Friday, December 31, 2010
We went out with a whimper as the Dow gained 7 points on very light volume. Advance/declines were positive. The overall market was weaker than the Dow despite the positive advance/decline line. I don't think we can make much of what went on this week due to the lack of volume. Next week should provide a better idea of the market picture. GE was up a dime on light volume. I will really have to think hard about dumping the January calls I have there in the beginning of next week. Still very overbought on the technicals there. I did have a specific price target in mind but it looks a bit unrealistic at the moment. We'll see. Gold was up $15 as we approach another all time high. The XAU gained 2 1/3. ABX, GG and NEM all had fractional gains on light volume and that is worrisome. The gold shares are lagging here and that isn't a positive. We'll see what happens Monday morning for a change in this situation hopefully. The dollar was down again today and that is supporting the price of gold for now. My GG calls gained some ground today but not much. Mentally I'm doing good, slept well. The 2010 trading year is behind me. I'm looking forward to a much better 2011. There is a lot to ponder over the weekend regarding the 2 trades that I'm currently holding. We'll see if my new money flow scenario pans out. But for now it's New Years eve and time for a break. Good Luck to everyone in the new trading year!
Thursday, December 30, 2010
The Dow lost 15 points in this weeks usual light trading. Advance/declines were about even. Just hanging around here, waiting for next year. Still overbought both short and medium term. GE lost a few cents on light volume and my January calls lost a bit too. Still overbought here as well. I'm waiting for next week as I've stated before. Gold fell $7 on the futures and a bit more so far in the aftermarket. The XAU dropped 1 1/2. ABX, GG and NEM all had fractional losses on light volume. The dollar fell further but it didn't help gold. Hard to make anything of what is happening in this light volume vacuum. I'm holding on to the GG calls as well. Mentally I'm doing OK. Taking a look back at the past year of trading finds me with the worst losses since I started out in this crazy game. My trading capital took a hit to the tune of 58%. That's right. I lost over half my trading account in the past year. My losers swamped the few winners that I had in the last 12 months. There are no excuses. My ideas and strategy didn't work. My analysis of the markets was way off as well as my timing and risk control. It was ugly in virtually every facet of the game. I've made some adjustments going into 2011 but that doesn't guarantee anything. However this year is over so I'm wiping the slate clean and starting all over. It already looks better with the trades I have in place now but that could change in a heartbeat. I'll continue to put forth the effort that I believe is necessary for success and we'll see what happens.
Wednesday, December 29, 2010
The Dow gained 9 points today on very light volume. Advance/declines were almost 2 to 1 positive. We were higher most of the day but fell back in the final hour. Hard to decipher the market mood here. Perhaps it's just a waiting game for the end of the year. Still overbought and some decline would not necessarily be a bad thing. GE lost a nickel and my January calls fell a bit. Very overbought here and I would hope for some sideways action in the next couple of days. Gold gained $8 but the XAU only rose 3/4. The dollar was pretty weak today. The gold shares didn't do much, with fractional gains and losses on light volume. GG was up a bit and my January calls gained a touch. However the price action here hasn't been robust as we are almost at a new all time high for the precious metal. I will be keeping a close eye on what goes on here as I am not liking this trade as much as when it began. The gold shares are not acting as expected. Mentally I'm feeling OK. A couple of days left in the week, month and the year. It's a waiting game.
Tuesday, December 28, 2010
Another quiet day as the Dow gained 20 points on holiday light volume. Advance/declines were about even. Meandering around here is about the best way to describe it. Basically waiting for the beginning of 2011. Summation index moving higher. Hard to get excited here due to the lack of market participants. GE was up 13 cents and the volume here wasn't bad, considering. But we are very overbought and that condition needs to be relieved. My GE calls are still doing OK. Gold had a very good day, up $22. The XAU rose 4 3/8. ABX up 1 1/3, GG up 3/4 and NEM up 1 1/2. Volume was very light. My GG calls are in the black but unfortunately GG was the laggard of the group. I would have liked to have seen more of a gain there. I am beginning to think that I will be out of this trade sooner rather than later. The volume isn't there due to the holiday week. Also the gold shares are lagging the metal itself and that usually isn't bullish. The dollar didn't do much today but interest rates are on the rise in the US. That should attract money to the US dollar at some point. That won't be bullish for gold. On the plus side we were oversold on the gold shares and the technicals have turned up. We'll see how long that lasts. Mentally I'm feeling tired, did not sleep well or long enough. My 2 positions are in the black but we all know how quick things can change in this game. I'm still of the idea to hold on into the beginning of next year. That's where I stand at the moment.
Monday, December 27, 2010
A very slow back to work Monday as the Dow lost 18 points on light volume. Advance/declines were positive. A major East coast snow storm hampered the already sparse trading environment. It will be a thin trading scenario throughout the week. GE was up 15 cents and that helped my January calls. Overbought here though and it needs to take a rest or move sideways in order to move higher at the beginning of next year. We'll see. Gold gained a couple of bucks and the XAU fell 3/4. The US dollar was weaker today. ABX and NEM were flat on the day, while GG lost 1/4. Volume was very light here as well. I did place an order for some January GG calls overnight and it got filled this morning. We are oversold on the gold shares however that doesn't mean we can't get more oversold. I have been looking at this trade and I was going to give it a shot when it hit my price target on the options. I'm looking for money to flow into these issues at the beginning of the year. I could be wrong and have been a lot this past year. But I'm moving on. I do not plan on holding these options deep into January unless gold itself breaks out. Mentally I'm feeling good after a nice break from the market action. I'm going to hold my 2 positions into next year so it is a matter of watching and waiting for next week. The GE calls are solidly in the black and the GG calls are where I bought them. I'm looking for a good start to the new year.
Thursday, December 23, 2010
The Dow ended the shortened trading week with a gain of 14 points on very light volume. Advance/declines were slightly negative The overall market was weaker than the Dow. As has been the case, we're still overbought. GE was flat on light volume. My January calls lost a touch. Gold fell $6 and the US dollar was weaker as well. The XAU rose 2 points however. ABX was up 3/8, GG was flat and NEM gained 3/4. Volume was light. I do want to purchase some gold share calls next week. I'm looking at GG this time. That is the idea at the moment. Mentally I'm doing OK, slept well. It should be another slow week ahead, with the end of the year upon us. Time to clear the ledgers and get ready for 2011. It's time for a nice long weekend. Happy Holidays everyone!
Wednesday, December 22, 2010
The light volume levitation continues as the Dow gained 26 points. Advance/declines were positive. Still overbought, still moving higher and the holiday week rise continues. No sellers to be found but that will change eventually. GE gained 30 cents on light volume. My January calls gained some ground. GE remains overbought as well but I'm holding on into next year. Gold lost a touch and the XAU fell 1 2/3. ABX lost 1/2, GG down 1/4 and NEM dropped 3/4. Volume was very light again. The dollar dropped a touch as well. I'm looking at the gold share calls for January and will probably purchase something next week. That is the game plan for now. Mentally I'm doing good. One trading day left for the week and then a long weekend break. Right now everything is proceeding according to plan. We'll see how long that lasts.
Tuesday, December 21, 2010
Continuing higher in light volume trading as the Dow gained 55 points today. Advance/declines were over 2 to 1 positive. This should move the summation index to point to the upside. It's hard to trust light volume rallies but it is a holiday week. Staying overbought for longer than normal. That usually never ends well. We'll ride it out for now. GE gained 20 cents and my January calls moved up a bit. GE is very overbought as well. I'm still waiting for next year to sell these, hopefully at a profit. We are not at the target that I have in mind. Subject to adjustment as we move forward of course. Gold gained a couple of bucks and the XAU was up 1/3. ABX, GG and NEM were flat to fractional losers on very light volume. We're oversold on the gold shares and I'm looking at the GG January calls for the next trade. I'm going to try and wait for next week to buy them considering the thinly traded markets at the moment. We'll see. There's only 2 trading days left in this week. Mentally I'm feeling good. I already am in what looks to be a profitable GE for the start of the new year and I have a gold share idea waiting in the wings. However we all know the market will do what it wants. That's what makes the game so interesting as well as difficult. I don't expect much movement for the rest of this week.
Monday, December 20, 2010
A quiet day as expected as the Dow lost 13 points on light volume. Advance/declines were slightly positive. The overall market was stronger than the Dow. It should be an uneventful week. GE was flat on light volume. My January calls lost some ground on the time decay. That is to be expected but I don't think it will be terminal. But you never know. Gold gained $7 and the XAU was up 1 1/2. ABX up 1/4, GG up 1/2 and NEM up 3/4. Volume was light. The technicals here are oversold and I will be looking to get some January calls in the next few trading sessions. The dollar was up today as well but gold was higher anyway. I still think that new money will be going into gold at the beginning of the new year. This should be beneficial to the gold shares if it indeed does occur. I'm trying to be patient with the purchase though. It's a shortened trading week and volume is thin. There is potential for time decay in these options as well. Mentally I'm feeling OK. Not much else to report. I'll be keeping an eye on the gold shares.
Friday, December 17, 2010
It was an uneventful expiration as the Dow lost 7 points on good volume. Advance/declines were positive. It was a sideways week and the technicals are still overbought. We will now enter the end of the year holiday mode. Trading will most likely be slow. There is also an extra week in the January option cycle. GE lost 7 cents on decent volume. There's been a lot of good news out of GE so far this month so I wouldn't expect any more in the near term. I'm holding the January calls until next year. They're still showing a profit. Gold gained 8 bucks today and the dollar rose a bit as well. The XAU was up 3/4. GG and NEM both dropped 1/2, while ABX was flat. We are getting oversold here so I'll be taking a long hard look at the gold share calls in the next couple of weeks. That should be my next trade initiation. I do expect the gold shares to rise in the beginning of the year with new money flows. I could be wrong. Mentally I'm a bit tired, did not sleep well. That should be it for this years trading ledger and it was a disaster. Let's hope there isn't a repeat next year. I've made some changes in risk management and we'll see how they work out. The markets will have many opportunities available. It's just a matter of finding them. It's getting close to Friday evening and time for a rest.
Thursday, December 16, 2010
Back to the upside as the Dow gained 41 points on average volume. I don't think that is all the decline we are going to get here but it puts an end to trying an OEX call trade. Advance/declines were 2 to 1 positive. Expiration tomorrow and then we'll move into holiday and end of the year mode. Things will slow down and trading will be thin. GE gained 28 cents today on average volume. My GE January calls are hanging in there. I'll be holding these until next year at this point. Gold fell $15 and the XAU dropped 2 7/8. The dollar didn't do much today. ABX and GG were both off 7/8, while NEM fell 2/3. Volume was good. The gold shares were lower but came back late. The gold shares have held up better than the metal itself. That's usually a bullish sign. I'll be keeping an eye on the January calls for the next trade. We are moving to oversold territory on the gold shares. I expect strength in these issues at the beginning of next year. Of course, I could be wrong. Mentally I'm doing OK. Not much else to do here but watch the expiration tomorrow. I do not expect any dramatic moves up or down in the equity markets in the next 2 weeks. It should be sideways action with perhaps a Santa Claus rally moving us a bit higher. Barring any unforeseen events, that's what I expect.
Wednesday, December 15, 2010
A down day in the markets? Can it really happen? The Dow lost 19 points today on average volume. Advance/declines were 2 to 1 negative. The overall market was weaker than the Dow. I do not expect this decline to last. I did place an overnight order for some December OEX calls. I am leaving the order open for tomorrow. This is a risky play with only 2 days left. However I do believe that we will see some decent upside before the close on Friday. I could be wrong and have been for much of the year. So we'll see. I may cancel the order tomorrow morning as well. GE lost 20 cents on good volume. My GE calls lost some ground but are still profitable. We are not near the target price that I have for GE prior to the January expiration. I'll adjust my expectations as we move forward in time. Gold lost $18 today and then some in the aftermarket. The XAU fell 3 7/8. ABX down 1/2, GG down 1/3 and NEM down 1 1/8. Volume was light. The dollar had a strong day and gave a reason to dump gold. The daily dollar candlestick chart is looking bullish. I am still looking to purchase some gold share calls before the new year. This could be the beginning of a pullback that I've been waiting for. Mentally I'm still feeling a bit tired. 2 days to go on the December options and I'm considering an OEX trade? This idea is really more of a feel for what is going on in the markets lately. Overbought markets tend to stay that way for much longer than anyone anticipates. That is what I think we're in the midst of. Declines will be aggressively purchased. So we'll see what happens.
Tuesday, December 14, 2010
It is a market that defies logic as we added another 48 points today. Advance/declines were negative though and the volume was average. The Fed made their announcement and we sold off a bit but then came back. We are so very overbought that I cannot even write about it anymore. If there is a pullback, I would buy it. However there are only 3 days left on the December option cycle. Plus being this overextended, the risk of getting the OEX calls is even more than usual. We'll see. GE gained a few cents on good volume. The January calls didn't close much different than yesterday. I'm holding on until further notice. Gold was up $6 but sold off in the aftermarket. The XAU lost 5/8. GG and NEM were flat, while ABX lost 3/4. Volume was average. The dollar was up a bit. No signal at the moment for the gold shares. Mentally I'm feeling tired, did not sleep well. The song remains the same and it's a broken record. Overbought, staying there and the market refuses to sell off. It will at some point and if this momentum keeps going up, the end won't be pretty. I still might try the OEX calls before Friday if we get some downside. My own reading of the technicals says that there will be another decent rise before the end of the week if we get some downward pressure. That's a guess as usual. We'll see what tomorrow brings.
Monday, December 13, 2010
The Dow rose 18 points today on average volume. Advances barely beat out declines. The overall market was weaker than the Dow. We won't go up forever and I think tomorrow should start a bit of a decline but I think it will be short lived. If we do pull back tomorrow I will be looking to purchase some OEX calls on weakness Wednesday. That is the idea at the moment. 4 days to go for the December expiration. GE lost a dime and my GE January options lost some ground. Volume was good. I'm holding on to these options at least until the beginning of next year barring an unforeseen collapse. Gold was up $13 and the XAU rose 2 1/3. ABX and NEM gained about 1/2, while GG was flat. Volume was light. The dollar lost ground today. I need to see the gold shares in oversold territory before trying the January calls there. Mentally I'm a bit tired, did not sleep well. If the market cooperates, I'll be trying one more trade for this year. If not it will probably mean the sidelines until a decent signal is generated. It has been a terrible trading year but lately perhaps things are starting to get back to profitability. That remains to be seen though.
Friday, December 10, 2010
The Dow continues to defy conventional logic and grinds higher. It gained 40 points today on average volume. Advance/declines were almost 2 to 1 positive. We really need to see some pullback or this won't end pretty. The market is very overbought still. And I have been saying that for over a week. This won't last forever but we have broken through the overhead resistance at 1220 on the S&P 500. The overall market remains stronger than the Dow. I'd like to see a pullback to 1220 on the S&P and then we could move higher from there. That would be my ideal scenario. GE gained 58 cents on heavy volume as they announced an increase in their quarterly dividend. Overbought here as well. Plus I don't know what other good news could come out for this issue after today. The January calls I own are solidly in the black. I would like to see a consolidation here before moving higher. We'll see. Gold lost $8 today and the XAU was up 1 1/4. ABX and GG were both off fractionally on light volume. NEM gained 1 1/8 on light volume. A mixed picture for the gold shares. The dollar bounced around today but finished a touch higher. I'm still bullish here for the January gold share calls. Mentally I'm feeling good. One week to go for the December options. If we see some weakness early in the week, I'll try the OEX calls. If not it will have to wait for next year most likely. GE has surpassed my expectations already but I'm going to hold on to the calls for now. We'll have to see if expiration week has its usual positive bias. After that, it should be slow going for the rest of the year. Friday afternoon and time for a rest.
Thursday, December 09, 2010
The Dow lost a couple of points on good volume as the market refuses to go down. Advance/declines were positive. We are the most overbought as we have been in the entire year. Yet there is no decline. The overall market was stronger than the Dow today. If we get a pullback, I'll be looking at the OEX calls. GE gained a few cents on light volume. My January calls are still in the black. I'm holding on for now. Gold gained $9 on the futures as the dollar gained a touch. The XAU was up 1 3/4. ABX up 3/8, with GG up 3/4. NEM fell 1/2. Volume was mixed. I'd like to see some sideways action in the gold shares before purchasing some January calls. We'll see what happens. Mentally I'm feeling OK. 6 days to go for the December option expiration. I'll try the OEX calls if things work out as I would like. Otherwise I'll have to sit it out. Things should really slow down after next week due to the holidays and the end of the year. So we'll see what happens tomorrow and take it from there.
Wednesday, December 08, 2010
The Dow closed higher by 13 points today on good volume. Advance/declines were negative. We are very overbought both short and medium term. We really need to see some type of pullback. If not, a consolidation at the least. We could get a market melt up but the odds for that are slim. I'm still a believer in higher prices but I don't think it will just be a straight line. I'm still considering some OEX calls for next week. GE was flat today on lighter volume. The January calls I own are still in the black. GE needs to consolidate as well before moving higher. That would be the ideal scenario but we all know that rarely happens. Gold took a hit today as the dollar was higher for the third day in a row. It fell $25. The XAU lost 4 3/4. ABX down 1 1/4, GG down 1 1/2 and NEM down 1 5/8. Volume was pretty good to the downside. Perhaps this is the decline that I was waiting for to get long some January gold share calls. I'll be waiting for an oversold reading on the technicals and then I will purchase some options. That's the idea at the moment. I still feel that there is demand for the precious metal due to global economic uncertainty. I don't see that changing anytime soon. The dollar is also a major factor here. It seems to have found a bid lately but I don't think that will last forever. We'll see. Mentally I'm feeling a bit tired, did not sleep enough. 7 days left in the December option cycle. I'll be keeping an eye on the OEX here. If we see some near term weakness, I'll be trying the calls at the beginning of next week. That is the game plan for now.
Tuesday, December 07, 2010
It was a one day reversal to the downside as the Dow opened higher, was up around 90 points and then closed the day off 3. We sold off in the last hour. Not a good sign going forward for the bulls but we are oversold and due for some selling. Volume was heavy. The advance/declines were even once again. A pullback would be healthy in the overall scheme of things for the bulls. We got some news on extending some Federal tax breaks and that was the catalyst for the early rally. Summation index is moving higher but not with any conviction. GE has shown good relative strength lately and was up 33 cents on heavy volume. Overbought here as well and I expect GE to take a rest for next few days. The January calls I own are solidly in the black for now. I still expect to try an OEX trade before expiration if things set up for it. Gold lost $7 today and more in the aftermarket. The XAU fell 3 1/2. ABX down 2/3, while GG and NEM both lost 7/8. Volume was average. The gold shares opened higher as well but could not hold their gains. Perhaps traders are locking in their profits on these issues for this year. That's my guess at this point. I still would like to get some January calls. We'll see if the opportunity presents itself. Mentally I'm feeling OK. Not much else to report today. I expect tomorrow to be weak following todays action. We'll see how it goes.
Monday, December 06, 2010
The Dow lost 20 points today on light volume. Advance/declines were even. We are taking a needed pause as the S&P 500 stalls around the 1220 level. I would expect sideways to lower action for the next few days. I am expecting the market to go higher before December expiration. I have an OEX trade in mind. I will be looking to purchase some December calls at the end of this week or early next week. That is the game plan for now. GE lost a few cents today and the January calls I own lost a bit of ground. I'm sticking with them for now. I think in the long run this trade could pan out. But we'll see. Gold was up another $10 and more in the aftermarket. The XAU rose 3 1/2. ABX up 7/8, GG up 3/4 and NEM up 1 1/4. Volume was average. The dollar was higher and gold continued to rally. Perhaps the market knows something that we don't. Overbought here and staying there. I will get some gold share calls on the next pullback. The money just wants to come into gold. It seems as though there is no stopping that. Mentally I'm doing OK. This week should be a non-event if all goes as planned. A consolidation before we move higher. But I could be wrong and often am. I don't think we'll see a full fledged decline.
Friday, December 03, 2010
The Dow was lower for most of the day but made a final hour comeback to finish the day with a gain of 19 points. Advance/declines were positive and the volume was light. The employment numbers were much worse than expected but the market held up rather well. When the market ignores bad news it usually means higher prices. We'll have to see about that. Getting overbought now so a pullback wouldn't be out of the question. Summation index is turning. GE gained a few cents after being lower early on. The January calls that I have are still positive. It was a good week for GE and we'll see if it can build on that going forward. I'm still a believer that it will. Gold had a stellar day as the dollar got whacked on the employment news. The precious metal gained over $15 and added more in the aftermarket. The XAU rose 4 3/8. ABX up 3/4, GG up 1/2 and NEM up 1 7/8. Volume was lighter than it has been. ABX and GG look as though they have put in doji tops on the daily candlestick charts. The gold shares are overbought here but we just set a new high in the price of gold itself. Money continues to flock to gold. That is a trend that I expect to continue. That is why I would like to get some January gold share calls if we get a pullback from here. May not happen though. Mentally I'm doing OK. It was a very good week for the GE January call position and that gives me an optimistic view for how that trade may pan out. Plenty of time to go for that trade yet. The overall market seems like it wants to go higher. If we solidly get above 1220 on the S&P 500, I think the rally will continue. For now, it's Friday afternoon and time for a break.
Thursday, December 02, 2010
The rally seems to have legs as the Dow gained 106 points on good volume. Advance/declines were over 2 to 1 positive. No more European worries for now it appears. How long that lasts is anybodies guess. It is as if the employment report tomorrow doesn't even matter at this point. Perhaps the market knows things that we don't. It usually does. Todays action should turn the summation index positive. We're not that overbought yet. GE gained 38 cents on good volume. We have broken through a daily downtrend line there today. My January calls are now in the black. I do have an upside target for GE but it isn't close to that yet. Moving to overbought there though. I'll be holding on for now. Gold was up around $10 most of the day but fell back for a gain of a buck. The XAU rose 3 1/3. ABX and NEM both gained 7/8, while GG rose 3/8. Volume was light to average for the gold shares. Gold itself almost broke out to a new high but fell back. The gold shares are outperforming here and that is usually bullish going forward. The dollar was a bit weaker today ahead of tomorrows employment numbers. If the dollar rally has ended, gold should move to new highs. Time will tell on that. I'd like to get some January gold share calls if we get a pullback before then. Mentally I'm doing OK, could have slept longer. The month has started out strongly and we are at S&P 500 resistance at 1220. I'd expect some hesitation here before moving to higher prices. That's my expectation but I've been wrong most of this year. We'll get the job numbers tomorrow and look forward to the weekend.
Wednesday, December 01, 2010
The Dow staged an impressive first day of the month rally as it gained 250 points on average volume. Advance/declines were over 3 to 1 positive. We were oversold and a bounce was due. What happens next is important for the medium term. If we fall back again, I think we can expect more of the same that we have seen recently with the market moving sideways. However if we can build on todays gain, I think we will take out the recent highs and the rally will resume. The summation index most likely turned up today but it will have to keep rising for the all clear signal going higher. We'll see. GE rose 47 cents on good volume. My January calls moved back to break even. Doubling the position at a better price seems to have been the right move at the moment. However we have plenty of time to go here. I do like todays action though and hopefully we can build on it. Gold only gained a couple of bucks even with the dollar losing ground. The XAU followed the overall market higher, gaining 4 1/3. ABX and NEM both rose 3/4, with GG tacking on 1/2. Volume was good to average. Perhaps gold will take a run at the highs as well. I think we'll need to see a lower dollar for that to occur but that's a guess as usual. I'll keep an eye on things. Mentally I'm doing OK. Today we got a rally out of nowhere and the following days will tell if it is for real or not. Fridays employment report and the market reaction to it will be very important. It could very well set the tone for the rest of the month. I think tomorrow will be a flat non-event while waiting for Fridays numbers. We'll see what happens.