Monday, January 31, 2011
We ended the month on a positive note with the Dow gaining 68 points on average volume. Advance/declines were over 2 to 1 positive. The unrest in Egypt continues but it doesn't matter to the market today. It seems like there is nothing to derail the indices. The trend remains higher until further notice. That tune hasn't changed for quite some time. GE lost 6 cents on average volume. Nothing new to report there. Gold lost $7 and the XAU gained 1/4. ABX and NEM had fractional gains, while GG lost 1/2. Volume was good. The dollar lost some ground today and gold was down. It appears that the flight to safety trade continues to be unwound. If rioting in the streets of Egypt can't help find a bid for the dollar and gold, than what can? That said, I put in an order for some February ABX calls. I would still like to try this trade if I get the chance. However it must be done on my own terms. We'll see. Mentally I'm a bit tired, did not sleep well. February begins tomorrow and we should see the beginning of the month money flows. Bernanke speaks later in the week and we have Fridays employment report to look forward to. We'll take it one day at a time and see what happens.
Friday, January 28, 2011
Today we finally got some decent downside as the Dow lost 166 points on heavy volume. Advance/declines were around 4 to 1 negative. The decline had nothing to do with economics. The market finally took into account the unrest in the country of Egypt. It's been going on for a while but today it made headline news. There's rioting in the streets and it's possible the government won't hold up. The market never likes uncertainty, hence the sell off. GDP came in about around as expected and was not a factor. Players didn't like the numbers from MSFT and that helped the downward trend. We'll see if we get any downside follow through to the indices on Monday. I don't think this is the beginning of a protracted decline. But what do I know? GE lost a dime on good volume and continues to hold up quite well. Its relative strength is superb at the moment. I'd like the March calls at some point. Gold was up over $20 today as the flight to safety trade returned for a day at least. The dollar was higher as well. The XAU barely participated and rose almost a point. ABX up 7/8, GG was flat and NEM lost 3/8. So it was a mixed performance there. Volume was heavy. I'm hoping that the gold shares are trying to put in a bottom here but the jury is still out. I canceled the open order for the February ABX calls but I do still want to try that trade. Perhaps next week before the employment numbers. I'll have to check things on the charts over the weekend. Mentally I'm feeling OK. Today was the first serious decline in the indices in months. We still haven't broken the major uptrend line in the S&P 500. The trend remains higher for now. We will be moving back down on the summation index with todays action though. We'll have to wait and see what Monday brings. The weekend is upon us and it's time for a break.
Thursday, January 27, 2011
We closed flat on todays session as the Dow ended the day with a gain of 4 points on average volume. Advance/declines were positive. We are short term overbought however in a market like this, it doesn't mean anything. We continue to grind higher. The overall market was stronger than the Dow today again. GDP tomorrow. GE was up 1/3 on average volume. Overbought here both short and medium term. I am still looking at the March calls for a possible trade here. I will need to see the overbought condition relieved first though. Gold lost $15 and more in the aftermarket. The XAU dropped 5 1/4. We reversed yesterdays bounce. ABX down 1 3/8, GG lost 3/4 and NEM fell 1 1/2. Volume was good. The US dollar lost some more ground today but once again it did not support the price of gold. Money is leaving both the dollar and gold. Money is leaving the bond market as well. Players are moving towards more risk and that money is finding a home in stocks. That is my best guess at the moment. I still want to try the ABX February calls. I have entered another open order. We'll see. Mentally I'm a bit tired, could have slept longer. I have no clue as to tomorrows GDP but I do think it won't be a weak number. How the market reacts will be the key, as always. There has been nothing in the way of the markets upwards progress. That will probably hold true tomorrow as well.
Wednesday, January 26, 2011
There weren't any changes from the Fed and the Dow managed a gain of 8 points. The overall market was much stronger that the Dow. Advance/declines were 2 to 1 positive. There is still nothing on the horizon to derail this market. We are getting short term overbought again but it hasn't mattered lately. The trend remains higher. GE lost 6 cents on average volume. I'm still hoping to eventually get some March calls there. The gold shares were the story today. Gold was up $10 and the XAU rose 7 1/4. ABX gained 1 2/3, GG up 1 1/2 and NEM rose 1 1/8. Volume was good. We were very oversold and due for a bounce. The dollar was lower again today. I did not get filled on my open order for the ABX calls. I canceled the order. I'll try again if we get some weakness in the next few trading sessions. I do still want to get some February ABX calls, however the opportunity may just have passed. We'll see. Mentally I'm feeling good, slept well enough. The continued strength in the stock indices has been nothing short of amazing in my opinion. The rally that started in the beginning of September continues unabated. It won't last forever. We are overbought both short and medium term. It would be much better for the overall health of this bull market if we got some sort of 10% correction. Hasn't happened though. I am keeping an eye on the gold shares and am hoping today was just a bounce. I still want to be able to try the February gold share call trade. But the market doesn't always accommodate your wishes. I'd expect tomorrow to be flat all around, waiting for Fridays GDP report.
Tuesday, January 25, 2011
The Dow tried to sell off today but came back once again. We were off 80 points but came back to only have a loss of 3. Advance/declines were slightly positive and the volume was good. The activity today is something that we have seen for weeks on end. The market just doesn't want to go down. You cannot fight that. We've got the Fed tomorrow so we'll see what kind of reaction that brings. GE lost 6 cents on very heavy volume. As I said yesterday, I'd like to try the calls there again if we get some downside. I'm looking at the March options. Gold lost $12 on the futures today, while the XAU dropped 1 3/4. ABX, GG and NEM were mixed with fractional gains and losses. Volume was pretty good. These issues were weaker during the day as well but came back with the overall market. The dollar continued weaker today but again, it didn't help the price of gold. I did put in an order for some February ABX calls but I'm not sure this is exactly the right time. However we are oversold there and a bounce is possible at any time in my opinion. As we all know, my opinion means nothing. The markets and individual issues will go where they please. Mentally I'm feeling OK, slept well. It appears the indices will continue to grind higher. That has been the case and there is no change for now. We'll see if there are any surprises for the Fed tomorrow. I don't expect any changes.
Monday, January 24, 2011
The Dow continued higher with a gain of 108 points on average volume. Advance/declines were over 2 to 1 positive. There is still nothing to derail the uptrend at this time. We do have a Fed meeting this week and the first look at 4th quarter GDP. However until the longer term uptrend line in the S&P 500 is broken to the downside with volume, we will continue higher. It won't last forever though. GE rose another 30 cents on heavy volume. I would like to try the calls here again for March on a pullback. That remains to be seen. Gold was up $3 today but sold off in the aftermarket. The XAU fell 1 1/2. ABX, GG and NEM all lost about 1/2 to 2/3. Volume was nothing special. The US dollar fell again today but it did nothing to support the price of gold. I'll try the February gold share calls at some point in the next 4 weeks unless we completely unravel to the downside. But for now it's a wait and see approach. Mentally I'm feeling tired, not enough sleep. A good start to the week for the bulls and we'll have to see if they can build on it. I don't expect any surprises from the Fed but you never know. The uptrend in the stock indices has been in place for quite a while. It won't last forever.
Friday, January 21, 2011
It was an upside expiration Friday as the Dow gained 49 points on average volume. Advance/declines were positive. GE led the market higher with blockbuster earnings. We were also getting to a mildly oversold condition but that was alleviated with todays action. The overall market continues to lag though. Plus the summation index is moving down. So there are crosscurrents going on here. GE soared 1 1/3 on extremely heavy volume. It was the biggest one day percentage move for GE in 2 years. The January call options were the proper play. Perhaps I should have taken a chance this week but hindsight is always correct. I certainly could not have predicted todays explosive move. But it is something to think about in the future. However I really do not have a good track record when it comes to the short term option trades. Gold lost $5 today and the XAU fell 2 1/8. ABX, GG and NEM had fractional moves one way or the other on average volume. The US dollar was down pretty good today and gold did not respond again. My guess is that the risk trade that worked so well last year is being unwound. With the economy supposedly on the mend, fear has moved into the back seat. There is currently no flight to safety into gold and the US dollar. Just as gold and the dollar moved higher together for a time last year, they are now moving lower together as money is reallocated into stocks. That's my guess. I still may try the gold share calls for February due to the oversold conditions in these issues. We'll see. Mentally I'm doing OK. Hard to say where the indices are headed near term. I guess I could make a case for either way. However with GE powering higher, I'm inclined to think that we will continue to move higher in a grinding fashion. But when the Dow is leading things higher, it usually means we are at the end of the ascent. So we'll see what happens. For now it's Friday afternoon and time for a break.
Thursday, January 20, 2011
We opened lower today and the Dow was off 75 points during the day. But we made it all the way back to end the day with a slight loss of just 2 points. Advance/declines were negative and the volume was good. Once again the overall market was weaker than the Dow. The summation index has turned down however we still haven't broken the uptrend line on the S&P 500. But we have violated some uptrend lines of the smaller cap stocks. So we are at an important juncture with regards to the near term direction of the stock indices. GE was up a nickel before the earnings tomorrow. Volume was average. I'm guessing the market will take its cue for direction from GE tomorrow. We'll see. I have no trades there for now. Gold took a hit today, down over $20. The XAU lost 3 1/3. ABX down 3/4, with GG off 1/4. NEM was actually up 1/4. Volume was heavy in the gold shares. They were all lower as well but came back with the overall market. The US dollar was a bit higher today. I am looking at the February gold share call options. I will perhaps attempt this trade next week. We are oversold but have been in a kind of free fall since the beginning of the year. Today could have marked the end of the decline but that is a guess and the market will dictate when we turn around. There is no hurry to put this trade on. Mentally I'm feeling OK, slept well enough. The stock indices tried to sell off today but came back. It's hard to say how much of todays action was expiration related. We aren't fully oversold on the indices yet. As for the gold shares, we are oversold but don't have the Gold/XAU ratio buy signal just yet. We'll get through the expiration tomorrow and look forward to the weekend.
Wednesday, January 19, 2011
The Dow moved lower today by 12 points. The overall market was much weaker than the Dow though. Advance/declines were 3 to 1 negative and the volume was average. I'm not sure this is the beginning of something major to the downside. We do need to work off the overbought condition of the indices. The uptrend line from the beginning of September remains in place. Todays action should start to move the summation index lower and that's something that we will have to keep an eye on. GE lost 24 cents on good volume. Earnings on Friday and it's anybodies guess what happens after the release. I'm trying to stay on the sidelines there. It isn't worth the risk at this point. Gold was up a couple bucks today but the XAU fell 2 3/4. ABX and GG were down fractionally, while NEM dropped over a buck. We are oversold here and I am looking at the February calls here. The dollar was down again today and it really didn't help gold at all. There is a disconnect going on there and I don't know why. However I do believe that my next trade will be in the gold shares for February. We'll see. Mentally I'm feeling fine. Slept well enough and I'm back in the normal market routine. Today was the first really negative day that we've seen this year. We'll have to see if we bounce back tomorrow or get some downside follow through. What actually happens could be the near term key to the market.
Tuesday, January 18, 2011
We started the week with a gain of 50 points on good volume. Advance/declines were positive. We continue to grind higher. Nothing has changed with that respect. The summation index moves higher as well. 3 days left for the January option cycle. I will hopefully not attempt any trades for January. GE lost 22 cents on good volume. Earnings are due on Friday. GE has been moving higher for quite a while. Perhaps it's time for a rest. It sold off on the last earnings announcement 3 months ago. Gold was up $7 today and the XAU rose 2 3/3. ABX up a buck or so, GG up 1/3 and NEM up 7/8. Volume was average. The dollar lost a bit of ground. I am looking at the February option cycle for the gold shares. We are short term oversold. However I believe that we need to have some sideways movement for a period of time before we move higher once again. I could be wrong. No trades there for now. Mentally I'm feeling a bit tired. My constant meetings environment is over. I can now get back to focusing on the markets in the way that is required. I don't have any solid ideas at the moment but that will change as I get back to normal. The trend remains higher.
Friday, January 14, 2011
The relentless climb continues as the Dow tacked on another 55 points today on good volume. Advance/declines were positive. The overall market was stronger than the Dow. It set a nice tone going into a long holiday weekend. Nothing has changed. The trend is up. GE rose 22 cents on lighter volume. Earnings in a week. I probably should not try a trade there with 4 days to go in the January option cycle. But I can't promise anything. I still think we are going to move higher there. Gold took another hit, down $25. The XAU lost 3 1/8. ABX fell 1/3, GG dropped 1 1/2 and NEM lost 1 1/8. Volume was heavy. The dollar didn't do much today, just off a touch. Money is moving out of gold. That is what I read into the current situation. The longer term uptrend is still intact though. I will have to look at things over the weekend to see how low we can go before support kicks in. Mentally I'm feeling tired. It has been a long week of meetings and thankfully I don't foresee that happening again anytime in the near future. There is one more such meeting on Tuesday and that's it. I'm glad it's Friday and I intend to take a nice long rest over the holiday weekend. The charts will be checked but there is plenty of time for that.
Thursday, January 13, 2011
We were lower from the start today, bounced around and ended the day with a loss of 23 points on the Dow. Advance/declines were negative and the volume was average. Digesting yesterdays gains is how I would describe it. Nothing in the overall market scenario has changed. GE lost 7 cents on lighter volume. 5 days left on the January options there which means the risk is pretty high to attempt a trade. I still may though. Gold was flat on the day but sold off over $10 in the aftermarket. The XAU shed 7 1/2 points. ABX down 2 1/2, GG off 1 1/2 and NEM fell a buck. Volume was average. The gold shares underperformed by a lot. I don't know the reason. The dollar got clobbered again and gold itself did not react in the typical fashion. There is something going on here but again, I don't know exactly what it is. If we get to a gold/XAU ration buy signal, then I'll look at the gold shares for a trade. Otherwise those charts look bearish. Mentally I'm tired again and it has been a long week. I'll be glad when it is over tomorrow and I can get back into a more normal market routine.
Wednesday, January 12, 2011
The Dow gained 83 points today on average volume. We were higher from the start and stayed there all day. Advance/declines were almost 3 to 1 positive. The trend is up, remains up and there isn't anything else to say. GE gained 4 cents on average volume. That wasn't much considering the positive day that we had. I still may try the calls there before the earnings on expiration Friday. We'll see. Gold gained a buck but the US dollar really took a hit. Gold itself should have had a better upside move. The XAU lost 1/4. ABX and GG were basically flat, while NEM lost 3/8. Volume was light to average. No trades here for now but I'm keeping an eye on the gold shares. Mentally I'm feeling tired. As I said before this isn't the usual market week for me with too many meetings and not enough time for the stock indices. This should be the only week as such this year. On to Thursday and I would expect more of the same, higher prices.
Tuesday, January 11, 2011
It was a positive day on Wall street as the Dow gained 34 points on average volume. Advance/declines were positive. We opened higher, eventually came back to unchanged and then rose back up again in the last 2 hours. All signs continue to point higher. We have worked off the short term overbought condition. GE rose 12 cents and it doesn't look like I'll get a chance for the January calls there again. Gold was up 10 bucks on the day and the XAU rose 3 7/8. ABX and GG gained about 7/8, while NEM was up 1/2. Volume was light. Is the decline now over for the gold shares? I don't think so but that's a guess. We are moving up from oversold on a technical basis. But the volume isn't anything to speak of yet. The dollar dropped a touch today. I may start to take a look at the February gold share calls. Mentally I'm feeling tired. Not sleeping enough and my usual schedule has been throw out of whack with a number of meetings that I must attend. I do not see any trades this week but I'll be keeping an eye on things.
Monday, January 10, 2011
The Dow lost 37 points today on average volume. Advance/declines were positive. The overall market was stronger than the Dow. Once again we sold off early, almost down 100 points and came back during the day. The trend remains up even though we have been moving lower the past 3 days on the Dow. No trend lines have been violated. GE gained 8 cents but was higher early in the day. Volume was average. I'll still try the calls again here but it doesn't look like I'll get the chance with only 8 days left in this option cycle. But who knows? Gold was up $5 and the XAU rose 1 1/4. ABX and GG were flat on the day. NEM gained 7/8. Volume was light. The dollar lost a bit of ground today. I still feel the trend is down for the gold shares. No trades one way or the other for now in gold. Mentally I'm feeling tired. I'm in meetings all week and my focus will be compromised. However if the opportunity to trade GE comes along again, I'll give it a try. My posts might be a bit brief this week.
Friday, January 07, 2011
The employment numbers came and went as the Dow lost 22 points today on good volume. Advance/declines were negative. We were down almost 100 at one point in the day but came back yet again. No uptrend lines have been broken and the trend remains intact. However the summation index is starting to stall here and we will have to keep an eye on it. The employment numbers were a bit weaker than expected but did not really excite the market one way or the other. The market did go down but it was well after the numbers had been digested. We're still overbought. GE lost 13 cents and was lower on the day as well. Volume was average. I'm still interested in trying the calls here again. Earnings are out in 2 weeks. Gold lost a couple of bucks as the dollar was stronger yet again. The XAU was up 1/3. ABX, GG and NEM all had fractional losses on average volume after being higher early on. These issues are looking bearish now. They've been in an uptrend for quite a while. I have no trades in mind there for now. Mentally I'm feeling a bit tired. I was called away for a meeting in the middle of the market day today so my feel for what what went on was skewed. I'll also be in meetings next week. However I am still going to try the GE calls if the opportunity presents itself. We got through the first week of the year on the positive side and that usually bodes well for the year to come. 2 weeks left in the January option cycle. I go over the charts this weekend and take it from there. For now it's the weekend and time for a rest.
Thursday, January 06, 2011
A day of waiting as the Dow lost 25 points on good volume. Advance/declines were negative. All eyes will be on tomorrows employment report and the markets reaction to it. The trend is still up. Whenever we have tried to sell off in recent weeks, the stock indices just keep coming back. You cannot fight that, even though we have been very overbought for quite some time. We'll see what happens tomorrow. GE lost 8 cents on lighter volume. I'll still try the calls again there if I get a chance. Gold lost a couple bucks and the XAU continued lower, losing 4 7/8. ABX fell 2/3, while GG and NEM both dropped over a buck. Volume was good here again and the trend has changed from up to down. The dollar was stronger again today, so gold is not the place to be at the moment. I don't have any ideas for trading the gold shares except perhaps try the puts on a snap back rally. The technicals have broken down for the gold shares. Mentally I'm a bit tired, didn't sleep enough. The markets continue to grind higher even with todays slight loss. Unless there is some big surprise with tomorrows numbers, I expect that trend to continue. We'll see.
Wednesday, January 05, 2011
Another day, another gain for the Dow as we were up 32 points. Advance/declines were positive and the volume was average. Summation index continues higher. We continue to grind higher in a very overbought condition and it has been that way for weeks. Nothing has changed. Employment numbers on Friday and we'll go from there. Tomorrow should be a waiting game. GE was flat on the day with average volume. I'm looking to buy the calls here again if we get some downside. Earnings are out on expiration Friday. Still very overbought here as well. Gold continued lower, off $5 on the futures and we were lower than that. The dollar had a strong session. The XAU fell over 3 points. ABX down 1 3/4, GG lost 1/2 and NEM fell about a buck. Volume here was good again to the downside. The trend has changed here in my opinion. We will get some type of bounce before expiration if I had to hazard a guess. But the timing is the question and I don't have an answer at the moment. Perhaps I'll eventually try the March gold share puts. March is historically a poor month for the price of gold. That is a long way off though. Mentally I'm feeling tired. Did not sleep well. I'm still looking for another trade in the January option cycle. However I think that I will let the employment report pass before I attempt something. All signs still point to higher prices on the stock indices for now.
Tuesday, January 04, 2011
The Dow gained 20 points today on average volume. Advance/declines were negative. The market tried to sell off today, being negative for most of the day but it came back. The trend is up and that hasn't changed for weeks. We should continue to grind higher in the equity markets. GE gained 33 cents on good volume. Yes, I sold the January calls too early. I did not wait for my target price and we are almost there. Still very overbought here but it doesn't seem to matter. I may want to try these again if we get some type of decline before the earnings on January 21st. Gold got clobbered today, down $44 on the futures. The XAU fell 4 3/4 but was down about twice as much during the day. The gold shares came back with the overall market itself. ABX lost a buck, GG down 1/2 and NEM led the way down by 2 bucks. Volume was good. At least dumping the GG calls yesterday was the right move. The gold shares had lagged the metal itself and the volume on the rise was light. Where we go from here is the next question. The dollar was higher today. If the US dollar has a sustained rally, gold will not be looking good from the long side. I'm on the sidelines there for now. Mentally I'm feeling OK. I'm looking for the next trade but nothing seems like a good set up at the moment. It is hard not to lament what could have been with the GE calls after todays positive action in GE. But you've gotta put it behind you and move on. Win or lose the markets keep moving and they don't take into account anybodies trades. There are still quite a few trading sessions before the January expiration. I'll check things over tonight and go from there.
Monday, January 03, 2011
It was a positive start to the new year as the Dow gained 93 points on light volume. The advance/declines were 3 to 1 positive. We were up well over 100 points for most of the day but fell back in the last hour. The summation index continues higher. We are still very overbought. However there is nothing on the horizon to derail the uptrend for now. That will change eventually. GE was down a penny after being higher early. I bailed out of the GE calls. Not sure it was the right thing to do and I may buy them back before expiration if we get some downside. The overall gain was 410%. About 300% on the first purchase of the calls and then around 600% on the second purchase. A nice way to start the year but I may have been early on the sale. Time will tell. The candlestick daily chart isn't looking good with todays action. We'll see. Gold was up a touch in the futures market and sold off in the aftermarket. The XAU fell 2 3/4. The gold shares were down on better volume. ABX and NEM had fractional losses. GG fell a buck. I dumped these calls as well. I should have been out sooner in the day because I realized that my theory of new money coming into this issue for the new year just wasn't panning out. I managed a slight gain of 12% but it could have been much better if I hadn't hesitated. Still, it's better than a loss but improvement is needed. I'm not sure about gold here, it could stall out and roll over. The rally back to the highs has been on light volume. The dollar didn't do much today. Mentally I'm a bit tired. I'm still in the bullish camp here but would like to see some pullback near term to try some January calls again before the expiration. That's the ideal scenario. The employment report is out on Friday and we should move off of that. Not sure if I'll have another position before then. A good start to the week for the stock indices and we'll see if we can build on it.