Friday, February 29, 2008
Just like that things can change. The Dow got clobbered today, off 315 points. Advance/declines were about 7 to 1 negative and the volume increased. I did not expect a sharp drop and had thought we would move higher. Things have changed, for whatever reasons. We are at the bottom of the consolidation rectangle and it appears we will break out to the downside. The summation index will be going down after todays action. It may be time for the OEX puts after all. Because if we do break down here, it will get ugly. Gold was higher to $975 and a new record. The dollar continues lower and there is a flight to safety on days like today. However the gold shares followed the overall market with the XAU down 6 1/4. ABX, GG and NEM were all off around 1 1/2 on average volume. I'll need to look at things over the weekend. GE lost 2/3 on good volume. That one may break down here as well. Mentally I'm feeling OK but concerned about todays action. There are a number of scenarios that can play out. Choosing the correct one is the challenge. Identifying opportunities and taking advantage of them is the name of the game. Was today an end of the month affair or something bigger? Monday should be interesting. At this point I'm considering getting short any strength. But we'll see. It's the weekend and time for a break in the action. All charts must be checked and we'll go from there.