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Friday, February 27, 2009

Drifting lower to close out the month as the Dow lost 119 points on good volume. Advance/declines were negative. Opened lower, came all the way back and then back down again at the close. Summation index headed lower. GE lost 1/2 and my calls were stopped out for a 55% loss. I kind of figured on that a couple of days ago. GE announced a dividend cut and rallied but then sold off again. So another losing trade for 2009 and that has been the story here so far. Gold was flat on the day and the XAU was off 3/4. The gold shares were mixed with ABX off a buck, GG flat and NEM up a buck. Volume was heavy in the gold shares. I suppose my next trade will be here. The gold issues are short term oversold. I'll have to check things over the weekend. Mentally I'm feeling tired, did not get enough sleep. The stock market cannot gain any traction. I still think that we could really see some more downside unless it holds up here. But I don't know where the buying will come from. So on it goes. It is quite a bear market. I'll have to check the charts over the weekend and see what to do from there. For now it's time for a break. Rest up a bit and start fresh on Monday.

Thursday, February 26, 2009

The Dow lost 88 points today on average volume. Advance/declines were negative. We were much higher and closed on the lows of the day. That usually doesn't bode well. End of the month tomorrow. More selling? We'll see. We are overbought on some of my indicators and if we don't hold up in here it will be ugly. GE was much higher and reversed. It ended up a nickel on good volume. My calls are under water and if today is any indication of what's ahead I'll be stopped out tomorrow. Gold lost over $20 but came back a bit in the aftermarket. However the XAU was up almost 2 points. Perhaps gold will stop heading lower. ABX and NEM were up fractionally, while GG gained over a buck. ABX has been a laggard as of late. Perhaps I'll try the GG calls for the next gold share trade. We'll see. I'm trying to stay patient there. Not much else on the radar screen for now. I guess we'll see if the market can hold up here. I'm thinking about getting short before the employment report next Friday if we hold up that long. Mentally I'm feeling good, slept well. I'm really starting to think we are about ready to collapse here but I hope that I'm wrong. Summation index heading lower. Rallies just do not follow through. We are at the last area of support. It sounds ominous. Perhaps things will turn around but I can't seem to find any catalyst for the upside. We'll see how the month ends.

Wednesday, February 25, 2009

The Dow lost 80 points today on average volume. Advance/declines were negative. Summation index still pointing down. Oversold on a medium term basis. My guess here is that we either hold up and move higher or crash. End of the month on Friday. GE lost a dime on heavy volume. My calls were a tick away from being stopped out. I adjusted the price down 5 ticks which probably wasn't the smartest thing in the world to do. We'll see what happens. Gold lost 3 bucks today and is selling off in the aftermarket. The XAU fell 1 1/4. ABX, GG and NEM were all off fractionally on heavy volume. I'm going to try and wait it out here for the gold shares and perhaps go out to April on the calls. Short term oversold on the gold shares here. However I'm inclined to let a base build, if and when that happens. No OEX trades as the premiums are still high with the new option cycle. Mentally I'm feeling tired, did not sleep well. Interesting times in the market at the moment. It's possible we could just grind lower here as well. The GE trade was supposed to be a bounce trade and we didn't get much of a bounce. That could be a problem. However the GE chart looks like this could be the bottom so we'll have to see how it plays out.

Tuesday, February 24, 2009

Finally got the expected bounce as the Dow rose 236 points on average volume. Advance/declines were about 5 to 1 positive. The beginning of something that will last? Who knows? It could all change tomorrow. GE only managed a 1/4 point gain with the Dow up over 200. Very disappointing. I'm going to get stopped out on this trade for another loss. That's how it feels at this point. Gold got clobbered, down $25 as the flight to safety trade gets reined in. The XAU lost 9 points. ABX off over 3, with GG and NEM down more than 2. All on heavy volume. Patience will be required here to get back on the long side. It's too late to short them. Mentally I'm feeling frustrated with the GE trade but what can you do? You give it a shot and keep on going. I have an appointment this afternoon, so the post is short. More tomorrow.

Monday, February 23, 2009

And down we continue to go. The Dow lost 250 points on average volume. Advance/declines were over 5 to 1 negative. So when will it end? Are we going to zero? Of course not. However we are in the fall apart zone it seems. Oversold and staying there. Both short and medium term. A bounce is overdue. But it hasn't happened. It will, but when? It also seems as though it is a sell anything point as well. GE lost another 50 cents on extremely heavy volume. GE is at 8 dollars and change. They will not be going out of business. Incredible. My GE calls are under water. The stop loss order is in and at this rate will be hit tomorrow. So on it goes. Gold lost $7 and the XAU dropped 4 1/4. ABX, GG and NEM all lost about 1 1/4 on average volume. I do think the gold shares will work again at some point but I am going to wait until they are oversold and we get a pullback in gold itself. So it's waiting game there for now. Mentally I'm feeling good, slept well. So where do we go from here? I wish I knew. It is possible that we could crash here and that would be a washout for a while. However I'm a believer in some type of bounce. Short covering or bargain hunting or whatever. I placed the GE trade in that scenario and I'm sticking to it. Tomorrow should be interesting to say the least. Will the slow melt downward continue?

Friday, February 20, 2009

Down once again into the expiration as the Dow lost 100 points on heavy volume. Advance/declines were over 3 to 1 negative. We are very oversold both short and medium term. I expect a decent bounce on Monday or Tuesday. Hence I did buy some GE calls today. GE was down about 3/4 on extremely heavy volume. My thinking is this is a washout to the downside and we should move higher from here. Of course we could just collapse as well. But I don't think so. This is supposed to be a bounce trade so I should be out on Monday or Tuesday. Yes, the last OEX bounce trade failed miserably but this is a new trade. So we'll see. Gold was up $25 today and closed above $1000 for the first time in a while. I still like gold but am looking for a pullback. The gold shares just did not follow gold as well here as the last trip to $1000. The XAU was up 4 3/4. ABX only up 1/3, GG up a buck and NEM led the way, up 3. Volume was good. So I'll try and be patient here and perhaps even wait for the April cycle. But that's a guess. When it gets oversold that will be the time. Mentally I'm feeling a bit tired after a long day. But that's the way it goes. A lot of questions to be answered next week. We are trying to hang in there at these levels. I think we will for now. The McClellan oscillator is probably in -300 territory, so a bounce is certainly in order. But who knows. You try your best and just keep on going. It is the weekend. I'll take a break and check the charts. A rest is in order and then back at it on Monday.

Thursday, February 19, 2009

Grinding lower as the Dow lost 90 points on average volume. Advance/declines were 2 to 1 negative. We are about ready to take out the 2002 lows for the S&P 500. Oversold and staying there. Summation index clearly pointing down. I'm thinking of getting some GE calls for a short term trade. Yes, I know that I said that I'd never try GE again. However there is a bounce coming Monday or Tuesday and the OEX options are too pricey. GE is almost at $10. Incredible. I'll mull it over tonight but I think I might give it a try. Gold lost a couple bucks but the XAU dropped over 6 points. GG and NEM had better than expected earnings so it was a sell on the news affair. ABX and NEM both off around 2 and GG down 1 1/2. Volume was decent as well. Is it time for the gold shares to take a rest? We'll see. That could coincide with a little rally in the market. But it's all just a guess as we wind out way through an epic bear market in stocks. I think gold needs a rest for now but you never know. Mentally I'm feeling fine, slept well again. I really think that you can buy weakness for a short term bounce in the next couple of days. The McClellan oscillator is getting into deep oversold territory. I'm not saying it's the beginning of anything sustainable but it could be tradeable. Whether or not I'm up for the challenge is the main question. So we'll see what the expiration brins tomorrow.

Wednesday, February 18, 2009

We hung around all day as the Dow gained 3 points. Volume was average, while the advance/declines were negative. Seems like we are just waiting to go lower and we are about ready to break the lows of last autumn. No doubt oversold here but it doesn't seem to make a difference. It is a brutal bear market. I'm a fool for buying calls last Friday at the close. Gold continued higher, up over $10 on the futures and continuing higher in the aftermarket. The XAU was up 2 1/4. ABX up over a buck, GG up 3 /4 and NEM up fractionally. The gold shares sold off early and then came back. Earnings for GG and NEM tomorrow. I thought about getting the ABX calls again but did not. I do think there is a chance that ABX will take off to the upside on the earnings on Friday. However with the recent losses that I have taken it is not in the cards for me now. I contemplated leaving in an overnight order yesterday but did not. Gold simply continues higher and there is nothing to stop it at this point. Even with dollar strength. Money is looking to hide and it's hiding in gold. My ideas seem to be OK but I'm not making any money on them. And so it goes. Mentally I'm feeling good, slept well. I've racked up some pretty hefty losses early this year which is the exact opposite of the beginning of last year. Yes, I can climb my way back up but it will take a lot of work and discipline. 2 days before expiration and I shouldn't be making any more trades here this week. A bounce for the market here with expiration? Doesn't seem like it yet. Maybe Friday. Maybe not.

Tuesday, February 17, 2009

It was down from the open and we closed on the low of the day. I guess it doesn't get any bearish than that. The Dow lost 298 points on average volume. Advance/declines were 9 to 1 negative. Summation index solidly down. My OEX calls got killed. They were dead from the start. It was a 75% loss. It was risky, I was wrong and I paid the price. That was an impulse trade and a dumb one at that. Nobodies fault but mine and it continues the terrible decisions that have so far characterized my trading year. Gold was the star of the day, up over $25. However the XAU could only manage a gain of 85 cents. I got killed in the ABX calls as well for a 70% loss. ABX down 3/4, GG was flat and NEM had a gain of over a buck. Heavy volume in the gold shares and they all opened higher but closed lower. Especially ABX. I had the right direction for gold but was trading in the wrong vehicle. GLD has done fine during this gold rally but the gold shares just aren't moving higher. Earnings on Thursday and Friday and somehow I am thinking of trying ABX again for the earnings release on Friday. I may do it. I am quite sure the gold companies earnings will be stellar but that doesn't mean they will trade higher. Perhaps at this point the prudent thing to do would be to sit back and let things play out as they may. Mentally I am tired, did not sleep much. Very disappointed in losing but it is part of the game. I need to put it aside and keep on going. Easier said than done. 3 days before expiration and do I really want to do another trade after these losses? Perhaps. It's a rough start to the new year, that's for sure. We'll see what happens tomorrow.

Friday, February 13, 2009

Another downer as the Dow lost 82 points on light volume. Advance/declines were negative. We are short term oversold. I bought some OEX calls on the close, expecting a bounce on Tuesday. I could be wrong. This will be an extremely short term trade as I expect to be out on Tuesday. No waiting around on this one. It either works or it doesn't. 4 days until expiration so there is no time for it to work out. Gold lost $7 today and the XAU dropped 2 points. ABX was off a buck, GG down fractionally and NEM fell 3/4. Volume was lighter on the decline. My ABX calls have been cut in half. Can they come back in 4 days? I doubt it. Earnings on Friday and really, should I wait that long? Maybe out on Tuesday or perhaps I'll wait. Decisions to be made over the weekend. Mentally I'm tired, did not sleep well. Taking a chance on the OEX but I'm thinking this is something that could actually work if I don't hang on too long. But you never know. Hard to make a case for owning stocks here but with expiration week there should be some more volatility. Right now it's time for a break from this game and try to come back fresh on Tuesday morning.

Thursday, February 12, 2009

It was a one day reversal to the upside in most indices except the Dow. We lost 6 points on average volume. Advance/declines were negative. We were down over 200 and then made a comeback in the last hour on some mortgage news. Probably short covering as there are no compelling reasons to own stocks at the moment. But you have to respect the market action. We'll see if there is any follow through tomorrow. Gold was up $5 and the XAU inched ahead by 3/4. ABX, GG and NEM were all up fractionally on lighter volume than yesterday. My ABX calls are slightly under water as gold hovers around the $950 mark. Running out of time for the options with only 5 days left. Might just have to dump them at a loss and go from there. The earnings for ABX don't come out until next Friday which is the last day in this option cycle. I'll have to mull things over tonight. Mentally I'm OK. Volatility has returned to the market. It keeps the option premiums up but it also makes it tougher to play the game. We'll have to see how things play out ahead of the long weekend We should see some follow through to the upside tomorrow. If not then who knows?

Wednesday, February 11, 2009

A day of rest as the Dow gained 50 points on average volume. Advance/declines were positive. I'm calling it a day of rest because that's what I believe is happening here. I still think we are going lower. 2 days before a long weekend. No OEX trades for me here. Gold continued higher, up $30. The XAU rose 8 1/2 points. Gold is breaking out and I bought some ABX calls. My overnight order wasn't filled so I adjusted it. ABX up 1 1/2, GG up 1 3/4 and NEM up 3. Volume was heavy. Price and volume are things that usually work. So we'll see. Yes I would have liked a better price but what can you do? The next question will be when and where to exit. Earnings are out next week as well. Mentally I'm a bit tired, could have slept better. So the next trade is in session. We will have to see where the market leads us. Money is definitely flowing into gold. We'll see if it keeps up. I do think the stock market will continue lower here. That should support the gold market. Not a lot of time for these options so they will have to be watched closely. On to tomorrow.

Tuesday, February 10, 2009

Well the market made up its mind to the downside today. The Dow lost 381 points on heavy volume. Advance/declines were 6 to 1 negative. I was thinking we would wait until the end of the week for the decline to begin but I was wrong. How low will we go? I don't know. I can't see any sustained buying in this type of environment. The credit/mortgage/banking etc. crisis continues. The government bailouts are to simply keep the banks open but nobody quite gets this. The economy won't be turning around anytime soon. Hence down we go. Gold had a good day, up over $20. The XAU opened higher and closed lower though, off 2 1/2. GG was flat on the day but ABX and NEM were down around a buck. Volume was average to heavy in GG. I'm leaving in an overnight order for ABX calls. It's risky to be sure but I think gold is going to break out above $925 here. Hopefully the gold shares will follow. Normally when gold is higher and the gold shares move lower it implies lower gold prices. The dollar was stronger here as well today. However, these are not normal times. I'm thinking that 120 will hold on the XAU and we will rally off of that. So we'll see. Mentally I'm doing OK, could have slept better. So I'm taking a chance here and it may or may not work. We could just go into a free fall here with regards to all assets, including gold. You can't rule anything out in this type of market. So we'll see what happens. I think it's too late for the OEX puts but you never know. Interesting game.

Monday, February 09, 2009

An indecisive Monday as the Dow lost about 10 points on light volume. Advance/declines were positive. We're waiting for the presidents news conference tonight and the next bank bail out plan tomorrow. What happens is anybodies guess. My trade idea for now is that if we rally or stay about where we are, I'll be buying some OEX puts on Wednesday or Thursday. We are short term overbought but could stay there for a bit. I do think that we'll see weakness towards the end of the week. I could be wrong. Gold lost over $20 today and the XAU dropped 3 1/2. ABX and NEM were off over a buck and GG down around 1. Volume was average. The dollar lost ground as well. I'm not as sure about the gold shares here from the long side. Overbought longer term and gold vs. the dollar hasn't reacted the way it used to. Only 8 days left in the February option cycle as well. But you never know, I could change my mind tomorrow. Mentally I'm feeling OK, slept well. I'm thinking that trading the OEX could be the way to go here as opposed to the gold shares. I'll have to mull it over tonight. Most likely though I will be putting on some type of trade this week. Stay tuned.

Friday, February 06, 2009

Unemployment up but so is the market as the Dow gains 217 points on good volume. Advance/declines were 4 to 1 positive. The market has moved higher on better volume and that is a good sign for the bulls. Shrugging off bad news is another sign of a market that wants to go higher. The summation index should be back to the upside after todays action. Getting short term overbought but not there yet on a medium term basis. Maybe this is the start of a longer term up move. Or not. It is one interesting game. Gold was little changed but the XAU followed the overall market higher, up almost 3 points. ABX, GG and NEM all had fractional gains on OK volume. We are overbought on the gold shares but there is nothing holding them back either. The dollar was weaker today, however gold itself didn't do much. There have been a lot crosscurrents lately between the dollar and gold. I don't know right now what that actually means but it means something. So we will have to see how that plays out going forward. Mentally I'm feeling tired, did not sleep well. 9 days left for the February cycle with a holiday a week from Monday. So it gets a little risky going forward. I don't have any solid trades in my mind right now. I will check things out over the weekend and take it from there. It is looking bullish for the Dow now though. The transports have started a nice rise as well. For now, time for a break and then back at it on Monday.

Thursday, February 05, 2009

Up ahead of the employment report as the Dow gained 106 points on good volume. Advance/declines were positive. Short covering? Does the market know that the number tomorrow won't be so bad? Will the federal stimulus package get passed tonight? No reason really but you have to respect what the market does vs. what you think it should do. We'll see what happens tomorrow. Gold was up over $12 and the XAU climbed 3 1/3. ABX up 1 1/2, GG up 3/4 and NEM up about a buck. The volume was OK. Overbought here and about to break out to the upside possibly. I'm going to wait to see what happens on the open tomorrow. I'd still like to take a shot with the gold share calls but will need to see some weakness first. There's a chance that they just open higher and keep on going as well. So we'll see. It's a tough call at this point. Mentally I'm doing OK. Trying not to do anything stupid here but I would like to put a trade on. I'm thinking that we will be down on the open tomorrow and we'll see how bad it gets. I can't imagine that the employment number will have any positive news. But there is a chance that the stimulus package gets done tonight and the market may simply focus on that. You know, it's never easy. So we'll see what happens.

Wednesday, February 04, 2009

The Dow lost 121 points on average volume. Advance/declines were negative. It wasn't as bad as it looked as the overall market was stronger than the Dow. So we are really at a point of indecision going into Friday. I think tomorrow won't see much one way or the other. Friday will be the key. I'm leaning towards the downside for the direction but have no trades in mind for now. We're more oversold on a short term basis. So we'll see. Gold was up $10 and the XAU rose 3 1/2. ABX, GG and NEM were all up over a buck on OK volume. I canceled the open order for the GG calls and am thinking of switching to ABX. We aren't really oversold here though. I think if gold does break out to the top it will take off in the short term. We are at resistance for the gold shares and have moved sideways. I think the prudent thing to do here would be to wait until the employment report comes out but you never know. The dollar was stronger today and gold went up anyway. That cannot last forever. Mentally I'm doing good, slept well. I'd like to put a trade on here. I'm trying to be patient. I'll look over things tonight and go from there.

Tuesday, February 03, 2009

Moving higher today as the Dow gained 141 points on average volume. Advance/declines were positive. The Dow rallied in the face of bad news and that's a positive. But it's hard to believe any of the moves lately. The recent lows at 8000 have held though for now. I still need to see what happens on Friday with the employment report. Not overbought or oversold now. I'm on the sidelines for the OEX. Gold lost $14 on the futures today. The XAU was flat as well as ABX, GG and NEM. Volume was light. The dollar was lower again today and gold did not rally. So there are some crosscurrents going on with that relationship. I still have an open order for some GG calls but I will have to rethink it before Friday. I still like the idea but the gold market isn't reacting well to what would normally be positive news. Mentally I'm doing OK, could have slept a bit more. I also need to get a new computer which is affecting my focus on the markets but I can't use that as an excuse really. So the game goes on.

Monday, February 02, 2009

A lackluster Monday as the Dow lost 64 points on light to average volume. Advance/declines were negative. Beginning of the month and it should have some supportive money flows. The overall market was much stronger than the Dow also. Summation index is pointing down though. Another day or 2 of decline and we will be short term oversold. Employment report due on Friday. Gold had a bad day off $20. The XAU fell over 4 points. ABA, GG and NEM all were down but the volume was light. I have an overnight order in for some GG calls. I'd like to own some gold share calls before the employment number on Friday. That's the idea at the moment. The dollar was weaker today and it didn't help gold but gold was overbought. So we'll see where we go. Mentally I'm doing OK, could have slept better. Option premiums are getting better as we have less than 3 weeks to go. I'm sure that I will try something. If there is a decent signal in the OEX, I may give that a shot. That's it for today.