Tuesday, August 31, 2010
It was an up and down session with the Dow ending with a gain of 5 points on better volume. Advance/declines were positive. We are oversold both short and medium term. I'm leaving in the open order for the OEX puts but it could be a mistake. The S&P 500 has drawn a line in the sand at 1040. If that breaks, we will be heading lower for sure. Beginning of the month tomorrow and it's possible we could see some inflows of cash. We'll see. Gold was up $10 today and we are on the cusp of breaking out to new highs there. The XAU gained 2 1/4. ABX up 3/8, GG up 1/2 and NEM led the way higher, up 1 3/8. Volume was better than it has been. End of the month purchases? Money continues to find a home here. I placed an order for some ABX September calls. If we do break out in gold, the gold shares should follow. We are overbought and staying there. I'm not exactly sure this is the right trade to try because there isn't a buy signal from the Gold/XAU ratio. However the price is far enough away that it could be triggered if we get there. Mentally I'm feeling OK. The overall stock market has been in a funk for a few weeks now. There is a chance we are putting in a bottom here and will head higher in the beginning of September. I'm sticking with the OEX puts though. The summation index continues lower but that could change with a very positive day. It could all hinge on Fridays employment report. Time will tell. I'll stick with the open order trades that I have in for now and adjust things as necessary.
Monday, August 30, 2010
The Dow gave back what it gained on Friday. The loss was 141 points on very light volume. Advance/declines were 3 to 1 negative. I placed an order for some OEX puts overnight and it was not filled. I adjusted the strike price down and replaced the original order. In downtrends, sometimes rallies appear from nowhere, as was the case on Friday. However the downtrend soon reasserts itself. That seems to be the case today. Volume was very weak though. Summation index still heading lower. Gold was flat today but the XAU lost 1 1/4 points. ABX and NEM were little changed, while GG lost a bit over 1/2. Volume wasn't much here either. The gold shares continue to show amazing relative strength. I think that the next Gold/XAU ratio buy signal that is generated will be my cue for the gold share calls. We'll see. Mentally I'm feeling frustrated. I cannot seem to get filled on the OEX put order. Perhaps I'm just trying to be a bit too cute. Sometimes you just have to buy it and take your chances. I'll need to get something done before the employment report on Friday. End of the month tomorrow and that could bring even more selling. Lots of data out this week, so there will be reasons for price movement. The trend is down and remains so until further notice.
Friday, August 27, 2010
Today we got a bounce as the Dow gained 165 points on average volume. Advance/declines were 6 to 1 positive. The GDP number wasn't as bad as feared by some. Plus there was some Bernanke babble that was viewed as positive. Have we put in a trading bottom here? Perhaps. The mood is quite bearish. I canceled my open order for the OEX puts. No need to hold it over the weekend. I do believe that we are going to head lower. I'll ponder my next move over the weekend. Gold ended the session basically flat, while the XAU gained 3 3/4. ABX up 1/3, GG gained a buck and NEM rose 1/2. Volume picked up as well. Plenty of interest in the gold shares. I still may try the calls here but I also canceled the open order here. No need to have anything out there over the weekend. The weekly charts still look bullish for the gold shares. I may try something next week. The daily charts are overbought though. Again, things to think about over the weekend. Mentally I'm feeling OK. I'll need to go over the charts this weekend and be ready with a game plan for next week. 3 weeks in the September cycle and one less day due to Labor Day. Another week until the major players return from summer vacation. It's the last weekend in August. Time for a rest.
Thursday, August 26, 2010
The Dow lost 74 points today on light volume. Advance/declines were 2 to 1 negative. GDP revision tomorrow. There just are not a lot of buyers and I have yet to see a short covering rally. Summation index continues lower. I still have in an open order in for some OEX September puts but it doesn't look like it will be filled anytime soon. I'm a bit frustrated about not catching this down move but I believe that if I remain patient there will be a chance to do so before the September expiration. Gold lost $3 today but the XAU rose 3 points. ABX up 1, GG up 1 1/3 and NEM up 3/4. Again, the September gold share calls are something that I should already be in. ABX is poised to break above $47 soon. Volume is picking up to the upside. I think there is a chance that when everyone returns in a week or so that they will pile into the precious metal as a safe haven play. I'm leaving in the order for the ABX September calls. Mentally I'm trying to remain positive despite missing these moves. It isn't easy. I'm still convinced that we are going lower in the OEX for the September option cycle. Sooner or later there should be a decent snap back rally and that would provide the opportunity that I'm waiting for. It hasn't happened so far. As for the gold shares, the Gold/XAU ratio is out of the buy zone. The next time it gets there I'll be purchasing some gold share calls. It may be too late though. On to Friday.
Wednesday, August 25, 2010
We opened lower and closed higher as the Dow gained 20 points. Advance/declines were positive. Volume was average. We're still oversold. I placed an open order for some OEX puts. I'll adjust it as necessary. I really don't expect much of a bounce here. I could be wrong. Fed speak tomorrow and the GDP revision on Friday. So we'll see. Gold was up $8 today and the XAU gained 4 1/4. ABX and GG rose 1 1/3. NEM tacked on 1 2/3. Volume was average. I also placed an open order in for some September ABX calls. It may be too late. The dollar didn't do much today. Money continues to flow into the precious metal. It should move with the GDP revision. I'll adjust this order going forward as well. Mentally I'm feeling OK. So I have a couple of orders in and we'll see where things go. I still feel that we will be heading lower in the indices. But I need to see some upside to get short. The OEX put open order is priced away from the market. I also adjusted the strike price. Summation index continues lower. We'll see what tomorrow brings.
Tuesday, August 24, 2010
Down is the direction as the Dow lost 134 points on average volume. Advance/declines were 3 to 1 negative. What else can I say? We are headed lower. I will try and get short on any snap back rally. No interest in owning stocks at the moment. The housing data was awful and we already knew that. GDP data on Friday and that will look bad most likely as well. Oversold, staying there and that isn't changing. We'll see how it goes. Gold was up $5 but the XAU fell 2 2/3. ABX, GG and NEM all had fractional losses on average volume. The Gold/XAU ratio is back in the buy zone. Perhaps I'll take a look at the September calls again. Maybe check Octobers while I'm at it. The dollar dropped a touch today. Gold is holding up rather well here. But it is summer, so things may not be as they appear. September is historically a good month for the precious metal though. But if the overall market tanks it will take everything with it. Mentally I'm feeling OK. Still trying to wait for some type of bounce. I'm sure that I'm not the only one. Perhaps a bounce will never come. There is no doubt that we are going lower, the only question is how far?
Monday, August 23, 2010
Another day, another downer as the Dow lost 39 points on very light volume. We opened higher and closed lower which isn't a bullish sign. Advance/declines were negative. Summation index heading lower. Oversold and staying there. It is like a broken record. Real estate data out tomorrow and it can't possibly be good. I'd still like to get the OEX September puts but I have to see some type of bounce. The light volume is a problem as well as I've mentioned before. So we'll see. Gold lost a buck today and the XAU fell 2 1/4. ABX, GG and NEM all had around 1/2 point or more losses on extremely light volume. The dollar was up a touch. Gold futures expire this week and that could skew things short term. Almost back to a buy signal on the Gold/XAU ratio. I don't think I'll be getting any gold share calls but you never know. We are working off the overbought conditions there. Mentally I'm doing OK. It's the end of the summer so the major market players are still on vacation. That makes it tough to step up to the plate here as well. The continued oversold nature of the stock indices could turn into a real problem if we don't see any upside soon. We are overdue for some type of positive move. I'll keep an eye on things and see how it goes for now.
Friday, August 20, 2010
We ended the week on a down note as the Dow lost 57 points on light volume. Advance/declines were negative. The overall market was stronger than the Dow. The weekly charts are looking bearish for the stock indices. That said, the daily charts show a potential bullish head and shoulders pattern here. The summation index is heading lower though. We are oversold as well. So there are some crosscurrents. I still want to get some September OEX puts. The summer light volume is hard to figure because we've had some volatility but no volume. So we'll see. Gold lost $6 today and the XAU 1 1/8. ABX, GG and NEM had fractional losses on light volume. The XAU sold off early and made somewhat of a comeback. The dollar had a good day so the inverse relationship to the precious metal is working again. We're still overbought on the gold shares. Perhaps I'll try the calls here but I'll have to ponder things over the weekend. Mentally I'm feeling OK. It's getting near the end of August and things should begin to pick up with regards to volume within a couple of weeks. Some data out next week with home sales early in the week and a GDP revision late in the week. I can't expect the home sales numbers to be strong but it may already be in the price of the market. I'll check the charts over the weekend and take it from there. It's a warm Friday afternoon in the summer. Time for a break.
Thursday, August 19, 2010
Back to the downside as the Dow lost 144 points on average volume. Advance/declines were over 3 to 1 negative. Volume was average. The economic data was weak today and gave the market a reason to sell off. Todays action should send the summation index lower again. We are oversold still and the bounce we had was anemic. Perhaps things are even weaker than I thought. I canceled my open order for the September OEX puts. My price would not be filled. I'm still a believer in that idea though and will be putting in another order soon. Gold was up $4 today but the XAU fell 1 1/2. ABX and GG were down 3/8, while NEM dropped a buck. Volume was light as it has been. The dollar had a bit of strength. Gold is overbought but it has seen some interest since the beginning of the month. The September calls still might be in play for me if we get oversold in the next week or so. But it's probably too late. Weak volume on the rise also. Mentally I'm doing OK, slept well enough. The stock index charts need to hold up here or we will be heading lower. Perhaps yesterday was the last chance to get the September puts at a decent price. Time will tell. Todays market reaction to the data wasn't bullish. Often times it's not the data itself but what the market does afterward that tells the story. I suppose I'll keep looking at the September OEX puts for a buy point.
Wednesday, August 18, 2010
We opened lower, climbed back to be higher and then closed about unchanged as the Dow gained 9 points on light volume. Advance/declines were positive. Still more oversold than overbought but the market has a listless tone to it. I still have an open order in for the September OEX puts. I adjusted the price down a touch in case we get a breakout above 1100 on the S&P 500. But it could be that we've seen whatever bounce there is and go lower from here. I don't know. The volume has been so light this summer that it's really hard to say exactly what is going on. Gold was up 3 bucks today and the gold shares continue to shine. The XAU rose 3 1/2. ABX and NEM were higher by around a buck, while GG led the way up 1 3/4. Volume was better than it has been but still very weak. The dollar didn't do much today. Are we headed for a new high in gold? Overbought and staying there for now. Money is heading into the gold shares for whatever reason. Another missed opportunity. Mentally I'm doing OK. August is a little over halfway through. The plan for now remains to purchase some September OEX puts. We do have to get through the next 2 weeks of summer slowdown though. I expect things will not return to what is considered normal until after Labor day. Perhaps waiting until then for the next trade is the proper strategy. We'll see.
Tuesday, August 17, 2010
We got a bounce today as the Dow gained 103 points on light volume. Advance/declines were over 3 to 1 positive. We were up around 175 at one juncture during the day. So I was a day early on the OEX calls and it cost me. That's the nature of the game when there isn't a lot of time left on the options. As usual, timing is everything. The market action wasn't too positive towards the close. I do now have an open order in for some September OEX puts. Not sure when and if it will be filled. There is the summer slow volume problem to deal with. We'll see. Gold was up a couple of bucks today and the XAU gained 2 3/8. ABX and NEM both gained 2/3. GG was up 3/8. Volume light again. We are overbought on the gold shares but the charts are heading higher. I'm not sure about making a trade here but you never know. We are in the seasonal strong period for gold. The Gold/XAU ratio signal is off for now. The dollar fell a bit today. It's possible that the recent strength in gold is due to the market selling off or the potential for the market to sell off in the future. That's a guess as usual. Mentally I'm feeling a bit tired, did not sleep enough. So we will have to see if there is any follow through to the upside tomorrow. Some data out on Thursday but that is about it. 3 days left in the August option cycle. We'll see what tomorrow brings.
Monday, August 16, 2010
It was a light volume Monday as the Dow lost a point. The advance/declines were positive. The market gapped down at the open and hit my stop loss order. So it was a 50% loss in a matter of 15 market minutes. That can happen. Not a lot of money involved but a loss none the less. I still expect upside and soon. Oversold both short and medium term. I'll now simply focus on the September OEX puts. However the slowness of the summer could be a problem. Gold continues to be the place to be as it gained $10. The XAU rose 2 1/2. ABX and GG gained 3/4, while NEM rose a buck. Volume continues extremely light here as well. But you cannot ignore the price movement. I really think it's too late for the September gold share calls at this point but we'll see. If the market does take the drop I'm expecting, the gold shares will go with it. Another missed opportunity? Time will tell. Mentally I'm feeling pretty good despite todays loss. It would not surprise me to see a solid upside day tomorrow with the current oversold condition. I thought about perhaps trying the OEX calls again today but did not. The next trade will be the OEX puts. The timing will have to be good because things will probably remain slow until around Labor day. It won't be easy. However I've been waiting all summer to put on this trade and if correct it will have been worth the wait.
Friday, August 13, 2010
The Dow lost 17 points today on very summer light volume. Advance/declines were negative. The overall market was weaker than the Dow. The market bounced around and closed practically on its low for the day. I took a chance here and bought some OEX calls near the close. I had an open order in for most of the session and it got filled near the end of trading. I'm still expecting some type of bounce on Monday but if we don't get one, then I'll know the market is even weaker here than I thought. This should be a quick trade if it works. The stop loss order is in. Gold was flat on the day but the XAU lost 1 3/4. ABX lost 1/4, GG down 1/2 and NEM fell a buck. Volume very light here as well. The dollar had a bit of strength today. The Gold/XAU ratio is in the buy zone. I'm bouncing back and forth as whether to get the September gold share calls. The weekly charts look bullish but the daily charts not so much. I'll have to go over things again this weekend. Mentally I'm a bit tired, could have slept more. Short term oversold here and I do expect some upside. However the summation index is heading lower and the major trend is now down in my humble opinion. I'll be looking to get some September OEX puts at some point here in the near future. The problem is that it is still summer and the volume is pathetic. Things can easily be moved around or just go nowhere. Expiration week coming up so we'll see how it goes. I'll check the charts over the weekend and be ready for Monday morning. However it could just be a slow summer Monday. We'll see. It's a summer weekend and time for a rest.
Thursday, August 12, 2010
We continued lower as the Dow lost 58 points on light volume. Advance/declines were negative. We were in the red for the full trading session. That said, we are shirt term oversold and I do expect a bounce by Monday. I had an idea to try and play the OEX calls today for the expected bounce but did not. I'll have to mull things over tonight. I think that it is a trade that could work. I'm still going to get some September OEX puts though, perhaps next week. Gold had a good day and was up $17. The XAU gained 3 1/2. ABX was up 3/4, GG up a buck and NEM led the way, up 1 3/4. Volume was light but better than it has been. I'm still liking the gold shares because even though we've moved higher the Gold/XAU ratio is still close to the buy zone. Perhaps I will go out to September for the calls. We're overbought here though but that doesn't mean the precious metal won't move higher. The weekly gold share charts look pretty bullish. I'll ponder this idea tonight as well. The dollar moved up today as well but it did not affect gold. Mentally I'm feeling OK. I do have a couple of ideas for trades that I did not consider until this weeks market action. I'll decide exactly what to do tonight. I do not want to lose focus on the main idea going forward though. That is to buy some OEX September puts on a move back towards the S&P 500 200 day moving average line. Gold looks good on the weekly charts and it would not be out of the question for it to rise on a stock market drop. 6 days to go on the August option cycle and next week is expiration. I'll check the charts tonight and take it from there.
Wednesday, August 11, 2010
Today we got clobbered as the Dow lost 265 on average volume. Advance/declines were 5 to 1 negative. The McClellan oscillator will be turning negative today. The expected decline has begun. The S&P 500 could not make it past the 200 day moving average line. I will be looking to purchase some September OEX puts when we get a snap back. Hopefully we will and I expect this to occur early next week. We have gotten oversold in a hurry. The gold futures were little changed on the day but the XAU lost 4 1/2. ABX, GG and NEM all fell more than a buck on light volume. The dollar had a very good day on the flight to safety trade. Gold held up rather well considering. Obviously things have changed and I am considering a short term ABX call trade now for August. I expect a bounce by Monday in the stock indices and the gold shares should participate. The buy signal has returned for the Gold/XAU ratio. I'll no longer consider going out to September on the gold share trade after todays negative market action. Mentally I'm doing OK. So we have todays very negative action to consider going forward. Was this just a one day wonder? It could be but I doubt it. The technicals have now rolled over for the major indices. My thinking is to perhaps try the short term gold share trade immediately followed by getting the OEX puts for September. I'll have to look things over again tonight and take it from there. I do expect a bounce by Monday but the market will do what it wants.
Tuesday, August 10, 2010
We got the Fed out of the way as the Dow lost 54 points on light volume. Advance/declines were over 2 to 1 negative. We were down over 100 at one point but came back on the Fed keeping rates low "for an extended period of time". This is nothing new from the Fed. We have hovered around the 200 day moving average line in the S&P 500 for a few days. Haven't been able to break through to the upside yet but I think it will happen. I still want the OEX puts for the autumn but would like to wait for now. It isn't easy trying to be patient. Gold was down in the regular session but shot up after the Fed announcement. The dollar was higher early but also turned around on the Fed. That was the reason for the upside in gold in my opinion. The XAU was little changed after being lower early. ABX, GG and NEM all had fractional upside gains after selling off early in the day as well. Volume was light but more than it has been lately. It has been such a light volume rally in the gold shares that getting the September calls may not be the thing to do. However if we do get a pullback, I'm still considering it. Mentally I'm a bit tired, did not sleep well. So here's my trading dilemma at the moment. I do expect a decent fall in the overall market in the coming weeks. But I would like to get long the gold shares. Getting long will not work if the market takes a hit. The weekly charts for gold look very promising for an upside move. Also gold has a pretty good correlation with the price of wheat. The price of wheat recently went parabolic to the upside. Could the same thing happen with gold? On the flip side the overall stock market has had a light volume rally that appears to be running out of steam. The over the counter shares have been weaker than the Dow and you really want to look for NASDAQ and Russell 2000 to be leaders, not laggards. If we are building a top here the resulting drop could be severe. I would like to be on the short side if that occurs. So there's my problem. I am at least going to try and wait until expiration week to do anything at this point. We'll see what tomorrow brings.
Monday, August 09, 2010
A summer doldrums Monday as the Dow gained 45 points on extremely light volume. Advance/declines were over 2 to 1 positive. Waiting on the Fed announcement tomorrow. Summation index continues higher. All indications are for the market to move higher. I have no OEX trades in mind right now. Gold lost a couple bucks and the XAU was flat. ABX, GG and NEM had fractional moves one way or the other on very light volume. The dollar had a slight gain today. If we get a pullback in the gold shares I will probably try the September ABX calls. But that remains to be seen. Mentally I'm doing OK, slept well. 9 days left in the August option cycle. I don't foresee anything happening in the near future to bring me off of the sidelines. I still would like to get some OEX puts when I feel the time is right. The rally in the stock market has been on light volume and I simply do not trust it. I could be wrong and often am. Perhaps market forces can keep things going up until Labor day. But unless the volume picks up I will not be a believer. We'll see what the Fed has to say tomorrow.
Friday, August 06, 2010
The Dow sold off early with the disappointing employment report and was off over 150 points. However we made a late day comeback and the Dow closed with a loss of 21 points. Advance/declines were negative and the volume was light. The market has shown great resilience lately and wants to go higher. Summation index still moving to the upside. You cannot argue with the market. The only fly in the ointment is the volume but it is summertime. I'm still leaning towards getting some OEX puts for the autumn. Gold was up $6 and the XAU gained 1 2/3. ABX, GG and NEM were all higher by 1/2 to 2/3. Volume was the usual light here. The dollar was weaker on the poor jobs report and gold finally acted as it should in relation to the dollar. If we get a pullback in the gold shares, I may try the September ABX calls. The weekly charts in the gold shares are looking bullish. So we'll see. The reality is that I probably missed it though. Mentally I'm doing OK. So the jobs report has come and gone. We've got the Fed next Tuesday with the announcement on interest rates. The volume here is slow. It is hard for me to believe in this move higher having any staying power. I cannot fight the market though. 2 weeks to go for the August option cycle. I do not think I'll have any trades for the August options. But you never know. It's Friday afternoon in the summer. Time to forget about the markets for a while and relax.
Thursday, August 05, 2010
The Dow traded in negative territory all day and closed with a loss of 5 points. Advance/declines were negative and the volume was light as usual. Today was a waiting game for tomorrows employment report. We are overbought but that doesn't mean that we can't stay there. I'm undecided about what to do here so I'm remaining on the sidelines as far as the OEX is concerned. Perhaps next week or later in the month. Gold was up $3 and the XAU was little changed. ABX and GG were little changed as well, while NEM rose 3/8. Volume was extremely light here as well. The dollar just hung around today as well. If we get a pullback in the gold shares, I'll try the September ABX calls. Otherwise it is too late for now in my opinion. So it's time to be patient. Mentally I'm feeling OK. So we'll digest the employment report and go from there. 2 weeks and a day left on the August option cycle. I don't anticipate any trades for me in the August cycle but we'll see how things develop. Volume is very light and that is a problem discerning what is really going on. But that won't stop me from making a trade if a decent signal appears. However there is nothing wrong with sitting things out for now.
Wednesday, August 04, 2010
The Dow gained 44 points on light volume. Advance/declines were almost 3 to 1 positive. Summation index continuing higher. Employment report on Friday. I'm thinking about getting some OEX puts tomorrow. We are just above the 200 day moving average line on the S&P 500 and stalling. If we break out to the upside there will be a lot of room to go. However if we fail here, it's possible that a top has been put in. That said I will ponder this idea tonight. Breadth has been very good on this uptrend but the volume hasn't. Gold had a good day, up almost $10 on the futures. The XAU rose 3 2/3. ABX and GG were both up over a buck, while NEM gained 3/4. Volume was light here as well. ABX has shown good relative strength here. If I do try the gold share calls, ABX will be the choice. The dollar was stronger today but gold rose anyway. The dollar/gold relationship has not made much sense lately. This could just be light volume summer gyrations of no consequence. I don't know. Mentally I'm feeling good, slept well. So I'm thinking of putting on a trade but I'm not quite sold on exactly what to do here. I will need to make sure that I'm not trading just to do something. That I'm not trading out of boredom or just for the sake of making a trade. I'll go over things tonight and come up with a plan for tomorrow. Perhaps remaining on the sidelines will be the best course of action after all.
Tuesday, August 03, 2010
The Dow lost 38 points today on light volume. Advance/declines were negative. The market is digesting yesterdays big gain before the next move. The employment report is out on Friday and that should be the next major catalyst. We are still hovering just above the 200 day moving average on the S&P 500. I'm still on the sidelines regarding the August OEX options. Gold was up a couple bucks today and the XAU closed flat. ABX was up 3/8, while GG and NEM had fractional losses. Volume was light here as well. The dollar continued lower and gold cannot rally. I'm not sure exactly what is going on with that relationship lately. I still may try the September gold share calls though. We'll see. Mentally I'm feeling OK, could have slept better. So it's the beginning of August and we continue in a positive mode for stock prices. As I said yesterday the question is how long can it last? I'll try and remain patient for now. As for the gold shares, we are in the seasonal strength period for gold. That doesn't mean that higher prices are in the offing but it should help the bullish cause there going forward. The volume has been very light for the gold complex and that makes me hesitate to put on a trade here at the moment. Summer doldrums for now in gold. We'll see what happens Wednesday.
Monday, August 02, 2010
August started with a bang as the Dow rose 208 points albeit on light volume. Advance/declines were 5 to 1 positive. The summation index remains in a steady uptrend. The short term oversold condition was worked off and the rally resumed. How much longer will it go is the question. I certainly don't have the answer. I'm still looking to get some OEX puts for September when I feel the time is right. The S&P 500 just broke through its 200 day moving average. I'm going to try and remain patient. I will take time for a decent top to be put in when and if that formation does occur. Gold was little changed on the day as was the XAU, which gained 1/2. ABX, GG and NEM all had fractional losses on light volume. The dollar was again pretty weak today but it isn't helping the price of gold. There's a disconnect going on there. Other commodities rallied but the precious metal just didn't do much. I'm still looking at the September gold share calls though. We are oversold on a daily basis and getting there on a weekly time frame as well. The Gold/XAU buy signal isn't in effect as yet. Plus the volume has been pitiful, indicating not much interest at the moment. We'll see. Mentally I'm feeling OK, slept well enough. 3 weeks in the August option cycle and I don't have anything that stands out trading wise at this time. It may be best to just wait things out until the summer is over. That won't be easy to do but it could be the prudent course of action.