Friday, July 30, 2010
We started the day down over 100 points, came back into positive territory during the last hour and closed the day off a point. Advance/declines were positive and the volume was summer Friday low. GDP was a bit less than expected but the market shrugged it off. The indices have the feel of wanting to go higher. Summation index remains to the upside. We'll see what happens next week. Gold had a good day, up $12. The XAU gained 2 1/8. ABX up 1/2, GG up 3/8 and NEM up 1/4. Volume was very light again. The technicals are moving up on the gold shares but the volume is lacking. I still may try the September calls. We are back to almost having a buy signal on the Gold/XAU ratio. The dollar didn't do much today. Mentally I'm feeling OK. The markets did move around a lot today but they had a lackluster attitude about it. It's a summertime market here to be sure. That's why the trading could be tougher than usual, volatility wise. There's no rush to do anything really. So I'm going to wait for a decent set up, hopefully. I'm still leaning towards waiting for the expected decline in autumn. But who knows? It's Friday afternoon and time for a break.
Thursday, July 29, 2010
An up and down type of day as the Dow closed with a loss of 30 points on average volume. Advance/declines were positive. End of the month tomorrow. Summation index still heading higher. I'm trying to remain patient here as I think we still may have some room to go on the upside. GDP report tomorrow as well. Gold was up $8 today and the XAU rose 3/4. ABX had good earnings but only went up 1/2. GG was flat on the earnings news and NEM gained 1/3. Volume was light. If good earnings can't move the gold shares, then what will? No interest there but I'm still going to look at the September calls as a seasonality play. The dollar was weaker today which helped the metal but not the mining shares. Mentally I'm feeling OK. 3 weeks to go in the August option cycle, so there is plenty of time to consider something. We are working off the overbought condition of the stock market. I think that we could head higher when that is complete. The gold shares are oversold on the technicals but not doing much despite that. I'll remain on the sidelines for now and we'll see what happens tomorrow.
Wednesday, July 28, 2010
The Dow lost 40 points today on light volume. Advance/declines were 2 to 1 negative. Once again the overall market was weaker than the Dow. We are are stalling at the 200 day moving average on the S&P 500. I do think that we will get through there in the near term. But I could be wrong. The summation index continues higher. GDP and the end of the month on Friday. So we'll see. I have no OEX trades in mind at the moment. Gold was up a touch on the futures and the XAU gained 1/2. ABX and GG were flat on the day. NEM reported disappointing earnings and dropped 3/8. Volume was nothing special for the gold shares. I did place an overnight order for the ABX September calls but it wasn't filled and I canceled it before tomorrows earnings announcement. I may try them again later. We are oversold on the daily chart and just about there on the weekly as well. We're also near the seasonally strong period of August and September for gold. So a gold share trade may be in order shortly. Mentally I'm a bit tired, did not sleep well. As much as I'd like to have some ABX calls before the earnings come out, I did not feel comfortable taking the risk. This is probably a byproduct of the lousy trading year so far. Also a factor is my prognosis for lower equity prices down the road in a few weeks which would affect the gold shares as well if indeed we see weakness. So it's the sidelines for now.
Tuesday, July 27, 2010
The Dow edged higher today by 12 points on average volume. Advance/declines were negative. The overall market was weaker than the Dow. We are due for some type of pullback here to relieve the current overbought condition. A lot of time left in the August option cycle. I'm not looking to get short here. I will wait for that sometime next month if all goes as planned. Which it rarely does. Gold broke down today, off $25. The XAU fell 5 1/2. ABX lost 1 3/4, GG dropped 1 1/2 and NEM was minus 2 1/3. Volume was heavy to the downside. ABX broke through its 200 day moving average line. Yes, I am still thinking about getting some ABX calls but I think that I'll go out to the September contract if I do anything. Plenty of gold share earnings in the next 2 days. We are oversold now. Almost a a buy signal on the Gold/XAU ratio as well. So perhaps now is the time for some calls. But it's risky and we have just broken out of a support zone in gold itself. We'll see how it goes tomorrow. The dollar is also due for a possible bounce here as there is a positive divergence on the RSI indicator. That would not be a positive for gold. The flight to safety trade is over for now. Mentally I'm doing OK. Remaining patient for now with regards to the overall stock market and the OEX. Might try an ABX trade Wednesday. It's a tough call after todays action and the looming earnings announcement. So we'll see.
Monday, July 26, 2010
We continue higher as the summer rally lives on. The Dow gained 100 points on light volume. Advance/declines were over 3 to 1 positive. The summation index remains in an uptrend. We're overbought and I'd expect some brief downside at some point this week. However we have broken above 1100 on the S&P 500 and the downtrend line from the end of April has been broken to the upside. I think the rally could have more steam than originally anticipated. I am not going to chase it here. Gold was down about $5 on the futures and the XAU lost 1 1/2. ABX fell 5/8, GG dropped 3/8 and NEM lost a buck. Volume was light. Earnings for NEM and GG on Wednesday, with ABX reporting Thursday. I canceled my ABX August call order. The technicals look like they are about to roll over to the downside. The dollar fell today and gold itself could not rally. I can't say that I know what will happen here but I'm taking the risk off the table. I could change my mind tomorrow if ABX were to fall to it's 200 day moving average. But that remains to be seen. Mentally I'm feeling OK. The end of the month is coming up on Friday. We'll see if that skews things. There is some data coming out this week, including the first look at 2nd quarter GDP. So the summer doldrums that I expected haven't materialized in the stock market.
Friday, July 23, 2010
We closed the week on a positive note as the Dow gained 102 points on light volume. Advance/declines were 3 to 1 positive. We got the results from Europe's "stress" tests of their banks. The only stress it caused was if you were short the market. I'll stick to the technicals. We're short term overbought but that doesn't mean that we can't stay there. Summation index still heading higher. GE increased its dividend and went higher which could be a precursor for the overall market. Perhaps playing this summer rally was the thing to do. I'm still going to wait and get short eventually. Gold fell $7 but the XAU rose a point. ABX, GG and NEM all had slight fractional moves to the upside on light volume. I adjusted down my August ABX call order but I'm thinking I may just cancel it. We are midway between overbought and oversold. There is no buy signal from the Gold/XAU ratio. The volume has been anemic lately. Earnings are due next week for the gold shares. That should be a catalyst but who knows? Again, I'll have to sort things out over the weekend. I think the July gold futures contract expires next week as well. Mentally I'm feeling good. We're right at the 1100 level on the S&P 500 and it looks like we could break through. That would propel us higher. The light volume would work in my favor for the case of shorting this market sometime next month. So we'll see. Gold isn't doing much and neither are the gold shares. That could change but I'm really going to have to consider passing on that ABX trade as well. Things to ponder. But right now it's Friday afternoon in the summertime. Time for a rest.
Thursday, July 22, 2010
Right on back to the upside as the Dow gained 201 points on average volume. Advance/declines were about 6 to 1 positive. The summation index continues higher and that portends higher prices. Yesterdays decline can be chalked up to Bernanke. So we'll see if we can get above 1100 on the S&P 500 and go from there. I'm still going to wait for the OEX puts for September or October. That's the game plan for now. Gold was up $3 on the futures, while the XAU gained 3 2/3. ABX and GG were both up about 1/2. NEM was higher by 7/8. Volume was light as it has been. I don't know how much longer that I'll leave in the ABX August call order. The slight recent rise has been on very light volume. We are moving up from oversold on the technicals. So we'll see. I still expect the earnings next week to be good. The dollar took a big hit today and gold didn't rally that much. That's another warning sign about getting long the gold shares here in my opinion. It could just be a summer sideways pattern in the gold shares for a while. So I will have to think about this trade overnight. Mentally I'm feeling good. The stock market has had more movement than I expected so far this summer. We'll have to see if that continues. My scenario remains the same and patience is necessary. I'm trying my best to wait things out. So far, so good.
Wednesday, July 21, 2010
The Dow lost 109 points today on average volume. Advance/declines were 2 to 1 negative. The market moved lower on Bernankes blabbering. That's about the only reason I can find. That doesn't mean we can't just go lower here. However the summation index remains to the upside. I'm still thinking sideways to higher for a while but I could be wrong. Gold was flat on the futures and down in the aftermarket. ABX and GG had fractional losses, while NEM fell 7/8. Volume was light as it has been lately and probably will be this summer. The XAU dropped 1/3. I'm still leaving in the open order for the August ABX calls. If it isn't filled before the earnings announcement, I'll cancel it. Mentally I'm tired today and it has been a long day. More of the same tomorrow. We'll see if there is any follow through to todays negative action.
Tuesday, July 20, 2010
Sold off early today over 100 points and came all the way back to finish the day up 75. Advance/declines were 4 to 1 positive and the volume was average. Bullish action to be sure. It is looking more like Friday was an aberration for now but there's still 3 days left in the week. I'm going to let the market run here and focus on getting short when this rally concludes. It will take some patience but I'm hopefully up to the challenge. My forward market projection still calls for weakness in late summer, early autumn. Gold was up $10 today, erasing yesterdays loss. The XAU rose 3 7/8. ABX and GG gained 2/3, while NEM was up a buck. Volume was light. I'm leaving in the open order for the ABX calls. Hopefully we'll build a bottom here and then rise on the earnings news next week. If not we could just head up from here and I'll cancel the order. The dollar was slightly higher today. Mentally I'm a bit tired but not bad. Bernanke is speaking this week and that always has the potential to be a market mover. The housing data out today was viewed as mixed. Summation index moving higher and that implies that the trend will be up. I have an appointment tomorrow and on Thursday, so the posting for the blog will be later in the evening.
Monday, July 19, 2010
The Dow gained 56 points today on light volume. Advance/declines were positive. The question is whether Fridays negative action was simply option related or not. The summation index continues higher. I'm inclined to think that we will slowly move upwards or create a trading range before heading lower later in the summer or at the beginning of autumn. But that's a guess. Gold lost $6 today and the XAU fell a couple of points. ABX off 1/2, GG fell 3/8 and NEM lost 7/8. All were lower earlier. Volume was better than it has been. Oversold on the gold shares and I placed an order for some ABX August calls. I'll be leaving it in overnight. Not exactly sure this is the most prudent thing to do but the Gold/XAU ratio is in the buy zone and the shares are oversold technically. So if there was a time to try the calls, now is it. We'll see what happens. The dollar didn't do much today. Mentally I'm feeling OK. We'll have to see if the market can regain its footing this week after last Fridays debacle. It is summer and as I've said before things can slow down. I'm willing to give the gold shares a try here because the earnings will be out next week as well. But they could sell off on good news too. There are never any easy trades in the game. Not a lot of data out this week, mostly housing numbers and I can't expect them to be anything bullish. So we'll see.
Friday, July 16, 2010
It was a sell off expiration as the Dow dropped 261 points. Now that's what I had been looking for a bit earlier this week. Volume was a little higher than lately. The advance/declines were around 4 to 1 negative. So now the question will be is this decline the start of something bigger or simply a one day wonder? I have no answers at the moment. I can say the technicals will be oversold in a hurry. I also think after today things will slow down but I could be wrong. Gold lost $20 on the futures but came back a bit in the aftermarket. The XAU lost 5 2/3. ABX dropped 1 1/4, GG fell 1 1/8 and NEM lost 1 3/4. Volume was light. The dollar ended the day with little change. The gold share charts look negative but the Gold/XAU ratio is back on a buy signal. Earnings are coming out in a week and a half. Perhaps this will be the next trade. Mentally I'm feeling good, slept well. The August option cycle has an extra week so the premiums are high. I'll have to look things over again this weekend. Volume has slowed and the best course of action could very well be to do nothing. Trading earnings alone is never a good strategy. Plenty to think about over the weekend. It's a Friday afternoon in the summer. Time for a break.
Thursday, July 15, 2010
We were lower for most of the day and down over 100 at one point but the Dow came back to close with just a loss of 7 points. Advance/declines were about even and the volume was average. Summation index heading higher. Still overbought and it looks like the positive expiration bias remains in effect. You could have bought the OEX puts yesterday and sold them early today for a profit. But I'm more interested in sustained moves. We are getting a summer rally and I'll have to wait for its conclusion. Gold didn't do much today and the XAU lost 3/4. ABX and GG had fractional moves both ways, while NEM lost a buck. Volume was light. The dollar got clobbered today and gold did not react. The flight to safety trade in the dollar is being taken off. I'm still thinking about the ABX August calls for the earnings announcement in a week and a half. However my confidence is shot at the moment. That said, ABX is in oversold territory. Things to ponder going forward. Mentally I'm doing OK. So it looks like we are putting in back to back decent weeks in the stock market. I have some levels that I'm waiting for and then I am going to purchase some OEX puts for September or October. That's the game plan for now. It's summertime and I expect the doldrums to appear shortly.
Wednesday, July 14, 2010
An up and down session as the Dow ended the day basically flat, with a gain of 3 points on summer average volume. Advance/declines were slightly negative. Good news from Intel led the way but it wasn't enough for a sustained rally. Still overbought here as the market seems to be holding up for the expiration on Friday. I canceled the OEX put trade with only a couple of days left in the July cycle but there's still a chance that I may try tomorrow. Very risky though. Gold dropped around $5 and the XAU was off 1/4. ABX, GG and NEM all had fractional moves on light volume. The dollar was a bit weaker today. Gold share earnings are due in a couple of weeks. I was going to play the ABX calls on this news but now I'm not so sure. The technicals are oversold here on a daily basis. However there doesn't seem to be any conviction in the gold market here as we simply move sideways. Mentally I'm a bit tired, did not sleep well. It is summertime in the markets. I really think that we are going to slow down even more as we continue into August. I could be wrong. If I don't try this OEX put trade then I'll be on the sidelines for a while I presume. I may simply wait to try the puts in autumn. So we'll see. There's 5 weeks in the August option cycle, which means that there is no hurry to do anything.
Tuesday, July 13, 2010
The market took off to the upside today as the Dow gained 146 points. Advance/declines were 6 to 1 positive and the volume was average. The strong open blew through my stop order and I had to take a bigger loss than anticipated. About 80% on that OEX put trade as I'm starting off the 2nd half of the year right where I left off the first half. Overbought and staying there but I'm still a believer that this rally isn't for real. 3 days left for the July option cycle. I am leaving in another open order for OEX puts and moving to a higher strike price. It's risky to be sure but the short term sell signal is in place. We'll see. Gold had a good day as the dollar was weaker. The precious metal gained about $15 on the futures. The XAU only rose 1/3 after being higher early. ABX, GG and NEM were mixed with fractional moves after being higher early as well. Volume was light to average. It looks like the flight to safety trade is still being unwound here in the gold shares. I will try them again at some point this summer. That's my thinking at the moment. Mentally I'm doing OK, slept well. Another trade and another loser as this year is like a broken record. Plenty of time left, however it may be time to take a break and wait for the anticipated drop in autumn. I'll wait and see if this next OEX trade gets filled tomorrow. Perhaps I'll simply cancel it but there will be some downside at some point by Friday.
Monday, July 12, 2010
Not much movement for a typical summer Monday as the Dow gained 18 points today. Advance/declines were negative and the volume was light. My OEX puts almost got stopped out today and probably will be tomorrow. 10 points out of the money and 4 days to go. Not really enough time for this trade to work. We're short term overbought now. However it looks like the positive expiration week bias is in effect for now. I still might roll up to a closer strike price on the OEX towards the end of the week if we continue higher. We'll see. Gold lost $10 today and the XAU fell 1 1/3. ABX, GG and NEM held up rather well with fractional moves one way or the other. Volume pretty light here as well. The dollar was higher on the day. I'm still interested in the August ABX calls if we get some weakness in ABX. Mentally I'm feeling OK. So unless we get a downside open tomorrow, this OEX trade will be dead. The timing wasn't right, again. I may sit things out for a while since it's summer and things really seem to be slowing down. No data out until Wednesday with retail sales. So we'll see what happens tomorrow.
Friday, July 09, 2010
It was a good week for the bulls as we had another up day on Friday. The Dow closed higher by 59 points on summer light volume. Advance/declines were 3 to 1 positive. My order for the OEX puts was filled. It's already in the red as the timing was a bit early. However light volume rallies are not to be trusted, so we'll see how it goes. We are at the resistance level that I had in mind , so some type of pullback is expected in my estimation. But I could be wrong. Perhaps we'll just continue higher for option expiration week. The stop loss order is in. Gold had a good day, up $14. The XAU rose 4 1/4. ABX and GG were up a buck and NEM tacked on 1 1/2. The volume was light however and these issues were higher earlier. I still may try the August ABX calls before the earnings announcement at the end of this month. I'll have to ponder this over the weekend. The dollar was up a touch today and hasn't been moving much in the past few days. Mentally I'm feeling OK. So we're a bit overbought now and the Dow is at its down trend line from the beginning of May. Grounds for a pullback in my opinion. But anything can and will happen. The summation index has turned around and is moving to the upside. So there are some crosscurrents out there. I don't see any major events moving gold one way or the other in the near term as well. We could enter the summer doldrums period, which would not help the OEX put trade. Volatility has disappeared this week as well. So we'll see what happens over the weekend and take it from there. It's summertime, Friday afternoon and time for a rest.
Thursday, July 08, 2010
The Dow continued higher today, up 120 points. Advance/declines were 3 to 1 positive. The summation index should be turning higher. The market opened higher, traded lower later in the day and then came back in the final hour. Perhaps the decline has ended. However I still have an open order for the OEX July puts. We're not overbought yet but getting there. The S&P 500 is 5 points away from what I consider resistance at 1075. So we'll see what happens tomorrow. Gold lost $3 today and the XAU shed 2 1/4. ABX was down over a buck and a quarter on good volume. GG dropped 34 and NEM was actually up 1/3. Both on light volume. I canceled the open order for ABX August calls. I still may do that trade but not right now. Mentally I'm very tired at the moment. I'm going to check on a few more things here tonight and then determine if I still want to try the OEX puts. It's been a long day and I need some rest.
Wednesday, July 07, 2010
Today we got the long awaited oversold bounce as the Dow gained 275 points. Advance/declines were over 5 to 1 positive and the volume was average. So now what? That is the question. I put in an order for some OEX puts which I will leave in overnight. I think we can go a bit higher here in the near term but I do not expect some type of straight up rally. As usual I could be wrong. We are at 1060 on the S&P 500 and I think there's a lid at 1075. We'll see. In downtrends you get these one day short covering rallies that then peter out. Time will tell. Gold came back today too, up $4 on the futures and a bit more in the aftermarket. The XAU gained 4 3/4. ABX and GG were both up around 3/4 or so and NEM led the way by 1 1/4. Volume was light. The dollar lost a touch. ABX is bouncing off of it's daily trend line that has held since February. I still have an order in for the August ABX calls but it won't be filled if we rally from here. I'll have to reconsider this idea tonight. Perhaps now is the time to just purchase some August gold share calls. We are in a seasonal weak period for gold though. However I expect the earnings to be good at the end of this month for ABX. Things to ponder. Mentally I'm feeling OK, slept well enough. So where do we go from here? Could the market be sold out right now? Always plenty of questions with no clear answers in this game. Will the summation index turn around here? I'm still a believer that this rally today won't last long. Another possibility is that we enter a sideways light volume summer doldrums period. That scenario will not be conducive to outright option positions. So there's a lot to think about tonight. Tomorrows blog will be later in the day as I am taking a half day off to get out of town for a while.
Tuesday, July 06, 2010
We got somewhat of a bounce today as the Dow gained 57 points. Advance/declines were positive and the volume was average. We gapped higher at the open and were up 170 points early. Gave it all back and then some but rallied into the close. So the volatility remains. I'm still considering the July OEX puts if we get some upside. But things remain uncertain. We're still oversold and haven't relieved that condition. So we'll see what happens. Not a lot of data out this week and it is summer. Gold dropped around $15 today and the XAU fell 1 1/3. ABX GG and NEM all had fractional losses on summertime average volume. GG led the way. I still have the August ABX call order in but we are right at the multi week uptrend line and if that is broken I may have to cancel. We are oversold on the gold shares though and the Gold/XAU ratio is in the buy zone. However the dollar was weaker today as well and that may mean that the flight to safety trade is being unwound. That's a guess as usual. Mentally I'm feeling OK after the long holiday weekend. 8 days remain in the July option cycle. Nothing imminent on the radar at the moment. It won't hurt to be patient here either. So I'll stay on the sidelines and see what the market brings.
Friday, July 02, 2010
The market tried to get into positive territory but failed at the close. The Dow lost 46 points on light volume. Advance/declines were negative. The jobs report was weak and that was expected. The market is so oversold it is hard to believe that it hasn't yet rallied hard for a day or crashed. The technicals are not acting as they should. The prudent thing to do would be to step aside in my opinion. I'm on the sidelines as far as the indices go but that will change. I'd like to short any bounce we get but then, so does everyone else. Gold was up a touch on the futures and in the aftermarket. The XAU was flat. ABX, GG and NEM had fractional moves one way or the other on light volume. I'm leaving in my August ABX call ticket. I'll rethink things over the weekend. The dollar was lower today. I think that the gold earnings will be stellar at the end of this month and would like to be long something by then. But that's a guess and subject to change of course. Mentally I'm tired, did not sleep well. So it was a down week to be sure and we are still oversold. Hard to figure out why there hasn't been some kind of bounce. If the market is really that weak, I would expect a violent down day. Hasn't happened. So on we go. Volatility has decreased in the past couple of days but we are still moving lower. That's another puzzle to try and figure out. Long holiday weekend and a short 4 day week coming up. 9 days left for the July options. I'm leaning towards the OEX puts if we ever get a bounce. But it's risky. There has to be some massive short covering at some point doesn't there? Who knows? Maybe we will simply grind down all the way to the July expiration. At any rate, there is a lot to think about for the next 3 days. But for now it's Friday afternoon and time for a break.
Thursday, July 01, 2010
The market tried to have a positive day but it was not to be as the Dow lost 41 points on heavy volume. Advance/declines were negative. We are very oversold here and really due for some type of short-covering bounce. But we've been oversold for a while. The Dow was down 150 at one point. We've got the employment report tomorrow ahead of a long weekend. Anything can happen. We are in a down trend. Rallies will be sold. Gold got clobbered today, down about $40 on the futures. The XAU fell 7 3/4. ABX, GG and NEM all were over 2 point losers on good volume. I canceled the ABX July call order. I placed another order for ABX calls going out to August. I'm not sure if today was a one day wonder for gold or the start of something bigger. The dollar got clobbered as well so the flight to safety trade was taken off in a big way. Perhaps the markets here sense a rally about to happen for the indices. Hard to believe that though. Maybe traders were trying to lock in some 2nd half of the year profits on the first day. It's all a guess but you cannot ignore the price action. Mentally I'm feeling fine, slept well. The summation index continues lower, we are in dangerous territory and the market cannot seem to get even one day of rally. Interesting times indeed. Who knows what tomorrows employment numbers will look like? I'm on the sidelines as far as the stock indices are concerned for the moment. So we'll see what tomorrow brings.