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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.

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