Friday, April 30, 2010
Back to the downside with a vengeance as the Dow lost 158 points on good volume. Advance/declines were 3 to 1 negative. More bad news for Goldman Sachs is the excuse. Perhaps locking in some monthly profits at the end of April. Today solidifies my idea of purchasing some OEX puts. I will most likely do so on some strength next week if we get any. Summation index should be moving lower. The weekly candlestick charts for the major indices will have bearish engulfing candles. I think lower prices are ahead. Gold continues to find buyers as the metal rose $12. The XAU was only up 1/2. ABX, GG and NEM all had fractional gains on good volume. They were all higher early. I still may purchase some gold share calls if they ever pull back here. However ABX is at the top of its trend channel on a daily basis. So it may be time for a break. Still, you cannot deny the relative strength of the gold shares here. Obviously I should have held those ABX calls longer. Mentally I'm doing OK. So the week has ended and the tone of the market in my opinion is changing. If we get any kind of bounce back up next week, I believe it can be shorted. At some point next week I'm going to try the OEX puts. The gold shares may have to wait. I'll have to check the charts over the weekend and go from there. For now it's time to take a rest.
Thursday, April 29, 2010
Continuing to the upside as the Dow gained 122 points. Advance/declines were 3 to 1 positive and the volume was good. That 200+ point decline on Tuesday? Forgotten for now. The summation index will be moving sideways once again. Hard for me to make out exactly what is going on here. Sell-offs don't have any staying power. Are we going back for new recovery highs? Seems like it. I'm still thinking about getting the OEX puts when and if we get overbought next week. Gold was off $3 but the XAU rose 2 points. ABX and NEM both had more gains but GG not as much. GG disappointed on its earnings report. Volume was above average again. We are overbought here now on the gold shares but staying there. I may try the ABX calls again if we get some weakness. The gold shares continue to outperform the metal. The volume continues to be good to the upside. Money is flowing into gold assets. Mentally I'm doing OK, slept well enough. GDP tomorrow and that will be the early market theme. I'm considering leaving in an order for some OEX puts but I think I'll wait until next week. Plenty of time remains on the May option cycle. Still thinking about the last ABX call trade but trying not to dwell on it. It's where we go from here that matters.
Wednesday, April 28, 2010
Got a bounce back today as the Dow gained 53 points on good volume. Advance/declines were positive. The Fed said nothing new and the market was in positive territory for much of the day. Spain has joined Portugal with a downgrade of its debt and that has led to some jitters. Getting short term oversold here but I'm still leaning towards the downside. The summation index is starting to head lower. We do have the beginning of next month approaching and that could lead to positive money flows. So it's a mixed bag but I'm thinking of perhaps some OEX puts before the employment report. We'll see. Gold was up $11 on the futures and the XAU rose 4 3/4. ABX, GG and NEM were all up around 1 1/2 on heavy volume. The ABX earnings were stellar. I sold my ABX calls for about a 120% profit. It wasn't a good trade. I could have done better had I held them longer during the day. Money continues to flow into gold due to the foreign debt uncertainty. Those problems are also supporting the dollar which was up a bit again today. The gold shares continue to outperform the metal itself and that's a positive. Mentally I'm a bit tired, did not sleep enough. I'm disappointed in the ABX trade. Even though I was aware of the earnings coming out, I really wasn't mentally prepared. I still think there is room to run here on the upside for the gold shares. I might even try them again in the May option cycle. However that trade is done and it's time to move on. OEX puts perhaps. I'll be checking the charts tonight.
Tuesday, April 27, 2010
The Dow got clobbered today as testimony from the executives at Goldman Sachs took center stage. The Dow lost 213 points on very heavy volume. Advance/declines were over 4 to 1 negative. Could this be the start of a multi week decline? Perhaps. It certainly is overdue. There were concerns over Portugals debt today also. Maybe they will be joining Greece as the reason for the fall in the Euro. Todays action was negative and we'll see if there is some follow through tomorrow after the Fed announcement. Gold was higher today, up $8 and higher in the aftermarket. However the XAU lost 1/2. ABX and GG had fractional gains, while NEM was flat. Volume increased. The gold shares held up rather well considering an over 200 point down move in the stock market. The dollar had a very good day as well and gold rose anyway. These look like flight to safety plays. NEM had great earnings but the stock did nothing and was down most of the day. ABX reports tomorrow and I'll hope it doesn't do the same thing. My ABX calls are still in the black. Gold looks like it is breaking through $1160 in the aftermarket as well. So decisions will have to be made tomorrow. Mentally I'm feeling OK, slept good enough. My eyes will be on the ABX reaction to the earnings tomorrow. The gold shares showed great relative strength today compared to the overall market and that can't be ignored. However I also cannot hold on to this trade forever either. The technicals are not overbought yet for ABX. Which makes it easy to continue to hold it here. But the dollar is rising and that isn't good for the price of gold, despite todays action. Plenty to think about as I wait for tomorrow morning.
Monday, April 26, 2010
The Dow ended flat for the session, after being positive for much of the day. Advance/declines were negative and the volume was average. The overall market was weaker than the Dow. The Fed is meeting this week, with the announcement on interest rates to come on Wednesday. The market could be in a holding pattern until then. We've got the end of the month coming up on Friday as well. We're a touch overbought here. I do expect weakness by Friday but perhaps we won't wait that long. That's a guess. Gold was flat today as well as the XAU. ABX, GG and NEM all didn't do much and the volume was extremely light. The dollar didn't do much today either. My ABX calls are still slightly in the black. Earnings on Wednesday and that should be the exit date. We'll see. NEM reports tomorrow. Gold hasn't made it through $1160 but if it could it would help the bullish case. Plus it would probably help my ABX calls. Mentally I'm feeling OK, slept good. So it's a waiting game until Wednesday morning and then how ABX reacts to the earnings. Not to mention how I react to whatever happens. That's probably the more important piece of the trading puzzle. And we have the Fed to contend with. So it will be an interesting week.
Friday, April 23, 2010
Overbought again on the Dow as we gained another 70 points today. Advance/declines were over 2 to 1 positive. Volume was average. I was expecting some weakness at the end of the week and all we got was a hundred points down early Thursday morning that was quickly erased. Hard for me to figure. You can't ignore the price action though. We are just about at the 200 day moving average for the S&P 500. That should be a barrier to further upside next week. But who knows? Gold was up over $10 and the XAU rose 1 7/8. ABX, GG and NEM only managed fractional gains to the upside on light volume. This is worrisome. When the major gold shares can't rally when the metal itself moves higher, it isn't a good sign in my opinion. The dollar was lower today as well but all we got were fractional moves higher. My ABX calls are showing a slight profit but it is tenuous. The overall market is overbought and any drop will affect the gold shares. Earnings are out for ABX before the bell on Wednesday and that is the key. The technicals look OK, we're not overbought as yet. If gold could bust through $1160, that would be a plus. Mentally I'm a bit tired, did not sleep enough. The market continues to defy logic here but it must be respected. Nothing seems to be able to bring it down. Not even for a few days. Eventually something will be a catalyst for a multi week downtrend. However we haven't seen it yet and the trend remains up. Bad news is ignored and that is bullish. I'll be checking the charts over the weekend. The game plan for now is holding the ABX calls until the earnings on Wednesday. But for now it's Friday afternoon and time for a break.
Thursday, April 22, 2010
The market tried to sell off once again but we came back for a gain of 9 points on the Dow. Volume was good and the advance/declines were positive. The market tanked early, down over 100 points. Somehow it rose steadily from the bottom for most of the session to get positive. I expected some weakness but it didn't hold. I'm still thinking that we are building a top here. Summation index moving sideways. Gold sold off early as well and ended with a loss of $6. We were down over $15 there early. The XAU gained almost 2 points as the gold shares outperformed the metal. ABX, GG and NEM all had fractional gains to the upside on light volume. The gold shares continue to show good relative strength vs. the S&P 500. The dollar was up again today as well but the gold shares managed gains. Volume is lacking though. My ABX calls moved slightly into the black. The game plan of waiting for the earnings next week is still in place for now. Mentally I'm feeling OK. I'm still expecting some near term weakness for the stock market but the market itself is saying otherwise. We'll see what tomorrow brings.
Wednesday, April 21, 2010
The Dow ended the day up 7 points on average volume. Advance/declines were positive. We opened higher but then dropped about 50 points in the afternoon. A late day comeback pushed us into positive territory. Tough to say what's going to happen next but I would not be surprised by some weakness for the end of this week. It's possible that we are finally building a top here. I could be wrong and often am. Gold was up $9 but the gold shares lagged again. The XAU was up just 1/2. ABX, GG and NEM all had fractional gains on light volume. My ABX calls are still in the red. The gold shares should be rallying on positive movement in the price of gold. The fact that they're not is worrisome. The dollar continues higher as well, which normally isn't supportive of gold. On the plus side the gold shares at least showed good relative strength today compared to the rest of the market. It looks like I'll be holding the ABX calls until the earnings next week barring a catastrophe. Mentally I'm feeling OK, could have slept better. The market seems to have shrugged off the Goldman Sachs news and hasn't fallen apart as yet. The summation index continues sideways for now. But all that could change on a dime. But it hasn't and that is important as well. We'll see what happens tomorrow.
Tuesday, April 20, 2010
The Dow gained 25 points today on average volume. Advance/declines were 4 to 1 positive. Today the overall market was much stronger than the Dow. I'm not exactly sure where we're headed from here. There was no downside follow through so the trend remains up for now. Summation index heading lower though. So we have conflicting data at the moment. No OEX trades for now. Gold was up $3 but was higher early. The XAU dropped 1/2 after being higher as well. ABX and GG were flat and NEM lost 3/4. All were higher early too. Volume was very light. My ABX calls are in the red. This trade is looking very shaky. The daily chart now looks like it's headed lower. I'll give it a bit more time. The dollar was up fractionally today but is moving sideways. Mentally I'm a bit tired, did not sleep good. So where do we go from here? ABX earnings are out in a week. Can I hold on that long? Is there any reason to own gold here? We could just hang around until next week with the gold share earnings due then. Time decay will affect the option premiums. On the plus side, there is an extra week in the May options cycle. But unless we see some upside in ABX, this trade will be a loser.
Monday, April 19, 2010
The Dow bounced back today, up 73 points. Advance/declines were negative and the volume was good. The overall market was weaker than the Dow and that isn't a positive going forward. Also the Monday following option expiration is usually the opposite of the Friday action, for whatever reasons. This happens more often than not. So tomorrows price movement is very important for the near term direction of the market. Gold lost a buck today but was lower most of the day. The XAU dropped 1/4. ABX, GG and NEM were mixed with slight moves after being down early. The volume was very light. The dollar was higher today. My ABX calls are break-even at the moment. They were showing a loss early. Tomorrow will be key here as well. If we see some gains for the gold shares, then this trade has a chance of working out. If we're lower this trade probably isn't going to work. Earnings are out next Wednesday, which seems like an eternity today. I'll have to mull things over tonight. Mentally I'm feeling good, slept well. I'm not a believer in the market rise today but I hope that I'm wrong, only because I have the ABX trade going. The weekly gold share charts don't look positive unless we turn around here. The daily charts look better for the bullish cause. But the market will go where it wants. Certainly we're overdue for some downside. Tomorrow is important, short term. We'll see what happens.
Friday, April 16, 2010
Well we got some downside today as the Dow lost 126 points on very heavy expiration volume. Advance/declines were over 3 to 1 negative. Goldman Sachs is being charged with fraud by the SEC. That's the catalyst for today. Will it lead to an extended decline? It could, since we have been so overbought for so long. The summation index should be moving down after today's action. But it could also just be a one day wonder. Time will tell and we'll see how it plays out. Gold took a hit as well, off $23. The XAU lost 4 3/8. ABX and NEM dropped 7/8, while GG fell 1 1/4. Volume was good. The dollar showed strength today. The weekly charts for the gold shares are bearish with today's price movement. My open order for the May ABX calls was filled. I did not expect that today. It is actually showing a slight profit because we came off of the lows of the day. I will have to reassess this trade over the weekend. The environment has changed. Mentally I'm feeling OK, could have slept better. Next week should be interesting. The market has been able to shrug off bad news for the past 3 months. That may change with today's developments. There will be a lot to ponder and I am in another trade. So lots to think about. However now it's Friday afternoon and time for a break in the action.
Thursday, April 15, 2010
The Dow gained another 21 points today. Advance/declines were slightly negative and the volume was good. Overbought, staying there and this is turning into a broken record. There hasn't been any weakness to speak of in weeks. How long will this go on? Who knows? The technicals don't work when you're overbought for weeks on end. Summation index still moving sideways as prices rise. That will roll over at some point and then we will have some downside. Gold opened lower but finished unchanged. The XAU lost 1 3/4. ABX and NEM had fractional losses, while GG was flat. Volume was light. The dollar gained ground today. I placed an order for some ABX May calls. We'll need to see some weakness for it to get filled. Perhaps next week. Of course I could change my mind depending on what the market does. Mentally I'm feeling good, slept well. April option expiration tomorrow. We'll see what happens. I would expect to see some type of pullback in the market but I've said that time and time again lately. It's been an incredible run to the upside. But it won't last forever.
Wednesday, April 14, 2010
The Dow gained 103 points on good volume. Advance/declines were about 3 to 1 positive. The S&P 500 crossed the 1200 barrier. Higher and higher we go. Expiration week certainly helps. The volume has been good this week and that's a bullish sign. It seems like there is nothing to stop this rally but we won't remain overbought forever. Gold was up $6 and the XAU rose a point and change. ABX, GG and NEM were mixed with fractional moves on light volume. The dollar was lower. I'm still thinking about getting some ABX May calls. Earnings are out in the last week this month. We're overbought here as well. I'll probably try it on a pullback if we get one. There wasn't any follow through upside today for the gold shares. It could be a short term negative. Mentally I'm feeling OK, slept well enough. We are going to get some negative divergences in the McClellan oscillator unless the market really takes off to the upside. I do not see that happening, with the summation index so high already. So regardless of the markets momentum to the upside here, I'm actually feeling cautious. That's what makes it tough to try the gold share calls. We'll see what happens.
Tuesday, April 13, 2010
The Dow managed another 13 points to the upside today on average volume. Advances barely beat out declines. We sold off early and came all the way back. Still overbought and have been for quite a while. It is option expiration week. Summation index moving sideways but prices remain moving higher. No OEX trades for now. Gold lost $8 today and the XAU dropped 1 1/4. ABX and GG had fractional losses, while NEM was up 1/4. Volume was light. It's possible that today was the day to get long the gold shares. We were lower early in the day and came back. The rest of the weeks action will determine if today was actually the day to get long. There hasn't been much volume or price movement on the down days. Mentally I'm feeling tired and unfocused. I need to get back into the proper frame of mind to trade. I've been distracted lately and there will be no success in that type of atmosphere. I realized this, did not try to push it and will go from here.
Monday, April 12, 2010
The Dow gained 8 points to crack the 11000 level today. Volume was average and the advance/declines were positive. We were higher for most of the day. The overall market was stronger than the Dow, which usually means higher prices are ahead. We are just about at the 1200 resistance level on the S&P 500 though. However there is the positive bias of option expiration week as well. We'll see how it all shakes out. Gold was off about $6 today and the XAU fell 2 points. ABX, GG and NEM all had fractional losses on average to light volume. The dollar was lower today but it didn't help gold. We've seen some crosscurrents there lately with that relationship. I'm still looking at the May ABX calls. I need to see the overbought condition worked off first though. We could be in that process now. Mentally I'm feeling tired and haven't been as focused as I need to be. Therefore I don't anticipate any trades until later this week or next. There's still a lot to consider. So for now it's the sidelines.
Friday, April 09, 2010
3 points shy of Dow 11000 as we gained 70 points today. Should pass that milestone on Monday. Volume was average and the advance/declines were 2 to 1 positive. Expiration is a week away and that should continue with its usual positive bias. Higher we go and there seems to be no end in sight. But there will be. When that occurs is anybodies guess. Summation index still moving sideways. When that starts to drop, we'll have our sell signal. Gold tacked on another $10 and the XAU was up a point. ABX and NEM had fractional gains, while GG was flat. Volume was average. I'm looking at the ABX May calls on any weakness. The dollar was weaker today and it looks like it is about to break a multi-week uptrend line. That should support the price of gold. We are getting overbought on the gold shares here but we know that it can last for a while. We'll see. Mentally I'm feeling better, slept well. The weekend is upon us. I'll be checking the charts as usual. I think gold is the place to be and will try to enter into a position next week. I am late but there still could be plenty of room to the upside, provided we get a pullback. That's my guess at this point. Friday afternoon and time for a break.
Thursday, April 08, 2010
A one day reversal to the upside as the Dow opened lower and closed higher by 29 points. Volume was average and the advance/declines were positive. The market tried to sell off early, held and came back. We are still below 1200 on the S&P 500 and that level will be key to get through if the rally is to continue. Summation index moving sideways. I think we are simply marking time on the summation index until we head lower. The reading is very high. We'll see. Gold was flat today and the XAU as well. The gold shares were mixed on average volume. I dumped the ABX puts for a 55% loss. Thankfully there wasn't a lot of money in that trade and rightfully so. But it is another loss which seems to be the theme here for quite a while. That trade was a loser from the start. The trend there is up and I'll continue to monitor the May calls for an entry on a pullback. However if the overall market rolls over, it probably will take the gold shares with it. Mentally I'm feeling tired, did not sleep enough. 6 days in the April cycle and I get the feeling we will try and test the 1200 for the S&P 500. I hopefully won't be doing anymore trades for this option cycle but you never know. May has an extra week on the options. So I'll move on from this trade and look for something else.
Wednesday, April 07, 2010
A bit of volatility today as the Dow fell 72 points today on better volume. Advance/declines were 2 to 1 negative. We sold off more than a hundred at one point. I thought we would be higher today and then drop but wrong again. I'm not looking for any big decline here but I suppose anything could happen. However with expiration next week I would expect a positive bias at least until that's over. We'll see. Gold had a good day, up $17. The XAU rose 3 1/2 points. ABX up 1 1/4, GG up 1 1/2 and NEM up 7/8. Volume increased. It looks like we are breaking out to the upside from the long consolidation. My open order for ABX puts was filled near the open and it's a loser. I should be cutting the loss tomorrow unless we get a complete turnaround to the downside. And I doubt that. The gold shares showed great relative strength today compared to the overall market. The dollar was higher but gold rallied anyway again. You cannot fight that. This was a short term trade and I was wrong. Mentally I'm doing OK, could have slept better. So it looks like another losing trade. In retrospect, I should have stuck with the May gold share call scenario. And I still might. I looks like any weakness in the gold shares can be bought here. I may give that a try if the opportunity presents itself. I really need to stick to the longer term trades because I usually do not do well on the shorter term ones. This is a lesson that needs to be learned. I also probably should have just exited the ABX put trade today when I saw that it was going to be a loser. Sometimes you're just wrong, as I was today. We'll see how things open tomorrow and go from there.
Tuesday, April 06, 2010
The Dow lost 3 points today on average volume. Advance/declines were positive. I've got to say that even average volume is pretty light these days. The overall market was stronger than the Dow. That portends higher prices ahead usually. We continue to grind our way higher. Not much data out this week. I don't want to get too complacent but it is April. Sometimes not much happens during this time of year. Gold was up a couple bucks even with a stronger dollar. The XAU lost 1/2. ABX, GG and NEM all had fractional losses on light volume. I'm going to try the puts here on the gold shares. I put in an open order for some ABX puts last night and I am leaving that order in. This would be a short term trade in the April option cycle. Longer term , I still like the May gold share calls. For now we are overbought on the gold shares and it looks like the dollar could be turning around from its recent weakness. We'll see. Not a lot of money in this trade and it needs to be filled tomorrow in my opinion at the moment. My thinking is that the overall market will be higher taking the gold shares with it. Then the ideal scenario would be a pull back into the end of the week. Mentally I'm a bit tired, did not sleep well. So I'm going to try this trade for tomorrow and go from there. It's risky but all trades are. I think it has a chance for success. We'll know more with tomorrows market action.
Monday, April 05, 2010
An upside start to the week as the Dow gained 46 points on average volume. Advance/declines were over 2 to 1 positive. It looks like we are breaking out to the upside from the 3 week sideways action. The small stocks are strong and leading the way. The trend remains up until further notice. The rally continues with no end in sight. We will be hitting resistance in the S&P 500 at 1200. But at this rate, we should eventually work through it. Gold was up $7 today and the XAU gained 1 3/4. ABX up 1/4, GG was flat and NEM gained 7/8. Volume was anemic. That has been the problem with this rally in the gold shares. The volume is light. I don't trust light volume rallies. In fact, I'm even considering getting some puts on the gold shares here. The dollar was flat today but with interest rates rising in the US, I don't see a big drop there. We've moved to overbought on the gold shares as well. Only 9 days remain in the April option cycle. We'll see. Mentally I'm doing OK. A bit confused as to what to do here, with regards to an April option cycle trade. The risk is high and I don't have any clear signals as of yet. I may have to stay on the sidelines. I think my focus is a bit off right now, for whatever reasons. I'll work on things this evening and go from there.
Thursday, April 01, 2010
The Dow gained 70 points today on light volume. Advance/declines were over 2 to 1 positive. We opened higher, sold off and came back. Really not sure what that means as we await the employment report. Beginning of the month money flows perhaps? Summation index still going sideways. Tomorrow's a holiday, beginning a long weekend. The stock indices have moved sideways for 3 weeks. The employment report could provide the catalyst one way or the other. We'll know on Monday morning. Gold was up again, adding another $11. The gold shares continued to outperform with the XAU up 6 points. ABX up a point, GG up 1 1/2 and NEM up 2. And yes, it looks like I missed it. Volume was a little better today and that has been the one thing that's been missing in the rise of the gold shares this week. Gold itself is at resistance of $1130. If we get through there, the trend will be confirmed to the upside. The dollar was weaker again today, supporting gold. It really looks like this rally in the dollar is over, completing a 5 wave pattern to the upside on the daily charts. There is also a negative divergence in the RSI. I saw this a week ago but did not act on it. Now that it seems legitimate, any weakness in the gold shares next week could be an opportunity to buy. Mentally I'm feeling a bit frustrated for the potential gold share miss. That's what previous bad trades will do to you. They sometimes have a negative carryover effect. The trade potential is there but you don't act on it. Again, there is no one to blame but myself. I'll try and banish those thoughts over the long weekend. I'll be going over the charts but with only 2 weeks in the April cycle, the risk is elevated. That's why May could be a better play. At any rate, I'll await the employment report tomorrow morning. Right now I'm going to take it easy, regroup over the weekend and come up with a game plan for next week.