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Wednesday, July 23, 2008

Continuing overbought as the Dow tacked on another 30 points. Advance/declines were positive and the volume was good. I'd expect some type of pullback in the next couple of days because we won't just be going straight up. Money has been coming back into stocks with short covering and the selling of bonds. That's my guess. Gold got clobbered again, down $25. They pile in and they pile out. Unfortunately I'm on the wrong side. The dollar got even stronger today. The XAU lost 9 3/4 points. ABX off 3 3/4, GG lost 2 3/4 and NEM fell 2 points. All on heavy volume. My GG calls are dead, I'm waiting for the oversold bounce to dump them at a loss. But at this rate, who knows? Maybe it's too late but they're not at a nickel yet. I guess I got greedy but the buy signal isn't working this time around. It is even stronger than it was but we keep dropping. I can't figure that out. GE was up 3/4 on good volume. Missed out on that one. It too, remains overbought and staying there. The tone of things has changed here. Mentally I'm feeling OK. I suppose I should have let the first week of the new option cycle pass in retrospect. There were signs that the GG trade may not work but there are always questions in the game. You try your best and that's all you can do. You've got to take risks but you also need to pick your spots. Gold will be back but not anytime soon to save the GG trade. We'll see what happens tomorrow.

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