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Tuesday, February 19, 2008

We started higher and closed lower today. The Dow was up over 100 points and ended the day down 11 points. Advance/declines were positive while volume was average. It isn't a positive when you can't hold the gains. My thinking is that tomorrow will be interesting. Oil closed over $100 today for the first time. We'll see what happens. Gold had a great day, up over $20. The XAU soared 8 3/4. ABX and NEM were both up 2 1/2. The volume wasn't that heavy but there were no sellers. The problem is that the options didn't move much with such big gains due to the time factor and expensive premiums. That said, with earnings on Thursday I still might pick up some calls. The buy signal that had been in effect for weeks is finally taking hold. If we get a little pullback tomorrow I might give it a shot. My thinking is that the overall market might show some weakness on the data out tomorrow and perhaps the gold shares will go with it. GE was flat on light volume. The chart there isn't looking good for the bullish cause. Mentally I'm feeling fine, got a good nights sleep. Again, with so much time left on the options for March, the premiums are very high. Even when the price of the underlying moves in the expected direction, the options don't gain as much as they would normally. You have to take that into consideration when entering the trade. I'm expecting weakness this week and so far we are getting it. So we'll see where we go from here.

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