Thursday, July 17, 2008
The bounce continues as the Dow gained another 200 points on good volume. Advance/declines were 2 to 1 positive. We've put in a near term low for now. We should back and fill from here. That's my guess at the moment. I doubt we will just go straight up. We'll see. Gold futures ended up $8 today but the XAU lost 3 3/4 points. Gold is falling in the aftermarket. ABX, GG and NEM were all lower on heavy volume. ABX is showing better relative strength now. There is a buy signal for the gold shares and I did put in an order for GG calls but canceled it. We have fallen sharply from the highs of Tuesday in the gold shares on good volume. Up trend lines have been broken. We are reaching oversold rather quickly. I'm going to go over the charts tonight and perhaps get some calls on weakness tomorrow. I think the earnings are due in the August option cycle as well. GE was up a touch on average volume. Getting overbought short term there and haven't said that for quite a while. Mentally I'm doing OK. For some reason I'm hesitating on the gold signal. It isn't that I don't believe it but there is a lot of time left on the options. I'm also thinking that the volatility will have to take a break at some point and it is the summer. I also think that is true for the overall market as well. So I don't want to sit in a position and watch the time premium fade away. But that's just some thoughts, not what the market will actually do in all likelihood.