Wednesday, March 31, 2010
We ended March with a down day as the Dow lost 50 points. Volume was average and the advance/declines were negative. Summation index still in a sideways channel but if we get another down day tomorrow it could start to break down. I don't get the feeling it will though. The Dow was weaker than the overall market today. Still in a wait and see mode with the employment report on Friday. No OEX trades for me here. Gold was up $8 today and the XAU gained 1 1/2. ABX, GG and NEM all had slight or modest gains on light volume. I would still like to get long the gold shares if we see some weakness in the next week or so. We've moved up from oversold territory so patience will be necessary. The dollar lost some ground today but the gold shares did not move up as they have in the past. Perhaps sideways is the norm for a while. Or I am too late for this trade. We'll see. Mentally I'm feeling OK. One more day left in this holiday shortened week. I do not anticipate doing any trades tomorrow but you never know. I'd like to sidestep the risk of the employment report and probably will.
Tuesday, March 30, 2010
Marking time for now as the Dow gained 11 points on average volume. Advance/declines were slightly positive. End of the month tomorrow. The story remains the same. Sideways to higher the past couple of weeks. No catalyst as of yet. Perhaps the employment report on Friday will provide an excuse for movement. We'll see. Gold lost what it gained yesterday. The XAU fell 3/4. The gold shares were mixed. ABX and GG off fractionally, while NEM was up a bit. Volume was light. The dollar gained a bit of ground today. Same story here. No trend lately and sideways. We are just about at a moving average crossover to the downside for the gold shares as measured by the HUI on a daily basis. I'm still looking at the May calls though. No hurry to do anything. Mentally I'm a bit tired, could have slept better. A little over 2 weeks on the April option cycle. I'd like to do something but I cannot trade just to make a trade. We've been overbought for quite some time and the trend is up. It's tough to fight that. Holiday weekend coming up and it's a holiday week. The prudent action is to stay on the sidelines in my opinion.
Monday, March 29, 2010
The Dow gained 45 points to day to start off this holiday shortened week. Volume was average and the advance/declines were 2 to 1 positive. The summation index continues to move sideways. This week could just be a light volume affair with Easter and spring break on the agenda. Friday is a market holiday. End of the month on Wednesday. I'm pretty sure I'll be on the sidelines with regards to the OEX. Gold was up over $5 and the XAU gained 3. ABX and GG were up 40 cents, while NEM gained a buck. Volume was light. The dollar was weaker today. I'd still like to get some May gold shares calls. Probably will do it when the Gold/XAU ratio hits the buy zone. It's possible that the rally in the gold shares is already starting here but the volume hasn't been much. There's no rush to do anything though. This week looks like it's something that I should just let pass. We'll see. Mentally I'm feeling OK, slept OK. I checked the charts over the weekend and the gold scenario is a mixed picture. The dollar may be putting in a top here though. That could and should bode well for gold. The stock indices are still overbought. They have been that way for quite some time. Some type of drop is overdue. You can't fight the trend though and the trend is up. We'll have to see for how much longer.
Friday, March 26, 2010
We did not see any downside follow through to yesterdays action as the Dow gained 9 points on average volume. Advance/declines were about even. So maybe yesterday wasn't an exhaustion move to the upside before giving back all the gains. We'll see. Summation index moving sideways and I believe that will be the case here for a while. But that doesn't mean we can't go higher. Gold was up $11 and the XAU rose 3 points mainly on dollar weakness. ABX up 2/3, GG up 3/8 and NEM up a full point today on average volume. Is now the time to get long the gold shares? Perhaps. We're oversold on some of the technical indicators. Almost getting a buy signal from the Gold/XAU ratio. There is a possibility that the dollar is completing a 5 wave pattern to the upside and if true would bode well for the bullish case for gold. We are also just about done with the month of March which has been historically bad for bullion. Mentally I'm doing good, slept good. Lots to ponder this weekend with regards to the markets and gold. I'll be checking the charts for clues on where we are heading. However the April cycle has just moved sideways in the past and that could be frustrating. So there's plenty to think about. But now it's Friday afternoon and time to take a break.
Thursday, March 25, 2010
The Dow only gained 5 points today but it definitely was an interesting session. We were up over 100 at one point. This could signal the end of the rally. Volume was good today for a change. The advance/declines were negative. There is some chatter again about the Greek debt situation. Tomorrow will be key. If we simply rally back up again, today will just be a blip on the radar. However if we're down tomorrow, I think it will be more meaningful. We do have a negative divergence on the S&P 500 RSI. Gold was up $4 on the futures but the XAU lost 2 3/4. ABX off 1/2, GG down 3/4 and NEM fell 1 1/3. Volume was average. The dollar was up again, perhaps in a flight to safety. I'm still considering the May gold share calls but there is no hurry. When a valid signal appears, I'll probably take it. We'll see. Mentally I'm feeling OK, slept good enough. Still going sideways on the summation index. Perhaps we will roll over here. But that's a guess. The volume picked up today and it may have been the last gasp to the upside when we were up over 100 points. Exhaustion maybe of the bullish move. We'll have to see how we end the week tomorrow.
Wednesday, March 24, 2010
The Dow lost 52 points today on average volume. Advance/declines were over 2 to 1 negative. Not much going on here really except for relieving the overbought condition. Summation index moving sideways. No OEX trades in the works for me at this juncture. Gold took a hit, down $15 on the futures. The XAU fell almost 6 points. ABX and GG off 1 1/2, while NEM dropped 1 3/4. Volume picked up to the downside. That isn't bullish. The dollar had a good day and that doesn't bode well for the gold shares. I am still going to look at the May gold share calls as my next trade. Patience is needed here. There is a possibility of getting some puts on the gold issues but that window of opportunity may already have passed. At any rate, I'll be keeping my attention on the gold stocks here. Mentally I'm a bit tired, didn't sleep well. I'm in no hurry to put on any trades here unless there's a decent signal. It's a waiting game for me as the 1st quarter of the year is about to end next week. So I'll be keeping an eye on things and see where we go from here.
Tuesday, March 23, 2010
Continuing higher as the Dow rose 103 points on average volume. Advance/declines were over 2 to 1 positive. It is like a broken record. Overbought and staying there. How high will we go? I don't know but you cannot deny the price action. The Dow was stronger than the overall market. We'll see how long that lasts. The trend is up. Don't fight it. Gold was up around $5 today. The XAU gained 1/2. The gold shares were mixed again. ABX off 2/3, GG up 1/3 and NEM was flat. Volume was nothing special. The dollar was up a bit. Still just moving sideways here for the gold issues. We are a bit oversold on the gold shares but I'm not looking at the calls just yet. I could be wrong. I think that I might go out to the May option cycle for the next gold share option trade. It isn't set in stone. Mentally I'm doing OK, slept well. The market continues higher. My thinking now is that it is simply a liquidity move since money is so cheap due to 0% interest rates. Money is finding a home in stocks. But that's a guess, as usual. Technically we might be setting up negative divergences in the indices with respect to RSI and the McClellan oscillator going forward. We'll have to wait and see if that comes to fruition.
Monday, March 22, 2010
A positive start to the week as the Dow gained 44 points on average volume. Advance/declines were positive. The rally continues. The much debated health care bill has finally been passed in Washington. The market doesn't seem interested overall, although some health care issues had nice gains today. The indices are still overbought here but that hasn't meant anything lately. No OEX trades for now. Gold lost $8 but the XAU gained 1/2. The gold shares continue to outperform the metal itself. ABX was flat, GG lost 1/3 and NEM gained 2/3. Mixed again. Volume was light. Perhaps NEM will lead the way higher again. The dollar was off a bit but not much. I'm leaning towards the gold shares as my next trade. Perhaps going out to the May cycle. We'll see. They sold off early and came all the way back today. We'll see if there is any follow through tomorrow. Mentally I'm feeling good, slept well. Just beginning the April option cycle. No rush to do anything yet. The market is overbought and has been. The summation index is starting to move sideways. It doesn't mean we have to drop here. Sometimes markets continue higher as the summation index builds a top. It could take weeks. Time will tell.
Friday, March 19, 2010
An actual downside day as the Dow lost 37 points. Advance/declines were over 2 to 1 negative and volume was expiration heavy. I doubt that this is the start of a prolonged down move. It is probably just expiration related. The trend remains up until the technicals point to otherwise. So we'll see where we go from here. Gold took a hit, down $20. The XAU lost 2 1/2. ABX, GG and NEM all had fractional losses on average volume. The gold shares have actually held up pretty well here considering that gold itself dropped pretty good. The dollar had a good day as well. Still just moving sideways here in the gold indices. As I said before my next trade could be in the gold shares again. We'll see. Mentally I'm feeling good, slept well. So we're done with the March option cycle and that should pretty much do it for me regarding the first quarter of the year. It stunk. I'll just have to suck it up and move on. There isn't much else to say about that. I'll be checking the charts over the weekend and go from there. No trades on the radar as yet. It's the weekend and time for a break.
Thursday, March 18, 2010
The Dow rose 45 points today on average volume. Advance/declines were negative. The overall market was weaker than the Dow. Haven't seen that in quite some time. Perhaps we are finally going to get a pause in this unprecedented run up. Still very overbought and staying there. Expiration Friday tomorrow. New highs have expanded and the advance/decline line continues higher. The trend is up. Gold was up a couple bucks despite dollar strength today. The XAU dropped over a point. ABX, GG and NEM were mixed on light volume. We've been moving sideways here. I think my next trade will be in the gold shares but haven't exactly decided what it will be. There's no rush at the moment. Mentally I'm doing OK, slept well enough. Option expiration tomorrow and we'll roll into the April cycle. Sometimes April has a tendency to be a sideways affair, which would not be conducive to profitable trading. So we'll see. I'm in no hurry to do anything with my confidence being as low as it gets. Plenty of time this year to turn things around. We'll see if I'm capable.
Wednesday, March 17, 2010
The Dow continues higher, up another 47 points today. Advance/declines were over 2 to 1 positive and the volume was average. It's up, up and away. Has been for quite a while. The usual technical indicators don't work in an environment like this. Well overbought and staying there for days on end. Summation index still going higher. 2 days until expiration and we should just continue to advance I guess. My ideas haven't been working all year, so who knows? Gold was up a touch during the day but has sold off a bit on the futures. The XAU was little changed. ABX, GG and NEM had fractional moves one way or the other on light volume. The dollar didn't do much today either. The dollar is right on an important daily uptrend line that goes back for a couple of months. What happens to the dollar here could have implications for the gold shares. It's something to keep an eye on. Mentally I'm doing OK, slept well. So where do I go from here? A terrible first quarter of the year trading. I'll have to take a step back and regroup. Again. I'll keep doing the work and looking for the next perceived opportunity. My trading tactics have got to change or the results will be the same. Plenty to work on and think about.
Tuesday, March 16, 2010
The Fed announcement came and went with the Dow gaining 44 points on the day. Volume was average and the advance/declines were over 2 to 1 positive. I dumped the OEX calls for a 75% loss. That was a horrible trade. We are in the middle of an unprecedented rise where the market has stayed overbought for days on end. The major averages are breaking out, following the over the counter markets. Volume is nothing great but you can't argue with price. Summation index continues higher. Continuing higher into the March expiration which I thought may happen but did not trade it accordingly. Gold had a good day on dollar weakness, up $17. The XAU rose about 4 1/2. ABX and GG were up a buck, with NEM up 1 1/2. Volume was average. No trades here but I do not think that gold is trending on way or the other right now. Sideways until the next decent move seems to be the case. Mentally I'm feeling tired but slept pretty good. This trade and the preceding one were just terrible. I did not follow the rules and I was not quick enough to do what was required. It hasn't been a good 1st quarter and there is nobody to blame but myself. Can I turn things around? Perhaps. I have before. However losing takes its toll and I am clearly presently in a funk. Perhaps a little time off is called for with regards to trading. We'll see.
Monday, March 15, 2010
A one day reversal to the upside as the Dow gained 17 points on average volume. Advance/declines were negative. We were down over 50 points early. That is when I should have dumped the OEX puts I own for a loss. It is always easy to look back. But I'm still holding them here, waiting on the Fed tomorrow. It isn't a wise strategy. The market simply continues to grind higher and it is expiration week. That usually implies a positive bias. So I do have another stop loss order in and it will be filled if we have a strong open tomorrow. We'll see. Gold was up a few bucks today even with a stronger dollar. The XAU fell 1/2. ABX, GG and NEM all had fractional losses on light volume. No trades for the gold shares here for me. I will probably let the month of March pass for gold trades unless there is a decent signal. Maybe get long at the end of the month. Mentally I'm disappointed in myself for not just taking the loss today on the OEX trade. It obviously isn't going to work and it looks like I'll be taking a better than 50% loss again. It doesn't make any sense to have trading rules if you don't have the discipline to follow them. This is one of my major trading flaws. Has been for years. Despite that I've still managed to do OK but the trading results could be so much better. It always seems to be a work in progress. There is nobody to blame but myself and that's how it is when you're a trader. The mental capital lost with losing trades is more important than the money. The money doesn't come up with the ideas, you do. So I will have to continue to work on myself. We'll see what happens with the Fed tomorrow and go from there. I would not be surprised if we go on up to new recovery highs.
Friday, March 12, 2010
The Dow closed the day higher by 12 points. Volume was average. The advance/declines were positive. The Dow had a gap up at the open and my stop loss order was jumped. I canceled the order since we moved so far away from it. The market came back and eventually the order would have been filled but I'm holding out for another day. It will be a cut the loss scenario at this point anyway. The strength of the market continues to amaze as there hasn't been a down day in the S&P 500 futures for 10 days in a row. I'm probably making a mistake by not just getting out today but the trade has yet to hit the 50% loss threshold. Gold lost $6 and the XAU fell 1 1/4. ABX, GG and NEM all had fractional losses on light volume. The GG earnings came out and there wasn't a pop to the upside as had been the case with ABX and NEM. The dollar had a weak session and it did not help gold. Not sure what it means but it usually isn't bullish. We are in the month of March so I would not expect much upside from gold. I'm on the sidelines there for now. Mentally I'm feeling a bit tired. Not happy that I just didn't book the OEX put loss today. It's one of the problems I encounter during my trading. It would have been better if the stop loss order had been filled and I could move on to the next trade. However now I'm stuck in this for another day. Time is running out with 5 days to go and the market shows absolutely no signs of weakness. And so it goes. So we'll see what happens Monday morning and go from there. Friday afternoon means time for a break.
Thursday, March 11, 2010
Opened lower and closed higher as the Dow gained 44 points on average volume. Advance/declines were positive. There's no keeping this market down. Today was a one day reversal to the upside and implies higher prices. I'm just about stopped out of the OEX put trade and probably will be tomorrow. We are as overbought as possible and yet there just hasn't even been a day of pullback. Summation index continues higher. How long can this unabated rally continue? We'll see. I could have exited the put trade early today for a profit and in retrospect that's what I should have done. Gold was little changed on the day. ABX, GG and NEM all had fractional gains on light volume. The dollar was a touch weaker. GG earnings after the close today. I'm not looking at any gold trades at the moment. Mentally I'm doing OK, slept longer last night. It looks like the Dow is about to bust out to new highs for the year, following the small cap stocks. My OEX put trade will be a loser unless we are pretty weak on the open tomorrow. At this point, I don't see that happening. Retail sales tomorrow will be the key to the opening. Or not. It could be that the momentum to the upside just continues. At any rate whatever happens I will be out of this trade at some point tomorrow.
Wednesday, March 10, 2010
The Dow gained 3 points today in pretty much range bound trading. Volume was good again, while the advance/declines were positive. Very overbought and staying there. Summation index continuing to move higher. The overall market was much better than the Dow. It's possible this is a momentum rally and will simply continue higher. That said, I did buy some OEX puts this morning. They are priced where I bought them for now. With all the strength in the indices, I don't expect to hold on for too long. The stop-loss order is in place. Gold dropped $14 today and the XAU fell 2 1/3. ABX and NEM were off 3/4, while GG lost a point. Volume was a bit better than lately. The gold shares are still outperforming the metal itself. The dollar fell a bit but it didn't help gold. I took a look at the GG puts but did not seriously consider a trade there. The earnings will be due tomorrow. Mentally I'm tired. Trading the OEX will do that. I need to get some more sleep and will do that tonight. So I'm in the OEX put trade and hopefully not for long. We are overbought by any measure. And we've been that way all week. Some type of downside action is overdue. However the market will go where it wants and do what it pleases. If we do get some type of drop, I'd like to exit this trade and get some OEX calls for expiration week. We'll see.
Tuesday, March 09, 2010
Trying to move higher as the Dow was up 12 points on better volume. Advance/declines were positive. We were up as much as 50 points but sold off late. I placed an order for some OEX puts, adjusted the price lower and was not filled. In retrospect, I should have just left the original order in place. I'm leaving in an overnight order for the OEX puts but it may be too late. Even so, I'll be looking to purchase some OEX calls for option expiration week, barring a collapse here. I don't see that happening. Summation index still pointing higher but we are very overbought and haven't even had the pullback here that I'm looking for. Gold lost a couple of bucks today but was much lower. The XAU lost a point. ABX, GG and NEM were mixed with fractional moves one way or the other. Volume was light. The dollar was up a bit today. No trades for me in the gold shares here but GG announces earnings after the bell on Thursday. If anything, I'm looking at the puts there but I could be wrong. Mentally I'm doing OK. Frustrated at not leaving my original OEX order in because I would like to own the puts here. I can't believe that we won't see some weakness in the next couple of days. We have been overbought and have stayed there for too long already. I don't think that it's the beginning of something big if it does happen because the internals are so strong. But I do believe that it's trade worthy and that's why I'd like to do it. So we'll see what happens tomorrow.
Monday, March 08, 2010
In a holding pattern as the Dow lost 13 points on light volume. Advance/declines were positive. I have an order in for some OEX puts which trade until 1:15 PST. I may wait until tomorrow. I do think that this is a trade that will work but it isn't a long term deal. It's possible that tomorrow could be another up day but the odds are against it. Summation index still heading higher. We are overbought here and have stayed there. I don't think my order will be filled. Gold took a hit today, off over $10. ABX, GG and NEM were all fractionally lower on light volume. GG has earnings out this week. I'm thinking of perhaps getting the puts. Gold is overbought here but the gold shares are outperforming the metal itself. The dollar didn't do much today. Mentally I'm a bit tired, could have slept better. My thinking is that this OEX put trade could work but it doesn't look like I'll be getting them today. Tomorrow could be too late. And so it goes. The timing has to be correct. My work over the weekend is pointing to higher prices in the near term even if we do get a midweek sell-off. So perhaps I'll be getting some calls if I don't get in on the short side here. And maybe even if I do. I guess I'll try again tomorrow.
Friday, March 05, 2010
A positive reaction to the employment report as the Dow gained 122 points today. Advance/declines were over 4 to 1 positive on average volume. Summation index still pointing higher. Overbought and staying there. I still am favoring the OEX put scenario for the beginning of next week. Strength on Monday can be sold in my opinion but I'll check things out over the weekend. The Russell 2000 and the NASDAQ have broken out to new highs and are leading the markets. This usually leads to the major indices following. So after this put play, if it occurs, getting long would be favored. Gold was up a couple bucks as the dollar didn't do much today. ABX, GG and NEM all had fractional gains on light volume. If anything I would be looking to get puts on the gold shares here. I could be wrong but we are overbought. Not to sound like a broken record but March historically isn't a good period for gold. I'll check things here over the weekend as well but I'll probably focus on the OEX for a trade. Mentally I'm feeling fine, slept well. Long and strong this week for the stock indices. We had everything but volume on this continued upside move. The advance/decline line continues to make new highs. It will be hard to buy those OEX puts on Monday but a decent signal is here. It's not going to be a trade to hold too long but it looks like it could work for a couple of days. We'll see. The weekend is here and there is much work to do but now it's time for a break.
Thursday, March 04, 2010
The Dow gained 47 points today on light to average volume. Advance/declines were positive. Short covering today? I don't know. The market action kept me from purchasing the OEX puts that I had wanted to get before tomorrows employment report. I did not want to take the risk. My ideal scenario now would be a positive day tomorrow and then a purchase of the puts on follow through upside Monday. But how often does the market do what you'd like? Summation index still heading higher. Gold lost $10 today and the XAU fell 2 1/4. ABX and GG had fractional losses, while NEM dropped a buck. Volume was average. The dollar had a good day. I'd be inclined to short the gold shares here but I probably won't. Perhaps if they build a multi-day top. Overbought on a daily basis there. Mentally I'm feeling good, slept well enough. So it looks like I will let the employment report pass and take it from there. 11 days in the March option cycle to go. So there is plenty of time to put on a trade. I'm trying to let the technicals line up for something here. If tomorrow is to the upside, then I think there will be a low risk opportunity to get short at the beginning of next week. If we drop tomorrow, then I'll have to look for something else.
Wednesday, March 03, 2010
In a holding pattern as the Dow lost 9 points on average volume. Advance/declines were positive. A rerun of yesterday as we were higher and then came back. I did place another order for some OEX puts but canceled it halfway through the trading day. We are either building a short term top here or consolidating before we move higher. I'll have to see how tomorrow shapes up before I decide what to do here. We are overbought but the internals are saying higher prices are ahead. Gold gained $5 today on a weaker dollar. The XAU rose 2 1/3. ABX, GG and NEM were all up at least 1/2 on average volume. We did break a daily downtrend line in the gold shares this week. However with March being a historically poor month for gold, I'm leery of getting long. But it looks as though the dollar may have topped out here as well. So it's a split decision and I have no trades there for now. Mentally I'm doing good, slept well enough. I had wanted to get short before the employment report and I still might do it. But I cannot rule out that the market will be going higher here and that would kill any trade in the OEX puts. So perhaps I will not do anything and stay on the sidelines. I check things over again tonight and go from there.
Tuesday, March 02, 2010
A slight pause today as the Dow gained 2 points. Advance/declines were over 2 to 1 positive and the volume was average. We were higher for most of the day and then sold off a bit. I did actually put an order in for some OEX puts at the high of the day but canceled it when it wasn't quickly filled. We are short term overbought here but it's possible todays action relieved that condition. Or not. I'm still thinking about getting some OEX puts before the employment report. However the summation index remains to the upside. The broader market was stronger than the Dow as well. Gold had a good day, up almost $20. The XAU rose about 4 points. ABX, GG and NEM were all up about a buck or so on average volume. The dollar was off a bit but not as much that would represent a $20 rise in gold. Perhaps something else is going on here but I certainly don't know what. I'm not looking to do anything with the gold shares at the moment. Overbought here as well and staying there. Mentally I'm doing fine, slept well. I'll be checking the charts tonight to see if the OEX puts play is viable. I may perhaps wait until Thursday depending on tomorrows action. Or I may do nothing at all. There's still plenty of time for the March option cycle. So we'll see what tomorrow brings.
Monday, March 01, 2010
A positive start to the week and the month as the Dow gained 78 points. Advance/declines were 3 to 1 positive and the volume was light. The trend remains to the upside as previously discussed. We are getting short term overbought but could stay there as is the case with up trends. The dollar had a good day and the stock market shrugged it off. Beginning of the month money flows perhaps? Gold was flat today and the XAU gained 2 3/4 points. ABX, GG and NEM all had at least 1/2 point gains or more on light volume. The gold shares outperformed gold and that is usually bullish going forward. The gold shares also decoupled from the stronger dollar. I don't know what it means going forward but we'll have to keep an eye on it and see if it continues. Mentally I'm feeling good, slept well. I don't have a clear idea of exactly what to trade here but I'm leaning towards getting some OEX puts if we hold up until Fridays employment report. That remains to be seen. The summation index is heading higher and it is tough to fight that. I'm going to have to remain in a wait and see mode for now. The daily technicals are overbought on the indices and have been for a few days. That won't last forever. However we could be in the final run up of the market which would last until the March expiration. Crosscurrents here to be sure.