Wednesday, May 21, 2008
Another downer on Wall Street today as the Dow lost 227 points. Advance/declines were over 2 to 1 negative and the volume was heavy. We're down over 500 points from the high on Monday. That's quite a move. Of course the OEX puts would have worked but not to worry, they still will. The summation index should roll over today. We will be short term oversold by tomorrow and there will be a bounce shortly. I'll look to buy some puts on the bounce. I think it will work but we'll see. Gold continued higher as the dollar has started to fall again. It was up 8 bucks and continues higher in the aftermarket. The XAU lost over 2 points though. ABX was up a touch, while GG and NEM were off fractionally. Volume was pretty good. Perhaps the XAU needs to take a rest here. GE was down another 3/4 on heavy volume. It has broken down through support. I think it's leading the market here and telling us that the downside is for real. Mentally I'm doing OK. Trying not to kick myself too hard for not getting short on Monday but I still think there's time for a downside trade to work. Most likely waiting for sometime next week would be prudent. I do have a target in mind for the OEX and it is quite lower from here. So we'll see. There is a lot of talk about oil lately as it rallies to new all-time highs. Any decline in the price of oil should send the Dow higher, at least on a short term basis. I'll be looking out for that if it occurs also.