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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.

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