucks but the XAU lost 1 3/4. I would have thought gold would have rallied a bit more considering. ABX was higher and NEM was lower on increased volume. If the gold shares pull back here, I'm getting long. GE held up pretty good, only down 35 cents. The relative strength has been very good lately but I'm still probably gonna dump the calls for a loss and start the new year flat. GE would really have to rally in the next 2 days to keep me in this trade and I doubt that will happen. Mentally I am feeling fine. Slept pretty good. Getting ready for next year. Looking forward to putting this terrible year behind me. Nothing is easy in the game, this much we know. I'm really going to have to regain my focus for the new year and I'm sure I can do that. Success requires discipline and that is what I will work on the most. It isn't easy but it can be done.
Wednesday, December 26, 2007
Another slow day in the markets as the Dow gained 2 points on light volume. Advance/declines were about even. It's a holiday week. We are overbought. I don't expect much one way or the other. Gold had a good day up $13. The XAU rose almost 4 points. ABX and NEM were both up around 50 cents on light volume. Perhaps a sustained move is beginning in the gold shares. The volume is lacking though. I'm on the sidelines but am ready to get long there. Might have missed the signal though. GE was flat on light volume. I'm debating on whether to book the loss this year or see if we get some upward movement in the beginning of next year. There's also the earnings coming out in the 2nd week of January. Probably should just dump it and start the New Year fresh. We'll see. Mentally I'm a bit tired as I did not get a good nights sleep. I'm also trying to take it easy since things are so slow this time of the year. I'm trying but there is always some work that needs to be done. Saw a lot of volume in the GE January calls today for whatever reason. Interesting...
Monday, December 24, 2007
The Dow up 98 on holiday light volume. Advance/declines 3 to 1 positive. The Christmas rally continues. Gold was up a buck and the XAU rose a point. ABX and NEM were mixed. GE was up around 40 cents on light volume. All in all we are overbought here, however the summation index is pointing to the upside. It should be a light volume week with an upside bias. That's my guess for now. Merry Christmas and Happy Holidays...
Friday, December 21, 2007
Better late then never for the Santa Claus rally as the Dow gained 205 points. Advance/declines were about 3 to 1 positive and the volume was good. The OEX call trade would have worked if you waited until late in the week to buy them. Hindsight is always correct. Gold had a good day up $12. The XAU rallied over 6 points. Both ABX and NEM were up over a buck on good volume. Perhaps this was the week to buy the gold share calls. We'll see. GE even was higher by 66 cents and at one point was above 37.50. It sold off at the end of the day though. The volume was extremely heavy. We broke a daily down trend line. That's a positive. I'm still holding the calls, ever the optimist. But I still feel that in reality this trade is going to be a loser. I'm just trying to cut the loss to as small as possible. Mentally I'm a bit tired, did not sleep well. My thinking is that next week will be slow. I'll be taking it easy over the weekend and see where we go from here.
Thursday, December 20, 2007
Up, down, up again today as the Dow gained 38 points on light volume. Advance/declines were positive. We can't seem to gain any traction to the upside here as it has been a sideways to down affair for a while now. The market is oversold but it hasn't meant anything lately. Option expiration tomorrow. No Santa Claus rally yet. Summation index still to the downside. Gold lost a couple bucks and the XAU gained over a half. ABX and NEM were little changed on light volume. The dollar has firmed recently but looks overbought here. The gold shares are oversold also. No trades yet but the long side will be favored when the time comes. GE was up over 1/4 on light volume. Oversold here as well. It will take a miracle for this issue to get near a close of 37.50 tomorrow. I still think it's due for some type of upside here but it hasn't happened yet. Probably won't. The weekly MACD is as blown out to the downside that it could possibly get. I do need to bail out though. Mentally I'm feeling OK. Slept OK. Waiting for an end of the year rally that looks like it will never come. Next week is bound to be slow. And so it goes.
Wednesday, December 19, 2007
Another wishy-washy day as the Dow lost 25 points. Advance/declines were negative and the volume was light. There is no conviction in the market these days with a bias to the downside. Maybe holiday mode has started early. I suppose that with all the uncertainty, people are holding back. Gold lost a couple of bucks and the XAU dropped a point. ABX and NEM both were down on light volume. I'll be patient there. I think that you have to be at this point. GE lost around 20 cents on average volume. We are at 36.62. We will get to 37.50 by the close on Friday? I doubt it. This trade is dead. Mentally I feel OK, got a good nights sleep. I suppose I'll just have to take my losses in GE and look forward to next year. It's really all that I can do. I'm going to have to have more discipline and work harder next year to get back to profitability. This was one of my worst years ever, for whatever reasons. You've got to put it behind you and start fresh next year. I will need to be prepared for the new trading year. So that's what I'll be doing for the next couple of weeks. Getting mentally ready to start the year off right. I'll also take a break since the markets will be thinly traded for the holidays. The market seems to be trading that way already.
Tuesday, December 18, 2007
Up, down and back up again as the Dow gained 65 points on better volume then yesterday. Volume on a daily basis has tapered off from what it was a month ago. Advance/declines were positive. The summation index is still pointing down but I am bullish here. I really think that we are going higher from here. But what do I know? I think that if we hold here you can make a case for a reverse head and shoulders pattern on the daily OEX chart. So we'll see. 3 days left until December expiration. OEX calls again on weakness tomorrow? Probably not. Gold was up 8 bucks today and the XAU rose almost 3 points. ABX and NEM both posted nice gains. I'm starting to think that it might be time to pick up the gold shares. The dollar is overbought and the gold shares are oversold. I'm pretty sure a longer term signal was generated yesterday. We haven't reached the weekly up trend line in ABX yet but if and when we do, calls will be in order. GE rose around 30 cents on average volume. At least it was up when the market acted better. Still need a weekly close of at least 37.50 to stay in that trade. Not there yet. Mentally feeling OK. Got a good nights sleep. Trying to do the right thing here which might be nothing at all. Next week is going to be slow with the market in holiday mode. That will most likely erode the time premium off of the January options. However I do expect some type of pop to the upside in the beginning of next year. So the best course of action at the moment could be inaction. But I've been wrong a lot this year. We'll see. There might be some opportunity to pick something up with the end of the year tax selling. Time will tell.
Monday, December 17, 2007
We gapped to the downside today as the Dow lost 172 points on light volume. Advance/declines were over 4 to 1 negative. Opened lower and stayed there. The summation index indeed did turn around on Friday and now is heading south. I sold the OEX calls at a more then 60% loss. Buy'em Friday and sell them Monday. The market would have to rally over 400 points for those calls to come back. In 4 days. Ain't gonna happen. And so it goes. It's been a terrible year and I suppose that trade just caps it off. Gold was up about a buck but the XAU lost over 6 1/2 points. Again, gold itself and the gold index aren't moving in tandem. ABX and NEM were both down on good volume. I'm still on the sidelines there. GE lost about 40 cents on average volume. I almost just dumped these calls also but GEs relative strength has been pretty good as we've moved lower. Now I don't know what that will mean going forward if we just continue to decline. GE is at 36.48 and it will have to close the week at 37.50 or higher for me to stay in this trade. Mentally I feel OK, got a good nights sleep. It's been a bad year as I look back. The recent OEX trade as a case in point. I certainly could have waited to enter but it is always easy to look back. The discipline just hasn't been there for whatever reasons. You at least have to be in tune with the summation index on the indice trades. But what can I say? I just wasn't good enough this time around. Perhaps next year I will stick to gold and the OEX. I tried some other things this past year and none of them worked. My win % was horrible. That said, where do we go from here? Todays summation action could actually be a buy spike. That would mean that todays momentum will mark the low and we will trade higher from here. It sure doesn't feel like it though. But that's just a guess and my guesses haven't really panned out lately. So we'll see what tomorrow brings and keep an eye on GE.
Friday, December 14, 2007
The week ended on a down note with the Dow off 178 points. Advance/declines were over 3 to 1 negative and the volume was light. The inflation data was higher then expected. We closed near the low of the day. I bought some OEX calls for next week but I'm thinking I could have waited until Monday. We are short term oversold however the summation index might be heading back to the downside after todays action. It's a tricky call. Gold lost 6 bucks today on a stronger dollar. The XAU lost 2 3/4. NEM and ABX were both down on light volume. Gold has lost its luster for the time being. No trades there for now. GE lost over 50 cents on average volume. Unless we get a decent rally in GE next week, this trade is dead and I will be exiting. We closed just below the weekly up trend line and that is not a positive. If however GE can get moving to the upside next week, I'll probably stick around a bit longer. But it doesn't look like it at the moment. Mentally I'm feeling OK. I still have a feeling that we are setting up for a rally into next year but I could be wrong. I didn't like the way we closed today for the bullish case. Monday will be important if things are going to turn around. There are only 5 days left in the option trade I initiated today. That isn't the smartest thing in the world to do. So we'll see what happens. It's time for a break and then check the charts over the weekend.
Thursday, December 13, 2007
Volatility remains as the Dow was down 100 points but came back to finish the day up 44. Advance/declines were about 2 to 1 negative and the volume was average. The inflation data was even stronger then predicted but the market came back. However the signals are mixed at the moment. I did have an order in for some OEX calls but wasn't filled. If we sell off again tomorrow I might try it again. I did think the inflation data would be less then expected and was wrong today. We'll see about tomorrow. Negative advance/declines on an up day isn't the most bullish scenario. Gold lost over $14 today and the XAU fell 5 points. ABX was down over 1 1/2 on good volume. NEM only lost 50 cents on average volume. ABX is beginning to interest me on a weekly basis but I haven't gotten a buy signal in gold yet. The dollar has stopped going down for now also. GE was up a third on average volume and I'm beginning to like the relative strength there. How we close out the week tomorrow will be key once again but it looks like the weekly uptrend line will hold at this point. That could all change tomorrow though. Mentally I got a good nights sleep and feel fine. I do like the way that the market came back today but the breadth wasn't good. However when you get bad news like we did today on inflation and the market shrugs it off, it has me believing that higher prices are in the offing. But you never know. Expiration week coming up and I'll be looking for the positive bias. That said, anything can happen. On to Friday and the CPI.
Wednesday, December 12, 2007
The volatility has returned to Wall Street. The Dow closed up 41 points on heavy volume. We opened up over 200 points and gave it all back and were down 100 points before a late comeback. Advance/declines were positive. I can't say that I know what is going on here. You really would have to take your profits quickly trading the indices. That is if you had any profits. I'm still leaning to the call side for the OEX but I have no trades there at the moment. Inflation data the next 2 days. The expectation is for some big numbers. I don't think that is going to happen but what do I know? Gold was up over a buck but the XAU rose more then 3 1/2 points. These two haven't been in sync lately. ABX and NEM were both up on average volume. Not trades there for now. GE was up about a quarter on heavy volume. It mirrored the market opening much higher and then selling off to be negative. It made a last hour comeback. The options aren't doing much though. Waiting for the weekly close. Mentally I'm tired, slept OK but not enough. Suffice it to say a market that opens much higher and cannot hold its gains just isn't bullish. I have no answers there. Hopefully we will get the selling out of the way here and head higher into the expiration. But that is a guess. It's anything goes at this point. There is nothing wrong with being on the sidelines until things work themselves out. I suppose I will try and be patient and wait for a valid signal. But you never know. So we'll see what the markets reaction to the inflation data is and take it from there.
Tuesday, December 11, 2007
Oh that Fed. They certainly are a market mover. The Dow lost 294 points today on good volume. Advance/declines were 5 to 1 negative. We were overbought and the rally had been on light volume. So to see a decline on the news today was not a surprise. However I did not expect such a dramatic one day move. It doesn't change what I think though. There will be a chance to get some OEX calls this week for expiration. I could be wrong if we just continue to tank out here. But I'd expect some sideways action and then we head higher. Gold turned around to the downside after the Fed as the XAU lost over 6 1/2 points. ABX and NEM were both down around 1 3/4 on good volume. No need to rush into the calls there. Just the opposite I'd expect. GE lost about 50 cents on heavy volume. GE had nothing to say that the analysts liked at todays meeting. It was down well over a dollar at one point. I must say it held up pretty good considering todays overall market action. The volatility threw in a little more premium for the options too. How it closes the week is the key and it's only Tuesday. Mentally I didn't sleep well. I'm also disappointed that I did not purchase some OEX puts before the Fed announcement as well as some gold puts. I was confused on gold for a time but I did expect a decline on the news from the Fed today. I also had previously thought that the OEX puts would not be worth trading on this news but the prices got pretty cheap pre-Fed. We also went right up to a daily downtrend line in the OEX and turned around. I was preoccupied with the GE trade. This I recognize but it doesn't make it any easier going forward. I was looking at the OEX puts but decided to sit tight. That was a mistake. So well see what happens from here. I will get the OEX calls when a signal appears. Even with todays negative action the summation index is still heading higher. I will not try and ignore that.
Monday, December 10, 2007
The Dow gained 101 points today on light volume ahead of the Fed. Advance/declines were almost 2 to 1 positive. We are overbought here and I expect a sell-off after the Fed announcement. I don't think it will be the beginning of anything big. It will possibly be a chance to pick up some OEX calls for expiration week. Gold rose $13 today and the XAU followed, up over 2 points. ABX and NEM were both higher by about 80 cents however the volume was light. Not a lot of volume before the Fed. GE was up around 20 cents on good volume before the analyst meeting tomorrow. Perhaps there will be some good news to propel the stock higher. I hope so for my options sake. Technically speaking, the weekly up trend line in GE has held for now. As long as it holds, I'm staying in the trade. Mentally I feel fine, got a good nights sleep. Tomorrow is all about the Fed and once that is done we will get back to the data. What was interesting about today was the fact that another brokerage had to increase its loan loss yet the Dow was up a hundred. When the market rises in the face of bad news, it's bullish. That's why I feel that even if we sell off tomorrow we will be coming back soon. But that's a guess as always. The market will go where it wants and do what it wants.
Friday, December 07, 2007
It was a day of rest for the market today with the Dow up 5 points on light volume. Advance/declines were about even. We most likely stop going up here for a while as the market is overbought. I think we sell off after the Fed on Tuesday. However I don't think any long lasting declines are in the cards at the moment. Any selling will be a chance to get some OEX calls. I don't think it's worth it to try and play the declines because the trend is up. The summation index is pointing higher. The Employment report was a non-event as the numbers weren't skewed one way or the other. Today gold fell over $6 but the XAU barely moved. Again this index isn't following gold itself which makes it hard to trade right now. ABX and NEM were both off about a half on so-so volume. Sidelines for now. The US dollar has stabilized here lately which means no big moves for gold like we've seen in recent months. GE didn't do much on less then average volume. The options just hung around also. It looks like the weekly up trend line has held for now. But next week could be a different story. There is a GE analyst meeting next week which should be a mover. However it may be overshadowed by the Fed. Time will tell. Mentally I'm feeling OK. 2 weeks left for the December option cycle. I might make another trade this year if something looks good. I'm leaning towards the OEX calls at the moment. The weekend is here, time to check the charts and come up with a game plan for next week.
Thursday, December 06, 2007
It was another positive day on Wall Street as the Dow rose 175 points. Advance/declines were over 3 to 1 positive but the volume was a little light again. I am surprised by the strength of this move. That said I think we are due for a rest. We can't just go straight up from here can we? I doubt it. In fact I wouldn't mind owning some puts right here as we are just about at a daily down trend line on the OEX. Plus the volume hasn't been as robust lately. Employment report tomorrow. I don't have any inkling this month for the numbers. Gold rose $3 today and the XAU followed the market higher by 3 1/2. ABX and NEM were both higher today. The former on average volume the latter on lighter volume. I'm staying out of this market for the time being. I will be getting long again eventually. However when that will be, I don't know. I haven't had a good feel or decent technical signal since the big run-up concluded. GE was up a half on light volume. Perhaps the weekly up trend line will hold. The weekly MACD is so blown out to the downside that I now think that this trade has a chance to work. The options didn't do much today though. So we'll see. Mentally I am a bit tired as I did not get a good nights sleep. Today the Federal government announced a bailout sub-prime package. I'm not here to discuss the merits of this thing. The only thing that is important is the markets reaction to the news. It was positive. It doesn't matter if the plan works or not. You have to respect price movement. Trading is about making money, not whether or not you agree with what the government is doing. We will get another dose of this next week with the Fed announcement. On to the employment report.
Wednesday, December 05, 2007
Back to the upside as the Dow had a nice gain of 196 points, ignoring bad news about credit for a change. Advance/declines were 3 to 1 positive. Volume still looks a little light though. I'd expect tomorrow to be a holding pattern day before the employment report. So the higher price scenario remains in place for now. Gold lost around 4 bucks with the XAU up a half. ABX and NEM were lower, with ABX leading the way. The US dollar is trying to form a bottom and I think that it will for now. So I can't get all that bullish for gold at the moment. There will be a time to get long the gold shares but I don't think that the time is now. I could be wrong. GE was up over 40 cents on again heavy volume. You really would want to see GE up better then that with the market tacking on almost 200 points. That said, the GE RSI indicator is showing a positive divergence with price and that could be a good sign for higher prices. Or not. The options aren't moving much. How it closes out the week will be the key for staying or leaving. At this point it isn't looking favorable on a weekly basis. But stranger things have happened. Mentally I'm feeling OK but didn't sleep as good as possible. Trading is never an easy task. You really need to keep it as simple as possible. And be honest with yourself. If things aren't working you may need to change things. If things are working, you still need to keep a sharp eye on things. The work never stops. You need to be up for it. Lazy won't cut it.
Tuesday, December 04, 2007
Another light volume decline for the Dow as it shed 66 points. Advance/declines were about 2 to 1 negative. Either my scenario for higher prices is going to come true or their is no buying interest and prices will fall much lower. The beginning of the month usually attracts capital and positive money flows. Hasn't happened yet. The summation index is moving higher and prices are dropping. We did have to work off the overbought condition and I believe that is what's happening now. So we'll see. Gold had a good day, up over $12. However the XAU fell a point. ABX and NEM were both down on light volume. Normally the gold shares would have had a good day with a decent rise in gold itself. I certainly don't know what is going on there at the moment. Sidelines for now. GE lost even more ground today, off around 60 cents. The volume was extremely heavy again. Unless we get some type of dramatic turnaround in GE by the end of the week, the recent option trade is dead. Perhaps this is a high volume break of the weekly trend line. It certainly could be. If it is then I would expect the overall market to follow. There's still 3 days left this week but it is beginning to look more and more as if GE is toast for the time being. The weekly indicators are in oversold territory though so you never know. We'll know by Friday though in my opinion. Mentally I'm feeling OK. The market seems to be following what I think it should do here. But that could change in a moments notice. However I have seen in the past where the beginning of December marks a low for the indices and they trend higher from there. I'm not saying that is the case this time around but it could be. Presidential election year coming up along with the markets favorable period. Or it will be the beginning of another bear market. Time will tell.
Monday, December 03, 2007
The Dow lost 57 points today on light volume. Advance/declines were negative. A pullback here is expected and needed if the rally is going to have legs. A positive was the lighter volume to the downside. I'll still remain constructive on the market unless we take out the November lows. I don't think that's going to happen. But what do I know? Gold gained $5 as the US dollar was weaker. ABX and NEM were both up over a half but the volume was light there as well. I think gold may have more room to go on the downside but I'm not sure. I really need to get a better handle on it to make a trade. Sidelines for now. GE was in the spotlight today as it was downgraded by some analyst and got pounded down a buck forty. The volume was extremely heavy. Does it bode ill will for the overall market ahead? Maybe. My hope is that today got rid of all the sellers and we will move sideways and return to the upside. That said, this trade was initiated on a weekly basis, so the end of the week close is what's important here. My options are again in the red but not as bad as I'd expect after a day like today. So we'll see. Mentally I'm a bit tired. Would not be surprised if we see weakness until Fridays employment report. What I don't want to see is a complete collapse from here. A slow steady decline would make me feel the prognosis for higher prices is correct. It's also possible we won't do much until the Fed meeting next week. That's unlikely but possible. So as usual it's a wait and see type of game. I'll be looking for some OEX calls if we get oversold.