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Tuesday, November 30, 2010

The Dow continued lower today with a loss of 46 points on good volume. Advance/declines were 2 to 1 negative. We closed the month on a down note. The summation index continues lower. We are moving to oversold territory. I still think this is a sideways consolidation before we move higher. But I could be wrong and usually have been this year. GE lost 14 cents on average volume. I bought some more GE January calls. The calls I had already got cut in half so I doubled my position. This isn't something that I normally do. It may not work out but I decided to take a chance. My thinking is that GE will follow the overall market higher in December and January. We'll see. Gold rose $18 today despite strength again in the US dollar. The XAU gained 2 1/3. ABX up 1 1/3, GG up 1/2 and NEM up 3/4. Volume was average. There is lingering fear about European debt so the dollar and gold are once again viewed as safe havens. Gold has bounced at its 50 day moving average on a daily basis. Perhaps the gold shares are the correct trade here again but I'd like to wait until sometime in December to try that again. Mentally I'm feeling OK. Doubling up on a losing position is not recommended. For some reason though, I feel that this is the time to give it a try. Perhaps it's because there is so much time left on these options to turn profitable. Time will tell. December begins tomorrow and we have the employment numbers on Friday.

Monday, November 29, 2010

The Dow started the week with a loss of 39 points on light volume. Advance/declines were negative. We were off over 100 or more for a good portion of the day but came back in the last couple of hours. End of the month tomorrow. Summation index still moving down. We are oversold. No OEX trades for now but I would be leaning to buying some calls before the employment report on Friday. That's my best guess at the moment. GE was up 16 cents but my January calls aren't doing much. Still showing a loss but there's plenty of time left. However I'll need to see some kind of upward movement before the end of the year or I'll book the loss for 2010. Gold was up a couple of bucks as the dollar continued higher. The XAU gained a point. ABX and NEM were down fractionally, while GG showed a slight gain. Volume was light with the exception of NEM. NEM led the way up and there is a chance that it will also lead the way down. There's also a possibility that today was the bottom for NEM as well. We're almost at the 200 day moving average there and the candlestick pattern today could be a star at the end of a downtrend. We'll see. Mentally I'm doing OK, slept well enough. I'm not really getting any clear signals here and so I'm on the sidelines for the short term. I might try something before Fridays employment report if things line up. Which way is anybodies guess. I still feel we will see higher prices going into the new year. It's a matter of how we line up before that. Patience for now.

Friday, November 26, 2010

The Dow lost 95 points today in a holiday shortened session. Advance/declines were 2 to 1 negative and the volume was extremely light. We are going back and forth here with a resolution coming. If the S&P 500 drops below 1180 and stays there, then we will be in for more downside. If not, then I think we go back up to the recent highs. The summation index is still pointing down. The technicals are oversold at the moment. A case could be made for either side. The dollar is on the rise as Korean tensions escalate and Euro worries persist. Interesting enough, gold fell $12 today. Probably in reaction to the US dollars good day. The XAU dropped 3 3/4. ABX off 1/2, GG down a buck and NEM fell 1 3/8. Volume was very light. GE fell 12 cents and the January options that I hold are solidly in the red. If we break down further here, this trade will be over. Mentally I'm doing fine. I'll have to check the charts in the next couple of days and decide if there is a viable OEX trade here or not. The market usually rallies during Thanksgiving but that wasn't the case as the week ended. So we'll see. Interesting times.

Wednesday, November 24, 2010

The Dow bounced back 150 points in pre-holiday trading. Advance/declines were 4 to 1. Volume was light. We are moving sideways as we have now relieved the overbought condition of a couple of weeks ago. The summation index is still heading down but may turn up soon. That's a guess. The market has shrugged off the Korean tensions and the Irish debt problem. We could have had more downside with all the bad news but so far it looks like a consolidation before we go higher. GE was up 18 cents on light volume but it didn't help my January calls. I'm not sure this was the trade to do looking at it now in retrospect. But we'll see what happens. Gold lost $5 but the XAU gained a point. ABX and GG were fractionally higher, while NEM fell 1/2. Volume light here as well. The dollar didn't do much today. I'll look at the gold charts over the weekend and decide what to do there. I think the sidelines are the place to be there for now. Mentally I'm doing OK. That is about it for this weeks trading for all intents and purposes. Thanksgiving is tomorrow and then we have a shortened stock market session on Friday. Other markets will be closed. So it's time to take a break for a few days barring any unforeseen circumstances. Enjoy the holiday.

Tuesday, November 23, 2010

The Dow fell 142 points today on average volume. Advance/declines were 3 to 1 negative. Tensions in Korea will be part of the excuse. I again placed an open order for some OEX puts overnight but wasn't filled. Summation index continues lower. We are getting close to the 50 day moving average on the S&P 500 and we'll see if it provides support. Getting close to medium term oversold if we're not there already after todays action. GE fell 27 cents and needs to hold in here or I will be forced to sell the January calls early at a loss. I'll try this trade again if that occurs. I'm still a believer in the longer term market uptrend. Gold gained almost $20 today on the Korean conflict news. The dollar also had a very good day on safe haven buying. However the XAU fell 2 1/4 in sympathy with the overall market. ABX, GG and NEM had fractional moves one way or the other on average volume. I'm still interested in the gold share calls but will hold off on purchasing them for now. I don't think the dollar and gold will rise together for an extended period of time. I could be wrong as usual. I'm still thinking about the January gold share calls. I am also considering trying the options on GLD. We'll see. Mentally I'm feeling OK. Tomorrow should be a non event considering it is the day before a long holiday weekend. However there is plenty of economic data to be released. So we'll see what happens.

Monday, November 22, 2010

The Dow lost 25 points today on light volume. Advance/declines were even. We were down about 140 during the day but slowly came back. The overall market was stronger that the Dow. The summation index remains in a down trend. I placed an open order overnight for some OEX puts but it wasn't filled. I canceled the order during the day. Not sure if I will try that again this week but we'll see. The market is making up its mind where to go. GE lost 19 cents and my January calls keep losing ground. I may have to bail out of this sooner than I thought. Plenty of time but the price action isn't positive. Gold gained $5 and another $10 in the aftermarket. The XAU rose 2 1/3. ABX, GG and NEM all had fractional gains on light volume. The dollar gained some ground today but it did not affect the price of gold. No trades here for now. We are moving up from oversold on the technicals for gold. Mentally I'm a bit tired, did not sleep as much as I wanted. Short week and I should probably stay on the sidelines. I'll check things over tonight and go from there.

Friday, November 19, 2010

The Dow closed up 22 points today in light trading. Advance/declines were positive. A pretty quiet option expiration. Volume should continue to slow down next week for Thanksgiving. Summation index still pointing down. I thought about perhaps trying the OEX puts again. I'll mull over this idea during the weekend. I think that perhaps doing nothing is the best choice during next week. GE was up a bit and the volume was nothing special. My January calls are still in the red. I'll consider ending this trade over the weekend as well. Gold was off a touch today as well as the US dollar. The XAU gained 1 1/2. ABX, GG and NEM all had fractional gains on light volume. I'm still in a wait and see mode for the gold shares here. There is seasonal strength going into January. But it's the end of November and I think patience is warranted for now. But who knows? Mentally I'm feeling OK. I don't expect much action next week considering Thanksgiving is on Thursday and Friday will be a shortened session. So it's really time to sit tight I think. That is what I'll try and do. It's the end of the week and time for a rest.

Thursday, November 18, 2010

The Dow got the expected bounce today, up 173 points on good volume. Advance/declines were 4 to 1 positive. Expiration tomorrow and then we'll see what happens. If the recent down move is more than just a short term correction, we should see weakness soon. If it is just a pause in the ongoing move higher, we may consolidate for a while before resuming the rally. I'm leaning towards a resumption of the downside. Perhaps some OEX puts will be in order next week. Gold gained $16 as the dollar was weaker today. The XAU rose 3 1/2. ABX was up 3/8, while GG and NEM were up 3/4. Volume was lighter than lately. We will have to see how things shake out here as well. I'm leaning towards the calls here after a period of sideways consolidation. Patience for now. GE was higher today and the January options that I hold were flat. This trade is not working out as I had hoped. I'm thinking that perhaps I will get out of this trade soon. When the underlying instrument moves higher and the calls don't budge, it isn't a good sign. So it's looking like just another mistake in the year of many. Mentally I'm feeling OK. Not much else to report. We'll get through tomorrow and then a holiday week of trading. The European debt fears seemed to blow over rather quickly this time. Perhaps they will resurface but that's a guess. On to Friday.

Wednesday, November 17, 2010

The Dow fell 15 points today on average volume. Advance/declines were positive. The overall market was stronger than the Dow. We are oversold and due for a bounce. I did cancel the open order for the OEX calls but I do think that trade could work in the next 2 trading sessions. I may try again tomorrow. Getting medium term oversold as well and will be with any negative action tomorrow. This would be a risky trade but the odds are in favor for a bounce. GE was flat on the day and my January calls are slowly losing ground. I may not hold this into next year after all. We'll see. Gold lost a touch in the futures market. The XAU gained 1/2. ABX, GG and NEM had fractional moves one way or the other on light volume. The dollar dropped slightly. No trades in mind here at the moment. Mentally I'm feeling OK. Just 2 days before option expiration and then a shortened holiday week. Perhaps the best course of action will be to just stay on the sidelines. I'll see how we open tomorrow and go from there. The trend is still lower for now, even if we get the expected bounce.

Tuesday, November 16, 2010

The Dow continued lower today and fell 178 points on good volume. Advance/declines were 6 to 1 negative. The summation index is heading down. Trouble in Europe surfaced again, with Ireland being todays main culprit. The trend has changed but we are oversold and I think there will be a decent bounce before expiration. I have an open order in for some OEX calls. I was just going to pack it in with regards to trading for the year but I've changed my mind. Opportunities should be taken advantage of. We'll see what happens. I do think that we will be heading lower for a couple of weeks though. Gold got clobbered again as the dollar continues higher. The precious metal futures lost over $35. The XAU fell 6 and change. ABX, GG and NEM were all lower by a buck or more on good volume. I don't have any trades in mind here but I will get long when there is a valid signal in my opinion. GE dropped 1/3 on better than average volume. The calls I own lost a bit of ground but this is a longer term trade. I'll dump them if we completely fall apart here but I do not expect that to happen. Of course I've been wrong most of the year. Mentally I'm feeling OK. The psychology of the market is changing here from bullish to bearish. I don't think that it will last too long but we'll see. 3 days to go for the November option cycle. If my order for the OEX calls isn't filled tomorrow I may have to adjust it. My hope is that it gets filled on a weaker opening. We all know that hope isn't a good way to trade. So we'll see what happens overnight and take it from there.

Monday, November 15, 2010

The Dow gained 9 points today on lighter volume. We were up over 80 during the day. Advance/declines were negative. The overall market was weaker that the Dow. The market tried to rally but could not hold on. Does that mean tomorrow will be negative? Perhaps. Still short term oversold here. The summation index is heading lower. The path of least resistance is lower for now. Gold was up $3 but sold off in the aftermarket. The XAU fell 3 1/4. ABX and GG were off 1/2, while NEM fell 7/8. Volume was very light. I thought about getting some GG calls today for tomorrows inflation report. However the dollar remains strong lately and gained more ground today. So I didn't do anything. GE was down a bit and the January calls I own dropped into the red. If the market has a significant drop here, this trade may not pan out either. So we'll see. Mentally I'm feeling a bit tired. Expiration week is upon us. We are still medium term overbought. Tomorrow could get interesting considering we are short term oversold. There's a chance it could be a very down day but that is a guess as usual.

Sunday, November 14, 2010

The remaining trading days of last week saw the Dow with a slight gain on Wednesday followed by weakness Thursday and Friday. The summation index looks to have rolled over here and is heading down. We are short term oversold at this point but medium term neutral. Expiration week is upon us and it usually has a positive bias. GE fell along with the overall market and the open order that I left in got filled. It's the January 2011 GE calls. I plan on holding these until after the earnings are released in January. That is the game plan for now. Gold didn't do much until Friday when it got clobbered and dropped over $35. The gold shares themselves are actually holding up better than the metal here. That is usually bullish going forward. The US dollar finished the rest of the week with gains and put in a solid week. We have held the key area of 76 for now. Mentally I'm feeling great after some time away from the markets. Perhaps I'll take vacations more often. Plenty of economic data out in the coming week for the markets to chew on. A holiday week after that. I think that next week will tell if this decline is just a blip in the ongoing rise or the start of something more meaningful to the downside. We'll see what happens.

Tuesday, November 09, 2010

A bit of downside today as the Dow lost 60 points on average volume. Advance/declines were 3 to 1 negative. I don't think it's the beginning of anything sustained but I've been wrong before. Quite a lot this year by the way. GE lost a touch and I'm leaving in the open order for the January calls. I'll be on vacation for the rest of the week. Gold had a sharp one day reversal today, opening higher and closing lower. Although the futures remained in positive territory, we sold off $20 in the aftermarket. The XAU lost almost 6 after being higher early on. ABX fell 1/3, GG off 1 1/3 and NEM dropped 2 1/8. All had very heavy volume on downside reversals. I'm not sure how long this will last but the charts look bearish after todays action. The dollar had another good day. So the US dollar index has reversed to the upside after breaking the key level of 76. That is not what traders expected. Golds volatility returned today and that is why it is a very tough market to trade at times. I'll still be looking to get long the gold shares in the future though. Mentally I'm doing OK, a bit tired. There will not be any blog postings for the rest of the week as I am taking the rest of the week off. It's my first vacation from the markets since the summer of 2006. I'll post a recap of the rest of this week on Sunday.

Monday, November 08, 2010

The Dow fell 37 points today on lighter than lately volume. Advance/declines were negative. We were overbought so a pause here is expected. I doubt it will turn into anymore more than that. The Fed is providing the liquidity to keep the market going. Until that changes, the trend is up. The overall market was stronger than the Dow which usually leads to higher prices going forward. I'm leaving in the open order for the GE January calls but we'll need to see a drop in prices for this to get filled. Gold made another new high today, even with strength in the dollar. The XAU gained 5 1/4. ABX up 2 , GG up 1 3/8 and NEM up a buck. Volume was good for ABX, average for the others. I've said for weeks that money continues to flow into gold and that hasn't changed despite being overbought for an extended period of time. Nothing can derail this market at the moment. I've had many opportunities to take trading positions in the gold shares and I've missed them all. Hopefully I'll do better in the future. Mentally I'm doing OK, slept well enough. Not much else to report. We'll see what tomorrow brings but it should be more of the same.

Friday, November 05, 2010

The Dow gained 9 points on good volume. Advance/declines were positive. The employment report came out much stronger than anticipated. We are short and medium term overbought and staying there. If the employment report is to be believed perhaps we will start to hear about the economy moving too fast. Maybe the coming easing from the Fed isn't needed. That's a guess as usual. I expect some type of pull back in the next 2 days but nothing that will derail this market. Gold was up another $14 today despite a stronger dollar. The XAU gained 3/4. ABX, GG and NEM had slight fractional moves one way or the other on average volume. Gold is about at $1400. With no signs of slowing down. I do still like the gold shares but they will need to take a rest at some point. Or maybe not. We're overbought there again but it hasn't meant anything lately. I'm still leaving in the GE January call trade to see if it will get filled. I'll need to see some weakness there for my price to be hit. So we'll see what happens. This is a longer term option trade that I usually don't do. Hasn't been filled yet and it could be another case of too little too late. Mentally I'm doing OK. Another losing trade this week but it's nothing new. That should just about do it for me this year. There would really have to be something that stands out for me to put on another position for 2010. And I don't see that happening. I'm also going on vacation next week for the first time since 2006. The market continues higher with lower interest rates and an accommodating Fed. Until that scenario changes the trend is up. We are also entering the favorable 3rd year of the presidential term. It's a time to be positive. The weekend is here and time to take a break from the markets.

Thursday, November 04, 2010

The Dow exploded to the upside, gaining 219 points on heavy volume. Advance/declines were 5 to 1 positive. Again, my trade was a loser. I dumped the OEX puts for a 60% loss. Not a lot of money, so that was a plus if you can consider that a plus. The market is going nowhere but higher for the foreseeable future. Do not fight the Fed. Only long side trades should be considered at this point. I did place an order for the longer term GE calls but yesterday was probably the correct time to do that. I'm leaving that order open in case the price returns to the level that I'll purchase them. Gold took off as well, up $45 to a new record high. The XAU gained 9 1/2. ABX was up 7/8, GG up 1 5/8 and NEM up 2 3/8. Volume was good. The dollar has broken through the 76 level. Gold has nowhere to go but higher as well. I suppose that I should have gotten some gold share calls last week. I could have adjusted the order. But I didn't and it's just another mistake in a trading year full of them. There isn't anything that I can do about it now. Mentally I'm doing OK. But I need to take a break. My guess is that I'm done trading for the year. I need a fresh start at this point. I'll leave in the GE call order since it rolls into next year anyway. The Federal Reserve is going to try and revive the economy again. It worked somewhat last time but not enough to help with the employment situation. So we'll see what happens this time. The employment numbers come out tomorrow and I don't think they're going to matter. The dollar is still going to fall. The beneficiaries will be stocks and gold. That is where the profitable trades will be.

Wednesday, November 03, 2010

The much anticipated Fed announcement has come and gone. The Dow gained 26 points on good volume. Advance/declines were positive. The market was lower for much of the day, then sold off on the announcement. We then rallied all the way back to close near the highs of the day. We are still short and medium term overbought. I did purchase some OEX puts and they are already in the red. At least I adjusted the price down. I do expect some weakness here soon but I've been wrong before. Perhaps the employment report on Friday will be the catalyst. Gold lost $20 on the futures but gained ground in the aftermarket on the Fed easing. ABX fell 1/3, GG dropped 3/8 and NEM lost 3/4. All had good volume. These issues were also lower earlier in the day. The dollar dropped a bit on the Fed but not as much as traders expected in my opinion. Perhaps a weak jobs report will push the dollar lower and gold higher. We'll see. No gold share trades for now, we have moved back to overbought here as well. Mentally I'm a bit tired, did not sleep well or long enough last night. So I'm in the OEX trade and it already has the feel that perhaps we will just continue to grind higher and this has the potential to be yet another loser. However time will tell. Speaking of time, I don't think that I will be holding on to this position that long. The Fed did nothing that wasn't already expected. After a brief sell-off, the indices resumed their climb. I'll wait for Fridays employment numbers and go from there.

Tuesday, November 02, 2010

The Dow gained 64 points today on average volume. Advance/declines were almost 3 to 1 positive. It looks like we are going to try and break out to the upside. I am not a believer though. Last night I entered an order for some OEX puts. I am leaving it in for tomorrow. We will be both short and medium term overbought tomorrow on any positive movement in the indices. The Fed announcement should be a market mover tomorrow. We'll see what happens. Gold rose $6 today and the XAU was up 1 1/2. The dollar took a good drop today, however gold itself didn't do much. Another Fed waiting game here in my opinion. ABA and GG were both up about 5/8 on light volume. NEM reported earnings and fell 1 1/3 on good volume. I'd still like to try something in the gold shares if we get some type of pull back. That remains to be seen. Mentally I'm doing OK. So I'm going to try the OEX puts here on the Fed announcement. We also have the employment report out on Friday. I don't expect this trade to be held for a long time if it gets filled. I will again check the charts tonight and see if any adjustment needs to be made. Perhaps I will decide to cancel the open order but I doubt it. We should see some volatility tomorrow.

Monday, November 01, 2010

The Dow gained 6 points today on average volume. Advance/declines were positive. We were up over 100 points early. Not really overbought or oversold here. I think it's a waiting game for the Fed announcement on Wednesday. We'll get through the elections tomorrow. No OEX trades for now. Gold lost $7 on the futures today. The XAU gained 1/2. The dollar was up today. ABX, GG and NEM all had fractional moves one way or the other on light volume. Might try a gold share trade if we get a sell off from the Fed. We'll see. I'm also looking at longer term GE calls going out to next year. Mentally I'm feeling OK. Just under 3 weeks for the November option cycle. If there is a decent trade out there, now is the time to put it on. I'm still a bit gun shy from the lousy trading year that I've had but I can't let that stand in the way. I'll check the charts tonight and go from there.