Thursday, May 01, 2008
Rally time as the Dow gained 190 points on good volume. Advance/declines were over 2 to 1 positive. It looks like we are breaking out to the upside from the longer term weekly down trend line. That could all change tomorrow with the employment report but I don't think it will. We'll see. I've waited quite a while to get to the longer term down trend line in hopes of buying the OEX puts. But the market has other ideas. Always listen to the market. Summation index continues higher. Gold lost $25 on the spot market and $12 or so on the futures. Depends on which gold quote you use. The dollar was much stronger today and money is now flowing out of commodities. Oil was weaker also. The XAU lost 5 points. ABX, GG and NEM were all lower on good volume. GG showed the better relative strength. The ABX calls I own are back in the red. Gold itself is at $850 and if it doesn't hold up here it will be going much lower. ABX earnings on Tuesday but even that may not be enough to save this trade. GE was up 40 cents on average volume. Mentally I feel pretty good, slept well. Employment report tomorrow. Perhaps if it's weaker than expected gold could get a pop but it seems as if the macro situation there has changed. Money moves around and it is moving out of gold at the moment. We may get an oversold bounce but we've been oversold and are staying there. That's never a good sign for the bullish case. Also we are seeing money coming out of bonds and into stocks as credit worries subside. As long as there are no surprises that probably will continue for a while. On to the employment report.