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Monday, March 31, 2008

March is going out like a lamb as the Dow gained 46 points today. Things are still settling out but the volume looks light and the advance/declines are positive. We were up 100 at one point today. It could be a waiting game until the employment report on Friday but we'll see. If we were negative today I could have made a case for getting long. But for now it's the sidelines with regards to the OEX. Gold lost $15 today and it looks like it followed oil lower. The XAU dropped 3 1/2 but was lower almost twice as much earlier. ABX, GG and NEM were all off over a buck. The volume was nothing special. Still getting a buy signal here for the gold shares. I'm going to be patient though. The dollar didn't do much and gold still went down. Could be end of the month gyration. GE was up 1/3 on average volume. Still no trades there as yet. Mentally I'm feeling OK, overslept today for a change. We are still in a sideways channel here for the OEX. The summation index is pointing higher but we haven't seen any rally yet. For now patience is the key. If there is a good signal I'll act on it but until then it's a waiting game. You still have to pay attention every day. The focus and discipline required doesn't change. It's the Super Bowl each business day from 6:30 to 1:00 PST. That's just something you have to accept and be ready to deal with. That's why the game is so tough and not easily figured out by most. Myself included.

Friday, March 28, 2008

Lower we go as the Dow shed 86 points on light volume. Advance/declines were about 2 to 1 negative. No buyers or interest as we head lower. Will be short term oversold on Monday if there is more negative action. Is it tradeable? Perhaps but the premiums for the OEX options are still pretty high. I might give it a try but I'm not expecting some huge rally. I could be wrong. Gold lost around $17 today, however the XAU only dropped 1 3/4. ABX, GG and NEM were all down fractionally on very light volume. Perhaps we will get back into the pattern of the gold stocks leading the metal again. Or not. The gold shares did sell off early and then came back. I'm still thinking we are going to move sideways there before the next big move. But that could change. GE lost 1/4 on light volume. Nothing exciting there either. Mentally I'm feeling OK, no great shakes one way or the other. We started the week with a nice up day and then just drifted off for the rest of the week. I'm still sticking with the up to sideways trend for the market here. I don't think there is a big sell-off coming in the April option cycle but I could be wrong. At this point the market seems to be waiting around for the next report of bad news. So we'll see. For now it's the weekend and time for a break. I'll be checking the charts and trying to develop a game plan for next week.

Thursday, March 27, 2008

Another downer for the markets today as the Dow lost 120 points. Volume was light again and the advance/declines were less than 2 to 1 negative. Almost at a short term oversold point and will be with another day like today. The market really doesn't seem like it's going anywhere at the moment. After such extreme volatility that we've seen lately a couple of 100 point down days don't seem like much. End of the month and the quarter approaching, that could be interesting. But for now it's really a wait and see time until a valid signal appears. Gold was little changed but it did sell off early in the session. The XAU dropped 2 1/2. ABX, GG and NEM were off 1/4, 1/2 and 3/4 respectively. The volume was light. The dollar stabilized. I'd still like to get long the gold shares after we build a base but we'll see. GE was off about 1/4 on light volume. No reason to trade there at the moment. Mentally I'm feeling OK. Trying to remain patient here, there is no need to force things at the moment. It's a waiting game at this point really and that is sometimes hard to do. No trades in the pipeline. It's simply a matter of keeping an eye on things and waiting for the next perceived opportunity. It may not be exciting but you don't lose anything either.

Wednesday, March 26, 2008

The Dow fell back today, off 110 points on lighter volume. Advance/declines were negative but not drastically. This action is to be expected for an up to sideways market. Volume is lighter on the declines. But that could change as we all know. But for now the prognosis remains the same. A waiting game until we reach the weekly down trend line. It could take a few weeks. Unless there is a decent signal before then. Gold continued to snap back, up $15. The XAU rose another 5 points. ABX outperformed today, up 1 3/4 on good volume. GG and NEM managed just around 1/2 each. I would expect these issues to fall back some from here but I could be wrong. The dollar got clobbered again today. GDP report out tomorrow and weakness may send the dollar even lower. But that's a guess. Bottom line here is that the bounce trade was missed. GE was off 1/4 on average volume. Considering the strong up move there we certainly are not seeing any weakness in GE. That could bode well for the overall market. Mentally I'm doing OK. Still thinking about what is going on in gold at the moment. Really disappointed in missing the bounce trade but I can't let it bother me going forward. The whole idea is really to identify opportunities and be able to take advantage of them. That's it in a nutshell. You do that and you'll do fine. You're gonna be wrong sometimes and you'll miss some but you've got to keep on moving ahead. Persistence doesn't hurt and neither does courage. But for now perhaps patience isn't a bad trait either.

Tuesday, March 25, 2008

Seemed like a day of indecision as the Dow lost 16 points on average volume. The overall market was stronger as both the S&P 500 and the NASDAQ were higher. Advance/declines were almost 2 to 1 positive. The summation index has turned around to the upside. The market certainly acts like it is out of panic mode for the moment. But we all know how that can change. A bit overbought but no signal for a trade yet. Gold rallied $16 as the dollar was weaker. The XAU gained 8 1/4 and closed near its high. That's the expected bounce taking place. Wasn't filled on the ABX calls as it was off to the races for the gold shares from the open. GG had the relative strength again as it was up 2 1/2. ABX and NEM managed 1 1/2 to the upside. Volume was average, not the heavy volume that took place on the spike to the top. May try getting long the gold shares on the next pullback but that isn't set in stone. Sideways action would help build a base for the next run-up if there is one. GE lost a touch again on average volume. No trades there. Mentally I'm feeling pretty good considering missing the gold bounce. The ABX calls didn't move that much anyway since we are so early in the option cycle. So now it's a waiting game for some other signal in the OEX or something else. Sometimes the April cycle is a sideways affair. We'll see how this year plays out.

Monday, March 24, 2008

A nice start to the week for the bulls as the Dow rose 187 points on good volume. Advance/declines were 4 to 1 positive. That should move the summation index back to the upside which would bode well for the near future. But you never know. The talk is that money is coming out of bonds and commodities and finding its way to the stock market. We'll see. I'm sticking with sideways to up for now until we reach the weekly down trend line on the indices. That will be the moment of truth in my opinion. Gold was higher early but closed down around a buck. The XAU followed suit and was off 3/4. ABX and NEM were down fractionally while GG managed a slight gain. The volume was heavy again in ABX. We are overdone here in the gold shares I believe, short term and I have an order in for some ABX calls. This is a scalp trade that I feel could work this week. Not to mention the technicals are blown out to the downside. It's a bounce trade really and one that won't last beyond a day or two, if filled and the timing is right. As always, I could be wrong. GE was down a bit on average volume. Just as gold probably won't go in a straight line down, GE most likely won't continue going in a straight line up. Mentally I'm feeling OK, got a decent nights sleep. I'm focused on gold and ABX for the time being as I think that this is where the current opportunity is. The new option cycle has just begun and normally I'd just be biding my time for the premiums to be better priced. Patience isn't a bad thing. However I think this trade may have potential but only in the short term. Timing, as always, will be key. Also the discipline to stick to a short term time horizon cannot be lost in the shuffle. On to tomorrow.

Thursday, March 20, 2008

Back to the upside today as the Dow gained 262 points on heavy volume. Advance/declines were over 2 to 1 positive. Whether the gain was expiration related or just players hoping this is the bottom is one of the questions. Personally, I think that's it for the bad news for at least a few weeks. But that's a guess. It is an election year and we can't have voters worried later in the year if you're a Republican. However we'll stick with the technicals when it comes to doing the trading. Gold lost another $25 to $30 depending on your choice of markets. Now it's a free fall after an amazing run up. The XAU shed 6 points. ABX, NEM and GG lost over $3, $2 and $1 respectively. GG is showing relative strength again but I really wanted to buy some ABX calls today for the bounce. Yes, there will be a bounce most likely followed by sideways activity until we get going again to the upside here. The dollar has stabilized this week and we'll see how long that lasts. My guess is that we won't be going any lower in the near term. GE was again the star of the day, up almost $2 on very, very heavy volume. Incredible volume really. GE had a week like I've never seen. It can't possibly keep that up. Mentally I'm feeling OK. Would have liked to have the courage to step up and purchase some ABX calls today. Might try it Monday if I get a chance but today could have been the day. I mean really, ABX lost 20% of it's value this week as the funds dumped gold shares. Anyway, that's something to ponder over the long weekend. Time to relax, take a break and get ready for next week. Will things begin to slow down, volatility-wise? We'll see.

Wednesday, March 19, 2008

The roller coaster ride continues as the Dow lost 293 points on heavy volume. Advance/declines were over 2 to 1 negative. Which wasn't too bad considering we lost almost 300. Bottoming process? We'll see. Expiration week gyrations? Perhaps. Just a continuation of the bear market? Time will tell. As usual lots of questions with no easy answers in this market. I'm sticking with a sideways to up theory at this point. With more volatility then usual. Gold dropped another $40 today. Depending on the market you use it will be reported that gold lost $60 today. Whether it's gold futures or spot market, it got clobbered. Nothing goes straight up forever. The XAU lost almost 15 points. GG and NEM were both off over $2. ABX lost almost 10% of its value. The volume was extremely heavy. They pile in and they pile out. There is a buy signal for the gold shares here again but I would not advise it. There will be an entry point again but not yet in my opinion. GE was off a half on heavy volume. It has indeed broken the weekly down trend line. That doesn't mean that it's straight up from here but it is constructive going forward for now. Mentally I'm doing OK. Volatility takes its toll but I don't have any trades going at the moment. We'll get through tomorrow and then take a look at things over the long weekend.

Tuesday, March 18, 2008

The Fed to the rescue again as the Dow soared 420 points! We've seen this before recently. I think this time it might have a little more staying power. Advance/declines were about 10 to 1 positive and the volume was huge. Rates were cut again. There was a non-conformation for yesterdays low with the McClellan oscillator. I'm not saying it's straight up from here but I think we'll stop going lower. It could only be a sideways move, we'll see. I still believe that shorting things gets interesting again when we get to the weekly down trend line. But I could be wrong. At any rate we should stop falling for the time being. Gold lost around $20 after the rate cut. All the good news for gold was already in the price I suppose. The XAU lost over 7 points. ABX, GG and NEM all lost over 2 1/2 on good volume. Maybe they just wanted to run them down for the March expiration puts. We did go parabolic in gold lately so a pullback is in order if not an extended decline. GE was up 1 2/3 on extremely heavy volume. Now when do we see GE move like that unless there's an earnings announcement? We don't. I'll need to check the chart but we could be breaking the longer term down trend line here. That would be overall bullish if true. Mentally I'm a bit tired, did not sleep as long as usual. 2 days before expiration. No trades in the works at the moment. Is it too late to get long something for April? We'll see. It will not be a given. The market has been unusually volatile so far this year. Will it continue? Stay tuned.

Monday, March 17, 2008

Well it wasn't too bad considering a major Wall Street investment bank just went belly-up. The Dow gained 21 points after being down almost 200 and up 100. Advance/declines were 5 to 1 negative and I don't have good volume figures at the moment but I'm sure it was heavy. They managed to keep it propped up today but tomorrow? Who knows? The dollar stabilized for a day and it's in free fall. Fed meeting tomorrow and even if they cut rates, which they will, it really doesn't matter at this point. The damage has been done. The overall market was weak, with the NASDAQ and the S&P 500 both lower. It's another worldwide margin call as the overseas markets were much lower. What happens next is the question. It does look like a 5 wave down pattern in the major indices so we could be near a bottom here sometime this week. Or not. It does seem like a lot of the bad news is out for now. Expiration week though and that good get things overdone. We'll see. Gold was up over $25 at one point but came back to be up $3. The XAU lost 6 points. ABX, GG and NEM were all down, with NEM down the least. How much longer can that party go on? No trades there at the moment. GE was up 1/2 on very heavy volume. My guess is that the word went out to buy stocks such as GE, INTC and MSFT to keep things from getting totally out of control today. At least you know that these companies are going to stick around regardless. Mentally I'm doing OK. 3 days before expiration and a Fed meeting to boot. Hopefully I won't be doing anything foolish here but you never know. Usually when it seems as if the world is falling apart, it's a good time to buy. I agree with that however it may just be a temporary bottom with more to come later on. Or it may not be near the bottom at all. As usual there are a lot of questions with no easy answers.

Friday, March 14, 2008

An interesting Friday as the Dow dropped 195 points on extremely heavy volume. It wasn't so bad as we were down over 300 at one point. A final hour save the day bounce came in to help things. Well they're trying to hold things up here. Advance/declines were 5 to 1 negative. Bear Stearns is going under. That's basically what's happening here but it'll be called a bailout. Everybody wanted to get their money out today and Bear just doesn't have it. Same thing would happen if everybody showed up at your local bank on the same day to withdraw their money. Anyway the option premiums are crazy with out of the money stuff still way overpriced with just 4 days to go. The inflation data was mild but it doesn't matter when major brokerages are failing. Will there be others? Stay tuned. Gold was up 5 bucks but was higher. The XAU rose a point. ABX and GG were up a touch on heavy volume while NEM lost a bit. The dollar is in free fall and everybody loves gold. This won't go on forever but there seems to be no stopping it at the moment. GE lost about 1/2 on heavy volume. It made a comeback along with the overall market. Mentally I'm doing OK, not feeling too well at the moment. No trades on the horizon with 4 days left in the option cycle. That could change but we do have the Fed on Tuesday. The markets are very volatile at the moment. If there is a decent signal, I'll do something but otherwise preservation of capital isn't a bad thing. In the last hour or so today the market moved 200 points one way and then 100 points the other. You've got to be able to handle that. For now it's the weekend and time for a break. A check of the charts and perhaps a game plan for April.

Thursday, March 13, 2008

Today a one day reversal to the upside as the Dow gained 35 points on heavy volume. We were off more than 200 points early and came all the way back. Advance/declines were positive. It seems as if we are trying to put in some type of bottom here but it is no sure thing just yet. Hard to say exactly what is going on but the expiration week gyrations are starting early due to next Fridays holiday. Hard to trade it right here as the risk is high. Weak retail sales data today and we get an inflation report tomorrow. Might hear the case for stagflation again. Gold was up $13 today and the futures hit $1000 for the first time today. The XAU gained 7 points. ABX and NEM were both up over $2 and GG rose 1 3/4. So much for my thoughts on shorting this group. It's a momentum driven gold market here. But we are still going straight up and that never ends well. GE was up almost a 1/4 on heavy volume again. We are almost at the weekly down trend line here. If we get through that it will help put a stop to the overall down market that we've been in since late last year in my opinion. But it hasn't happened yet. Mentally I'm feeling much better. Got a decent nights sleep and that helps a lot. Trading all the time can be a drain. You've got to balance things out once in a while. That doesn't mean you pack up and are not paying attention. It does mean that you pick your spots and try not to make it so intense by trading every tick in the market. It isn't an easy game and it's best to try not to make it any harder.

Wednesday, March 12, 2008

A one day reversal to the downside as the Dow closed lower by 46 points. We were up around 140 at one point. Volume was good and the advance/declines were negative. After yesterdays stellar gains it wasn't a surprise to see some downside. It's where we go from here that matters. Was it a one day oversold bounce? I certainly don't know but time will tell. I dumped the OEX calls. The entry was good but he exit was horrible. Greedy? Tired? Just plain dumb? The gain was well over 100% in 2 days but it could have been better. I had a chance to do well but blew it. And so it goes. Gold was up $4 and the XAU was about unchanged. ABX was up 1/4 while GG and NEM were down fractionally. Was busy with the OEX trade and haven't been watching gold as closely as usual. Will check the charts tonight. Am leaning to the short side though even with the recent buy signal. Guessing the Fed will disappoint next week and there will be some dollar short covering. GE was up 60 cents on very heavy volume again. It's possible that GE is going to turn around here. That could bode well for the overall market. We'll see. Mentally, I'm spent at the moment. Tired and not happy with the OEX trade. But you've gotta move on. We quickly reached levels in the past 2 days that I thought would take a lot longer. I needed to make the adjustment but didn't. It's never an easy time or so it seems. But that's the nature of the game. On to the next trade.

Tuesday, March 11, 2008

The Fed to the rescue as the Dow roars ahead 416 points! Volume was huge and the advance/declines were over 4 to 1 positive. Today the Fed decided to play musical chairs with bank mortgage debt. I don't really know what it all means but the stock market viewed it as a big positive. But what happens after today? We've relieved the oversold condition by far. The short term down trend line has been broken to the upside. There is another longer term down trend line about 250 Dow points from here. At this rate we'll get there tomorrow but I doubt it. The OEX calls from yesterday are in the black. Hopefully there will be some follow through to the upside tomorrow and I'll probably get out. It was supposed to be a short term trade but there is room to go higher. Gold was up about $4 today while the XAU surged 9 1/2 points. GG and NEM both up over $2, while ABX gained over a buck. Volume was nothing special. The gold signal from yesterday worked again. However I've noticed that lately when NEM is leading the way we are nearing the end of the up move for the gold shares. We'll see if it's true this time around. GE had an incredible day, up 1 3/4 on heavy volume. Is the down trend over in GE? It still hasn't broken the weekly down trend line but it is way overdone on the downside. Mentally I'm a bit tired as I didn't sleep all that well. That and the ongoing position at times can take a toll. The question now is, was today a one day wonder? Time will tell. A bounce was due but this was beyond super ball material. The shorts got squeezed big time. The advance/declines were not as robust as I would have liked for a move like this. So we''ll see what happens. Retail sales and inflation data later this week. What the Fed did today won't change those numbers. Anyway, some follow through tomorrow morning supposedly and we'll go from there.

Monday, March 10, 2008

The downside continues with the Dow off another 153 points on good volume. Advance/declines were 5 to 1 negative. Oversold and staying there. Summation index still pointing down. There is a chance that we could even crash here. That said, I bought some OEX calls today. Now who in their right mind would be purchasing calls in a market like this? A bounce is overdue. I think we will have a triple digit up day tomorrow. The medium term technicals are blown out to the downside. This is a short term trade to be closed before the end of the week unless something dramatic to the upside occurs. And I doubt that because we could just as easily fall apart even more here. Gold lost a couple bucks today but the XAU shed 7 1/2. NEM was the strongest today as it only was off fractionally. ABX and GG were both off over a point on light volume. I'm getting another buy signal for gold here today. Some gold calls tomorrow? GE lost 1/2 on good volume and leading the market down. Would like to see some strength in GE for the OEX trade. But the trend is down. Mentally I'm a bit tired as I didn't get enough sleep. Needless to say actually being in a trade again requires a lot of attention and energy. We are at an interesting point in the market. We could just head down for a final washout here. Or not. I have an idea of what will happen here so I had to put on the trade. As always, I could be wrong. We'll see what happens tomorrow.

Friday, March 07, 2008

Closed the week on a down note with the Dow losing 147 points on good volume. Advance/declines were around 2 to 1 negative. We did come back a bit but the trend remains down. That said I think that you can buy weakness Monday for a short term trade. That's the idea at the moment. My work says that Monday or Tuesday will be a decent up day. We could completely collapse here as well but that is a low percentage bet. I think we'll see 580 on the OEX before expiration but we are getting medium term oversold and are already short term oversold. I'll check things over the weekend. Gold lost a couple bucks but the XAU dropped over 6 points. ABX, GG and NEM were all down around 1 1/2 on lighter volume. I have no trades in mind there at the moment. Will try and wait for the next buy signal. GE lost 1/2 on good volume. I'm thinking of the April 33 calls perhaps at some point. But we'll see. Mentally feeling OK. Somewhat thinking I've got a handle on things marketwise here. Will try and get the conviction over the weekend to take a trade early next week. Summation index is still heading down and approaching the zero line which usually leads to the market unraveling. However we have been dropping for so long that a bounce is due. At this point I'd like to try and play the bounce and then get some puts after that. It's all a guess but we should see some kind of rebound attempt early in the week and then after that it's anybodies guess. For now it's the weekend, time to regroup, check the charts and get some rest

Thursday, March 06, 2008

Breaking out to the downside today as the Dow lost 215 points on good volume. Advance/declines were about 9 to 1 negative. The OEX puts were always too expensive. But we are heading lower even if we bounce from time to time. Still may get a chance to play the downside but that would be next week. May not happen. Gold lost $10 today while the XAU only dropped 1/2. ABX and NEM were down today while GG continued its relative strength, up a touch. The dollar continues lower but that won't go on forever in a straight line. GE lost 3/4 on good volume and is looking to take out its lows. Tomorrow maybe? Mentally I'm feeling OK I suppose. Would love to have a conviction for a position here but I don't. Summation index still heading lower and it has been the key here. There's a chance things could fall apart tomorrow but that's not a certainty. The employment report will be a mover early. A weak report would probably mean more weakness in equities and vice versa. Who knows, we could get a short covering rally again. There are a lot of questions at the moment. This much is certain. We are breaking out to the downside of the consolidation as of today. Unless we turn around tomorrow in a big way, the trend is down.

Wednesday, March 05, 2008

Up, down, up as the market tries to make up its mind here. The Dow gained 41 points today on average volume. Advance/declines were positive. We were oversold and a bounce is to be expected. Have we formed a bottom and on the way to much higher prices? It's possible but not a certainty. The summation index will still be pointing down and that is troubling for the upside at this point. But it all could change. Employment report on Friday and that will be the key in my opinion. Had every chance to sell off today and the market held on. Gold came back big, up over $20. The XAU rose over 7 1/2 points. ABX, GG and NEM were all up over a point. Will we get to $1000 this week? Maybe. Do I still want some gold calls? This market is moving back and forth so much lately that it is hard to say what is going to happen. Can't go up forever though. GE was up 20 cents on average volume. No trades there. Mentally feeling OK, slept well. Really have the feeling that getting long here is the way to go but just can't bring myself to do it. I don't think rallies have any real staying power in a market like this. I could be wrong. Did just get a buy signal on one of the indicators that could last into early next week. Or not. That is part of the problem. We are still in a sideways pattern until proven otherwise. It will break out sooner or later. Waiting for that break requires discipline and patience. It isn't easy.

Tuesday, March 04, 2008

We got a big move today but it was to the downside. The Dow was off over 200 points but came back in the last hour or so to be down 45 on the day. Advance/declines were 2 to 1 negative and the volume was heavy. If you had the guts you could have bought the weakness. We are still short term oversold and I would expect upside tomorrow. What to do after that is the key. Perhaps today was the end of the selling for a while. It's possible. But it's also possible that it's just another oversold bounce. We did break out to the downside of this lengthy consolidation but we came right back up into it. The summation index continues lower. There are conflicting signals at the moment. It's never easy. Gold finally took a break, losing over $17. The XAU dropped over 7 points. ABX and NEM each lost over $2 on good volume. GG off over a point. Is this the rollover in gold? Do I want to get some calls now? Again, confusion here reigns at the moment. If the overall market holds up here, that should help gold and we'll hit $1000 before the March expiration. If not, who knows? GE was up 20 cents on average volume. Is GE foretelling the direction of things to come? So many questions with so few answers at the moment. Mentally I'm feeling fine, got a good nights sleep. What is needed at the moment is an idea and the conviction to go with it. I would like to be positioned in something before the employment report on Friday. You don't lose anything on the sidelines but you don't make anything either. When in doubt, stay out is also something that shouldn't be ignored. I'll see what happens tomorrow and go from there.

Monday, March 03, 2008

We came back from the precipice again today as the Dow lost 7 points on good volume. Advance/declines were negative. The Dow was off almost 100 and came back in the last hour. We are at the bottom of the consolidation rectangle and could of broke out to the downside but did not. At this point we are short term oversold. The summation index is pointing down but the McClellan oscillator issued a signal for a big move within the next 2 trading days with the odds of it being to the upside. The signals seem to be to purchase some OEX calls. We'll see. Gold was up another $9 today continuing the straight line upward. The XAU gained back 6 1/2. I almost bought some NEM calls. Maybe tomorrow I'll get some gold calls but the risk is high. ABX and NEM were both up over a dollar and GG gained 1/2. How long can this last? Usually longer then you think. Money continues to go to gold but at some point it will come back out and it will come back out quick. When that point is, is anybodies guess. GE was up 1/3 on light volume. No trades there but perhaps the gain is a preview of thing to come for the overall market. Or not. Mentally I'm feeling tired, did not sleep well. My thinking is that any weakness can be bought tomorrow for a short term trade to the upside. I'm not sure I'll do it though. This has been a long consolidation for the indices. I still think the lows will be taken out sooner or later. That is really the trade that I'd like to be in. But I could be wrong. Employment report on Friday and that should be the mover of the week. Perhaps I will have to wait and position myself before then.