Monday, February 25, 2008
The Dow continued the rally as we rose 189 points on light to average volume. Advance/declines were 3 to 1 positive. Is it possible that we have put in a base and will break the sideways action to the upside? Or is this another rally in the ongoing consolidation that has gone nowhere in the past month or so? Time will tell. The summation index should be heading back to the upside with todays action. There is no rush to trade here as we still have plenty of time in the March options. Gold lost $7 in todays trading, however the XAU was up a touch. GG remains the relative strength there. My thinking is that we could go either way here with gold. It is overbought but has had the tendency lately to stay that way. GE was up 2/3 on average volume and that should bode well for the overall market. INTC didn't do much. Mentally I am feeling OK. Trying to remain patient and wait for a decent signal. If I had to guess I'd say we're going higher here. But I don't have the conviction to throw any money at it. Sometimes you just have to wait and see. I really think the trade is buying OEX puts if we rally back to the weekly down trend line. But that is a long way off. For now it's the sidelines and we'll wait for something solid to develop.