Tuesday, May 27, 2008
A holiday shortened week begins with the Dow gaining 69 points on light volume. Advance/declines were positive. Oversold and definitely due for a bounce and we got it. I did have a thought of getting some OEX calls that expire this week but didn't. Haven't tried them yet but today may have been the time to take a chance. Obviously not a longer term proposition. I'm still leaning to the short side and have an open order in for some OEX puts. Need to be careful here though as the snap back could go farther and last longer then expected. We'll see. Gold lost $20 today as the dollar was higher and oil weaker. The XAU dropped 5 points. ABX, GG and NEM were all down at least a buck with GG off almost 2. Volume was light though. The weekly XAU chart looks ominous as it is, so I'm not looking to trade gold here. Unless a decent signal appears of course. GE was only off a few cents on heavy volume again. The volume has picked up in GE to the downside lately and that is not a good sign in my opinion. But who knows? I've been wrong before. Mentally I'm feeling good after a 3 day break. It's always good to step back from the game once in a while. My thinking is that we will see some positive market action this week based just on the technicals. I'm guessing it's a set up to buy some puts for later on in the June option cycle for those who haven't gotten them yet such as myself. It could just be a 2 day bounce or perhaps stretch out for the whole week. As long as the volume remains light to the upside, shorting things here appears to me to be the way to go. Timing as always is crucial. I do think we have more to go on the downside and am looking to trade accordingly. For now we'll see how far the snap back goes and take it from there. I don't think this is the beginning of a new rally. But the market will do what it does. I'll try to listen.