Friday, September 30, 2011
More downside today as we ended near the lows for the week. The Dow lost 240 points on average volume. The advance/declines were 4 to 1 negative. I really feel as though we at at the edge of a cliff. We're at the bottom of the trading range and I think we will break it to the downside. Unfortunately I don't own any OEX puts yet as the premiums are very expensive with the recent volatility and 3 weeks left in the October cycle. I'll still try and get some before the employment report next Friday if we get some upside next week. But that may not happen. We're oversold here but that doesn't matter if we see a collapse. There aren't any reasons to buy stock here just yet. GE lost 2/3 on better volume. Probably getting ready to break down here as well. I'm going to get some January calls here next month. That has been the idea and I'm sticking with it. Gold was up $5 on the futures. The XAU was higher during the day but ended up only 1/2. ABX rose 3/8, GG gained a buck and NEM higher by 3/8. Volume was a little better today. The US dollar had a good day as money sought safety. However the flight to gold for safety is not happening at the moment. I am still going to get some gold share calls next month for the November cycle. We're oversold on the gold shares. However if we get the market collapse that I fear here, the gold shares will follow. Mentally I'm feeling tired, did not sleep enough. The stock indices cannot gain any traction to the upside. When we started the week with about a 600 point gain on Monday and Tuesday but couldn't hold it, that was telling. It isn't a good sign. Perhaps we can get one more short covering rally in the beginning of next week to buy some OEX puts. If not, I'll have to look at the other longer term call trades in GE and the gold shares. There is still plenty of time in the October option cycle. The VIX is pretty high here and if it continues upwards, look out. The market will go where it wants. I think next week could be very interesting. But for now it's Friday afternoon and time for a rest.
Thursday, September 29, 2011
An up and down day as we opened higher, went lower and then closed higher by 143 points on average volume. The advance/declines were over 2 to 1 positive. Not quite sure of what to make of todays session. The overall market was weaker than the Dow. I'd still like to own some OEX puts before the employment report in a week. The summation index is moving back and forth with no real trend at the moment. I still have the open order in for the OEX puts but I'll probably cancel it over the weekend unless it gets filled tomorrow. GE was up 3/8 on light volume. GE was a proxy again today as it never went negative even with the market selling off. GE is once again getting close to its 50 day moving average on the daily charts. It is something to keep an eye on. Gold was little changed on the futures today but did sell off last night before coming back. The XAU was up 1/3. ABX and GG gained 1/3, while NEM was up a buck. Volume was light. The US dollar didn't do much today. Perhaps the gold shares are trying to put in a bottom here. However if my market prognosis is correct, we will see lower prices in the coming weeks. I could be wrong. Mentally I'm feeling OK. We had every reason to sell off today but somehow made a comeback. This portends near term strength. The ideal scenario for me would be to purchase the OEX puts next Tuesday or Wednesday on market strength. That is probably wishful thinking. We have been going sideways for about 2 months in the stock indices. The breakout, when it happens, is something to be a part of. I still think it will be to the downside but the longer we wander around here increases my doubts of that. I still want some November gold share calls as well. Tomorrow ends the week, the month and the quarter.
Wednesday, September 28, 2011
Back to the downside today as the Dow lost 180 points on average volume. The advance/declines were 5 to 1 negative. My guess is that the chance to purchase the OEX puts at a reasonable price has passed and we will be heading down from here. Monday and Tuesday were nothing more than a short covering snap back rally in retrospect. I think that we will be taking out the lows of support shortly. I could be wrong. I'd still like to be short ahead of the employment report next Friday. I'm leaving in my open order for the OEX October puts but it probably won't be filled. Perhaps I'll adjust the price. GE was off 1/3 on light volume. I'm expecting the recent lows to be taken out here as well. The game plan is to still get some January calls within the next month or so. Gold fell back $35 today and a bit more in the aftermarket. The US dollar was higher. The XAU dropped 8 7/8. ABX off 1 3/4, GG down 1 3/4 and NEM fell 1 7/8. Getting pretty oversold on the gold shares but the timing here will be the key. I'd still like the November calls at some point. Trying the October cycle here would entail more risk if we get the market selling off more as I expect. Mentally I'm feeling a bit frustrated. That is to be expected when what I was looking for shows up and I don't take advantage of it. I'll just have to take it from here. No hurry to get long at this point, however the gold shares are getting blown out to the downside. I really think we are about to have a precipitous fall in the stock indices. Stay tuned.
Tuesday, September 27, 2011
The Dow took off to the upside today but pared its gains in the final hour. We closed the day higher by 146 points but we were up over 300. The advance/declines were almost 5 to 1 positive and volume was average. This should turn the summation index back to the upside. I placed an order for some OEX puts but it wasn't filled. I'm leaving it in overnight but I may be too late again already. No real news for the rally in the stock indices, just the hope that Europe ends up OK. Not overbought or oversold here on a short term basis. I'm a believer that puts should be owned at some point before the employment report next week. I could be wrong. GE was up about 1/4 on light volume. It too was higher earlier in the day. I'll keep an eye on GE as a proxy for the overall market. It has been a precursor of sorts lately. Gold bounced back today, the futures gained over $50. The US dollar had a weak day. The XAU was only up 1/4 after being much higher early in the day. ABX was up 1/4, GG was flat and NEM lost 7/8. Volume was light here. I think it is too early for a sustained up move in the gold shares here. That said, I would still like to own some November calls eventually. If the overall market falls as I expect, the gold shares should drop and that would be an entry point for the calls. Wishful thinking perhaps. Mentally I'm feeling OK, slept well. So we had a huge move to the upside in the stock indices and couldn't hold on. My order is in for some OEX puts but it may not get filled. The daily candlestick charts don't look positive for the stock indices with todays move. But that could all change tomorrow. End of the month on Friday. We'll see what happens overnight in Europe and go from there.
Monday, September 26, 2011
A huge rally to start the week as the Dow gained 272 points on average volume. The advance/declines were about 3 to 1 positive. I'm inclined to believe that this is simply an oversold bounce but you never know. No concrete news to rally on today yet up we went. I'm not going to try and figure it out. The market speaks and we should listen. I still want to own some OEX puts before the employment report at the end of next week. Hard to be patient here but that is what's required. GE was up 1/3 on average volume. The January calls are still what I have in mind here. No hurry to purchase them as I will probably wait until next month. Gold was very volatile today as the futures lost $45 but made a comeback in the aftermarket. Overnight the futures were down twice that much. The dollar was off a bit today. The XAU gained 3 3/4 after being lower early on. ABX up a buck, GG rose 1/2 and NEM led the way higher by 1 1/2. Volume was average. I did place an order for some ABX calls but was not filled. I'm leaving the order in overnight. I'm pretty sure this is where to make the purchase. I would expect things to be choppy for a couple of weeks but I could be wrong. I'm trying the October cycle but may go out to November as time goes on. Mentally I'm feeling tired, did not sleep well. A nice rally out of nowhere today and we should see some follow through in the overseas markets. I'm still a believer in the OEX puts for the October option cycle. My feeling is that gold will hold up here around the $1600 level but I could be wrong. The technicals for the gold shares are oversold here. The ideal situation would be for some base building before we move higher. We'll see.
Friday, September 23, 2011
The Dow held up pretty well today and finished the day with a gain of 37 points on good volume. The advance/declines were positive. Perhaps we'll see a bounce in the beginning of next week. I get the feeling anything to the upside will be a short lived reprieve. I think we'll still see lower prices in the weeks ahead. Looking out a couple of weeks, I'd probably like to own some OEX puts before Octobers employment report. GE was up about an 1/8 on average volume. We're at the bottom of the trading range here and I do believe that we will break down. I'm still looking to buy the January calls here at some point. Gold had another debacle of a day, down just over 100 on the futures, with a slight bounce back in the aftermarket. The US dollar was down a touch but that didn't matter. Gold is now in a free fall as usually happens when something goes parabolic. The XAU fell 8 1/4. ABX down 2 1/3, GG lost 2 1/8 and NEM shed another 2 1/3. Volume was heavy. The gold shares did bounce a bit during the day. I would still like to get some gold share calls for October or more likely November. However we are just gapping down every day right now. Gold itself is around 1650 and support in my opinion come in at 1600. I may purchase some calls if and when we get to that point. Mentally I'm feeling a bit tired, did not sleep well. It was a negative week for all of the markets it seems as the realization is now that a worldwide slowdown in economic activity is at hand. We're oversold on a lot of the indices but could stay that way for a while. It's a tough trading envirornment. I still think that if we get a bounce, it can be shorted. I could be wrong. Plenty of data out next week and we've got the end of the month as well. I'll check the charts over the weekend
Thursday, September 22, 2011
We are in liquidation mode as the Dow fell 391 points on very heavy volume. The advance/declines were 8 to 1 negative. A slight comeback before the close as we were down over 500 points. We've got lower to go though as the August lows are not going to hold up here in my humble opinion. Something is going on here but I certainly don't know what it is. All markets are dropping around the globe in what looks like a repeat of the fall of 2008. Buy index puts on any bounce if we get one is the strategy now. Plenty of time left in the October option cycle. Not sure just how low we will go this time around. It creates opportunity as well don't forget. I'm going to try and be patient but who knows? GE was off 1/3 on heavy volume. I'm still looking at the January calls here. No rush to purchase them but that is the game plan for GE. Gold got pummeled as well, down $66 on the futures as the flight to the US dollar was substantial. No flight to safety for the precious metal today. The XAU dropped 16 2/3. ABX lost 4 1/2, GG fell 3 1/2 and NEM down 2 1/2. Huge gaps to the downside in the gold shares. If the stock indices continue to the downside, the gold shares probably will follow. That said, I would still like to own some calls here at some point. The October or November calls in either ABX or GG. Mentally I'm feeling OK. The summation index is heading lower. The trend is down. We are about to break through the congestion zone of the past few weeks to the downside. I'm not sure how low we will go. If we drop hard again tomorrow I may purchase some gold share calls but I could be early. These are interesting times. Opportunity will present itself. It's a matter of being ready and being prepared. I'll check the charts tonight and go from there.
Wednesday, September 21, 2011
I suppose we know which direction that we are headed now as the Dow lost 283 points on average volume. The advance/declines were 6 to 1 negative. This will turn the summation index back to the downside. The Fed spoke and the market reacted. I don't know if there will be a chance to get any OEX puts on this move. They were expensive before todays move and they are more so now. If we do get one of those one day bounces, that would be the time. My guess is that we are going to take out the lows of August. GE lost 2/3 on better volume. I'm still a believer in the January calls here. I'll be getting them in the next few weeks if the decline proceeds as I expect. We could not make it through the 50 day moving average on the daily charts. Gold fell today as well and the US dollar was higher. The precious metal was down over $20 in the aftermarket. The XAU dropped 6 1/4. ABX off 2/3, GG down 1 1/2 and NEM fell 2 1/4. Volume was average. I'm going to try the October or November calls here at some point. I'm not sure if it will be with ABX or GG. Mentally I'm doing OK. Hard to fault myself for not already owning some puts here as the premiums are so high. But if we just drop like a rock here I certainly won't be happy. I do have some longer term ideas that could work though. Keep an eye on TRAN to see if it breaks the previous lows as it is a leading indicator as of late. Volatility picked up today and we will have to see if that continues as well. I think we are heading much lower in the next few weeks. Puts are in order for the stock indices in my opinion. I could be wrong and often am.
Tuesday, September 20, 2011
Kind of a mixed bag ahead of the Fed as the Dow gained just 7 points after being up well over 100. The advance/declines were negative and volume was light. The overall market was weaker than the Dow. Now I'm not exactly sure what the next move is. Todays action leads me to believe that we are now headed lower. I might get some OEX puts tomorrow when we get the usual gyrations during the Fed announcement. Or not. More overbought than oversold here. One of the problems is the high priced option premiums. However if this is the beginning of the next leg down, puts will be profitable regardless. I'll consider this overnight. GE lost 1/8 on light volume. Volume has shrunk here in the first 2 days of the week. Waiting on the Fed perhaps. Gold had a good day, the futures were up $30. The XAU rose 4 1/2 points. ABX up 1/2, GG gained 2 1/4 and NEM was the star of the day up 3 2/3. Volume was good. NEM is breaking out to new highs. Will ABX and GG follow? I did put an order in for some ABX calls today but canceled it before the close. This is something to consider tonight as well. If the overall market drops will the gold shares go down as well? The gold shares are more overbought as well but there could be room to move higher. The dollar didn't do much today. Mentally I'm feeling OK. Waiting on the Fed and so is the market at this point. I have a couple of ideas here but not sure what direction that I'll take. I'll check the charts overnight and decide which direction to take from there.
Monday, September 19, 2011
We started the week off with a whimper as the Dow fell 108 points on light volume. The advance/declines were 3 to 1 negative. European worries persist but I think the real trouble is the slow economy. That's my take for now. We were down well over 200 points early. The small stocks are still showing good relative strength so I continue to believe in higher prices near term. We've got the Fed announcement the day after tomorrow as the main news of the week. Prices should move off of that. GE lost an 1/8 on light volume. Getting close to the 50 day moving average on the daily chart for GE. If we can get through there it could bode well for the overall market. Gold dropped $35 on the futures today and the XAU fell 2 points. The US dollar was higher today. The gold shares were mixed with ABX off 1/8, GG down 7/8 and NEM up 1/2. Volume was average. I'm on the sidelines here for now. We are getting oversold though. The plan is to own some calls prior to the earnings releases in October. Mentally I'm doing OK, slept well enough. The market seems to want to go higher here. The summation index is still rising. One thing that troubles me though is that the price of copper has broken down. This is usually a good indicator of the strength of the economy. It also has a tendency to be a proxy for the stock indices in my opinion. That is why even though stock prices seem to want to rise here, I'm not inclined to purchase the calls. We'll see what happens as time goes on. Option premiums are high with the extra week in the October cycle. Stay tuned.
Friday, September 16, 2011
An expiration upward drift as the Dow gained 75 points on average volume. The advance/declines were just about even. Short term overbought now and I would expect some type of pullback in the beginning of next week. The summation index is moving higher and the trend is up. The major stock indices are still in the consolidation zones from the recent August decline. However the small cap indices have broken out to the upside. They are usually the leaders going up or down. Therefore I would expect the other stock indices to follow. We'll see. GE was up 1/4 on OK volume. We are at the top of the congestion zone here as well and it is something to keep an eye on. If GE breaks out I would expect the stock indices to follow. Gold made a comeback today, up $33 on the futures. The XAU rose 2 1/3. ABX up 3/4, GG higher by 7/8 and NEM gained 1 3/8. Volume was light. The US dollar bounced back today as well. Not exactly sure of what to make of things here with gold. The daily gold share candlestick charts do look constructive to the upside though. The gold share calls could be my next trade. I would like to own the calls ahead of the next earnings reports. Mentally I'm feeling OK. It wasn't a good trading week for me but I suppose it could have been worse. The market wants to go higher here it seems. You cannot fight that. However we are in an event driven marketplace and Europe is the driving force at the moment. So we'll see if any news comes out over the weekend and go from there. The option premiums will be pricey for October going from here. It's Friday afternoon and close to the end of summer. Time for a break.
Thursday, September 15, 2011
An expiration week rally as the Dow gained 186 points on lighter volume. The advance/declines were 3 to 1 positive. Summation index moving higher. We've broken the downtrend lines on some major stock indices and the trend is now up. Getting short term overbought here. No trades in mind for the OEX at the moment. We'll be rolling into the October option cycle on Monday and they have an extra week. Premiums will be higher than usual. GE was up another 1/3 on lighter volume. Still looking to go out to the January options there. Perhaps next month. Gold took a hit today as the flight to safety trade looks like it got unwound a bit. The precious metal fell $45. It came back a bit in the aftermarket. This happened despite the US dollar taking a good hit today. The XAU was up 1/3. The gold shares sold off early but made a comeback. ABX up 1/8, GG down 1/3 and NEM up 1/8. Volume was light. I'd like to own some calls before the next earnings reports here but that is over a month away. Getting oversold here but not there yet. Mentally I'm doing OK. I've put yesterdays dumb trade behind me and I'm looking ahead. That's really all you can do. No solid ideas at the moment. It looks like we'll be heading higher near term. We'll get through the expiration tomorrow and go from there.
Wednesday, September 14, 2011
It was the third positive day in a row as the Dow gained 140 points on average volume. The advance/declines were 3 to 1 positive. We were up twice as much but sold off in the last half hour. When we got to the downtrend line on the S&P 500, I bought the OEX puts. We then raced higher through the line and the puts got slammed. I took the loss at around 65 % in the span of a few hours. This was a trade I should have avoided as I do not do well with the short term options. The market was telegraphing higher prices and I did not listen. I once again tried to impose my idea on the market and the market is always right. That said, as soon as I sold the puts the market dropped back to the downtrend line that it had broken through. The OEX puts that I bought regained their value. So perhaps this trade would have worked. We'll find out tomorrow. GE was up 1/3 on average volume. I should have taken the cue from here, as GE was stronger for the past couple of sessions. Again, I did not listen. Gold lost a few bucks on the futures. The dollar didn't do much today. The XAU lost 3 1/2. ABX fell 7/8, GG dropped 1/3 and NEM down just a touch. Volume here was nothing special. No trades in the gold shares for now. Mentally I'm feeling frustrated. I really should have just stayed on the sidelines today. Even if we drop tomorrow, I'm out of the OEX put position. So it's a no win situation and I've already booked the loss. The problem is being able to do the right thing when necessary under market conditions. I think that I just wanted to make a trade without the technicals all in line and I paid for it. I also could have bailed out with a smaller loss but I didn't. So there was nothing good from this trade. 2 days left for the September option cycle and I'll be on the sidelines. I'll have to put today behind me and go from here.
Tuesday, September 13, 2011
To the upside today as the Dow gained 44 points on average volume. The advance/declines were 3 to 1 positive. The overall market was stronger than the Dow. The market has the feel of wanting to go higher here. I did not try the OEX puts today but still may before Friday. If we get up to the down trend lines on the OEX or S&P 500, I might give it a shot. However as I've said before the short term trades are not my best. Economic data out tomorrow and that should move things around. GE was up over 1/3 today on average volume. That was another excuse not to buy the OEX puts today. Gold was up $16 and more in the aftermarket as the dollar was much weaker today. The XAU was up a buck. ABX rose 1/4, GG fell 3/4 and NEM gained 1/4. A mixed bag there. I think that I'm going to wait for a pullback to the up trend lines in the gold shares before I put on the next trade. I'll be looking at the October calls. Mentally I'm doing OK, could have slept better. Sometimes the hardest thing to do in the game is to do nothing. That is what I am facing at the moment. As much as I'd like to try something here with 3 days to go, the more prudent approach may be to just sit it out. I'll check the charts again tonight and decide what to do or not do.
Monday, September 12, 2011
An interesting session as the Dow was down for most of the day but made a last hour comeback to finish up 69 points. The advance/declines were negative and the volume was good. It feels like the Dow is trying to put in a bottom here. However I am considering some OEX puts before the week is out. We still have a down trend line that is in effect until broken to the upside. The European indices have already broken down through the congestion zones that the US indices currently find themselves in. With only 4 days to go on the September options the risk is high. I may have to consider going out to October but the premiums are very high. GE was off a touch on heavy volume. I'm still looking out to January there for the calls. No hurry. Gold took a hit to start the week, off $46 on the futures. We came back a bit in the aftermarket. The US dollar was higher today but closed off of its highs. The XAU was down 6 points but was much lower. ABX off 1 1/4, GG fell 2 1/4 and NEM shed 1 1/4. All of these issues were lower during the day as well. I thought about getting some ABX calls for this week but did not do it. Again, the risk in trading this week will be very high. The potential for profit somewhere is out there. However the chance for loss is just as great. Mentally I'm doing OK. The stock indices had an upside reversal today, opening lower and closing higher. We are more oversold than overbought as well. I think I will wait and see if we make it to the down trend line and then buy the OEX puts at that point. That's the idea at the moment.
Friday, September 09, 2011
A steep sell off to end the week as the Dow lost 303 points on average volume. The advance/declines were about 6 to 1 negative. I was leaning more towards the upside but that was obviously wrong. Troubles in Europe again and there is no end in sight there. The summation index will now head lower after todays action. The S&P 500 had a huge drop in August and we have stabilized and moved sideways since then. This is perhaps a bear flag implying much lower prices in the offing. The German stock market has already broken through to the downside. This is something to consider and keep in mind. GE lost 1/2 on good volume. We are back to test support at $15. If GE breaks down through $15, it could mean that the stock indices will follow. I'm still looking at the January calls there. Gold was up a couple of bucks as the US dollar soared. I'm not sure what is going to happen here because higher dollar prices are generally bearish for gold. However the flight to safety trade is still in vogue and gold is part of that. The XAU lost 3 7/8 today. ABX down 2/3, GG fell 1/2 and NEM off 3/8. Volume was average. I might try some gold share calls next week but it is extremely risky. Still overbought and staying there. Mentally I'm feeling tired. Yesterdays usual aftermarket routine was interrupted by a power failure. 5 days left in the September option cycle. Again, any trades for next week will be of the short term variety. The October cycle has an extra week. I'll check the charts over the weekend and consider what strategy to undertake for next week. I'd expect some follow through downside on Monday but after that, who knows? For now it's Friday afternoon and time for a rest.
Thursday, September 08, 2011
Back to the downside today as the Dow lost 119 points on average volume. The advance/declines were about 4 to 1 negative. So where do we go from here? I certainly don't know. The case can be made for either direction since we are not overbought or oversold. I will try and not do anything stupid here but you never know. Bernanke blabbed today and tonight we get Obama. I'm favoring the upside here but not enough to take a position. GE lost 1/4 on light volume. I probably won't be trying the September 16 calls here. Too much risk. Gold made a comeback as all sell offs are being bought at the moment. It was up $40 on the futures and more in the aftermarket. The XAU rose 2 1/2. ABX gained 3/4, GG up 3/4 and NEM higher by 1 7/8. This despite the US dollar having another very good day to the upside. The gold shares are very overbought and staying there. I might try something here before expiration but again, the risk is high. The prudent thing to do would be to stay out for September at this point. Mentally I'm feeling OK. Not exactly sure what I'd like to do here but my bias is for higher prices for the stock indices in the short term. That's a guess as always. When in doubt, stay out as the saying goes. Not sure I'm going to do that. One more trading day in the shortened week.
Wednesday, September 07, 2011
The Dow soared to the upside today as it gained 275 points. The advance/declines were 7 to 1 positive. Volume was lighter than yesterday. The summation index should be back to moving higher after todays action. Europe, meaning Germany, had some good news for a change. The question now is whether this rally is for real. I certainly don't know. We aren't overbought or oversold here. The lesser issues such as the NASDAQ are performing well here and that usually leads to higher prices. However I will consider the OEX puts again once we reach near term resistance. We'll see if we get any follow through tomorrow before Obamas jobs speech. GE was up 1/2 on average volume. I am considering a short term call trade here for the September option cycle. But I may be too late as yesterday probably was the day to initiate it. There's only 7 days left on the options. I'm still looking to go out to January there as well. Gold took a hit today, down $55 on the futures. The US dollar was down as well as the flight to safety trade took a day off. Perhaps this is the beginning of the unwinding of that trade. That's a guess as usual. The XAU was up almost 1 1/2 as the gold shares did not follow gold today. ABX was up 7/8, GG gained 1/2 and NEM fell 3/4. Volume was average. Not sure what to make of the gold shares today. I do know that ABX and GG are right at their resistance of $55. If they break through that level there is nothing to stop them from going much higher. Overbought here on these issues but that may not matter. Might try a trade here before expiration. Mentally I'm feeling tired, did not sleep well. Volatility has returned to the stock indices as we were down 300 points early yesterday and today we gained 275. The trades have to be short term in nature I believe to be successful. That really isn't one of my strong points. I'll be keeping an eye on things as usual and we'll see what happens.
Tuesday, September 06, 2011
An interesting start to the week as the Dow lost 100 points on average volume. The advance/declines were about 3 to 1 negative. We started the day down hard and at one point were off 300 points. However there was never any follow through downside and we rallied almost 100 points in the last half hour. A short squeeze? Perhaps. I think it has more to do with Europe and perhaps some good news coming out of Germany tomorrow. But I don't know, of that we can be certain. I sold the OEX puts today for a 140% profit and it should have been more. The market did not react the way I wanted it to but I held on to the puts anyway. I should have dumped them early in the morning. I may buy them back before expiration but we'll have to see exactly what the market does from here. GE lost 1/2 on heavy volume. If GE is a proxy for the stock indices again then perhaps we're heading lower. It has been gapping down and is at support at $15. I'll keep an eye on it. Gold lost around $20 on the futures after hitting a new record high. The US dollar was stronger today and appears to be starting an uptrend. That could be important for the stock indices and gold going forward. The XAU was up 1/4. ABX gained 3/4, GG lost 1/8 and NEM was flat. Volume was good. The daily charts may have put in short term tops with todays action. The daily candlestick charts look like dojis at the end of an up move. We'll see what happens tomorrow. I still want to try the gold shares again when they get oversold. Mentally I'm doing OK. Still not impressed with the way I handled the exit of the OEX trade. As always, trading is an ongoing process. 8 days left in the September option cycle. I don't have any pressing ideas at the moment. The stock indices have the feel of wanting to go back up here but that is nothing to trade off of. I'll check the charts again tonight. I did have a thought of perhaps getting some gold share puts here. I'll review tonight as well. Had I properly exited the OEX trade, perhaps my confidence would be a bit better. We'll see what happens in Europe overnight and take it from there.
Friday, September 02, 2011
It was a downer on Wall Street today as the Dow lost 253 points on light volume. The advance/declines were 6 to 1 negative. It was a steep drop at the open and then we hovered around for the rest of the day. The employment report was a disaster, as no new jobs were created last month. I'm a bit surprised that we didn't drop even more. My OEX puts are solidly in the black. The question now is when to sell them. I'll consider the scenarios over the long weekend after checking the technicals. GE was down almost 1/2 on average volume. I might take my OEX cues from here. GE made a slight comeback in the afternoon. We'll see. Gold was the star of the day gaining $47 on the futures and another $10 in the aftermarket. The dollar was higher as well and the flight to safety trade is back. The XAU rose 3 1/2. ABX up 1 1/4, GG gained 1 1/3 and NEM tacked on 2 bucks. Volume was good. Looks like I sold the ABX calls too soon. Even though it was a profit, it should have been much more. Continuing to be overbought on all levels for gold but I think we are going to see new highs next week. I may just jump in and buy some more gold share calls as well. I'll consider it over the weekend. Money continues to flow in there and we are in the gold favorable month of September. Mentally I'm doing OK but a bit tired. Not all that happy about dumping the ABX calls early but you've got to move on. At least I'm on the right side of the OEX trade and the entry timing worked. Getting out right is the next challenge. A long 3 day weekend to consider things. I don't get the feeling that this downdraft is the beginning of something big to the downside but we'll see how it plays out. We're not short term oversold on the stock indices but could get there in a hurry. As I said, gold is very overbought but continues to attract capital. No easy way to trade that scenario. It's the unofficial end of summer with Labor Day weekend on tap. Time for a break.
Thursday, September 01, 2011
It was another up and down session with the Dow closing the day with a loss of 120 points. The advance/declines were almost 3 to 1 negative. Volume was average. We were up around 80 points early in the day. The employment report will be the catalyst for tomorrow and then we have a long holiday weekend. I did purchase some OEX puts in the morning and they are in the black. I'm not sure how long I'll hold on to them. The stock indices are overbought but only on a short term basis. We'll see how it goes tomorrow. GE lost a dime on average volume. No trades there yet and there is no hurry. Gold lost a couple bucks on the futures and a couple more in the aftermarket. The US dollar was higher today. The gold shares were mixed as the XAU gained 1 1/3. ABX up 7/8, GG gained 1 3/8 but NEM lost 1/8. Volume was light. Looks like I should have held those ABX calls another day but as always hindsight is never wrong. I may try them again before the September expiration now as the relative strength is hard to ignore. What's also hard to ignore is the fact that the gold shares are both short and medium term overbought. I'll be keeping an eye on things of course. Mentally I'm feeling tired, did not sleep enough. So it's on to the next trade involving the OEX puts. The OEX is a much faster moving contract and that makes it more of a challenge to trade. If we are down tomorrow I'll probably hold the trade over the weekend. We'll see what the employment report brings, gauge the markets reaction and see what happens.