Thursday, September 30, 2010
The Dow closed the month with a drop of 47 points. Volume picked up today. The advance/declines were about even. We opened higher and closed lower. I ended up getting some OEX puts in the morning when the market was positive. They are in the black. I'm not sure this trade will work but we are overbought and as I said yesterday the daily chart pattern looks like the August top. We also had a small move in the McClellan oscillator that implied short term weakness. I don't know how long that I will hold this position but it may not be too long. Tomorrow will tell a lot. Gold sold off early today but came back to finish unchanged. The XAU lost 2 points. ABX lost 2/3, GG off 1/2 and NEM led the way, off a buck. Volume picked up here as well. The dollar sold off early but then came back a bit. I canceled the ABX call trade for now. I wanted to focus my attention on the OEX. I may try the gold shares again later before the expiration. Still very overbought here. Mentally I'm feeling OK. There are some longer term indicators that imply there will be some weakness going forward. We'll see if they are accurate. Beginning of the month tomorrow and that usually means positive money flows for the market. The OEX trade is on.
Wednesday, September 29, 2010
The Dow lost 23 points today on average volume. Advance/declines were positive. Moving basically sideways for the past 3 days. End of the month and some economic data tomorrow. I would like to try the OEX puts again but there is no decent signal yet. However the daily pattern is similar to what the market did before the August decline. In August it felt like we were going to move to the upside out of the sideways pattern but we dropped. So we'll see. Gold was up a couple bucks as the dollar was a bit weaker. The XAU dropped 1/3. ABX up 1/4, GG was flat and NEM fell 1/3. Volume was light. I'm leaving in the open order for the ABX October calls. This may not be the right move but I'll leave it in for another day. Gold itself is still very overbought. Conditions like this cannot last forever. So we'll see what happens. Mentally I'm feeling a bit tired today. Did not sleep enough. We'll wrap up September tomorrow and go from there. Seasonally, this is usually one of the weakest periods for the stock indices. It hasn't been that way this year. Perhaps the market is simply much stronger than I realize at this juncture.
Tuesday, September 28, 2010
We opened lower and closed higher as the Dow gained 46 points on average volume. Advance/declines were 2 to 1 positive. I have thoughts of trying the OEX puts again but the market seems like it just wants to go higher. There also appears to be a lot of bulls coming out of the woodwork. If we break 1150 on the S&P 500 then we should move higher. I'm on the sidelines for now. Gold set yet another new high as the dollar continues to drop. It was up $10 on the futures. The XAU gained 3 3/4. ABX up a buck, GG gained 1/2 and NEM rose 1 1/2. Volume was good. Money just continues to flow into this sector. I placed an open order for some ABX October calls. However most likely today was the day to purchase them. Still overbought but it just doesn't correct. We'll see what happens. Perhaps today was just an end of the month window dressing for the gold shares. It's tough to chase things sometimes. As I remember, it didn't work the last time I tried it. Mentally I'm kind of in a funk. I really don't have a good handle on things here. No reason really. The stock indices are in an uptrend and gold is too. But these trends don't last forever.
Monday, September 27, 2010
It was a slow day today as the Dow lost 48 points on light volume. Advance/declines were negative. We opened lower, made it back to positive territory and went back down into the close. I have no OEX trades in mind at the moment. We're overbought but that hasn't meant much lately. End of the month on Thursday. We'll get the most economic data on the last couple of days of the week. Gold was flat on the day. The XAU lost 1 1/2. The dollar didn't do much either. ABX fell 1/2, GG off 1/4 and NEM shed 3/4. Volume was light. I still might try the gold share calls if we move to oversold this week on a daily basis. But that remains to be seen. So it's a wait and see game here as well. Mentally I'm feeling OK. There isn't much for me to say here. We broke out on the S&P 500 when we crossed 1130. Unless we are forming a bull trap, the trend is up and we are going higher. The gold market continues in an uptrend. Volume continues light. We'll see what happens Tuesday.
Friday, September 24, 2010
The Dow staged an explosive rally today as it gained 198 points on average volume. The advance/declines were 5 to 1 positive. I don't know where it came from but I'm sure some short covering was involved. I got stopped out of the OEX put trade for another 40% loss. This trade looked great yesterday but that all changed today. The summation index has turned back to the upside today. The weekly charts don't look bearish anymore. I'm not sure where the next trade is for me with regards to the OEX. Gold was up only a couple of bucks, which wasn't much considering the US dollar got clobbered again. The XAU gained 2/3. ABX was off 1/3, GG was flat and NEM dropped about 1/2. Volume was light. The gold shares and gold itself are very overbought. They have been for a while. Perhaps I'll try a trade there but I certainly don't have a good idea. Mentally I'm feeling OK. Well it looks like my overall strategy of a drop in the market in the autumn didn't work. Unfortunately none of my ideas this year have worked that well, if at all. It's been a memorable year to forget so far. So where do we go from here? It looks like the rally that started in the beginning of September has legs. Unless we get a complete market reversal, the trend is up. There's 3 weeks to go on the October options. I don't see any trades for me at the moment but I'll check the charts over the weekend. It's the first weekend of fall. Time for a break.
Thursday, September 23, 2010
The Dow lost 77 points today on light volume. Advance/declines were 2 to 1 negative. We sold off early, came all the way back and then fell again. The summation index should be rolling over today but that doesn't mean we are going to collapse. My OEX puts are now slightly in the black. We'll be oversold by Monday so I will have to think about exactly what to do here. No news to speak of really. So perhaps the technicals are going to work here. Gold was up $4 on the futures, however the dollar gained some ground today. The XAU lost 1 1/2. ABX and GG fell 1/2, while NEM lost a buck. Volume was average. I still may try the gold share calls here again but they are very overbought. So we'll see. However if the market drops, the gold shares will go with them. Mentally I'm feeling OK, slept well. So perhaps the OEX put trade will work but it's still early. Tomorrow will tell a lot. The weekly charts for the indices now are looking bearish. That, combined with a declining summation index could make the put trade profitable. Time will tell.
Wednesday, September 22, 2010
The Dow dropped 21 points today in what I would describe as listless trading. Volume was average. The advance/declines were negative. Once again the overall market was weaker than the Dow. My OEX puts didn't do much and are still in the red. The postings on the summation index are getting closer and perhaps will turn this indicator down. It has yet to happen though. A bit of economic data out tomorrow so we'll have to see what happens. Gold continues to be the story and we hit new highs again today as the dollar continued to weaken. The gold futures were up $17. The XAU gained 2 1/3. ABX up 3/8, GG up 1/8 and NEM up 3/4. Volume was good, confirming the moves higher. We are overbought here but the gold market doesn't care. I might just have to try the ABX calls again for the October option cycle. I suppose that I'm still regretting getting stopped out on that last trade. Mentally I'm doing OK, slept better. We'll have to see how this OEX put trade works out in the coming 2 days before the weekend. We're still a bit overbought but we could just be working off that condition. I'll really need to see some solid downside to tell if this trade has a chance. We'll see what happens tomorrow.
Tuesday, September 21, 2010
It was an up and down session with the Dow ending with a slight gain of 7 points. Volume was average. The advance/declines were negative. The overall market was weaker than the Dow. The Fed made its announcement and we gyrated after that. We were down 40 and up 70. Still very overbought here short and medium term. My OEX puts almost got stopped out at the highs for the day but somehow were not. They are still in the red. We'll see if they last tomorrow. On to gold, which sold off early in the day and then roared back after the Fed announcement as the dollar plummeted. The futures closed off $6 but then gained all that back and another $7 in the aftermarket. The XAU sold off and came back as well, up 1 1/4. The gold shares sold off early and I was stopped out of the ABX call trade for a loss of 40%. ABX then turned around and the same position would now be up 20%. That is the downside of having the stop loss order. Sometimes you lose the position and it would of worked. But I have to limit my losses. ABX was up 1/3, GG up 1/2 and NEM up 7/8. Volume expanded to the upside. Gold is the place to be at the moment as it is attracting new funds. It has been the place to be for a while. If the dollar continues to break down here, gold will flourish. Mentally I'm feeling tired, did not sleep well or enough. I'm disappointed in the gold trade loss but it's been that type of year. Perhaps this OEX trade will work but it could be stopped out tomorrow on market strength. We'll see. Now that the Fed is out of the way, we'll see what happen overseas tonight and go from there.
Monday, September 20, 2010
The Dow broke out to the upside today, gaining 145 points on average volume. Advance/declines were 5 to 1 positive. Summation index heading higher. My open order for the OEX puts was filled but this trade is not going to work if this breakout is valid and it appears to be. The stop loss order is in place and should be hit tomorrow. When everyone is looking for a decline, it won't happen. That seems to be the case here. It's just another losing trade for the year. Fed announcement tomorrow and that will probably propel us even higher. Gold was up $3 today and the dollar was a touch weaker. The XAU was up 2 2/3. ABX gained 1/2, GG up a buck and NEM gained 1/4. Volume was light. My ABX calls are slightly in the red. They did turn positive during the day but the gold shares sold off with the rally. It doesn't look like this trade will work either but we'll see. Mentally I'm feeling OK. Could have slept better. So it looks like the market wants to head higher and all indications are that it will. My trades will most likely be stopped out. We'll see how it goes tomorrow.
Friday, September 17, 2010
We closed the week with a slight gain of 13 points on the Dow. We opened higher on the day and then just drifted. Advance/declines were positive and the volume was better than it has been. That could be expiration related. We're still overbought here. Summation index continues higher. Nothing has really changed. We either break out on good volume to the upside next week or we begin a decline. I still have the open order in for the October OEX puts. I'll go over things this weekend and re-evaluate this idea. Gold was up a couple of bucks today but the XAU fell 1 1/8. ABX, GG and NEM moved fractionally one way or the other on what goes for average volume these days. My ABX October calls are still in the red. Perhaps I'll have to dump them on Monday if I'm looking for downside in the overall market. However if we break out to the upside, then this trade will probably work. More things to ponder over the weekend. The dollar was up a touch today but had a bearish week. Mentally I'm feeling OK. I think that next week will be the key to where the stock indices are heading. We are at the resistance on the S&P 500 once again. If we break through there could be what's called a stock melt up. Money will pile in. In the opposite scenario if we fail to get above the resistance, sellers will reappear and down we will go. I'm still in the latter camp but I realize that the market will go where it wants. I'm going to have to make up my mind this weekend and go from there. Seasonality favors a decline here. So we'll have to wait and see. For now it's Friday afternoon and time for a rest.
Thursday, September 16, 2010
The Dow gained 22 points today on light volume. Advance/declines were negative. We were lower for most of the day and got back into positive territory in the last 2 hours. Still overbought here and I would expect some weakness near term. I just don't know how long that will last if it does occur. I adjusted down the price for the OEX October puts that I have an open order for. Summation index remains to the upside, implying higher prices for the indices. Option expiration tomorrow. Gold was up $5 today and the XAU rose 2 1/2. ABX up 7/8, GG up 1/4, while NEM was flat. Volume was average. My ABX calls are still in the red. I'm thinking that now this may just be a trade to get out of, since my timing wasn't correct on the entry. We'll see. Still 4 weeks to go and gold has broken out to new highs. The dollar lost a bit of ground today and gold reacted as expected for a change. Mentally I'm doing OK. So we'll see what kind of expiration Friday we get. Could be another non event as it has been lately. We still haven't gotten through the resistance at 1130 on the S&P 500 but we are close. If and when that happens the OEX put trade will have to be canceled. However the volume really needs to pick up. It has been light for months and summer is over. We'll see how we close out the week and go from there.
Wednesday, September 15, 2010
Overbought and staying there as the Dow gained 46 points on average volume. Advance/declines were positive. We are both short and medium term overbought now. I do expect lower prices in the near future. That doesn't mean things won't hold up here for expiration, they could. I'm leaving in the OEX October puts order. We still have yet to break the resistance at 1130 on the S&P 500. Let me say something about the volume here. Average volume lately would normally be considered light. Light volume is now considered very light. There just aren't as many participants as there used to be. That will change but I don't know when. Gold was off a couple of bucks after yesterdays record run. The XAU fell 1/2. ABX, GG and NEM all moved fractionally on average volume. I would have liked to have seen some follow through on gold and the gold shares but it didn't happen. My ABX calls are in the red. If the market does drop here, the gold shares will probably go with it initially. So this trade at the moment looks like another loser. I may just bail out of it before the weekend if I don't see some upside in the next 2 days. The dollar bounced a bit today and that didn't help the precious metal. Mentally I'm a bit tired, could have slept longer. It is also possible that tomorrow brings a very positive day as some of my work indicates that there could be an upside breakout to the trading range. But it would have to be a huge volume day and with the current overbought status, I don't think it will happen. But I've been wrong for much of the year already. If we do open strong I'll have to cancel the OEX put trade. So we'll see.
Tuesday, September 14, 2010
It was an up and down session as the Dow finished off by 17 points. Advance/declines were negative and the volume was average. We are at the overhead resistance. I think this is a major inflection point for the stock indices. We are either going to break out to the upside on increased volume and continue the rally or we will fail here and begin another decline. I'm leaving in the open order for the OEX puts. We are overbought here but sometimes we stay there. Gold had a breakout to new highs on increased volume. The XAU rose 5 points but was higher early. ABX up 1, GG rose 1 1/2 and NEM up 2 3/8. These issues were also higher and sold off late. Volume was above average. I bought some ABX October calls on the breakout. I was going to wait for the Gold/XAU buy signal but it's possible that the parameters for that have now changed. Time will tell. I did not like how the gold shares ended the day by selling off. I would have liked to have seen these issues end the day near their highs. So perhaps this is another mistake. However the breakout of gold occurred on increased volume and that is a positive sign. The dollar also fell again today and gold paid attention. Mentally I'm feeling OK. The trade that I put on here is already off 10%. I have the stop loss order placed. So we'll see what happens. I still think the overall market is headed lower but gold would be looked at as a safe haven again. Or perhaps that's just wishful thinking. We'll see what tomorrow brings.
Monday, September 13, 2010
The Dow continues higher, up another 81 points today. Advance/declines were over 3 to 1 positive and the volume was average. Summation index continues higher. We are approaching short term overbought here. I expect this week to be positive with the expiration of the September option contracts. That said, I did place an order for some October OEX puts. We are just about at the resistance of 1130 on the S&P 500. It will take an expansion of volume getting through that level to change my mind. That could happen. Gold was flat on the day despite the US dollar getting clobbered. Another divergence between gold and the dollar. ABX dropped 1/2, NEM lost 1/4, while GG was flat. Volume here was very light. The Gold/XAU ratio is nowhere near a buy signal. I'll be on the sidelines here until this indicator provides a buy signal and we are oversold. Mentally I'm doing OK. The stock indices rallied today with the drop in the US dollar. Could this be a sign of things to come? I certainly don't know. However I am sticking with my negative market outlook going forward until proven otherwise. We are still in a trading range and approaching the top of that range. We'll see what happens tomorrow.
Friday, September 10, 2010
It was just another lackluster day in the markets as the Dow gained 47 points on light volume. Advance/declines were 2 to 1 positive. It's just more of the same here as we are grinding higher approaching the 200 day moving average line on the S&P 500. Volatility is low and that will change eventually. The question is, when? Option expiration week coming up and we'll see if it has its usual positive bias. No OEX trades at the moment but I'm probably going to try some October OEX puts if we stall again at around 1130 basis S&P 500. Gold was off almost $5 on the futures, while the XAU gained 1 3/4. ABX and NEM were up around 1/2. GG was flat. Volume extremely low here. The dollar closed about unchanged today. The weekly charts on the gold shares have stalled. The metal itself continues to act better. I don't know what it means going forward but you'd rather see them move in tandem. I'm still leaning towards the October ABX calls. No trades for now though. Mentally I'm feeling OK. Hard for me to figure out just where we are going from here. The lack of participation isn't a good sign in my opinion. However we could see some type of short squeeze if we get above 1110 on the S&P 500. That seems to be the short term resistance for now. The summation index continues higher and that still implies that the trend is up. I'm going to stay on the sidelines for now and watch where we go in the beginning of next week. But now the weekend is here and it's time for a break.
Thursday, September 09, 2010
The Dow rose 28 points on light volume. Advance/declines were positive. We were higher than that early on. Not much to say here really. Sideways for now. Summation index still moving higher. Option expiration next week. Gold dropped $6 today and fell further in the aftermarket. The XAU shed 3 1/3. ABX down 1 1/4, GG down 2/3 and NEM down 1 1/3. Volume light as usual. The dollar didn't do much today. No trades in mind for the gold shares at the moment. I will keep an eye on the October calls though. Mentally I'm feeling OK. There isn't much going on for all I can tell here. The markets are lightly traded and stuck in a trading range as I have stated before. Sooner or later, that will change. I'm trying to remain patient at this time. It isn't always easy. However as the time passes, perhaps my confidence will return and that would be a plus. Sidelines for now.
Wednesday, September 08, 2010
The Dow gained 46 points today on again quite light volume. Advance/declines were 2 to 1 positive. Not much data except the Fed book. Obama had a speech for the public. Usually when Obama talks the market goes down, so maybe this is a positive going forward. The extremely light volume is worrisome to me because it will take volume to move this thing higher. So we'll see. I am looking at the October OEX puts now. However it seems as though most market pundits are calling for a swoon here. The market never accommodates the majority. Gold was off a bit today and the XAU fell 1/2. ABX, GG and NEM all had fractional losses on lght volume. I'll continue to wait here on the next gold share trade. The dollar was weaker today but that did not help the precious metal. No volume here either. Mentally I'm doing OK, could have slept better. So it's a waiting game for me here. Only 2 days left this week and then September option expiration week. No trades in sight at the moment. That could change as we progress going forward. We'll see what tomorrow brings.
Tuesday, September 07, 2010
We began the shortened week on an inauspicious note as the Dow lost 107 points on very light volume. Advance/declines were almost 3 to 1 negative. Rumblings of trouble again in the European credit markets were the excuse for the drop in prices today. We'll have to wait and see if there is any follow through tomorrow. We were approaching short term overbought and todays activity relieves some of that condition. Gold had a good day, up $5 as it backed off from setting a new all time high. The XAU managed to gain 1/2. The gold shares were mixed, with ABX up 1/2, NEM up 1 1/4 and GG down 1/2. Volume was light to average. The dollar had a good day and yet gold managed to rally. Gold it about at new highs but the gold share indices are nowhere near their old highs. We'll see what this means going forward. I'm getting long the gold shares on the next Gold/XAU buy signal. We are not close to a signal at the moment. Mentally I'm feeling better after the long holiday weekend. I'm making some trading tactic adjustments, to help prevent the kind of poorly managed trade that I just experienced. I'm also cutting down my amounts to trade until I can regain some sort of level of confidence. We're still in a trading range for the major stock indices. The S&P 500 has a potential head and shoulders bottom in place. For this pattern to be valid, we would have to break through 1135 on good volume. I'm not sold on that. I still feel that we will be heading lower and taking out 1040 on the S&P. I may try the October puts in the future.
Friday, September 03, 2010
The Dow continued higher as we closed the week with a gain of 127 points on light volume. Advance/declines were over 3 to 1 positive. Summation index moving higher. I dumped the OEX puts for an 80% loss. The employment report was weak but not as weak as expected. That was a horrible trade. It had no stop loss provision which was my own fault. I also had a gut feeling when it was filled that it wasn't the right trade to put on at the time. But I didn't listen to my gut and I paid the price. There are no excuses though. You've got to live with the losses and with the gains. It's been a bad year so far. I doubt that I'll be able to recover to break even. Gold lost a couple of bucks and the XAU gained 3/8 after selling off early. ABX was flat, GG lost a buck and NEM fell 2/3. Volume was light. These issues also were lower earlier in the session. I'm tempted to get some ABX calls here because the daily chart looks like it wants to turn back to the upside. But there is no buy sign from the Gold/XAU ratio. Not to mention that my confidence is shot once again. The dollar was weaker today but gold didn't manage a rally either. Mentally I'm feeling down after another loss. It could have been mitigated with the proper tactics. It wasn't and there is no one to blame but myself. Not the way that I'd like to start a long holiday weekend. It's basically back to the drawing board. The market found support and is now going to challenge the overhead resistance. Perhaps we are still in a trading range. I'll have to check things out over the next few days. For now it's Friday afternoon at the end of summer. Time for a break.
Thursday, September 02, 2010
The Dow tacked on another 50 points today on light volume. Advance/declines were over 2 to 1 positive. The summation index has now turned positive. It was quite impressive actually, considering yesterdays huge gain. The trend is up. My OEX puts are dead and all that's left for this trade is calculating the loss. Employment numbers tomorrow and the only hope is that they are weaker than anticipated. You can't trade on hope though. The sellers have disappeared. Just another mistake in the many of this year. Gold was up $5 and the XAU gained 2 1/8. ABX and GG were basically flat, while NEM gained 1 1/4. Volume was light. The dollar didn't do much today. Gold still looks like it could break out to a new high. But the big cap gold shares are nowhere near their old highs. Mentally I'm feeling OK. All eyes wait for tomorrows numbers. It's also a Friday before a long holiday weekend. The volume could be lighter than usual. But volume has been light for quite a while. So we'll see how it goes tomorrow and take it from there. I don't expect this OEX trade to be saved, even with a weaker number than expected.
Wednesday, September 01, 2010
We broke out to the upside today as the Dow gained 255 points on average volume. Advance/declines were 5 to 1 positive. The down trend line in effect since the beginning of August was broken to the upside. My order for the OEX puts was filled and it's a loser. I'll give it until the employment report on Friday but the tide has turned. We may revisit the downtrend line that was just violated and that would give me a chance to get out and cut the loss. Timing is everything and there was a chance that we'd see something like today as I mentioned yesterday. But the song remains the same for me this year. And it hasn't been a good one. Gold lost a couple of bucks even with a weaker dollar. The XAU fell 7/8. ABX fell 1 3/8, GG off 3/4 and NEM dropped a buck. Volume picked up to the downside. The daily charts here have turned bearish. I canceled the open order for the ABX September calls. Perhaps I'll try the October calls when we get another buy signal on the Gold/XAU ratio. But for now I'll have to concern myself with the OEX trade. Mentally I'm feeling a bit tired, could have slept better. So it's another mistake for now with regards to the OEX trade. Could things turn around and make this trade a winner? Perhaps but not off of todays market action. I'll let tomorrow pass and wait for Friday. Unless we get another upside breakout. We are perched at the 50 day moving average on the S&P 500 daily chart. A break through there and this trade will be done.