Tuesday, May 20, 2008
The expected weakness materialized as the Dow lost 199 points. The advance/declines were 2 to 1 negative and the volume looks a little light. Is it the beginning of something big? Doesn't look like it as the overall market did not match the decline in the Dow. The summation index might start to turn here though. It bears watching. Plenty of time in the June options cycle. I did put in an overnight order for some OEX puts but we were weak from the start and it wasn't filled. Gold had another good day, up around $15. The XAU rose 4 3/4 as the dollar was weaker. ABX, GG and NEM were all higher on OK volume. GG was up the most. It looks like the June calls for the gold shares is the correct trade here. I missed it. Might be able to try again if we get a pullback. GE lost 70 cents on heavy volume. Perhaps GE is sending a message for the overall market. It looks as though it is breaking down here. Really needs to hold 31.50. Mentally I'm feeling OK. Slept well enough. At this point I'm thinking that this is the first wave down. We should see the market try and come back from here. As it comes back it will possibly give me a chance to pick up the OEX puts again. That is the scenario I'm looking at now. The market will go where it wants. It's possible that this decline will fail to really take hold and we will rally to new highs from the March lows. However, I am going to look for more of a decline. Patience will be required for now and we'll go from there.