Thursday, June 30, 2011
The stock market is powering higher here as the Dow gained 153 points on average volume. The advance/declines were almost 3 to 1 positive. The Dow and the Dow transports have already broken through their daily downtrend lines of resistance. The summation index is trending higher. I adjusted down the price on my order for the OEX July puts but I'm thinking about just canceling it. The S&P 500 is at the resistance area but with other stock indices breaking out, the S&P may follow. I expect some beginning of the month money flows tomorrow. The stock indices are overbought here but that doesn't mean that they can't stay that way. GE was up 1/4 on average volume. Not even close to the resistance here but we are above the 200 day moving average. Gold lost $7 on the futures and more in the aftermarket despite a weaker US dollar. The XAU followed the stock indices higher with a gain of 1 5/8. ABX, GG and NEM all had fractional gains on light volume. Not exactly sure what to make of the gold shares here. I now don't think that I'll be trying any trades for the July option cycle for the gold shares. The troubles in Europe seem to have subsided for now, so the flight to safety aspect for gold is diminished. That's subject to change, of course. Mentally I'm feeling OK. Trying to figure out what to do with regards to the pending OEX put trade. The smart thing to do would most likely be to cancel the order and look for something else. I will have to think long and hard about it tonight. The first half of the year has ended and the trading account is only up 12%. That certainly isn't enough considering the risks that are taken. The return was much better but I haven't had a winning trade in months. As usual, I will try to have a better second half of the year performance. My guess is tomorrow will be a light volume affair before the long July 4th holiday weekend.
Wednesday, June 29, 2011
It's a 3 day winning streak as the Dow gained 72 points on better volume. The advance/declines were over 2 to 1 positive. It's got the feel of something real as we head higher. Summation index heading upwards. We are getting closer to the resistance zone. I've put in an open order for some OEX puts, adjusting the price for the distance remaining to resistance. At the rate we're going, we'll be at the resistance tomorrow. But nothing goes up forever. I'm not exactly sure this is the right trade to do however I'm going to leave it out there for now. GE gained another 1/8 on light volume. We have moved back above the 200 day moving average line here. No trades in GE for now. Gold mover higher by $10 today and the XAU rose 4 1/8. ABX was up about 1 1/4, while GG and NEM climbed 3/4. Volume was light. The US dollar was weaker again today. Perhaps the gold shares are the trade to do now, I certainly don't know. Uncertainty is not conducive to successful trading. I'll think things over tonight about gold. Mentally I'm doing OK. It certainly looks like the S&P 500 has put in a double bottom with the market movement this week. The measuring objective would take us right up to the resistance line at approximately 1320. I'm going to try the puts there and that is why I have the open order in. However the market at this juncture has the feel that it wants to go higher and probably through the resistance. That would lead to a retest of the highs from the beginning of May. We'll have to see how we go from here. End of the month tomorrow. Gold has started an oversold bounce in my opinion because of the weakness so far this week in the US dollar. I think the weakness in the dollar is also helping the stock indices. How long this continues is the question. I'll be trying to figure out the answer.
Tuesday, June 28, 2011
Another triple digit day to the upside as the Dow gained 145 points. The advance/declines were over 3 to 1 positive and the volume was light. The stock indices are looking forward to good news from Greece tomorrow. There's no other explanation for todays upside move. Perhaps some short covering as well. The summation index is now solidly moving higher. The trend is up but for how long? I'm still considering getting some OEX puts when we reach resistance. GE was up 1/8 on light volume and is back to its 200 day moving average. Gold gained $5 today and the XAU rose 3 1/8. The US dollar fell again today. Perhaps the breakout in the weekly US dollar chart was a false one. That would change the scenario for gold. ABX and GG gained 3/4, while NEM rose almost 1/2. Volume was light. Again, it looks like another positive RSI divergence in the daily ABX charts. I'm not sure if I'm going to try the calls here though. A little less than 3 weeks for the July option cycle and there's a holiday off thrown in there as well. So we'll see. Mentally I'm feeling a bit tired, did not sleep long enough. I guess we'll have to wait and see what the markets reaction to what happens in Greece is tomorrow and go from there. More overbought than oversold on the stock indices but not excessively so. If we see another big up move tomorrow, I may just try the OEX puts. But I'll have to ponder things once again tonight before any trades.
Monday, June 27, 2011
An upside start to the week as the Dow gained 109 points on light volume. The advance/declines were over 2 to 1 positive. Todays action should turn the summation index back to positive. However it is hard to trust light volume rallies as I've said before. Waiting on news from Europe about the Greece problems. I would have liked to try the OEX July calls if we saw weakness early this week but that hasn't happened. I suppose that I'll wait for the S&P 500 to reach resistance and go from there. GE was up 1/3 on light volume. Still below the 200 day moving average here. It's something to keep an eye on. Gold lost about $5 on the futures and the XAU gained 1/4. ABX, GG and NEM had slight fractional moves on light volume. Oversold on the technicals with the gold shares. Might try a bounce trade later this week but haven't decided about that just yet. The dollar was weaker today and it didn't help gold. Another possible bullish divergence for ABX on the RSI indicator. We'll see. Mentally I'm feeling OK, slept well enough. The S&P 500 is attempting to hold its 200 day moving average and has for now. The daily charts also show a potential double bottom. If the double bottom is valid, the measuring objective would take us up to the resistance. Time will tell. End of the month on Thursday and then a long holiday weekend. But we'll have to wait and see what happens in Europe this week first.
Friday, June 24, 2011
It was a down day to end the week as the Dow dropped 115 points on good volume. The advance/declines were negative. The summation index could start to head back down with todays action. However the S&P 500 is at its 200 day moving average and could be putting in a double bottom here on the daily charts. On the other hand, we did not follow through to the upside after yesterdays comeback in the stock indices. What I'm trying to say is that I have no clear direction of the markets next move. The technicals remain neither overbought or oversold. GE was lower today by 40 cents on good volume and is clearly below the 2oo day moving average. I've been using GE as a proxy for the overall market. It is saying that we are heading lower. GE is oversold here however. Gold fell around $20 today and the XAU dropped 4 1/2. The dollar had another good day and the weekly downtrend line has been broken to the upside. Gold had a pretty dismal week. ABX lost a buck, while GG and NEM each lost around 1 3/4. Volume was good. The RSI buy signal for ABX did not last long. My next line of thinking on the gold shares is perhaps the July GG puts. Not exactly sure on this either but will consider it over the weekend. Mentally I'm a bit tired, did not sleep well. An interesting week in the stock indices to be sure but that doesn't help the trading for me. I really need to pay more attention to exactly what is going on here. End of the month approaching next week. Plenty of economic data as well. Plus there's the problems over in Europe that seem to have the markets interest at the moment. Gold is going to try and hold the $1500 level in my opinion. But will it? That's another question that needs to be answered. So there will be plenty to ponder over the weekend to come up with a successful game plan for next week. It's Friday afternoon in the summer and time for a break.
Thursday, June 23, 2011
A very topsy-turvy day as the Dow gapped down and was off by well over 200 points early but came back to be down only 60 at the close. The advance/declines were negative and the volume was heavy for lately. The stock indices came back on news that Greece got another bailout. The overall market was stronger than the Dow as the NASDAQ ended the day positive. Volatility has picked up needless to say. I think we're going to head higher but the technicals are still neither overbought or oversold. GE broke through its 200 day moving average and then rallied all the way back. It finished down 18 cents on the day with good volume. Gold took a hit as the US dollar rallied. The precious metal was down over $30 on the futures. The XAU was down 1 3/4 but was much lower early, following the stock indices. ABX and GG were both down over 3/4, while NEM only lost 1/8. Volume was average. I canceled the open order for the July ABX calls. Not exactly sure which way we are going to go here. The US dollar is breaking through the weekly downtrend line from last year right now. If that holds, gold should move lower. Mentally I'm doing OK. Today was volatile and I was was otherwise distracted as well. Not the greatest scenario that is conducive to successful trading. I'm going to have to review the charts tonight and go from there. My thought at the moment is that we are putting in a bottom in the stock indices. We'll see what tomorrow brings.
Wednesday, June 22, 2011
Back to the downside today as the Dow lost 80 points on light volume. The advance/declines were negative. We hung around the unchanged level for most of the day until the Fed announcement. That's when the decline began. I suppose traders didn't like what the Fed had to say or not say. Now we will have to see if this is the beginning of something bigger or just a pause to refresh before heading higher. I don't think that this is the start of a huge decline. I may change my mind about that when we reach the resistance in the S&P 500. That level as of now is 1325. GE fell 1/4 on light volume. Still above the 200 day moving average. We've been in a congestion zone here for the last 2 1/2 weeks. Gold gained $7 but fell in the aftermarket after the Fed. The XAU rose 1 1/2 but was higher early. ABX up 1/2, GG gained a buck and NEM rose 3/4. Volume was good here. The gold shares also fell back with the overall market. The US dollar rose on the Fed and that did not help the precious metal. I still have the order in for the ABX July calls but I'll be considering canceling it overnight. Perhaps this 2 day rally in ABX will be all we get from the RSI buy signal. That is the question. Mentally I'm feeling OK but could have slept more. The markets negative reaction to the Fed has thrown a little wrench into the recent up move. We're not overbought or oversold on the technicals at this point in time. I'm going to have to rethink things tonight, go over the charts and take it from there.
Tuesday, June 21, 2011
A nice pop to the upside before the Fed as the Dow gained 110 points. The advance/declines were 5 to 1 positive and the volume was average. The debate will now be focused on whether or not the rally we have seen lately is for real. We haven't yet gotten to the resistance area. That will be the key in my opinion. The summation index should be turning back to the upside with todays action. We'll see what the Fed says tomorrow and go from there. GE was up 1/3 on average volume. The 200 day moving average has held for now. So I think that the stock indices should hold up here with GE as the proxy for the market. Gold was up $5 and the XAU rose 6 1/3. The dollar lost ground today and has not broken through the weekly down trend line from last year. ABX up a buck, GG rose 1 1/8 and NEM tacked on a buck and a half. My ABX July calls were not filled but I'm leaving the ticket in. The RSI positive divergence signal was valid and confirmed by todays action. Perhaps the gold shares will follow the overall markets higher. That's my thinking at the moment. But it could all change tomorrow with the Fed. Mentally I'm feeling OK despite missing for now the ABX call trade. Another possibility with the Fed is that it will be a non event. It is the summer. The stock indices have had a nice short term move and the technicals are not even close to being overbought. So perhaps there is more room to go on the upside. We'll see what happens with the Fed tomorrow and the markets reaction.
Monday, June 20, 2011
It was a light volume levitation today as the Dow gained 76 points. Advance/declines were positive. Not much to make of todays action really. The stock index technicals are still oversold and it appears that we are trying to put in a bottom. Summation index still heading down though. We've got the Fed this week, with the announcement on Wednesday. We'll see what happens there. GE was flat on light volume as we continue to hover at the 200 day moving average. I am keeping an eye on what happens with GE here. Gold was up a couple of bucks while the US dollar drifted. The XAU gained 1/3. ABX was flat, GG up 7/8 and NEM rose 1/4. Volume was light. I placed an order for some ABX July calls. I'm leaving the order in overnight. I guess that I'm going to try the gold shares here for a bounce. GG saw some upwards movement today but ABX lagged. I'm not exactly sure this trade is the right move. The technicals are oversold but they have been for a couple of weeks. If the overall market falls again, the gold shares will follow. There is a positive divergence on the RSI indicator for ABX. I'm also thinking that the Fed announcement could be bullish for gold on a weaker US dollar. That is a guess and I certainly could be wrong there. Mentally I'm feeling OK. Another concern here for putting on a trade is that tomorrow is the beginning of summer. Summertime can in some instances be very slow. The summer doldrums. If that occurs trading options becomes even that much more difficult due to lack of movement.
Friday, June 17, 2011
It was a mixed market today as the Dow closed higher by 43 points. The advance/declines were positive and the volume was good. The NASDAQ was lower. Summation index still heading lower. We got through the expiration and the question now is where do we go from here? I certainly don't have any answers. The stock indices are trying to hold the line here. If they do, I think the most you can expect is a weak bounce back to resistance. If they don't hold up here, I think we'll be heading a lot lower. Next week will be important for sure. GE was up a nickel on average volume. Still holding at the 200 day moving average. Gold was up $10 and the XAU gained 2/3. The dollar took a hit today and I believe that we are right at the weekly resistance downtrend line. If that line holds, then the dollar should weaken and that would be a positive for gold. If it doesn't hold, the opposite is true. ABX, GG and NEM had fractional moves one way or the other on average volume. I'm looking at the ABX July 45 calls. They had heavy volume this week and the open interest expanded. Somebody is interested in them. I'm going to have to take a closer look over the weekend. Oversold both short and longer term on the gold shares. But if the market falls apart, everything will flounder. Mentally I'm feeling OK, slept well. Even if we get some type of rally here the overall trend has changed to down. It is also possible that we simply get a listless, drifting market of sideways action as well. I don't think we will be getting a rip roaring rally. But I've been wrong before of course. The focus lately has been on Greece, Europe and all of their problems. We've been down this road before. The technicals here are blown out to the oversold side. The trouble is that when that happens we at least see some type of sustained upside movement. Hasn't happened. Which means that it is possible that we simply fall apart here. I'm thinking that perhaps that may be postponed until later this summer. I don't know. Lots to ponder over the weekend as we roll into the July option cycle. For now it's Friday afternoon and time for a break.
Thursday, June 16, 2011
Another interesting day in the markets as the Dow gained 64 points on average volume. The advance/declines were negative though and the overall market was weaker than the Dow. It looked like we were falling off a cliff but the stock indices rallied in the final hour. I'd like to think that we are trying to put in some type of short term bottom here but the market will go where it wants to. Summation index still heading lower. It is possible that there is a bullish divergence on the S&P 500 RSI daily technical indicator. We'll see if that pans out. GE opened below its 200 day moving average but ended the day back above it. Volume was average. I think that keeping an eye on GE here is important. I believe that the 200 day moving average is the line in the sand. I could be wrong and often am. Gold was up a few bucks and the US dollar was flat. The XAU fell 4 1/8. ABX down 7/8, GG lost 1 1/2 and NEM shed 2/3. Volume was good. Yesterday I thought that I would not be making any trades in the gold shares for a while. Today, I'm not so sure about that. Gold has held up surprisingly well here, however the gold shares have been pummeled. The Gold/XAU ratio remains overdue in the buy zone. I'm actually considering trying the gold share calls for July. Some type of bounce is long overdue. Mentally I'm feeling OK. Volatility is at its highest since March. The technicals on the stock indices are all oversold. Many of them are trying to hold at their 200 day moving averages. We are at an important juncture. If we do not hold up here, I think we will be heading much lower sooner rather than later. My own belief at the moment is that we'll have some type of bounce here and then head lower later this summer. But we all know how my ideas have worked out lately. We'll close out the June options tomorrow and go from there.
Wednesday, June 15, 2011
Back to the downside with a vengeance today as the Dow set a fresh new low. We lost 179 points on good volume. The advance/declines were over 4 to 1 negative. Well, so much for my theory that we'd seen the lows for this move. At this point I'm beginning to get the feeling that anything could happen. And I don't mean that in a good way if you're bullish. Summation index continuing lower. Todays action negates the bullish candlestick patterns of yesterday. The technicals are oversold and staying there on the stock indices and that isn't a good thing. GE is back at its 200 day moving average after losing 1/4 on good volume. I'd keep an eye on this issue here. If we break the 200 day, the market could be in bigger trouble. We'll see. Gold gained a couple of bucks and 5 more in the aftermarket as of right now. The dollar had a huge day to the upside as fear has taken its grip on the players. The precious metal is being viewed as a lesser safe haven at the moment. The XAU fell a point. ABX was flat, while GG and NEM had fractional gains on average volume. I think that there will indeed be a time to get long the gold shares. However I don't feel that the time is now. Mentally I'm doing as best that I can. 2 days left for the June cycle and I don't see myself taking any chances at this rate. I was at the dentist again today and that interrupted my already skewed market schedule. As I've said in the past, if you can't put forth the proper effort to be successful, don't even waste your time. We'll see how the rest of this week plays out and take it from there.
Tuesday, June 14, 2011
Got the bounce today as the Dow gained 123 points on average volume. The advance/declines were over 4 to 1 positive. Summation index still pointing down but I think the decline is over for now. I'm basing that on the daily S&P 500 candlestick chart, which now shows a bullish reversal pattern. Even if we drop back again tomorrow, I think we've seen the lows for this move. I could be wrong and often am. The technicals for the stock indices are still oversold but coming off of their lows. I might try the OEX puts for June but with only 3 days to go before expiration the risk is very high. It would probably be wiser to stay on the sidelines. GE was up 1/4 but off of its highs for the session. Volume was average. The 200 day moving average has held for now. Gold gained $7 and a little more in the aftermarket. The XAU rose 3 1/8. ABX and NEM were up around 1/2, while GG gained 7/8. Volume was light. The dollar dropped a bit today. There doesn't seem to be much interest in the gold shares here. The Gold/XAU remains strongly in the buy zone yet there hasn't been a rally in the gold shares. I'm keeping an eye on things here and will eventually try the calls. The weekly technicals are in the oversold zone. Mentally I'm doing the best I can. The botched trade of last week still weighs on my mind and not trying the calls again yesterday didn't help. The analysis has been solid but the trading tactics need adjustments. It's the continuing ongoing battle with myself. As usual it's a work in progress. Getting back to the stock indices, I'd expect to see a move back up to the declining tops line. That equates to around 1325 on the S&P 500. This should take a few weeks and that could be the area to try the OEX puts again. We'll see what happens if we get there.
Monday, June 13, 2011
A little back and forth today as the Dow gained a point on light volume. The advance/declines were negative. Summation index still heading down. If I had to guess, I'd say tomorrow will be an up day for a change. My work suggests that. Oversold here and staying there but that doesn't mean that we won't see a bounce. I didn't like the OEX option prices so I didn't take a position in the calls today. We'll see what happens tomorrow. GE didn't do much on light volume but is holding at the 200 day moving average for now. I believe that this is important for the overall market as well. If the 200 day holds we could see something better than a bounce near term. Time will tell. Gold was down around $15 today and the XAU fell 2 1/4. ABX and NEM dropped around 1/4, while GG fell a buck. Volume was light. The US dollar was lower today and that didn't help gold either. The head and shoulders top in GG looks valid. The measuring objective there would be around $38. That's quite a drop from where we are now. We'll see. No trades in gold for now. Mentally I'm feeling OK. Would have liked to get some OEX calls again today but didn't like the premiums. Only 4 days to go for the June option cycle. Risk is high. Some inflation data out later this week. It looks like I'll have to wait and see what happens tomorrow go from there. Perhaps there will be a chance to try the OEX puts later in the week.
Friday, June 10, 2011
No follow through to yesterdays weak bounce as the Dow lost 172 points on light volume. The advance/declines were 4 to 1 negative. I dumped the OEX calls that were profitable yesterday as today they turned into losers. Basically a 50% gain turned into a 50% loss. Not a lot of money involved once again but the constant inability to do the right thing is what the problem is. Actually my exit yesterday missed by a dime and then my exit today was only partially filled so I simply had to bail out at the market on the remainder of the order. Oh yes and pay twice the commission. There is nobody to blame but myself, as usual. Getting back to the stock indices, oversold and staying there. Summation index heading lower and the trend is down. Then why did I try the OEX calls? Because that trade did work, I just didn't get out right. But now getting the puts next week may have too much risk. I'll consider things over the weekend. GE fell 1/4 on average volume and is right at its 200 day moving average. I would expect GE to find some kind of support here. GE is in the same oversold and staying there mode. Gold lost $5 today and a bit more in the aftermarket. The XAU fell 3 1/2. ABX, GG and NEM all had fractional losses ranging for 3/8-7/8 on average volume. The gold shares are following the markets down however there might be a double bottom forming on the XAU daily charts. Next week will be telling there. The dollar had a great day in the flight to safety trade. But the precious metal did not follow. Perhaps because the dollar was so strong. Mentally I'm feeling a bit frustrated after watching a winning trade turn into a loser. The fact that I wasn't filled on my exit order yesterday irks me. But it has happened before and will probably again because I am simply a small player in the game. I don't have the same access to the marketplace as the bigger players. That is a fact of trading life. That doesn't mean that I can't be successful. It does mean that I have to make adjustments going forward. I'll ponder these things over the weekend as well as check out the charts. The trend is down until further notice and we've seen the highs for year at this point. Only one week until the June expiration and any trade put on will carry even more risk than usual. It's Friday afternoon and time for a break.
Thursday, June 09, 2011
We got the expected bounce today as the Dow gained 75 points on light volume. Advance/declines were almost 2 to 1 positive. We were about 60 points higher than the close but sold off in the last hour. I had an order in to sell the OEX calls but it wasn't filled. Perhaps I got too greedy with the price. The calls are still in the black but I would have liked to get out of them today. This bounce may last a couple of days but I would like to be out before the weekend which is tomorrow. We'll see. GE was also higher during the day but sold off as well. Volume was very light. Gold was up $6 and the XAU gained 3 points. ABX was flat while GG and NEM gained 1/2. Volume light here as well. The dollar was up a bit today as well. The Gold/XAU ratio remains in the same strong buy territory that it's been in for weeks. No trades there for now. Mentally I'm feeling a bit tired. As I said, would have liked to exit the OEX call trade today. My order was within a dime of getting filled. I need to get out of this trade so that I can focus on the puts for next week. I do feel that is the trade that holds the most potential before the expiration on June 17th. So I'll see if we get any follow through to the upside tomorrow so that I can exit this trade. Stay tuned.
Wednesday, June 08, 2011
The Dow continues to fall as we lost another 21 points today. The advance/declines were about 3 to 1 negative and the volume was good. Very short term oversold now. Summation index heading lower. As much as I want to try the OEX puts I think a bounce is overdue. The technicals are blown out to the downside. I bought some OEX calls today in anticipation of the so called upcoming bounce. I could be wrong. This is a risky trade with only 7 days to go in the June option cycle. The options are about what I paid for them. I'll be out of this trade before the close on Friday. GE was flat on average volume. No trades there for now. Gold was down $5 today and the XAU fell 4 1/4. ABX and GG were both down a buck, while NEM fell 5/8. Volume was OK here. The dollar rose 1/3 today for no apparent reason. I also considered getting some June ABX calls today but decided to try the OEX instead. The Gold/XAU ratio buy signal hasn't been working here. There is also the potential head and shoulders top on the daily GG chart to consider as well. So it's the sidelines here for me in the gold shares. Mentally I'm feeling OK. Not exactly sure trying the OEX calls here was the right thing to do. The trend is down. However, sometimes the toughest things to do are the ones the ones that should be done. Technically the trade makes sense. It isn't a long term deal. That must be remembered. We'll see what happens tomorrow.
Tuesday, June 07, 2011
The market tried to rally today as we were up over 80 points during the day. However we sold off in the last couple of hours and ended the day with a loss of 19 points on the Dow. The advance/declines were positive and volume was light. If today was the bounce that we get then the market is in bigger trouble than I think. Oversold on the short term still. Summation index heading lower. I'd still like the OEX puts if we get a 3 day or so rally for the bounce. But like I said, if today was it then we're in trouble. So we'll see. GE was flat on average volume. No trade in mind there. Gold lost $3 and the XAU fell 2/3. ABX, GG and NEM all had fractional losses on light volume. The dollar was lower today and it didn't help gold. Getting oversold on the gold shares but not all the way there yet. The daily chart on GG still looks like a head and shoulders top. But it's still a dilemma with the price of gold so high. And so it goes. Mentally I'm feeling better. 8 days to go in the June option cycle. I still would like to try a trade here if the conditions set up properly. The trend is down and by now it's obvious. A nice snap back to the upside here would help to put on the OEX put trade. However there's a chance we may just continue lower in a hurry. Tomorrow will be very telling in my opinion. I'll be hoping we get some upside but the market will go where it wants.
Monday, June 06, 2011
We started the week on a down note as the Dow lost 61 points on average volume. The advance/declines were about 4 to 1 negative. Summation index heading lower. Oversold here and we are due for some type of bounce. If we get it, that will be the time to buy some puts in my opinion. However at the rate we are going, it is hard to see any upside coming. The technicals are oversold but I still feel that playing the downside on a bounce is the way to go. We'll see. GE fell 1/3 on good volume. GE is about at its 200 day moving average. No trades in mind there. Gold was up $5 today and the XAU fell 4 1/4. ABX down 1/3, GG fell 3/4 and NEM dropped 1 1/3. Volume was good to average. The US dollar rose today in the flight to safety. The Gold/XAU ratio is again at a screaming buy and has been on a buy signal for weeks. However this signal hasn't really worked lately. Therefore I'm hesitant to put on a long trade here. Gold itself is about to hit an all time high but the gold shares are nowhere near their highs. So despite the buy signal, I'm wary. Mentally I'm feeling tired, did not sleep well. I have decided that the next attempt at a trade for me will be some OEX puts. I will need to see a snap back first. I intend on holding the position until the Friday of expiration next week. That is the plan for now. The tone and tenor of the stock indices have changed. Lower is now the trend until further notice.
Friday, June 03, 2011
Continuing lower as the Dow lost 97 points on light volume. Advance/declines were over 2 to 1 negative. The summation index has rolled back over to the downside. Not short term oversold just yet. The employment report was weak, we sold off, came back and sold off again. It was a bearish week and the trend is down. I suppose I'll look to get some OEX puts on a snap back. GE was down 1/4 on average volume. Oversold and staying there on GE. That's never a good sign. Gold was up about $10 today on the weaker US dollar and flight to safety play. The XAU was flat. ABX and NEM had fractional losses, while GG had a fractional gain. Volume was light. The gold shares really aren't rallying with the precious metal itself. I would like to try the GG June puts here but it is hard to do with the rally in gold. The US dollar also shows no sign of moving back to the upside here. It's a dilemma for the GG short trade. Perhaps I'll just have to look elsewhere. Mentally I'm doing OK, slept well. So we had a bad week and now where do we go? I will look for some type of snap back next week to go short. That is my idea at the moment. I'll have plenty of time over the weekend to decide which path to follow. I will have to ponder what to do with the gold shares as well. Right now I'm going to take a break and clear my head from the goings on in the markets this past week. It's Friday afternoon and time for a break.
Thursday, June 02, 2011
The Dow continued lower by 42 points today on average volume. The advance/declines were slightly negative. The overall market held up better than the Dow. We're short term oversold here but that doesn't mean that we can't go lower. We were down twice as much near the middle of the session, came back and rolled over again. The employment report is due out tomorrow and we'll have to see what the reaction to those numbers are. I don't really have a good handle on what's going on here. I'd like to maybe try the OEX puts before expiration. I'll need to see some type of upside first though. GE was flat on light volume. No trades there for now. Gold was off $10 and the XAU fell 1 3/8. The gold shares were lower early. The US dollar dropped again today. ABX down a buck, GG lost 2/3 and NEM fell 1/2. Volume was average. I am thinking of getting some calls for ABX or GG. However the technicals are not completely oversold. There is also a possibility that GG is forming a head and shoulders top on a daily basis. I could be wrong. What is true is that Gold itself has held up quite well lately. The Gold/XAU ratio remains on a buy signal. The weekly candlestick charts for the gold shares now look bearish though. A lot will depend on tomorrows action I suppose. Mentally I'm feeling OK, could have slept better. I would like to make some type of trade here but I'm not exactly sure what. I don't want to do anything stupid. But you never know. I'm getting the feeling here that I want to make a trade just to make a trade, if you know what I mean. That's a recipe for disaster. I think the trend has now turned to the downside for the indices. The bearish belt hold candlestick pattern shouldn't be ignored. We'll see what the employment report brings.
Wednesday, June 01, 2011
Everything changed today as the Dow got hammered, losing 279 points on good volume. The advance/declines were 4 to 1 negative. There was no apparent reason for the sell-off. The economic data was weak but that shouldn't cause a decline such as this. Something is going on behind the scenes once again. The S&P 500 daily candlestick chart now shows a bearish belt hold pattern. The trend has quickly shifted to the downside. I'm on the sidelines for now with regards to the OEX. GE lost 1/2 on good volume. Looks like the downside breakout in the GE trading pattern was a signal of things to come. Gold gained $6 on the futures, while the XAU fell 4 1/8. Gold held up rather well today. The US dollar gained some ground today. ABX, GG and NEM all had losses of at least 1/2 on good volume. I'm not sure about the gold shares here. Still short term overbought. I'll think it over tonight. Mentally I'm a bit tired. Also my daily market routine will be altered for the next 2 1/2 months due to a scheduling conflict. There is nothing that I can do about that but make the adjustments. That I will do. More importantly is the question, where do we go from here? It certainly looks like the answer is lower. How low and what is really going on is the mystery of the moment. I'm sure things will become apparent in due time. For now it's on to Thursday.