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.