Wednesday, May 07, 2008
It was a down day for the Dow as we lost 206 points on average volume. Advance/declines were over 2 to 1 negative. Nobody was in a buying mood today as higher oil was deemed the catalyst for the decline. Will it turn the summation index around? Stay tuned. We were overbought and perhaps a short term top is in place. Or it could be that the rally is over and we head lower from here. We'll have to see what happens. Gold lost $6 today and the XAU fell 2 1/2 points. It wasn't too bad as the dollar had a pretty good day. ABX and NEM were lower, heavy volume in ABX. GG bucked the trend and was up on the day. I still have the ABX calls but they're losers. Will have to go into cut the loss mode unless the ECB meeting sends the dollar back down. GE lost 40 cents on average volume. Not much going on there as has been the case lately. Mentally I feel OK, slept well. Now where do we go from here? Was today just a one day sell-off? Have we begun the sell in May and go away syndrome? I don't have the answers yet. I also do not have an explanation for todays action. Perhaps we are setting up for an expiration week rally. But it would all be a guess at this point. There wasn't a clear technical signal for todays sell-off. At any rate, I've been keeping my eye on gold, with the ABX trade still in play. We held up quite well with the rise in the dollar today. Perhaps the major selling in the gold shares is behind us. Time will tell. We'll see what happens tomorrow.