Friday, May 29, 2009
We closed the month with a positive bias as the Dow gained 96 points on average volume. Advance/declines were over 2 to 1 positive. Most of the gain came in the last hour and last few minutes. I canceled my order for the OEX puts. I might try again next week but it looks like we've moved sideways and are poised to head higher. I could be wrong. We haven't broken the channel we're in just yet. I'll need to go over everything this weekend. Gold continues in a straight line up, gaining $17. The XAU was up almost 5. ABX up a buck, GG rose 3/4 and NEM up 1 1/2. Volume was good. North Korea is threatening to blow up the world again. When the news hit early in the week gold didn't move. It did today. The dollar got whacked again and continues in free fall for now. We are at $980 for gold and $1000 seems inevitable. Do we blast through there? I don't know. Very overbought in gold here. I'll try and wait for a pullback. Mentally I'm feeling OK, slept well. We are about at the top of the recent channel in the S&P. It looks like we are about to break out to the upside. I could make a case to go either way here but the upside seems to be the way the market wants to go. There will be lots to think about over the weekend. For now it's time for a break.
Thursday, May 28, 2009
Back and forth we go as the market decides which way to go. The Dow gained 104 points on average volume. Advance/declines were positive. We are still stuck in a trading range. I'm leaving in my open order for OEX puts but I'm not as sure about it as I was. We could be consolidating before we move to new recovery highs. That is certainly a possibility. I'll keep an eye on things and adjust my view accordingly. Gold is still moving higher, up $8 and now over 960. The XAU gained 6 1/3. ABX and GG were up over a buck and NEM rose 1 1/2. Volume was average. The dollar continues lower to support gold. It has been an incredible move and I'm not taking part. I think it's too late at this point but who knows? Mentally I'm doing OK, slept better last night. So where do we go from here? The market has held up better here than I expected. I'm getting the feeling that we are going to move higher. But that's a guess. The technicals are mixed at this point. End of the month tomorrow. I'm not sure how that may affect things. Missing the gold move here was a mistake. It has lasted longer than I expected. I certainly don't want to short gold here but I can't chase it now. I'm leaving in my order for the OEX puts for now and will decide what to do with it before the weekend.
Wednesday, May 27, 2009
Back to the downside as the Dow lost 173 points on average volume. Advance/declines were over 2 to 1 negative. My overnight order for the OEX puts wasn't filled and perhaps it is too late. We'll see. Todays action will probably send the summation index lower again. I'm still leaning bearish. I'm leaving the OEX put order out there. We haven't broken 880 on the S&P 500. If we get there and fall through I will have to just buy some puts because then we will know that we are heading lower. Not there yet but I think it will happen. Gold was flat on the day but the XAU fell 2 1/2. ABX off 3/4, GG was flat and NEM lost 1 1/4. Volume was average. I'd like to try the gold shares if we fall further before the June expiration. The dollar showed a bit of strength. Overbought on gold and the gold shares. It is time for a rest but the momentum and money continue to go there. I am hopefully not going to chase things there. Mentally I'm feeling OK, could have slept more. End of the month coming up. It looks like today was the day to buy some index puts. I may not get another chance. I suppose I should have adjusted my order but hindsight is always correct. I'll keep an eye on things and will try to be mentally ready for a break of 880 if that occurs.
Tuesday, May 26, 2009
We started the week off with a bang to the upside as the Dow gained 196 points on average volume. Advance/declines were 4 to 1 positive. Are we on our way to new recovery highs? Could be. There is a chance that we have just seen a consolidation here and are going to test the 200 day moving average lines for the S&P. It's possible. We'll know pretty soon I think. Regardless, I put in an overnight order for some OEX puts. I'm sticking with a down scenario for the June option cycle until proven otherwise. I could be wrong and the market will let me know I'm sure. Gold lost $5 and the XAU was flat. GG and NEM gained a touch while ABX lost a buck. Volume was average. Is ABX telling us something here? Who knows? It did lead on the way up here after NEM. The dollar was slightly higher today and is very oversold on a daily basis. The trend is up for the gold shares though and they sold off hard early before coming back strong. I may try the June calls if we get some weakness that is more than temporary. Mentally I'm feeling OK after a nice long weekend. Plenty of questions here as todays action probably brought the summation index back to the upside. I'll need to check the numbers tonight. I'm still leaning towards the bearish side but if we break the recent highs on strong volume I will have to review my strategy. Let's see if we get some follow through tomorrow.
Friday, May 22, 2009
We were higher for most of the day but dropped in the last hour for a loss of 15 points on the Dow. Advance/declines were slightly positive and the volume was light before the long weekend. I still would like to get some OEX puts here but we are oversold and due for a bounce in the beginning of next week. The other scenario would be that we drop from the open on Tuesday and take out 880 on the S&P 500. I'll hope for a bounce but the market will go where it wants. Gold was up another $7 today and had a great week. The XAU rose 1 1/2. ABX was up over a buck while GG and NEM each tacked on about 1/2. Volume was pretty good considering it was a get away Friday. The gold shares just continue to move higher as the dollar moves lower. I like them on a pullback but there hasn't been any. I'll have to think about chasing them over the weekend. Mentally I'm a bit tired, could have slept more. So where do we go from here? I'm still leaning towards the bearish case. I don't think 880 will hold on the S&P 500. I would like to get some index puts before that happens. The ideal purchase time may have already passed. But I still feel there is money to be made. I could be wrong though. However the summation index is moving down. As for gold it is on a tear but overbought. So that's a tougher call for me. I'll probably try the calls if it ever pulls back. The money has flowed there. But it can flow out just as fast as well. I'll have 3 days to ponder things. It's time for a rest though.
Thursday, May 21, 2009
Continuing lower as the Dow lost 130 points on average volume. Advance/declines were about 3 to 1 negative. A late day comeback mitigated the damage done. Getting short term oversold here. The support at around 880 on the S&P 500 has held for now. I still like the OEX puts if we get a bounce here. But the market may not wait to head lower. Summation index will be back to pointing down here. Plenty of time in the June option cycle but I would have liked to be positioned already. I'm leaving in the OEX put open order. Gold was up $14 and continues higher in the aftermarket. The money is flowing there and you have to respect that. The XAU could only manage 2 points to the upside. ABX up 2/3, GG up 1/4 and NEM gained over a buck. Volume was good again but you have to think these issues need a rest. But who knows? The dollar continues lower, oversold and staying there. I don't think that it's too late for the gold shares but they are extended here. Tough call. Mentally I'm trying not to beat myself up over missing gold again and not getting short yesterday. You do what you can really. I just haven't been quick enough here. I'm working on it. Long weekend approaching so the trading might be light tomorrow. We'll see.
Wednesday, May 20, 2009
It was a one day reversal to the downside as we opened higher and closed lower. The Dow lost 52 points on better volume. Advance/declines were positive. It could be that I've missed the opportune time for the OEX puts but the jury is still out on that. The overall market wasn't as weak however volume did expand on the down move. I've got an open order in for some OEX puts but it may be too late. My ideal day to purchase them would be Monday if things hold up here. Gold had a good day, up over 10 bucks. The XAU climbed 7 1/4 points. ABX up 2 1/2, GG up 2 1/2 and NEM up 1 3/4. Volume expanded to the upside. I should have bought the calls on Monday. Thought about it but didn't do it. The dollar is in a free fall it seems here. That said the XAU looks like it has put in a 5-wave up move and could be due for a rest. That would coincide with my downside scenario that I'm looking for here. The gold shares are breaking out here on good volume so if there is a pullback to the breakout point, I'm getting some calls. It's all just a guess at this point but the gold shares are showing relative strength. Mentally I'm feeling so-so. Did not sleep solidly. So now what? Where do we go from here? I think we have or are building a top here. I want to own some stock index puts. A long holiday weekend coming up in 2 days. Trading should be thin after tomorrow and there is no new data after tomorrow either. We'll see what happens.
Tuesday, May 19, 2009
A slight pullback today as the Dow lost 29 points. The overall market fared a bit better. Advance/declines were positive and volume was average. I'm still leaning towards the OEX puts. I'd like to see some negative divergence with the McClellan oscillator at some point this week. But that may just be wishful thinking. I may try and let this week pass, we'll see. Gold was up $5 and the XAU rose 3 1/3. We were higher than that but sold off in the last hour along with the overall market. ABX up 1/2, GG up 2/3 and NEM up over a buck. Volume was light but better than yesterday. The dollar lost ground again. If we get a drop in the overall market it will probably take the gold shares along with it. Again, I'm going to try and wait for a pullback here before trying the calls. Mentally I'm a bit tired, did not sleep well. So we'll have to see what happens from here. Perhaps today was the day to get the OEX puts, I don't know. I'm trying to stay patient with so much time left on the options. But the market certainly won't wait for me. On to Wednesday.
Monday, May 18, 2009
A very good Monday as the Dow gained 235 points on average volume. Advance/declines were 6 to 1 positive. Often times the Monday after expiration does the opposite of the expiration. I believe that this is what we saw today. As long as the volume doesn't pick up to the upside, I'm going to get some OEX puts on a retest of the recent highs. We'll have to see how the next couple of days plays out. We also have a long weekend coming up with the Memorial day holiday. And it's early in the option cycle. Plenty to ponder. Gold lost about $10 today but the XAU was up 1/2. ABX and GG were little changed but down early. NEM lost 1/4. Volume was extremely light. The dollar was weaker today yet gold fell anyway. Working off the overbought short term condition in the gold shares. If the overall market drops as I presume, the gold shares will fall with it in the beginning. I'm in no rush to make a trade here but when we get oversold I'll be more interested. Of course that could all change tomorrow. Mentally I'm feeling OK. Questions loom over exactly what we have going on here. I'll have to check the volume when things settle out tonight. You can't argue with price though. I may have to be patient here as well but who knows?
Friday, May 15, 2009
The Dow closed the week down 62 points on average volume. Advance/declines were negative. It was a downer week for the stock market. The summation index has turned down. I think the upside is limited from here. Again, I'd like to see a light volume retest of the recent highs and then get some OEX puts. But the market will do what it wants. Option expiration today was relatively mild. On to the June cycle and it's a week longer than usual. Gold was up a couple bucks today and the XAU dropped 2 points. ABX and GG had fractional losses, while NEM lost a buck. Volume was light. The dollar was stronger today. We'll have to see how the dollar and gold do next week. Gold is overbought and the dollar is oversold. I still like the gold shares and may purchase some calls on a pullback. Mentally I'm feeling good. I didn't do anything stupid this week and it's time for the weekend. I think the overall market moves sideways to down here but that's a guess. I've stated the optimal scenario for buying the OEX puts for June and we'll have to wait and see how it unfolds. I'll check the charts over the weekend and go from there. The extra week on the option cycle keeps the premiums high and that will have to be taken into consideration. So it's a couple of days to rest and back at it on Monday.
Thursday, May 14, 2009
A slight bounce back as the Dow rose 46 points on average volume. Advance/declines were over 2 to 1 positive. The overall market was stronger than the Dow. Expiration tomorrow and then we'll go from there. Next week should be positive in my view and that may be a chance to get some OEX puts. Perhaps I'll give the market some time to build a top. The summation index won't be going much higher, if at all. We'll have to see how things play out here but I'm leaning to the downside for the June cycle. Gold was up a couple of bucks and the XAU gained a point. ABX lost 1/4 while GG was up 1/2. NEM gained 3/4. Volume was lackluster. The gold shares sold off hard early but came all the way back and then some. I still like them on a pullback. Overbought and have stayed that way for a while. The dollar was weaker again today. Conditions seem to be favoring gold at the moment. But I need to see the technicals come off the overbought condition before a trade is made. Mentally I'm a bit tired, could have slept more. An extra week on the June cycle and it's basically a waiting game for me at this point. It's all I can do. I've got some ideas going forward but we'll have to wait and see what the market tells us.
Wednesday, May 13, 2009
Continuing lower as the Dow lost 184 points on average volume. Advance/declines were 6 to 1 negative. The summation index will be turning down today. Is the rally over? Probably. I'd like to see a light volume retest of the highs to get some OEX puts for the June cycle. But that's a best case scenario. The market will go where it wants. No trades for this week. I'll have to let the options expire and look to do something for June. Gold was up a couple of bucks but the XAU fell 4 points. ABX and GG lost 3/4, while NEM dropped 1 1/2. We are overbought here and a pullback would not be a surprise. I'm not going to chase things here but I still like the gold shares. However if we get a drop in the overall market the gold shares could fall in sympathy. The dollar was higher today and if we fall enough to raise the fear level again, money will flow into the dollar. So I think we are in a possible transition here but I don't know for sure. It's my guess at the moment. Mentally I'm feeling OK, slept well enough. Inflation data in the next couple of days and I don't expect anything out of the ordinary. I think the surprise will be in the June data but I could be wrong. So for now it's time to sit tight for a while I suppose. Never easy but sometimes necessary.
Tuesday, May 12, 2009
The Dow gained 50 points today on average volume. Advance/declines were slightly negative. The overall market was weaker. We were lower but made somewhat of a comeback. Only 3 days left for this option cycle. Will I try the OEX puts? Only if we get a bounce that cheapens the puts. But it's risky. I still might do it though. Gold gained $10 today as the dollar was weaker. The XAU gained almost 5 points. The HUI has broken out above 340. ABX, GG and NEM were all higher by more than 1 1/2. The volume was average but the gold shares outperformed. Obviously I should have held the GG calls a bit longer. I would have tried the gold shares if we got some weakness in them early today but it didn't happen. So on it goes. Mentally I'm feeling OK. So where do we go from here? I think that we will be heading lower for the June option cycle. We've had a nice run but we are starting to see signs technically that we're running out of steam. The NASDAQ is not leading us higher anymore and has stalled at its 200 day moving average. If it could somehow break through there on heavy volume, I would change my mind. I still like gold and the gold shares too, even if we have a drop in the overall market. If we get a pullback there, I'll be looking to get long. We'll see what tomorrow brings.
Monday, May 11, 2009
The Dow took a hit today as it lost 155 points on light volume. Advance/declines were over 2 to 1 negative. It is options expiration week. It's probably too late for the OEX puts now but I can't rule anything out. Not a lot of time here though and the risk is high. Lots of divergences with the McClellan oscillator and we are just about at the top of the summation indexes range. I think we're there. That doesn't mean we can't move higher or go sideways but I think it does mean that the bulk of this rally is behind us. How to trade it is another matter. Gold didn't do much today, off a buck. the XAU was off about 1 1/2. ABX and GG off 1/2 and NEM lost a point. The volume was light. We were lower but made up a lot of ground in a hurry during the last 5 minutes. I don't know what it means but I may try the gold shares again this week. With only 4 days left? And overbought as we are? I might do it but again the risk is higher. The shorter term technicals will be the key. Gold isn't selling off here and I don't see any rally in the US dollar either. But that could all change tomorrow. Mentally I'm feeling OK. Kind of itchy to make a trade here and that isn't the usual scenario during expiration week. However if I feel that something has a chance to work I'm going to try it. Leaning more towards gold since we have already fallen pretty good with regards to the Dow. So we'll see. I could also just sit tight here and roll on to the June cycle. An extra week in that particular cycle so the premiums will be expensive. Let's see what Tuesday brings.
Friday, May 08, 2009
Back to the upside as the Dow gained 165 points on good volume. Advance/declines were 5 to 1 positive. The employment report really didn't matter. Unemployment continues to rise but so does the market. How long will it go on? Perhaps into the expiration. I'm still going to probably try the OEX puts at some point next week. But we'll have to wait and see on that. Gold moved both up and down but was little changed at the close. The XAU continues to outperform the metal as it rose 4 1/2 points. ABX and GG were up over 1 1/4, while NEM gained a buck. Volume was average. The dollar lost ground today but is oversold. Sure I would have liked to have held on to the GG calls but they're gone now. I still like the gold shares for the June cycle if we get a pullback. Mentally I'm doing OK. Not as tired. Of course I'm disappointed that I didn't make as much on the GG trade. It was declared dead at one point though and it was profitable. But I certainly could have done better. The question now is just how high will the stock market go here? Nobody knows. I'm going to check things out over the weekend and take it from there. We've already come a long way in a short time so my longer term view is that this is a bear market rally. But I could be wrong. It's Friday, the weekend is here and time for a break.
Thursday, May 07, 2009
We headed lower today ahead of the so called "stress tests". The Dow lost 102 points on good volume. Advance/declines were almost 2 to 1 negative. It was a one day reversal as we opened higher and closed lower. I'm still going to consider the OEX puts if we test the recent highs on lighter volume. But it might be too late. Employment report tomorrow. Gold was up another $6 but sold off in the aftermarket. The XAU lost 1 3/4. NEM and ABX were flat, while GG gained 7/8. All the gold shares were much higher early. Volume picked up a bit. I dumped the GG calls for a 70% gain. It should have been more but I can't complain too much since they were dead a week ago. The earnings were good and if the market hadn't been so weak I'm pretty sure GG would have done better. I still like the gold shares here and might try another trade before expiration. Mentally I'm pretty tired, did not sleep enough and was up early. I should have been better prepared mentally for the trade. It's always easy to see the mistakes looking back. I entered the trade too early and exited today too late. Not usually a winning combination. The power going down at the office halfway through the trading day didn't help things either. So on to tomorrow and I'll have to come up with something from here.
Wednesday, May 06, 2009
Powering higher as the Dow gained 101 points on good volume. Advance/declines were over 2 to 1 positive. A melt up? Who knows but you just can't short it here, can you? The summation index still has a bit of room to move to the upside after checking things yesterday. Overbought and staying there. It seems like the market will move higher regardless of the news. I'm still going to try the OEX puts at some point before expiration. Might wait until next week though. Gold was up $7 and the XAU rose 7 points. Finally gold and the gold shares are moving together. ABX, GG and NEM were all up about 1 1/2. The volume wasn't anything to write home about though. We are overbought here as well. But it looks like we are breaking out here on the XAU. GG earnings tomorrow morning and the calls are back where I bought them. The prudent thing would be to sell on any up move, if there is one, in the morning. The dollar was weaker today and that helped gold. Mentally I'm doing OK. What to do with the GG trade is the question. I'm considering myself lucky that it has any life left at all. The stochastic is at the top of the channel and that is the signal to get out really. We'll have to see how it opens tomorrow. However gold has broken its down trend line and the XAU has broken through resistance. It's never easy.
Tuesday, May 05, 2009
The market remains strong as it tried to sell off today and came back late. The Dow did lose 16 points on average volume. Advance/declines were slightly negative. I would like to get some OEX puts here but probably won't. But you never know. Overbought now and we could stay there for a couple of days. Perhaps if we hold up for the rest of the week I'll give it a shot before the employment report. But the trend is up and you must respect that. Gold did little today and the XAU was up 2/3. Volume was light once again as ABX gained 2/3, GG lost 1/2 and NEM was up 1/4. The GG calls are still in trouble and the only hope at this point are the earnings out on Thursday. When it gets down to hope the odds are that the trade is dead. Mentally I'm a bit tired, did not sleep as good as could be. Power outage here on Thursday and that is a factor. The market is strong here regardless of the data lately it seems. However the summation index is getting to the top of where it can go. That doesn't mean a big sell off per se but it does mean that the upside from here will not be as dramatic as it has been, in my opinion. But I could be wrong.
Monday, May 04, 2009
It was a good Monday for the bulls as the Dow rose 214 points. Advance/declines were 5 to 1 positive and the volume was decent. Price and volume moving higher and you can't argue with that. Summation index still moving higher. We are overbought and if tomorrow is positive there will be a short term sell signal for the OEX. We are at resistance for the OEX here at just over 420. I may have to buy some puts but this market seems to just keep going up. It won't last forever though and there is plenty of data later in the week. We'll see. Gold was up $14 today and the XAU finally joined in, up 7 1/2. ABX was 1 3/4 higher, GG up 1 2/3 and NEM added 2 1/4. However the volume was missing as has been the case lately. My GG calls showed some life but they're still losers. Earnings on Thursday morning and I suppose I'll wait for that now. This could just be more sideways action for the gold shares but we'll have to see. Nothing says that it's otherwise at this point. The dollar was weaker today and that helped things along. Mentally I'm doing OK, slept pretty good. It's an important week and there's a problem here at the office. The power is going out halfway through the trading day on Thursday for some maintenance. There is no getting around it. So my data feed will be gone along with the ability to trade. I'll try and take care of things in the morning with contingent orders. But it isn't something that I'm pleased about. It also could keep me out of trading the OEX. So we'll see. I'll run the numbers tonight and come up with a plan for tomorrow.
Friday, May 01, 2009
We ended the week on a positive note as the Dow gained 44 points on average volume. Advance/declines were positive. Beginning of the month money flows probably helped things here. We are getting near a possible sell signal but it isn't quite clear just yet. I think that we will see some weakness in the beginning of next week but I'm not sure if it will last or if it's trade worthy. I'll check things out this weekend. Gold lost around $5 today while the XAU was up 1/3. ABX and GG were flat while NEM lost around 1 1/2. Volume was the usual light. NEM has been the leader and I don't like the fact it was down so much. I suppose I may as well wait for the GG earnings at this point. Regardless, the GG call trade will be a loser. Mentally I'm feeling OK. Lots of info next week with the bank stress tests and the employment report. I'll check the charts over the weekend and go from there. For now, time for a break.