Friday, October 29, 2010
The Dow closed the month with a gain of 4 points. Advance/declines were positive and the volume was lighter than lately. GDP for the 3rd quarter came in as expected and wasn't the market mover that I expected. We are still just moving sideways here and I expect some type of explosive move one way or the other soon. I don't think we will stay in a trading range forever. Either next weeks election results or the announcement by the Fed should be a catalyst. No OEX trades yet. Gold gained $15 on a slightly weaker dollar and possible terrorist bomb threat packages around the world. The XAU gained 2 3/4. ABX and NEM were up a buck, while GG gained 1/3. Volume was average. Nothing is stopping the upward movement of gold. Money continues to flow there. That is really where my next trade should be. At least that's my thought at the moment. But I'll have to ponder this over the weekend. Mentally I'm feeling OK. October was another good month for the stock indices and we never got the usual fall in the fall. Next week should be interesting considering we'll get the Fed and the employment report in the same week. There will be opportunities. Whether or not I'll be able to take advantage of them is another question. I really should have done something with the gold shares this week. But it's the story of 2010, missed chances and bad trades. I'll check the charts over the weekend and try and come up with a game plan for next week. It's the last Friday in October and time for a rest.
Thursday, October 28, 2010
The Dow closed down 12 points today on average volume. Advance/declines were positive. The overall market was stronger than the Dow, Still moving sideways here but that could change tomorrow with the release of the 3rd quarter GDP. The summation index began to move lower. No OEX trades in mind at the moment. Gold was up $20 today as the dollar took a big drop despite weak economic data. The XAU gained 5 points. ABX and NEM rose about 1 1/2, while GG added 2 1/4. Volume was good in GG, average for the others. The earnings for ABX and GG were stellar. This was yet again another missed opportunity. The gold share calls that I wanted never got to my price and I should have made the adjustment. Had it not been such a dismal trading year so far, perhaps I would have been more aware and taken the chance. This failure mindset is yet another negative residual of a poor trading year. The gold shares had reached oversold again. The demand seems to be there regardless of the lofty prices. Mentally I'm doing OK, could have slept better. GDP in the morning and we'll see the markets reaction.
Wednesday, October 27, 2010
The Dow lost 43 points today on average volume. Advance/declines were over 2 to 1 negative but the overall indices were stronger than the Dow. We were down well over 100 points but came back as has been the pattern for quite some time now. It seems as though the market just wants to continue to grind higher. Until we see some real downside, that is the scenario that I expect. No OEX trades for now. Gold lost $16 today as the Dollar gained some more ground. The XAU lost 3 7/8. ABX and NEM each lost a buck, while GG fell about 1/2. Volume was a bit better than average. I canceled the open order for the November ABX calls before the earnings. We'll see how they come out and take it from there. I may try the order again. We're oversold on the gold shares here. I expect pretty good earnings but that doesn't mean the shares will rise. Mentally I'm feeling fine. GDP on Friday and the Fed next week. There will be plenty of information for the markets to digest. However, the overall trend remains up until proven otherwise. The summation index is moving sideways and after today it should start to head lower. That could be the sign of a change in direction but it hasn't happened yet. It's possible the summation index could head lower and the indices simply move sideways. We'll see.
Tuesday, October 26, 2010
The Dow opened lower but closed with a gain of 5 points. The advance/declines were negative. Volume was average. We are doing a whole lot of nothing here. Volatility is nonexistent again. Short term overbought. No OEX trades in mind at the moment. Gold opened lower as well but came back to be unchanged. The XAU gained 3/4. ABX, GG and NEM were flat on the day with light volume. The dollar had a decent day but gold did not react as much as would be expected. I left the ABX November call trade open for another day. Earnings for ABX before the open on Thursday. I'm expecting good numbers but that doesn't always mean the stock will go up. ABX is working off the recent oversold condition at the moment in my opinion. Mentally I'm doing OK. The market continues to grind higher. The summation index is moving forward but in a sideways channel. I'm not going to force anything here. Still plenty of time on the November options. We'll see what tomorrow brings.
Monday, October 25, 2010
The Dow closed up 31 points today on average volume. Advance/declines were positive. We were much higher on the open and faded out for the rest of the day. Not sure that means anything though. Summation index continues higher and the market grinds up. No change in that scenario, even with the one day sell-off of last week. No OEX trades in mind. We are moving back to short term overbought. Gold gained $14 and the XAU rose 2 3/4. ABX and GG gained about 1/2 each, while NEM was flat. Volume was light. The dollar fell a bit. The big cap gold stocks did not move as much as I would expect with a decent gain in gold. Earnings for GG and ABX in a couple of days. I placed another order for the ABX November calls. We'll need to see some downside for this order to be filled. If it isn't filled ahead of the earnings, I'll be canceling the order. So we'll see what happens. Mentally I'm feeling tired, did not sleep well. End of the month at the end of the week. Plenty of data this week including the first look at 3rd quarter GDP. The market continues higher for now.
Friday, October 22, 2010
The Dow lost 14 points today on light volume. Advance/declines were positive. Today the overall market was stronger than the Dow. So here we are, continuing to grind higher. Summation index moving sideways. Nothing new to report. We had some volatility earlier in the week but it tapered off. No OEX trades in mind at the moment. Gold was flat on the day in the futures market. The US dollar as well. The XAU gained 1/3. ABX, GG and NEM all had fractional moves to the upside on light volume. ABX and GG report earnings next week. I would like to try some ABX calls before the earnings and I will if the option prices reach what I believe to be a decent level. I canceled the open ABX November call trade for the weekend and will look to enter it again on Monday. Mentally I'm feeling OK. Not much else to report here. We'll close out October next week. There is a G-20 meeting this weekend but it will be the usual talk with no concrete action. I'll check the charts over the weekend as usual and decide if there are any trades available. I am looking at a longer term GE option trade for January. We'll see. It's the weekend and time for a rest.
Thursday, October 21, 2010
The Dow gained 38 points today on good volume. Advance/declines were negative. The overall market was weaker than the Dow. The market seems to be earnings driven for the time being. No more economic data this week. Todays numbers were mixed. No OEX trades for now but I'm leaning towards trying the puts again. Gold fell $18 today as the dollar was a touch higher. The XAU dropped 2 1/3. ABX and GG were both off 1/2, while NEM dropped 1 1/4. Volume was good here as well. Perhaps the long gold trade is finally unwinding. I'm still leaving in my open order for the November ABX calls. It isn't close to being filled yet. I'll adjust things going into the weekend if necessary or simply cancel the order and wait for next week. Mentally I'm feeling OK. The jury is still out as to whether this is an actual top being formed or simply another consolidation until we continue higher. The summation index is moving sideways. That could be a precursor to a drop in prices. Or not. Patience is the key for now regarding trading the OEX. The gold shares are now oversold, so we'll see what happens there.
Wednesday, October 20, 2010
The Dow bounced back today as it gained 129 points on good volume. Advance/declines were 3 to 1 positive. So was yesterday it for the decline? The rest of the week should tell. If we don't fall back then I think we will simply continue to grind our way higher. Resistance is at 1200 on the S&P 500. The summation index probably moved back to positive territory today. There's a chance that we are perhaps building a top here as the volatility has picked up. We will have to wait and see what the market says. Gold bounced back as well, up $10. The XAU rose 3 1/3. ABX, GG and NEM all gained around 1/2 on average volume. I'm leaving in the open order for November ABX calls. We'll have to see some weakness to have this order filled. ABX reports its earnings next week as well. The dollar gave back all of yesterdays gains as well. Perhaps the gold shares will consolidate and move sideways here before another leg up. That's a guess as usual. Mentally I'm feeling OK. Not much else to report. Some economic data out tomorrow and that's about it except for earnings the rest of the week. No rush to do anything and there aren't really any solid OEX signals right now. Patience required.
Tuesday, October 19, 2010
We finally got some downside today as the Dow lost 165 points on heavy volume. Advance/declines were 4 to 1 negative. China raised interest rates and there was some Bank of America mortgage problem. Was todays action just a one day wonder? Stay tuned. This will turn the summation index down. Whether or not we get an extended decline remains to be seen. Gold took a hit today as well, dropping $35. The XAU fell 9 1/2. ABX lost 2 1/3, GG shed 2 and NEM led the way down by 2 1/2. Volume was pretty good. Could this be the end of the gold trade for now? The dollar had a very good day as well and is now bouncing from its oversold condition. I am not sure if this is a lasting trend. I did place an order for some ABX November calls. An extra week on these options. If this is the end of the gold trade than this trade will not work. However I expect that at some point gold will have some type of snap back bounce. So I'm willing to take a chance here. Mentally I'm feeling OK, could have slept more. Perhaps this is the beginning of the decline in the indices that I expected a month and a half ago. However, technically we broke through the resistance on good volume. One scenario would be that we return to the resistance and then begin a more sustained rise. That would mean at the most, this decline would hold at around 1120 on the S&P 500. At this point it's all a guess. We'll see what the market has to say.
Monday, October 18, 2010
The Dow gained 80 points today on good volume. Advance/declines were 2 to 1 positive. The market continues to gain ground and there is no letting up. Price and volume are leading the way. Summation index also continues higher. Overbought and that doesn't seem to mean anything. This can't go on forever, can it? I have no OEX trades at the moment. Gold was flat today on the futures, while the XAU lost 1 1/8. ABX, GG and NEM were mixed on light volume. The dollar opened higher and closed lower. There is nothing stopping gold at the moment either. Very overbought and has been for what seems like weeks now. I'll be looking at the gold share calls on a pull back. I've said that for weeks as well. Gold and the stock indices moving higher are the trends that have been in place since the end of August. That ties in with the weaker dollar in the same time period. 76 is the key level for the US dollar. Mentally I'm doing OK. Not much else to say here. I don't have any good ideas right now. I'll be on the sidelines until something looks good to me.
Friday, October 15, 2010
The Dow lost 31 points today on expiration heavy volume. Advance/declines were negative. The overall market was much stronger than the Dow. GEs earnings disappointed and the major banks took a hit. We are still moving higher though. We'll see how the earnings shape up for next week. Gold lost $5 on the futures and a bit more in the aftermarket. The XAU lost 2 1/3. ABX, GG and NEM all had fractional losses of at least 1/2 on light volume. The dollar bounced a bit today. I might try the November gold share calls on a pull back. Mentally I'm feeling OK. I didn't do anything stupid this week and that's a plus. The NASDAQ is much stronger than the Dow at the moment and that is usually a bullish sign. The next resistance for the S&P 500 is at the 1200 level. I'll check the charts over the weekend and go from there. It's Friday afternoon and time for a break.
Thursday, October 14, 2010
The Dow lost a point today on average volume. Advance/declines were negative. We were down 70 points during the day but came all the way back. The economic data was mixed. We're still overbought. Thought about getting the OEX puts but the prices had moved too much. Will remain on the sidelines with regards to the OEX. Gold gained another $7 to another record high as the dollar was weaker today. The XAU lost 1 1/4. ABX, GG and NEM all had fractional losses on average volume. The US dollar is about to hit a key support level at 76. If we bounce from there, gold should come down from it's extreme overbought level. That may be an opportunity to try the gold shares again. However even with this recent spike in gold, the gold shares haven't had the proportional rise. Perhaps the GLD options would work better next time. We'll see. There's also the possibility that the 76 level won't hold on the US dollar. Mentally I'm feeling OK. Option expiration tomorrow and we move on to the November cycle.
Wednesday, October 13, 2010
The Dow continued higher today as it gained 75 points on heavy volume. Advance/declines were 3 to 1 positive. The market moves higher regardless of the overbought condition. Summation index moving higher. We were up 130 at one point but sold off a bit in the last hour. I did want to try the OEX puts but held off. With only 2 days to go a trade like this has to work fast. The trouble is it could turn into another loser just as fast. A lot of data in the next 2 days and option expiration. Usually that means some volatility but that hasn't been the case in recent months. We'll see. Gold also cannot be stopped as we moved to another record high. The precious metal was up over $22 on the futures. The XAU gained 5 1/2. ABX up 3/4. GG up 1 1/4 and NEM up 1 1/8. Volume was above average. Gold is so overbought here that a downdraft is imminent in my opinion. It cannot simply continue to go straight up. The US dollar fell today but not enough to justify a $20+ move in gold. But that is just my opinion, which means absolutely nothing. Purchasing some gold share October calls yesterday would have been profitable. But it's too late and risky now. If and when we get a pull back, that may be the time to give them a shot. Mentally I'm feeling OK. 2 days to go in the October options and I will have to try and keep myself from doing something stupid. The only good set-ups here are for the downside and that hasn't worked for weeks. I'll do my best to stay on the sidelines. GE announces earnings on Friday and I have taken a look at the options there. However the risk is above average there as well. We'll see what tomorrow brings.
Tuesday, October 12, 2010
The Dow gained 10 points on average volume. Advance/declines were positive. The Fed minutes came out. Nothing new there. We were lower, we were higher and ended up in the middle. Nothing really going on so far this week as far as market movement but that could change. 3 days until expiration. No OEX trades in the works. Gold lost $7 on the futures. The XAU fell 3/4. ABX, GG and NEM were flat to slightly negative on light volume. There is an outside chance that I'll try something with the ABX calls this week but it's extremely risky. The dollar lost just a touch. Probably the best course of action here would be inaction. Mentally I'm feeling OK. Not much going on as I've already stated. It's earnings season so that might cause some movement to individual issues. The overall market is still overbought. That won't last forever. On to tomorrow.
Monday, October 11, 2010
It was a quiet expiration Monday as the Dow gained 3 points on light volume. Advance/declines were positive. Not much to say about todays session. Banks were closed for Columbus Day. All the players should return tomorrow. Overbought here but I don't think I'll be attempting any trades. 4 days left for the October options. So we'll see what happens. Gold bounced back another $10, even with the dollar moving higher. The XAU was flat. ABX, GG and NEM all had fractional moves one way or the other on light volume. I might try a trade here this week but we are very overbought and it has been for an extended period of time. However the money continues to flow into gold and that must be respected. I've stated this for quite some time now. Of course, I haven't made any money on the fact. The Fed minutes will be announced tomorrow and that could be a market mover. Otherwise there isn't much data until the end of the week. Mentally I'm doing OK, a bit tired. The smart thing for me to do here is let this week pass. The November options have an extra week on them. So we'll see.
Friday, October 08, 2010
The Dow rose 58 points today, climbing back above 11000. Volume was average and the advance/declines were 3 to 1 positive. The employment report was weaker than expected but it didn't matter. I dumped my OEX puts for around an 80% loss but it's worse than it sounds. Not a lot of money involved in that trade and within the guidelines that I set a month or so ago. But it's still another loser in the year of many. As usual the market goes where it wants. Don't fight the Fed was the moniker of market maven Marty Zweig. That seems to be the case for the recent positive market action. One week to go in the October option cycle and Monday is a bank holiday. My guess is that the powers that be will keep things propped up here for another week. Gold was up around $10, gaining back what it lost yesterday. The XAU was up 3 1/2. ABX rose 7/8, GG up 1/3 and NEM fell a touch. Volume was light to average. The dollar was off a bit today but not much considering the weak employment data. I really do not want to chase gold right now at these levels. Very overbought both long and short term. I will have to wait for at least some type of pull back before trying anything here. At least I should. There's always a chance that I'll do something stupid. Mentally I'm doing OK, a bit tired and need a good nights sleep. The weekend should take care of that. Not much else to say really. It's the beginning of October and we haven't seen any sustained downside since August. The seasonality pattern of the stock indices isn't working this year. I don't have any solid ideas at the moment. It would probably be best for me to stay on the sidelines next week but you never know. I do have an idea for some longer term GE calls but it may be too late for that after this weeks action in that issue. So it's another weekend to ponder the markets and try and come up with something profitable for the future. However it's Friday afternoon and time for a break.
Thursday, October 07, 2010
It was basically a waiting game today as the Dow lost 19 points. Advance/declines were slightly negative and the volume was light. On to the employment report tomorrow and the market reaction to the numbers. Just about out of time for the OEX puts I own. Probably bail out at a loss tomorrow unless we get some negative action in the indices. We'll see what happens. Not really overbought or oversold at the moment so anything can happen. Gold finally had a down day as it lost $12. The XAU dropped 5 1/2. ABX fell around a buck, while GG and NEM fell around 1 1/2. Volume was good. The dollar didn't do much today. Perhaps today was the beginning of the long awaited correction in gold. The good volume turnaround that we saw might be a clue. We'll have to wait and see what occurs tomorrow. Mentally I'm a bit tired, did not sleep well. Tomorrow should be interesting, one way or the other. I think as long as the US dollar continues to weaken, the indices should be in an uptrend. Owning the puts here isn't really the thing to do. I should have dumped them on the big up move this past Tuesday. But it's been a year of mistakes and this trade is just another one.
Wednesday, October 06, 2010
The Dow closed up 23 points on average volume. Advance/declines were negative. The overall market was weaker than the Dow. I still have the OEX puts but they're dead. Should be dumped this week. The employment report is the next catalyst on Friday. We'll see what happens. Gold gained another $10 today and the XAU was up 4. ABX, GG and NEM all rose a buck or more on average volume. The US dollar went to fresh lows. I canceled the open order for the ABX calls. Way too late for the gold shares at this point I believe. Overbought and staying there and that won't last forever. There will be a time for the gold shares again. Perhaps when they return to the breakout area. Gold has been the place to be. Mentally I'm feeling OK. 7 days in the October option cycle. I think that the prudent thing to do here is to let the October cycle end and go from there. For now it's a waiting game for Friday.
Tuesday, October 05, 2010
The stock market exploded to the upside today as the Dow gained 193 points. Advance/declines were almost 5 to 1 positive and the volume was good. It looks like an upside breakout as we completely turned around from yesterdays negative price action. Needless to say this action dooms my OEX puts. They are now under water and I'll be dumping them shortly. There is no technical reason for todays breakout. There wasn't any economic news as the driving force. It is a currency rally as the dollar made fresh lows for this move down in the buck. The market does what it wants. Gold made it to new highs, up over $24. The XAU gained over 6 points. ABX was up 1 1/3, GG up 1 1/8 and NEM up around a buck. Volume increased moving higher here as well. I put in an open order for some ABX October calls. This is a risky move with just 8 days to go but we are in a runaway upside gold market. My thinking is that the powers that be will hold it up into the expiration. Actually gold should have been my focus after Bernanke said he would do whatever it takes to keep rates low and the economy going. It's always easy to look back and determine what should have been done. It's a lot harder to live with your mistakes. Mentally I'm feeling OK. I get the feeling after today that it doesn't matter what the employment report says. The market will simply move higher. We would have to have a complete reversal in the next 2 days to negate that. I don't see that happening.
Monday, October 04, 2010
Monday started the week with a loss of 78 points on light volume. Advance/declines were over 2 to 1 negative. My OEX puts are back in the black but not by much. This is a trade that needs to be exited this week. Before Fridays employment report would most likely be the smart thing to do. It looks like the market wants to roll over here but the summation index is still moving sideways. So we'll see. The daily charts could also break down here but it hasn't happened yet. However if we follow through to the downside tomorrow, it could get interesting. Gold was off a buck today as the dollar had a bit of strength. Perhaps the dollar got some interest with the heightened overseas terror alert. The XAU fell 3 1/2. ABX, GG and NEM all dropped around a buck on light volume. The daily charts here look like things are heading lower. I'm not looking at the gold share calls for October at the moment. The metal continues to outperform the gold shares. Eventually this relationship will change and when it does that will be the time for the gold share calls. Mentally I'm feeling OK. 9 days to go in the October option cycle. I feel as though I need to get out of this OEX trade before the employment report on Friday. That is what my work is telling me. However we might just go lower into that report. That's a guess. We'll see how it goes tomorrow.
Friday, October 01, 2010
The Dow rose 41 points today on average volume. Advance/declines were 2 to 1 positive. We opened higher and moved sideways for the rest of the day. My OEX puts are a touch in the red. We have been range bound for the week and I expect we will break out one way or the other soon. It has the feel of wanting to move higher. Beginning of the month money flows perhaps. I will probably have to dump these puts if we get any weakness early next week. Gold continues to set records as it gained another $8. The XAU rose 3 1/3. ABX up 3/4, GG gained 1/4 and NEM was higher by 7/8. Volume was about average. The dollar was weaker on the day once again. Perhaps the ABX call trade was really the way to go. The trends with gold higher and the dollar lower continue to persist. Very overbought on gold and very oversold on the dollar. That won't last forever but it remains to be seen when it will change. Mentally I'm feeling OK. 2 weeks to go in the October option cycle. Summation index starting to move up once again. That won't help the OEX puts. Perhaps it's just another mistake in the year of many. We'll find out early next week I'm sure. But now it's the weekend and time for a rest.