Friday, August 29, 2008
We ended the month on a down note as the Dow lost 171 points. Volume was light as the long weekend begins. Advance/declines were almost 2 to 1 negative. I don't know how much emphasis you can put on the action this week. The volume wasn't there all week. However the summation index continues to the upside and that has to be respected. Gold was off a couple bucks and the XAU lost 1 3/4. ABX, GG and NEM all had fractional losses on light volume. I still think I'm going to get stopped out of the GG calls. Either that or I'm going to have to sell them next week. We'll see. GE lost 60 cents on light volume. Mentally I'm doing OK, slept better than lately. Not much else to say on the last trading day of August. As usual I'll go over the charts this weekend and try and come up with some sort of game plan for next week. It will be good to have an extra day to think things over and figure out what to do from here. For now, it's time for a break.
Thursday, August 28, 2008
More room to the upside as the Dow gained 213 points on better volume. Advance/declines were over 3 to 1 positive. Summation index back to the upside. Short covering? End of the month movement? Beginning of a sustained up move? Plenty of questions. The volume wasn't that good normally but it is the last week of August. Long weekend almost upon us. Gold was up $4 but was much higher early in the day. The XAU had the same price pattern and ended down a 1/4. ABX, GG and NEM ended up slightly down to flat on light volume. The pattern for the gold stocks today was the same as it's been for most of the week. Opening higher and then selling off throughout the day. Basically the gold shares haven't been able to hold their gains. That doesn't bode well going forward. We're getting overbought here as well. My guess at this point is that I will get stopped out. We'll see. GE gained 60 cents on light volume. No trades there for now. Mentally I'm doing OK, haven't been sleeping good lately. I really don't know if this weeks market action is setting up for a fall or if we are going to get to 620 soon on the OEX. Sometimes what happens in September is that we are strong in the first half of the month and then weak in the second half. Or vice versa. The breadth has been very good lately. What's been missing is the volume. That is why it is hard to trust it at the moment. End of the month tomorrow and we'll go from there.
Wednesday, August 27, 2008
To the upside today as the Dow gained 90 points on light volume. Advance/declines were 3 to 1 positive. Hard to make much of this weeks action but today looked good for the bulls. I think we'll meander into the weekend but that's a guess. Next week it'll be back to business. Gold rose about $5 today and the XAU gained 3 3/4. ABX and NEM gained a buck, with GG up 3/4. All had light volume and all are approaching short term overbought territory. The GG call trade continues to be positive. It will be a tricky time trying to get out of this thing with the most profit. And I still like it on a longer term basis. I'm thinking about just holding for the long term but the stop loss order remains in place. We'll see. GE was flat on light volume. Mentally I'm feeling better with a better nights sleep. End of the month coming up. The dollar bounced around and ended lower. Oil was up a couple of dollars. Both were supportive for gold. It may seem as though I've been posting a lot about gold lately but it's where I see opportunity at the moment. The OEX has been volatile and choppy. That's a tough trading environment. There hasn't been a clear signal there for me in some time. That will change but it hasn't yet. So I have to focus on what I'm looking at. It changes of course but for now it's the gold shares.
Tuesday, August 26, 2008
The Dow gained 26 points on light volume. Advance/declines were positive. No downside follow through and that was a positive. It felt more like summer in the markets today. That could be the story for the rest of the week. Gold moved up a couple bucks and the XAU gained a 1/2. ADX and GG were flat, while NEM rose 1/2. Volume was light again. Oil was up a touch and the dollar was stronger. The GG calls are losing time premium as we drift. I've got a stop loss order in. The stochastic looks like it could roll over here earlier than expected. If it does than I'm out and I'll look to buy them back next week. The other scenario would be that we continue to rally here in GG but that doesn't look like it will happen this week. But you never know. GE lost a dime on light volume. Perhaps I'll take a look at the September calls there. If I had the guts I would strongly look at some OEX calls here. But I don't have a clear signal yet. Mentally I'm feeling a bit tired, did not sleep well last night. Trying to do the right thing in the GG trade. The stop loss order eliminates some of the risk, which is important. However there is plenty of time for that trade to work. We're still oversold on a weekly basis. One of my thoughts is that there could be some selling in GG as we close the month and losing positions are eliminated. But that's a guess. Technically it could be rolling over here, short term. We'll see what tomorrow brings.
Monday, August 25, 2008
A downer Monday as the Dow lost 242 on very light volume. Advance/declines were over 3 to 1 negative. No buyers today and a thin market. The summer doldrums did not appear this year. Where we go from here is anybodies guess. It's a tough trading environment. No trades in the OEX on the horizon for now. Gold lost around 8 bucks on the futures. The XAU dropped around 1 3/4. ABX, GG and NEM all had fractional losses on light volume. I still like the volume pattern in the gold shares but that could change overnight. GG calls still in the black. I'm going to try and wait for the stochastic to reach overbought territory. That is the plan. It may roll over before we get there though. It's never easy. GE lost 80 cents on light volume. Nothing doing there for now. Mentally I'm a bit tired, did not sleep well. I was hoping for a slow week but that doesn't seem to be the case with todays action, price wise. A lot of people will be on vacation this week so I don't really know how much weight you can put on the moves. I would not expect a complete collapse here but you never know. I doubt it but that doesn't mean anything. I'm going to try and stick to the plan with regards to the GG call trade but I'm ready to get out if that's what the market is saying. So we'll see what happens.
Friday, August 22, 2008
A summer Friday rally as the Dow gained 198 points on light volume. Advance/declines were over 2 to 1 positive. Are we heading to 620 on the OEX? Perhaps but there is still a long way to go there. The summation index should be back to the upside after today. No trades in mind for the OEX until we see a decent signal. Gold lost ground today, down $5 on the futures and twice that in the after market. The XAU lost 5 points. ABX, GG and NEM were all lower. ABX and GG each shed more that a point. The volume was lighter than lately. The GG calls are still showing a profit. The volume pattern is positive for the upside for now. But we know how that can change. The dollar had a good day and oil gave back everything it gained yesterday. I'm going to look for slow trading in gold next week. GE was up 1/3 on light volume. Would have liked to see it higher since we gained almost 200 points. Mentally I'm feeling OK, slept well enough. So where do we go from here? I suppose that I'm still going to wait for GG to get to the top of the stochastic range before I dump the calls. Unless something dramatic occurs. Perhaps we will take next week to build a better base there. I'll wait on the OEX. I'll be checking the charts over the weekend. For now it's Friday, at the end of summer and time for a break.
Thursday, August 21, 2008
We opened lower and closed higher for a one day reversal in the Dow. It gained 13 points on average volume. Advance/declines were negative though. The news wasn't all that great and oil gained over 5 bucks. However the market was able to shrug that off and close up on the day. We broke the daily up trend line a few days ago on the indices but we haven't really seen a sustained down move. I don't exactly know what to make of it so I'm on the sidelines for OEX trading. Feels like it wants to move higher. Gold had a stellar day, up over $20. The dollar was weak today and oil helped support the up move. The XAU climbed almost 8 1/2. That is more of what I've been looking for. ABX, GG and NEM all posted good gains, with ABX and GG both up over $2 on the day. Volume was heavy and continues to confirm the move higher. The GG calls are doing well for now. When to exit is the next question. I would like to wait until the slow stochastic reaches its peak for the gold shares. It's not there yet. GE was up a touch on light volume. Nothing doing there for now either. Mentally I'm doing alright, didn't feel all that well last night. Trying to figure out just what the market is trying to say here. The news continues to be lousy but we haven't sold off that much. There are buyers out there. I suppose I will continue to wait for the OEX to reach the weekly down trend line at about 615-620. Summation index is moving sideways. No clear signal but like I said, it has the feel of a market that wants to go higher, for whatever reasons. We'll see what happens.
Wednesday, August 20, 2008
An interesting day today as the Dow gained 69 points on good volume. Advance/declines were positive. Bad news from the mortgage industry but we managed to move higher. We were a bit short term oversold but not enough to trade off of. Some data out tomorrow and that's about it for the week. The day was choppy, moving up and down a couple of times. No trades in mind right now. Gold was flat on the day but the XAU gained 2 1/2. Most of it was in FCX. ABX, GG and NEM all had fractional gains on very good volume. I'm seeing what I'd like to see here. The gold shares moving higher with good volume even when the metal itself doesn't do much. That said, we are overbought and a pull back in the gold shares would not be a surprise. The GG calls are still in the black. GE was flat on light volume. Mentally I'm feeling OK. Just trying to get through the rest of the month really. What I mean by that is we've had such a volatile summer this year, that I'd like to see things slow down before everybody comes back after Labor day. One of the facts of the game is that you always have to make adjustments. The analysis never stops and change is the norm. Usually in the summer you can take it easy every now and then because things slow down. That hasn't been the case this year. So if we could move sideways here for a couple of weeks, I'd welcome that. However the market goes where it wants to. That's another undeniable fact.
Tuesday, August 19, 2008
The Dow lost 130 points on average volume. Advance/declines were over 2 to 1 negative. We have broken the up trend line from the beginning of the rally in July. The McClellan oscillator will be moving into negative territory and the summation index should begin to roll over. We can always snap back to the up trend line in the days ahead. We could always just turn around and head higher also, the way the market has been so volatile. No OEX trades for now. Gold was up $11 on the futures and the XAU rose 3 1/4. ABX, GG and NEM were all higher with GG leading the way, up 1 1/3. Volume was good and that is a positive going forward. I would have liked to have seen the XAU gain more ground in the past 2 sessions but we'll take what we can get. The GG calls are showing a profit. I would not be surprised to see GG move sideways for a while and that would not necessarily be a bad thing. GE lost about 1/2 on light volume. Was lower earlier. Mentally I feel OK, slept OK. Bad news on the inflation data today but we didn't exactly fall apart in the indices. We did break that up trend line though, so we'll see. I doubt gold will continue straight up here, as it did on the decline. Base building is probably in order. I'll have to figure out what to do with the GG calls. At this point I'm leaning towards selling them if a certain profit target is hit and hopefully buying them back again cheaper later on. We'll see.
Monday, August 18, 2008
It was a downer Monday as the Dow lost 180 points. Advance/declines were over 2 to 1 negative and the volume was light. Expiration hangover? Could be. We are back at the multi-week up trend line so we need to hold here or things change. Inflation data out tomorrow but like I said before, it's a slow week for data. Gold had a nice bounce, up $13 but the gold shares didn't follow. The XAU was up only 2 points. ABX, GG and NEM had gains between 1/2 and 3/4. Volume was good for a summer Monday though. MY GG calls are where I bought them. I still think I am a bit early there. The dollar didn't do much today. GE lost 40 cents on light volume. Mentally I'm feeling OK, slept pretty good. I think we may be in a for a 2 week lull here. Which makes managing the GG trade slow torture if I'm correct. There's entering the trade, managing the trade and exiting the trade. I would have liked to see the gold shares move much higher today considering the move in the precious metal. That fact that they didn't suggests that a base building period may be upon us. Or maybe it's just a rest from the recent collapse. Time will tell. I'm out to October but there will be time decay regardless. Looking at things over the weekend makes me think that I'm early there. So we'll see. I'm still going to wait for the OEX to hit 620 to short it, if we get there. Holding up right here is key.
Friday, August 15, 2008
A somewhat mild expiration as the Dow gained 44 points on light volume. Advance/declines were about even. It finally felt like a Friday in the summer. OEX at 599 and no trades on the horizon there. I really think we will slow down until after Labor day. But I could be wrong. Gold continues its free fall, down another 22 bucks. The XAU lost 5 1/4. ABX, GG and NEM were all off 1 1/3 on heavy volume. My overnight order for GG calls was filled. I think I'm a bit early here. There will be a divergence on the RSI if we hold up here but the gold market has the feel of something that wants to continue lower. Perhaps I should have been more patient. I'm out to October so we'll see what happens. I may just sell out and try again at the end of the month. We'll see. GE was up 1/3 on light volume. Mentally I'm doing OK, did not sleep that well. Well, I'm back in another trade and it feels a bit too early. But the timing is never exact anyway. The September option cycle has an extra week so that should keep the premiums a bit higher. Not a lot of data out next week so it could be pretty slow. The volume selling gold has been pretty heavy and I'm wondering how long that can last. Usually longer than you think. The macro picture has changed there also with the recent dollar strength. So why even try the calls? You've got to go against the grain sometimes. The dollar has already rallied. When everyone knows about it, it's too late. When nobody wants something is when you have to want it. So we'll see what happens. I'll be checking the charts over the weekend. For now though, it's time for a break.
Thursday, August 14, 2008
The up trend line is holding for now as the Dow gained 83 points on what looks like lighter volume. Advance/declines were positive. Expiration tomorrow. Still in an uptrend as the news today was clearly negative but we went higher anyway. Summation index continues to the upside. I'm thinking things could slow down a bit beginning next week but it hasn't happened yet this summer. Gold was back down over $15 today. The XAU lost 6 1/2. ABX and NEM lost around 1 1/2, while GG dropped over 2. Volume was good but not as much as on the rise yesterday. I'm putting in an overnight order for GG calls again. I really think we are at the moment of truth for gold longer term here. We either hold up and continue the multi-year uptrend or we break down and the game has changed. There is a possibility that the game has changed with a macro shift into the US dollar. We are at a multi-year weekly downtrend line in the dollar index. If we break through on good volume, that will be the signal that things have changed. It could happen. GE gained 1/4 on light volume. Mentally I feel OK, slept good enough. Tomorrow could be an interesting day as well. I'm thinking that the gold shares could continue to fall off here and retest the earlier week lows. We'll see. They could also blow out to the downside and signal a continuation to much lower levels. Time will tell. I'm still going to wait for the OEX to get to 620 before I attempt anything there. On to expiration.
Wednesday, August 13, 2008
Continuing to the downside as the Dow lost 109 points on average volume. Advance/declines were negative. The Dow was weaker than the overall market. We also came down and touched the near term up trend line and bounced off. So we need to hold on here or the trend will change. Gold came back to the upside by $16 and continues higher in the after market. The XAU gained 8 1/4. ABX, GG and NEM were all higher by 1 3/4 on heavy volume. I'll say that the bottom is on for the gold shares. None of my calls were filled. That's usually the case when the trades are going to work. I suppose I should have made adjustments but it's early for the move. I'll look to get long as we work our way back to test the lows, if that occurs. Oil was higher today too. Another missed opportunity in gold but it's part of the game. GE lost 40 cents on light volume. It lends support to the theory that the decline here isn't going to last. But we'll see. Mentally I'm feeling OK, didn't sleep all that well. So where do we go from here? I will look to get some OEX puts when we get to 620 on the index. It could take a few weeks or it may not happen at all. I will look to get some ABX or GG calls on a retest of the recent lows. So there's a couple of ideas in the works. I'm not saying that I won't change my mind depending on market circumstances. September has an extra week on the option cycle so there's no hurry. We'll see how we close out expiration week.
Tuesday, August 12, 2008
The Dow lost 140 points today on OK volume. Advance/declines were about 2 to 1 negative. So much for the early week positive expiration bias. We're still in an uptrend though. Oil was lower today and that didn't help. No trades here for now. Gold lost another $13 but is coming back in the aftermarket. The XAU gained 4 1/4. ABX and NEM both up 3/4, while GG rose 1 1/2. They all had good volume. I'd like to think we are putting in a bottom here. I had some orders for calls in but they were not filled. I'm leaving in some overnight orders. The options didn't move much even with the gains of today and that has me puzzled. The gold shares are still very oversold. I think it's worth taking a shot here but it may just be a dead cat bounce. GE lost 1/4 on light volume. Although I haven't traded GE in a while, I still feel it's a good proxy for the overall market. Mentally I feel pretty good, slept well. I'm still making a case in my mind for the gold shares here. They have fallen so far, so fast that I have to believe a decent bounce is going to occur. I could be wrong. And I could be late. I'm going to try not to chase things here. There's also the possibility that we just move sideways for quite some time on the gold indices. 3 days before expiration. I'm also thinking that perhaps things will slow down in the next couple of weeks before Labor day. It hasn't happened yet this summer so we'll see.
Monday, August 11, 2008
More room on the upside for Monday as the Dow gained 48 points. The advance/declines were positive and the volume was good. The positive expiration bias seem to be in effect for now. My thinking remains that the OEX could get to 620 before it stalls. We're around 605 at the moment. Money continues to flow out of other instruments and into stocks. The summation index continues higher also. Gold is in free fall. It dropped $35 today as the dollar remains strong. The XAU fell almost 8 points. ABX and NEM lost over 2 points each and GG shed another buck. Volume was extremely heavy again. Oversold and staying there. I did put in a couple of buy orders for calls but they were not filled. Trying to catch a falling knife here? Probably. You really don't know when the carnage in gold will end. However the dollar has reached the point I expected resistance to come in. I'm going out to October on the calls. The gold indices have reached their 200 day moving averages on a weekly basis. Yes they could just blow right through them but I expect some type of attempt at support to surface here considering how oversold we are. But I could be wrong. It might just be an utter collapse. Gold is following oil and we are just about at the up trend line in oil from months ago as well. Support there should come in at 110 and we are around 115. I will check things again overnight and perhaps leave in some overnight orders. GE was up 1/3 on average volume. Nothing doing there. Mentally I'm doing OK, could have slept better. Not in a hurry to make a trade but I think there's an opportunity here. My guess is the overall market should remain positive for the beginning of the week at least. However I'm looking at the gold shares again. I think going out an extra month on the options will work to my benefit. The media is hyping how strong the dollar is all of a sudden and that usually is at least good for a move in the opposite direction. Dollar strength has helped stocks as money looks to invest in US assets of late. It's also taken gold and the gold shares down in a straight line. That won't last forever, will it?
Friday, August 08, 2008
Up and down we go. Back to the upside for the Dow as it gained 301 points on what looks to be average volume. Advance/declines were a bit over 2 to 1 positive. Still moving higher but this is a tough trading market. Positive expiration bias in effect? Could be. I think it has more to do with the dollar rally as investors look for dollar denominated assets. But that's just a guess. Gold continues lower, down around $15. The gold shares continue their free fall with the XAU off 6 2/3. ABX and NEM off a buck. GG down over 2. Volume heavy again. It's been an incredible drop for the gold shares. I'm still looking at going out to the October calls, perhaps next week. Oil has tanked, off another $5 today. The commodities are seeing money flee and it's finding a home in the stock market. The stronger dollar is the main reason in my opinion. We are just about at what I consider resistance for the dollar. So the time for the gold shares could be upon us. Or not. GE was up a buck on average volume. Its pattern is following the overall market here. Mentally I'm feeling OK, slept well. We have seen a tremendous shift in the money flows in the past few weeks. The question is how long can it go on? Usually, longer than you think. I'm going to have to check the longer term charts carefully over the weekend. No summer doldrums this year. But it's the weekend and time for a break. August in summertime.
Thursday, August 07, 2008
Back to the downside now as the Dow lost 225 points on good volume. Advance/declines were 3 to 1 negative as we got the opposite of Tuesdays action. It makes for a tough trading market. I guess that's why I'm on the sidelines at the moment. Time for the OEX calls again? I certainly don't know and don't think it's worth the risk at the moment. Patience is what I'm calling for. It isn't easy. Gold lost $5 and the XAU fell 1 1/2. ABX and GG were both off 1/2, while NEM eeked out a small gain. Here is where I'd like to make a play and getting long is my choice. However I'm trying to wait until the dollar stops going up as it did again today. I really think that gold is done on the downside here for the most part. However I could be wrong and have been lately. GE lost 40 cents on light volume. No hurry there to try anything. I keep an eye on it as a proxy for the overall market but it isn't the greatest trading vehicle. Mentally I'm feeling OK. Doing my best to not make any stupid moves before expiration next Friday. But you never know. I don't see any compelling short term set-ups at this point in time. Yes, I'm looking at the gold shares again but I'd like to go out to the October options and they're expensive. So it's a wait and see type of approach for now. As I've said I even might wait until Labor Day to make the next trade but that is a long way off. Discipline isn't easy and it's not for everybody. But if you want to succeed in the game, you've got to have it. So I'm going to try and wait things out here and see where that leads.
Wednesday, August 06, 2008
A bit of follow through to yesterdays big gain as the Dow was up 40 points on average volume. Advance/declines were positive. We were off about 100 early in the day. Money continues to rotate into stocks and the trend for now is higher. Summation index continues higher. The OEX is at 597 and I think we could get to 620 before stiffer resistance sets in. Gold futures lost a couple bucks today but the XAU rose 5 1/2 points. An oversold bounce was due, no doubt about that. However the gold shares were mixed with ABX closing down on the day, while GG and NEM both managed about a gain of a point. Volume was heavy. The dollar continues higher here and gold probably won't do much to the upside while that trend is in place. But I am keeping an eye on things here because we could be forming a bottom in the gold shares. I'm going to give it some time though. GE was off 1/4 on light volume. Nothing doing there. Mentally I feel fine, slept well. Not much time to go in the August option cycle and I don't see any near term trades on the horizon. September has an extra week for the options and premiums will reflect that. I'm not trying to push anything here at the moment. If a good signal for the OEX appears, I'll trade it. Otherwise I may just lay low until Labor Day when all the major players are back. It's been a crazy summer but there's a chance things will settle down in August. Or not.
Tuesday, August 05, 2008
An explosion to the upside as the Dow gained 332 points on good volume. Advance/declines were 3 to 1 positive. It looks like we are breaking through the daily downtrend line today. That's a positive. The Fed left rates unchanged and the statement was viewed as bullish. No chance to buy the OEX calls now. This summer has been more volatile than any I can remember in recent history. No doldrums this year. Gold continues to get pummeled, down another twenty bucks or so today. Money is moving out of commodities and into equities. ABX, GG and NEM all lost at least 2/12 with ABX down 3. The XAU dropped 7 3/4. Volume was very heavy. No support levels are holding. It is an incredible ride down. The dollar is continuing higher for now and I think that is the main catalyst for the downside move in commodities. GE had a good day, up a buck on average volume. I'm not looking at doing anything there. Mentally I'm doing OK, slept alright. No trades in the immediate future as it stands now. I'm in standby mode, waiting for a decent signal. I'm not going to press things here after the recent debacle. So it's time to be patient with a wait and see attitude.
Monday, August 04, 2008
Monday in the summer as the Dow lost 42 points on lighter volume. Advance/declines were about 2 to 1 negative. The overall market was weaker than the Dow. Fed meeting tomorrow. Everyone expects no change in rates. No good signal one way or the other for the OEX. I'm on the sidelines. Gold dropped another $15. The XAU fell over 7 1/2 points. It has been an incredible straight fall down for the gold shares. They keep getting more oversold. ABX, GG and NEM all down, with the latter two dropping over a point apiece. At some point there will be a snap back rally. These shares are not going to go to zero. I am amazed that they have fallen this much in such a short period of time. But I'm not going to try and guess what will happen. I'm still licking my wounds from the last attempts at trying to call a bottom here. GE lost a touch on light volume. Nothing doing there for now. Mentally I'm doing OK. Less than 2 weeks left for the August option cycle. We should get some movement off the Fed statement tomorrow. Perhaps if we continue to see weakness into the middle of the week I'll get some OEX calls for expiration week. Summation index continues to the upside, which supports the long side. So we'll see what happens with the Fed tomorrow.
Friday, August 01, 2008
Friday in the summer as the Dow lost 51 points. I'm getting a bad data feed on the advance/declines and volume figures. Unemployment rose and we lost more jobs in July. Doesn't seem to be bothering the market that much. No OEX trades for now. Gold lost 5 bucks and the gold shares continued to get hammered. The XAU lost 6 1/4. ABX, GG and NEM all down on good volume, with ABX leading the way off 1 3/4. I thought that the bottom was put in this week but I was wrong again. The selling is relentless as money is just moving out of gold and into the stock market. Or so it seems. The buy signal reading for the gold shares is the highest that I can remember. But it isn't working. I'll need to check the longer term XAU charts this weekend. It could be the end of the bull move there but I don't really think so. GE was flat on light volume. Not trades there but perhaps I'll be looking at some calls there. Mentally I'm doing as well as can be expected following huge losses. It isn't affecting me as it usually does. I'm not really mad at myself. I'm just moving on. Risk control is something that I'll have to address and work on for the next trade. I don't have anything in mind at the moment and I may just take August off as far as trades go. I'm going to check things out over the weekend and go from there. It's time for a break and some relaxation.