Thursday, June 05, 2008
I must say I was surprised to see a rise of 214 points in the Dow today. Advance/declines were over 3 to 1 positive and the volume was good. I canceled the open order for the OEX puts and was thankful that I didn't chase the move down. Short covering today for sure but it was even more impressive than that. With oil up over $5, the market continued higher. Luckily the medium term oversold condition stopped me from buying the puts. Where do we go from here? The overall market was always stronger than the Dow on the way down and that was puzzling. Perhaps it was telling you that the decline didn't have legs. We'll see. I'll have to wait for a signal but I would guess that we're going higher. Gold was down over $5 but the XAU followed the market, higher by 5 1/2. ABX, GG and NEM were all up a buck or more and the volume picked up. The gold shares followed oil and the weaker dollar but gold itself didn't. Don't know what to make of that. I'll try and be patient there. GE was up 1/2 on average volume. It's still oversold but could this be the beginning of something to the upside? I'll have to check the charts. Mentally I'm feeling OK. Trying not to do anything stupid here. Still over 2 weeks on the June option cycle. I'll try not to force things here. There is now room technically for the market to go either way. However todays action certainly looks like the beginning of a multi-day move to the upside. We'll see. Employment report tomorrow.