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Wednesday, May 11, 2011

The Dow fell 130 points today on average volume. Advance/declines were about 3 to 1 negative. Almost the exact opposite market action from yesterday. We are right at a daily uptrend line that began in March. Not exactly sure what is going on here. If I had any guts I would try the OEX May calls on weakness tomorrow in anticipation of the uptrend line holding. We'll see. Again, we're not overbought or oversold here. I'll mull it over tonight and make my decision. GE lost about 1/4 on light volume. Still no trades in mind there. Gold was off $15 and the XAU fell 8 1/2. The drop in the gold shares has been relentless. ABX down 2 1/8, GG down 1 3/4 and NEM down 1 1/4. Volume was good. The US dollar had another good day and has had quite a rally in the past 5 trading sessions. I'm still considering the June gold share calls but not yet. The Gold/XAU ratio buy signal is off the charts and hasn't worked this time. That is letting you know that something is up. What exactly I do not know. And that's part of the problem of trying any kind of trade here. Mentally I'm feeling OK. So the question is now what to do tomorrow about an OEX trade. I'll check the charts again overnight. 7 days to go on the May option cycle.

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