Friday, March 30, 2012
We closed out the week and the month on a positive note as the Dow gained 66 points today on light volume. The advance/declines were positive. The overall market was weaker than the Dow and the summation index is still moving to the downside. I still think that we'll be moving higher here but that's a guess as usual. Beginning of the month money flows should help the bullish case for the beginning of next week. GE was up 1/8 on light volume. Moving sideways there now for the most part. I'm probably still going to be a buyer of the May calls before the earnings announcement in April. Gold gained about $15 on the futures today as the US dollar was lower. The dollar almost broke a near term support line today but has strong support at the 78 level. The XAU was up 1 2/3. ABX rose 1/3, GG up 2/3 and NEM was a touch lower on the day. Volume was light. My April ABX calls are still in the black. However GG is once again showing much better relative strength and I really should have purchased the calls there instead. There is a possible positive RSI divergence for ABX on the daily charts though. We'll have to wait and see if that plays itself out to the upside as it normally would. Mentally I'm feeling tired, did not sleep well again. We had some selling this week but the stock indices still managed to make some gains. The trend remains up as it has been for months now. A holiday shortened week coming up, with the employment report due on the holiday with the markets closed. That could be interesting. I'm in another ABX April call trade and I'll have to figure out what exactly to do there this weekend. I would like to try the May gold share calls as well. We'll see. I'm still on the back-up computer and these issues should be taken care of sometime next week. For now it's Friday afternoon and time for a rest.
Thursday, March 29, 2012
The Dow managed a gain of 19 points today on average volume. The advance/declines were negative. The overall market was weaker than the Dow. It was a one day reversal to the upside, as the Dow opened lower and closed higher. That would imply higher prices going forward. However the summation index continues lower. We'll end the month tomorrow and go from there. Still overbought on the stock index technicals. GE was off a touch on light volume. Sideways here for the past couple of weeks. Still considering the May calls and would like to purchase them before the earnings report in April. The technicals are mid range here. Gold was off $5 on the futures but came back a bit in the aftermarket. The US dollar ended the day little changed. The XAU was up 1/3 and showed the same positive one day reversal as did the Dow. ABX was flat on the day, while GG and NEM lost 1/8. Volume was average. The gold shares now appear to have bullish hammers on the daily candlestick charts, depending on where we go from here. My open order for the ABX April calls was filled in the morning but I really should have adjusted it to get a better price. They are slightly in the black. I'm not sure how long I'll be holding them but will until at least next week. The technicals on the gold shares remain oversold. Mentally I'm feeling tired, did not sleep well. The next trade is now on. I was lazy this morning, which is unacceptable. The game is hard enough without making it any harder on yourself. The weekly as well as daily charts for the gold shares are oversold, so I think getting the calls here is the right choice. I would still like to go out to May on this trade as well. But as we all know, the markets will go where they want. The Gold/XAU ratio remains in a strong buy. We'll see what happens. The stock indexes have been weaker this week but I'm still looking for higher prices into the April expiration. The trend still remains up for now.
Wednesday, March 28, 2012
We continued lower today but finished off of the worst levels as the Dow fell 71 points on average volume. The advance/declines were about 2 to 1 negative. The summation index is heading lower. I'm not exactly sure what's next but what else is new? Still overbought on the technicals for the stock indices. 2 days remaining this month. Volatility spiked up early today but then fell back. We could go either way near term but I'm still looking for higher prices into the April option expiration. GE ended up flat on the day on better volume. We're moving sideways again here. The May calls for GE are still on my radar. If the options get to the price level that I'd like to pay, I'll probably give that trade a try. Gold fell today, off over $25 on the futures. The US dollar was marginally higher. The XAU lost 3 7/8. ABX down 2/3, GG lower by 1/2 and NEM shed another buck. I placed an overnight order for the April ABX calls but it wasn't filled. I'm leaving it in overnight and I may modify it early tomorrow morning. Oversold on the technicals plus the Gold/XAU ratio is still deep in the buy zone. The Gold/XAU ratio has been in the buy zone for quite some time yet the gold shares continue lower. That won't last forever. Mentally I'm feeling a bit tired, did not sleep well. We'll have to see how the stock indexes fare tomorrow afters todays decline and comeback. We'll also be looking to see if gold follows through to the downside. I'll consider the ABX April call trade again tonight and try to decide what to do tomorrow. I still think that purchasing the ABX calls again here is the proper trade. We'll see.
Tuesday, March 27, 2012
Digesting yesterdays gains today as the Dow fell 44 points on light volume. The advance/declines were negative. Not exactly sure where we go from here but I am still looking for higher prices. The stock indexes kind of fell apart in the last hour and that usually means lower prices ahead. End of the month on Friday as well. The summation index is moving sideways. GE was flat on the day with light volume as well. I'm still waiting on the May calls here as the price hasn't reached the level that I'd like to purchase just yet. Patience is required and there is no hurry for now. Gold was off a touch on the futures and fell $5 in the aftermarket. The US dollar was bit higher today and is trying to hold an upside trend line on the daily charts that has been in effect since November. If it holds we'll see a rally in the dollar and that would not be positive for gold. If it doesn't hold than the opposite should occur. The XAU fell 2 1/2. ABX off 2/3, GG lost 1/2 and NEM lower by a buck. When the stock market continued to drop in the final hour, I dumped the ABX calls. The profit was 45%. I needed to have a winning trade and I at least accomplished that but the profit could have been better. I still like this trade and will probably put in an overnight order to buy these again. Or perhaps go out to May, which is the preferred idea. The Gold/XAU ratio remains solidly in the bullish buy zone which leads me to believe the gold shares calls will work again. We'll see. Mentally I'm feeling OK, slept well enough. We'll have to see if there is any follow through downside for the stock indices tomorrow morning. Still overbought on the technicals. I'll be keeping an eye on the gold shares for follow through to the downside as well. Perhaps will try the April calls again this week. Not much else to report for now.
Monday, March 26, 2012
We started the last week of March with a bang as the Dow gained 160 points on light volume. The advance/declines were 3 to 1 positive. This should move the summation index back to the upside. Big Ben Bernanke said the US would keep interest rates low. This isn't new news. However the market will go where it wants. Still overbought and still moving higher. It's a broken record but you cannot fight it. There were no sellers today. Plenty of liquidity it seems. GE was up 1/4 on light volume. I'm still looking at the May calls here if the price gets to what I'd like to pay for them. May not happen at this rate. No hurry here as GE is usually a pretty slow mover. Gold had another good day as the US dollar was weaker. The gold futures were up $23 and gained some more in the aftermarket. The XAU only rose 2 3/4 though. ABX gained 3/4, GG up 1 1/8 and NEM managed only an 1/8 higher. Volume was nothing special. My April ABX calls are solidly in the black. Both the daily and weekly charts look constructive now here but I would still like to try the May calls. However once again the relative strength is with GG, as the options there have appreciated much better than ABX here. But my focus is on the April ABX calls since that is the position that I've taken. The Gold/XAU ratio remains in the bullish buy zone. Mentally I'm feeling OK, slept well enough but still on the back-up computer. The stock indices continue to the upside with no end in sight for the rally. There is no technical damage to say that the rally is going to end. Looking for calls to purchase remains a winning strategy. You cannot fight the trend, the tape or the Fed. Once again gold is moving higher and the gold shares are lagging. That usually isn't bullish going forward but the gold share charts are looking bullish at the moment. We'll see what happens in the overseas market and go from there.
Friday, March 23, 2012
A slight bounce to close out the week as the Dow gained 34 points on light volume. The advance/declines were better than 2 to 1 positive. The summation index continues heading lower. The technicals for the stock indices have rolled over but they are still overbought. We will have to see if this recent decline is bought as all the previous declines have been. Still 4 weeks to go in the April option series. I have no OEX trades in mind but I still have to be looking for higher prices going forward. I could be wrong. GE was flat on the day and the volume was very light. I am still looking to be a buyer of the May 20 calls at the right price. My thinking is that this trade should be put on before the mid-April earnings announcement. Preferably with oversold technicals. Gold had a good day for a change as it rose about $20 on the futures. The US dollar was lower yet again. Interest rates in the US have risen in the past couple of weeks yet the dollar fell. This is not the normal expectation. I do not know the reasons. The XAU gained 2 7/7. ABX up 2/3, GG rose 3/4 and NEM higher by 7/8. Volume was light to average. My ABX April calls are in the black. I should probably be selling these next week but we will have to see what happens. I really do need a winning trade though, just for the confidence factor. However I don't want to sell too early either. The game is never easy. Mentally I'm doing the best I can considering my computer problems and moving onto the back-up. Like anything else you just have to make the adjustments and keep on moving. End of the month coming next week. I'll be keeping an eye on GE for a possible entry point for the May calls. Plenty of economic data to digest as well. I'll need to come up with a solid game plan for the ABX call trade. Checking all the charts on various time frames must be done as well. But for now it's Friday afternoon and time for a break.
Thursday, March 22, 2012
Lower once again as the Dow fell 78 points on light volume. The advance/declines were 3 to 1 negative. Summation index heading lower. Is this the beginning of a long awaited multi-week correction? I certainly don't know. Perhaps we'll move down to the 50 day moving average on the stock indices. Or not. All of the recent declines during this rally have been bought so far. There's no reason to think that now is any different. GE was off about 1/4 on average volume. The technicals appear to be rolling over here. Perhaps there will be an opportunity to purchase the May 20 calls at a decent price. I'm still considering that trade. I'll probably be looking at a move down to the 50 day moving average here as well. Gold lost $7 on the futures but were lower during the session. The US dollar gained a bit today. The XAU fell 3 1/2 and was weaker than the precious metal again. ABX off 1/2, GG down 1/4 and NEM dropped 3/4. Volume was light to average. I modified lower my open order for the ABX April calls last night and it was filled in the morning. They are slightly positive here at the close. I'm still thinking that this trade will work but I don't plan on holding it that long. We'll see. Mentally I'm doing as best that I can. Computer problems occurred today and I may have to buy another computer over the weekend. I'm on the back-up computer and it is not the same as regular trading operations. But the markets move on. We'll have to see how the week ends tomorrow as it seems that buyers have moved to the sidelines for now. The technicals on the stock indices have started to roll over. The next trade has begun. I'm expecting some type of bounce for the gold shares here but there's always the possibility that we just keep heading lower. The gold shares remain oversold on the technicals and the Gold/XAU ratio remains solidly in the buy zone. That hasn't mattered for some time now but it will. We'll see what tomorrow brings.
Wednesday, March 21, 2012
2 down sessions in a row as the Dow fell 45 points on light volume. The advance/declines were just about even. The overall market was stronger than the Dow again. Despite the lower prices we're still short term overbought. It seems like we are simply meandering around in the stock indices this week so far. Not a lot of economic data out to drive prices. I don't expect any major decline to be in the works but what do I know? Summation index still heading lower. GE was flat today on average volume. I'm still considering the May 20 calls there at the price I'm willing to pay. Gold was up a few bucks today but closed off of its highs. The US dollar was slightly higher. The XAU was flat on the day. ABX and GG were off about 1/8, while NEM fell 1/2. Volume was average. I still have the open order in for the ABX April calls but I may cancel it tonight. I'm still considering the May calls there as well. Feels like the gold shares are trying to make a stand here at 175 on the XAU. If we don't hold here, gold and the gold shares will be heading much lower. My thinking is that this level will hold and we'll see some type of multi-week rally. We'll see. Mentally I'm feeling OK, slept well enough. A couple days to the downside in the stock indexes but no real technical damage. I'm guessing the rest of the week will be relatively quiet. Not much else to report today.
Tuesday, March 20, 2012
A bit of downside today as the Dow fell 69 points on light volume. The advance/declines were 2 to 1 negative. We are still overbought and really need more downside than just today. The market was down more earlier but every hint of a decline is being bought. That will not last forever. The summation index is heading lower now. Perhaps we will now see some type of extended move lower. Or not. GE fell 1/8 on light volume. If the May 20 calls get into the price zone that I'm looking for, I'll buy them. They're not there yet. One day does not make a trend. If we work off the short term overbought condition here, the premiums might come down to my buy level. Time will tell. Gold fell again today, off $20 on the futures. The US dollar had a slight gain. The XAU however rose 3/4, which is the first time in a long time that the gold shares have outperformed the precious metal. I think the gold shares are at a short term bottom. ABX, GG and NEM were all up 1/8 after being lower early. Volume was good. I am going to try a short term ABX call trade. I have left in an open order for the April 45 calls in case we see some weakness tomorrow morning. There is a positive divergence on the daily RSI indicator. Todays price action was bullish for ABX and we still have a screaming buy from the Gold/XAU ratio. This trade may be too late though if we simply continue to move higher from here. So we'll see. Mentally I'm feeling OK. We'll have to see if we get any follow through downside with the stock indices tomorrow. The overall market still remains stronger than the Dow and that is usually bullish going forward. I'm trying the gold share calls again here. I could be wrong and I'm still looking to go out to May with this trade idea as well. Another factor for attempting a short term trade here is the distance that ABX has moved below its 50 day moving average. My thinking is that the price will now start to move back towards that line. We'll see.
Monday, March 19, 2012
Just another day in the marketplace as the Dow rose 6 points on average volume. The advance/declines were positive. The overall market was much stronger than the Dow. Both short and medium term overbought here and I would expect some type of pullback pretty soon here. But the market will go where it wants and we could stay overbought as we have in the last few months as the stock indices grinded higher. But I would not be surprised by some weakness near term. GE was off a touch on light volume. I am going to try the May 20 calls here if they get to a price that I'm looking for. That is one of the ideas I am looking at going forward. Overbought here as well, so perhaps I'll get a chance to purchase the calls this week. We'll see. Gold was up $11 on the futures but pulled back from there in the aftermarket. The US dollar was lower again today. Not exactly sure what is going on with the dollar here but it hasn't led to any kind of rally in gold really. That generally isn't bullish for gold. The XAU lost 1/3 after being higher early. ABX, GG and NEM all had fractional losses of 1/4 or less on average volume. I think we may get one more washout downdraft in the gold shares and I will be looking at the May calls if that occurs. That's a guess as usual. The gold shares are still oversold and staying there. The stock market is rallying and there is not any interest in the gold shares. The Gold/XAU ratio remains in a strong buy signal and nothing is happening. We are getting to be at about the most bearish that it can get for gold. That is probably when you want to step in. Mentally I'm feeling OK. Nothing has changed since the last trading session. Moving higher in an overbought environment for the stock indexes. The trend remains up. It will end at some point but trying to pick that point right now is impossible in my mind. I'll be looking for some calls on a dip. March is typically the worst month for the price of gold and that is the case so far this month. Patience is required here to get long again.
Friday, March 16, 2012
Not much action for expiration Friday as the Dow fell 20 points on heavy volume. The advance/declines were negative. Pretty overbought on the short term here and I would expect weakness at some point early in the new week. Perhaps that will bring an entry point for some calls. The trend for the stock indices remains up. A lot of housing data out next week but that's about it. GE was up a touch today and the volume remains strong. I'm now considering the May calls here if we get a pullback. I think GE has more room to the upside and it has yet to take out its recovery high at about $21. The May 20 calls could be the next trade. Gold didn't do much today, off about $3 on the futures. This despite another down day for the US dollar. The interest in owning gold has waned. The XAU was off 1/3. The gold shares were mixed again. ABX up 1/8, GG off 1/3 and NEM rose 1/8. Volume was extremely heavy here. I'm guessing that is was option expiration related. This really looks to me like a place to try the gold shares again but the recent losses that I've taken here are making me hesitate. Not to mention that the dollar has taken quite a hit in the past 2 sessions and gold hasn't really done anything. I'll consider things over the weekend. Mentally I'm feeling a bit tired, did not sleep well. The stock indexes continue to rally. Nothing seems to be in the way of that. Any dips are being bought. Until that changes, calls are the only way to go. Option premiums will be priced a bit higher for April due to the extra week involved. I'll be going over all the charts over the weekend trying to find the next opportunity. For now it's Friday afternoon and time for a rest.
Thursday, March 15, 2012
The positive expiration week bias continues as the Dow gained 58 points on average volume. The advance/declines were positive. The trend remains up until further notice. Overbought and staying there. The volume has been good on the recent rise to new highs. That would imply even higher prices yet to come. Pullbacks can still be purchased in my opinion. GE was up 1/3 on good volume. The chance to get the calls here may have passed. But like the stock indices, pullbacks can be bought. We haven't set new recovery highs here yet. Gold bounced back around $15 on the futures today as the US dollar lost some ground. The XAU was up 1/2. The gold shares were mixed. ABX gained 1/2, GG was flat and NEM off 1/2. Volume remains pretty good here. I'll be considering the May gold share calls if we get a signal but patience is probably the best course of action at this time. The Gold/XAU ratio remains a strong buy but that signal hasn't been working in this gold sell off. Mentally I'm feeling OK. Trying not to force a trade here. The stock indices remain strong and usually will go higher than most traders think. We are on the cusp of the April option cycle. There is an extra week for the April options, so the premiums will be higher than usual. I suppose there is no rush. We'll see how the week finishes tomorrow.
Wednesday, March 14, 2012
Digesting yesterdays huge gains would describe todays market action as the Dow gained 16 points on good volume. The advance/declines were almost 3 to 1 negative though. The summation index did turn back to the upside yesterday. Still short term overbought on the stock indices. I have no trades in mind here. GE was up 1/4 on good volume again. We've broken out from the congestion zone. If we get a pullback towards the zone, I may try the April calls there. I do not want to chase things here, so patience is advised. If a pullback happens I'll consider the trade. Gold got clobbered again today, off $50. The US dollar was higher. The XAU dropped 6 1/3. ABX down 2 bucks, GG lost 1 1/2 and NEM fell 1/2. Volume was heavy. The gold shares and gold are in what looks like a free fall. We are at a level on the gold shares that would normally indicate a bottom and a buy. But I am going to continue to stay on the sidelines for now. I am going to let this week pass at the least. Oversold both short and medium term here. I'm being cautious and that's what happens with a lack of confidence. Mentally I'm feeling tired, did not sleep enough. 2 days to go for the March option cycle and I will not be making any trades this week. Perhaps we will have one more run higher before the week ends. That's a guess as usual. GE's strength could mean that the rally still has legs. I'm going to wait for the May calls to open up for the gold shares. I think that perhaps near the end of the month could be the time to try that trade again. So it's a watching and waiting game for now.
Tuesday, March 13, 2012
The market took off today as we made new yearly highs in the Dow. The most watched index rose 218 points on good volume. The advance/declines were 5 to 1 positive. The summation index should be moving back to the upside after today. The market was already 100 points higher before the Fed. We didn't do much after the Fed announcement but them rallied strongly again in the final hour. We're overbought now but that hasn't meant much in this bull run. The trend remains up as there seems to be plenty of capital to go around. GE gained 1/2 on good volume as we have finally broken through the top of the trading range there. It looks like we are on our way to the old highs at $21. Probably too late to get the calls there but I'll keep an eye on things. Gold fell $5 on the futures but another $25 in the aftermarket when the Fed announcement happened. Nobody wants gold now. The US dollar was higher today. The XAU was off 2/3. ABX down 1/4, GG off 1/2 and NEM fell 7/8. Volume was good. The overall stock indices are rallying and the gold shares are going nowhere. March is historically the worst month for the price of gold. The Gold/XAU ratio buy signal isn't working. I'll be looking at the May gold share calls when I think that gold has completely washed out. Should be towards the end of this month. Mentally I'm doing OK. My mind was so tied up with the gold shares and gold that I've missed this opportunity in the stock indexes. That is a fact. The losing trades weakened whatever confidence I did have. The mental capital is always the most important. I'll be keeping an eye on things but on the sidelines for now. The stock indices are once again moving higher and there is nothing in the way to change that for now.
Monday, March 12, 2012
A day of marking time as the Dow gained 37 points on very light volume. The advance/declines were negative. The overall market was weaker than the Dow. Waiting on the Fed I suppose as the outlook going forward for interest rates will be announced tomorrow. Technically we're more overbought than oversold on the stock indices. It is expiration week for the market. I'm on the sidelines for now as my confidence is shot and I have no real trading ideas. GE was up 1/8 on light volume. No trades for me there. Gold fell $10 on the futures today as the US dollar was a touch weaker. The XAU lost 2 2/3. ABX off 1/4, GG down 3/4 and NEM fell 1 1/8. Volume there was light to average. The Gold/XAU ratio just keeps becoming a stronger buy but the gold shares are not moving higher. I don't know what to make of that. I'll probably be trying the April or May gold share calls if we get a decent technical signal on the daily charts. Oversold to be sure here now but no rally. Again, I don't know what to make of it. I think that I'll let this week pass and check the May options when they come out. Mentally I'm feeling a bit tired perhaps due to the time change. The S&P 500 is knocking on the door to new highs for the year. Perhaps we will get there after the Fed tomorrow. That's a guess as usual. I don't have any trading ideas for now. 4 days left in the March option cycle. I'll try my best to not do anything stupid. I rarely do anything good on the short term trades. I suppose it's time to sit back, study the charts and try to regain some confidence.
Friday, March 09, 2012
The employment report came and went as the Dow gained just 14 points on light volume. We were up over 50 during the session. The advance/declines were 2 to 1 positive. The overall market was stronger than the Dow. The job numbers were in line and the S&P 500 rallied back up to the resistance at around 1375 before backing off. We'll probably get through that level sometime next week. The summation index may turn back up today. GE was flat on light volume. Nothing new to report here. The technicals are not overbought or oversold. Gold had an interesting day as it opened lower on the employment report but then closed higher for a one day reversal. This occurred despite a huge rally in the US dollar. The precious metal gained about $13 on the futures. The XAU lost a point though. ABX and GG fell about 1/4, while NEM was little changed. I dumped the ABX calls for yet another loss. In fact as soon as I sold them ABX rallied and I could have cut the loss in half. But who knew that at the time? This was another trade that never showed a profit and my 3rd loss in a row for attempting the ABX calls. The loss was 70%. Despite the Gold/XAU ratio buy signal, the gold shares aren't rallying. That signal is just growing stronger. I don't know what to make of it along with both gold and the US dollar moving higher together. I might have to try the gold share calls for April because the technicals remain oversold. Or I might just sit things out for a while. Mentally I'm feeling tired, did not sleep enough. The stock indices look like they want to go to new recovery highs. With the usual positive bias of option expiration week, they should make it. My confidence is shot once again with another losing trade. It's all about the mental capital. You can't possibly be successful when you're in a trading funk. I'll have to somehow snap out of it because the markets aren't going to wait for me to feel better. But maybe when the usual reliable signals don't work, it's time to take a step back. I'll have to ponder things over the weekend and go from there. You've got to also have the ability to shake off losses and losing streaks. They are inevitable when playing this game. It isn't easy. It's now Friday afternoon and definitely time for a break.
Thursday, March 08, 2012
Today looked like a repeat of yesterday as the Dow climbed 70 points on light volume. The advance/declines were about 4 to 1 positive. There was no follow through to Tuesdays heavy selling. The market has the feel of wanting to go to new recovery highs. Of course that could all change with tomorrows employment report but I doubt it. However my market thinking has been way off lately. GE was up 1/4 on light volume. We are moving up off of oversold technicals on a daily basis for GE. N0 trades in mind for GE at the moment. Gold was up today again as well, gaining $15 on the futures. We are back at $1700 for the yellow metal. Might see some resistance here for gold. The US dollar took a hit today as the worries over Greece subside for now. The XAU rose 2 1/4. ABX and NEM up 1/4 while GG gained 3/4. Volume was weak. I'm still holding the ABX calls at a loss as I have yet to have a chance to get out with a profit. That may not happen, depending on tomorrow. However the Gold/XAU ratio continues to be in the buy zone. The daily candlestick chart for ABX looks bullish and the technicals are oversold. Having a long gold share position here seems to be the correct choice but the market will go where it wants. Mentally I'm feeling tired, did not sleep enough once again. All eyes will be on tomorrows employment report. I have no idea what it will contain but watching the market reaction will be the key. The volatility has picked up this week. That is helping to keep up the pricing of the option premiums. The gold shares haven't kept up with the bounce in gold and the volume has been weak. That isn't bullish going forward. I'll need to take another hard look at the ABX calls tomorrow if they ever turn profitable and even if they don't. We'll see what happens overnight and wait for the employment report.
Wednesday, March 07, 2012
We got a snap back today as the Dow gained 78 points on light volume. The advance/declines were almost 4 to 1 positive. I don't think you can read too much into todays action. It was a light volume affair. The McClellan oscillator had gotten very negative and a bounce was warranted. Tomorrow should be a waiting for Fridays employment numbers session. No OEX trades in mind at the moment. GE was up 1/3 on average volume. That could bode well for the overall market going forward. Or not. GE is trying to hold up at its 50 day moving average on the daily charts. Gold was up over $10 today as the US dollar fell a bit. Another snap back here as well. The XAU was down almost 1/4. ABX was flat on the day, GG fell 1/4 and NEM off 1/2. I'm still holding the ABX calls and they are in the red. The gold shares never got going today like the overall stock indices. I never had a chance to exit the trade at break even or a profit. The daily chart on ABX is potentially putting in a bottom, with 2 bullish candlesticks. The Gold/XAU ratio is still flashing a buy signal. So we'll see what happens. Mentally I'm feeling a bit tired, could have slept longer. So it looks like I'll be waiting for the employment report on Friday along with everyone else. I think the ABX trade could actually work out but the price action tomorrow will be important. I will probably dump the calls if they get back to a profit. The gold shares are still oversold and there is a Gold/XAU ratio buy signal. If that doesn't signal higher gold share prices coming, I don't know what does.
Tuesday, March 06, 2012
We finally got some downside today as the Dow registered its biggest loss of the year. We fell 203 points on average volume. The advance/declines were over 10 to 1 negative. The Greek worries are back for whatever reason. I think eventually we'll see a default there but that's just my opinion. My opinion hasn't meant much lately as whatever I thought was about to occur just hasn't happened. My market thinking is way off and that is costly. The McClellan oscillator is very blown out to the downside and I would expect some type of snap back for the indices. But I thought that yesterday as well. Not sure exactly what will happen near term so It's the sidelines with regards to the OEX. GE was down 3/8 and it was a gap down as well. Starting to break through to the downside from the congestion of the past 2 months. That isn't a bullish sign going forward. No trades planned for GE here as well. Gold got clobbered again as the US dollar rose on the flight to safety trade. The precious metal was down over $30 on the futures. The XAU dropped 4 points and it could have been worse. ABX and GG were both off a buck, while NEM fell 3/4. Volume was good. I left in an overnight order for some ABX calls and it was filled when we opened. Somehow, they are still priced right where I bought them. The Gold/XAU ratio buy signal is still in effect. That, combined with the oversold technicals on the gold shares was why I put this trade on. But the environment has changed and I will need to exit this trade quickly. Tomorrow if we get some kind of bounce. Only 8 days left in the March option cycle. Mentally I'm feeling OK, slept well enough. It really looks like we have rolled over here for the stock indices and anything is possible. Volatility is back. I haven't had a handle on things market wise lately and that is dangerous for the trading account. My strategy at this point is to exit the ABX call trade as soon as possible and take to the sidelines. There may be a chance to try the OEX March calls at some point if we get completely oversold. However my ability to determine when that is has diminished. We'll see what happens overseas tonight and take it from there.
Monday, March 05, 2012
Tried to sell off today but the Dow only lost 14 points on light volume. We were down over 80 early. The advance/declines were negative. Summation index heading lower but I think we're in for a short term bounce. I could be wrong. The overall market remains weaker than the Dow. We've got the employment numbers on Friday and not much of significance before that. I may try the OEX calls if we actually get an oversold signal but it hasn't happened yet. GE was off 1/8 on light volume. Almost made it to the 50 day moving average on the daily charts but I'm leaning towards another trade elsewhere. We've been moving sideways here since the year began. The Bollinger bands contracted and we have yet to see a breakout as expected. Gold dropped around 6 bucks today and the US dollar was a bit weaker as well. The XAU fell 4 1/3. ABX down 2/3, GG off about 1 1/4 and NEM shed a buck. Volume was average. The technicals on the gold shares are now short term oversold and the Gold/XAU ratio gave us a buy signal today. All signs point to attempting a gold share call trade here in the short term. I almost did it today but hesitated due to the recent 2 losing trades attempting this. I'm pretty sure that if I see some weakness in the gold shares tomorrow morning that I am going to try this trade again. GG lost some of its relative strength today so I may go with ABX again. I'll consider this tonight and go from there. Mentally I'm doing OK but didn't feel all that good this morning. I'm hearing a lot of chatter about how the market should be going down now. Which leads me to believe that we might just start heading back up again. March is generally a decent month for stocks. All signs point to trying the gold share calls here but today may have been the day to do it. We'll have to see what happens tomorrow morning if I'm going to try that trade again. It's hard to just follow the technicals sometimes when your confidence is low but that's what needs to be done. It would have to be a short term trade and those are not my best. We'll see what happens overnight and take it from there.
Friday, March 02, 2012
It was downer all day today although the Dow only fell 2 points on very light volume. The advance/declines were 2 to 1 negative. The overall market was weaker than the Dow. Summation index still heading lower. Moving sideways now for major stock indices. The TRAN and the RUT have already rolled over. I'm not exactly sure what that means. GE was off 1/8 on light volume. Perhaps a trade will be viable when it reaches the 50 day moving average on the daily charts. But I'm more inclined to look for the next trade elsewhere. We'll see. Gold fell over $10 on the futures today as the US dollar had a strong day. The dollar looks like it has turned around here and that won't be bullish for gold. The XAU dropped 3 1/3. ABX off about 2/3, GG fell 3/8 and NEM down 3/4. Volume was light. Not completely oversold on the gold shares yet and there isn't a Gold/XAU buy signal. GG continues to show very good relative strength even when the gold shares are falling. Mentally I'm feeling OK. I still don't really have a good trading idea with two weeks left in the March option cycle. There isn't a decent signal one way or the other right now for the stock indices in my opinion. Hopefully that will change. I'll be checking the charts over the weekend to come up with some type of game plan going forward. For now it's Friday afternoon and time for a break.
Thursday, March 01, 2012
A bounce back today as the Dow gained 28 points on lighter volume. The advance/declines were 2 to 1 positive. The overall market was stronger than the Dow. Still a negative divergence on the RSI for the stock indices but no meaningful decline yet. Perhaps todays action was dictated by the beginning of the month money flows. I suppose I will continue to look for higher prices going into the March expiration. I would like to try the OEX March calls but not without some downside first. GE was flat on light volume. Still a sideways affair here. I'm looking elsewhere for a trade. Gold had a slight bounce back after yesterdays debacle. It gained $10 on the futures as the US dollar finished near unchanged today. The XAU rose 2 points. ABX up 1/3, GG gained a buck and NEM tacked on 1/4. Volume was average. We've blown out to the downside in gold. It will probably take a while to build a base and recover or we will continue lower. I'm willing to try the April or May gold share calls eventually but patience for now will be required. Mentally I'm feeling OK. The stock indexes continue to grind higher. It has been an incredible run and there seems to be no end to it. But it will end at some point. When that is, is anybodies guess. I don't have any good set ups right now and I have no solid trade ideas either. I'm going to have to stay on the sidelines until some type of signal one way or the other develops. The losing ABX trade is history and moving ahead is the proper course of action. I will try and not let the loss affect my trading going forward.