Monday, April 30, 2012
We ended the month of April with a slight loss as the Dow fell 15 points on light volume. The advance/declines were negative. The overall market was weaker than the Dow. The week could just end up being a waiting game for Fridays employment numbers as far as the stock indices are concerned. That's just a guess as usual. I would expect to see some beginning of the month money flows in the next couple of days though. I have no OEX trades in mind here but I'd be leaning towards the calls. GE was off about 1/4 on very light volume. No hurry to put on any trades here but I am looking out to the July calls. Gold was flat on the day after selling off early. The US dollar gained just a bit. The XAU fell 7/8 and was lower early on as well. ABX and NEM dropped 1/4, while GG lost 7/8. Volume was light. My ABX May calls are still very much in the red with the exception of the purchase at the lower strike price. Simply waiting for the earnings out on Wednesday morning. That will determine if the loss will be big or small. Three weeks left for the options but I doubt I'll be holding on for that long. We'll see. Mentally I'm feeling OK. The stock indexes were getting short term overbought and todays action relieves some of that condition. Todays daily candlestick pattern on the RUT looks ominous so we will have to see how things play out going forward. Gold sold off and then came all the way back. Perhaps that will be bullish going forward. Just a waiting game on the May ABX call trade at this point. We'll keep an eye on the foreign markets tonight and go from there.
Friday, April 27, 2012
We finished off the highs of the day but the Dow still managed a gain of 23 points on light volume. The advance/declines were 2 to 1 positive. The GDP number was lower than expected but the stock indices shrugged it off. The trend is now up. The summation index is moving higher. Declines can now be purchased, in my opinion. End of the month on Monday. GE was up 1/8 on light volume. Getting to short term overbought here. Perhaps GE will take a rest now ahead of next Fridays employment report. The overall market could follow this pattern as well. Gold was up $4 on the futures as the US dollar sold off on the weak GDP report. The XAU gained 2 1/4. ABX up 3/4, GG rose 3/8 and NEM gained 1/8. Volume was light with the exception of NEM. The earnings for NEM were in line with expectations and the stock finished well off of the highs. My May ABX calls are mostly still in the red. I might be able to cut the loss a bit if the earnings surprise to the upside next week. At any rate it looks like a loser overall. Mentally I'm feeling OK. The stock indexes are getting short term overbought here, so a pause would not be unexpected. The key to next week will be Fridays employment numbers but if we are in rally mode they will be interpreted as positive regardless. We'll see. Gold had a pretty good week for a change and we will have to see if there is any follow through next week. The ABX earnings on Wednesday will tell a lot about whether the May call trade has a chance. At this point it's in the cut the loss mode. Not much else from here on a Friday afternoon. I'll check the charts over the weekend and go from there.
Thursday, April 26, 2012
Three days in a row to the upside as the Dow gained 114 points on what passes for average volume these days. The advance/declines were 2 to 1 positive. Summation index continues to the upside, so higher stock prices can be expected in the future barring some unforeseen event. The stock indices are in rally mode. Calls are the way to go here. We've got the 1st quarter GDP tomorrow but whatever the number is, it looks like we will simply continue to the upside. GE was up about an 1/8 on light volume. Things are looking constructive there as well but there is no hurry to put on a trade. Gold had a good day as the futures rose $18 with the US dollar a bit weaker. The gold shares did not follow as the XAU fell 2/3. ABX was flat, GG lost 2 1/3, while NEM was up 1/4. Volume was extremely heavy in GG as the earnings disappointed and the stock got crushed. NEM announces its earnings report before the open tomorrow. My ABX May calls are still losers with the exception of the lower strike price purchase. I'll wait for the earnings next week and go from there. The volume on the May ABX calls was really big today. We'll see how that plays out going forward. Mentally I'm feeling OK. The stock indexes are in rally mode and we will see if we can take out the March highs. I believe that we will but time will tell. Tomorrows GDP report should be a mover for the US dollar and hence gold as well. We're still oversold on the gold shares and still in the extreme buy zone on the Gold/XAU ratio. Hasn't meant any price upside though in the past few weeks. My feeling is that it won't stay that way forever.
Wednesday, April 25, 2012
A rally from the open today as the Dow gained 89 points on average volume. The advance/declines were 3 to 1 positive. The earnings from Apple were the catalyst for todays market action. The Fed announcement was a dud. Nothing new stated there. The summation index should now be moving back to the upside which means that this rally could have legs. The next important piece of news will be the 1st quarter GDP report out on Friday. GE was off a touch after being much higher early. Not exactly sure what that means going forward. No trades in the near term there for me but I am still perhaps interested in the July calls. Gold had a volatile session as it sold off hard on the Fed announcement but came all the way back to finish virtually unchanged. The US dollar was slightly lower. The XAU gained 3 1/8 as the gold shares outperformed the precious metal for a change. ABX up 1/3, GG rose 5/8 and NEM led the way higher by 1 1/8. Volume picked up here. The majority of my May ABX calls are showing a loss, with a slight gain for the lower strike price purchase. We'll get GG earnings tonight followed by NEM tomorrow morning. If they are halfway decent perhaps ABX will rise in sympathy. The ABX earnings are due next week. Not sure that will help this trade but I will probably hang on until then. Mentally I'm feeling tired, did not sleep enough. The Fed has come and gone and the market is now in rally mode. The small stocks had a gap to the upside this morning and that is very bullish. Calls are in order for the stock indices. Gold made a good comeback today but it still seems like it is just dead money there. We will need to see some type of upside follow through there for my gold share calls to have a chance. And by that, I mean a chance to cut the loss. We'll see how the overseas markets fare tonight and go from there.
Tuesday, April 24, 2012
A mixed market today as the Dow was higher but the NASDAQ lower. The Dow gained 74 points on light volume. The advance/declines were 2 to 1 positive. Waiting on the Fed here in my opinion. We will wait for that announcement tomorrow and see how the markets reacts. The summation index continues lower. GE was up 1/2 today on OK volume. If GE is a precursor for the overall market, then a rally is imminent. That is yet to be seen though. Gold was back up $10 on the futures as the US dollar was weaker. The XAU was flat. ABX and NEM were down a touch, while GG gained 3/8. Volume was light. GG earnings out tomorrow after the close. My order for the May ABX calls at a lower strike price was filled today and they are slightly in the black. The original ABX May call trade remains mired in the red. Tomorrows Fed announcement should produce some movement in the gold shares one way or the other. Very oversold both short and medium term for the gold shares but we have yet to see any type of rally. Mentally I'm a bit tired, did not sleep enough. All eyes and ears on the Fed tomorrow and if GE along with the transportation index are leaders as they often are, then I'm looking for some type of stock index rally. But anything can and will happen. It could also just be a non-event but I doubt it. Of course I'll be keeping an eye on what gold does. Earnings this week for GG and NEM. That will also produce some movement in ABX. We'll see what happens tomorrow.
Monday, April 23, 2012
A negative start to the week as the Dow fell 102 points on light volume. The advance/declines were over 2 to 1 negative. The stock indexes started the day with a huge decline at the open and never really recovered. The summation index continues lower. I'm not sure what is going on here but the weak volume isn't a positive. Perhaps we are simply marking time until the Fed announcement. Getting short term oversold on the daily charts but we aren't there yet. GE had a gap to the downside and finished off 1/3 on light volume. No trades in mind here but I am starting to consider going out to the July calls. There is no hurry though. Gold fell $10 on the futures but came back a bit in the aftermarket. The US dollar was higher today. The XAU fell 3 points but was lower early. ABX off 5/8, GG fell 1 1/3 and NEM dropped a buck. Volume was heavy here. My ABX May calls are still very much in the red and this trade is looking like a big loser. That said, todays action seems like a washout to the downside. The daily candlestick chart for ABX appears to have formed a hammer or star today. I'm leaving in an overnight order for some more ABX calls at a lower strike price. This isn't something that I would normally do but unless the stock indices and gold simply collapse here, it looks like a bottom for the gold shares. The Gold/XAU ratio is the highest that I've seen it in years. We'll see. Mentally I'm feeling a bit tired, did not sleep well. We're still in a sideways consolidation on the daily charts for the S&P 500. Plenty of economic data this week so perhaps we will break out one way or the other. I've been a believer in the gold shares here and so far that is not working out. If we don't see some upside this week I'll probably just have to take my losses and move on. Waiting on the Wednesday Fed announcement.
Friday, April 20, 2012
We came well off the highs of the day but the Dow managed to close with a gain of 65 points on average volume. The advance/declines were 2 to 1 positive. The overall stock indices were weaker than the Dow. Basically sideways for a couple of weeks now after the recent decline. I still think we could go either way here. The GE earnings came out and the market liked what it saw. The stock gained 1/4 on good volume but also came off of its highs. It really wasn't the type of gain that I was looking for though. I don't have any trades in mind here at the moment. Gold was up a buck or so on the futures despite a weaker US dollar. The XAU fell 1 1/2. ABX off 2/3, GG was flat and NEM dropped 1/2. Volume was light except for ABX which was average. My ABX calls are now deeply in the red. We have also now broken down through the recent congestion zone with todays negative action. It appears that my idea for the gold shares here is wrong. There are still 4 weeks to go in these options but we would have to turn around a lot in a hurry. I'm still holding them until we see what happens next week. Mentally I'm feeling OK, slept good enough. Plenty of economic data out next week so we will have to see how the market reacts to it. The stock index technicals are still mid-range on the daily charts. Right now it looks like gold is simply dead money. The US dollar fell today and gold didn't even move. The Gold/XAU ratio is deeply in the buy zone again and nothing is happening. There seems to be absolutely no interest in owning the gold shares. I built a position in the ABX May calls and it's looking more and more like a loser. I'll check the charts again over the weekend and get ready for Monday morning. We could be in a holding pattern until the Fed announcement on Wednesday. For now it's Friday afternoon and time for a break.
Thursday, April 19, 2012
A mostly down session today as the Dow fell 68 points on average volume. The advance/declines were negative. The summation index continues lower. The stock index technicals remain mid-range. We still could go either way here. If we do start to fall and get a positive divergence on the McClellan oscillator, that would be a decent buy signal in my opinion. Or the market could simply continue higher from here. I think that for now it's still a toss up. GE was flat on the day and the volume was pretty good. The earnings out tomorrow will probably set the trend for the stock indexes for the day. The technicals here are neither overbought or oversold. Any position in GE held now has a lot of risk. Gold was up a couple bucks on the futures and the US dollar bounced around but finished the day basically unchanged. The XAU was up early but closed the day with a 1/4 point loss. ABX off 1/8, GG was up 1/2 and NEM off a touch. Volume for the gold shares was nothing special. My ABX May calls continue in the red as the time decay occurs. I'm going to at least hold on here until at least next week. Oversold both short and medium term for the gold shares but they haven't rallied. The market will do what it wants. Mentally I'm feeling tired, did not sleep enough. Expiration Friday tomorrow. We'll get through that and wait for next week when we get the Fed, 1st quarter GDP and some gold share earnings. Patience is required sometimes.
Wednesday, April 18, 2012
Back to the downside as the Dow fell 82 points on light volume. The advance/declines were 2 to 1 negative. The McClellan oscillator is trying to get through the zero line but has failed once again. This will keep the summation index continuing lower for now. The stock index technicals are mid-range, which means we could go either way here. Worries about Spain today but any excuse will do. The volume has been pretty anemic lately and we would need some volume to push prices higher. The overall market was better than the Dow and that is usually a positive going forward. GE lost 1/4 on light volume. Just waiting on the earnings report due Friday. Gold fell $11 on the futures and the US dollar really didn't move much today. The XAU dropped a point. ABX off 1/4, GG fell 7/8 and NEM lost 3/8. Volume light here as well. I left in an open order for some ABX May calls and it was filled this morning. The position has now been completed on the buy side. It is already under water but I plan on holding it for a couple of weeks unless we have some type of market breakdown. We'll see what happens. No interest in gold at the moment. Mentally I'm feeling a bit tired, did not sleep enough. 2 days left in the April option cycle. The gold share call position has been established. We'll see what tomorrow brings.
Tuesday, April 17, 2012
A huge day to the upside as the Dow climbed 194 points on light volume. The advance/declines were 3 to 1 positive. Some good earnings reports but nothing really out of the ordinary. Coming off of the recent short term oversold condition. The question now is the recent decline done? I certainly don't have the answer but it could be. It is expiration week and the positive bias seems to be in effect. Today was also the last day to contribute to retirement plans due to the income tax deadline. We'll have to see if there is any upside follow through tomorrow. GE rose 3/8 on light volume. Earnings out on Friday. No trades there for now but the calls are looking good after todays action. Tomorrow is another day. Gold was pretty much flat on the day after selling off early. The US dollar was flat. The XAU rose 1 3/4. ABX up 1/2, GG gained 1/3 and NEM 1/8 higher. I tried to complete yesterdays ABX trade but the order was not filled. I'm leaving it in overnight. I'm still thinking that the calls are the way to go here and going out to May is the strategy. We'll see what happens. Mentally I'm feeling OK. The S&P 500 is trying to hang on at its 50 day moving average line on the daily charts. How that is resolved will probably let us know the near term market direction. The summation index is still heading lower but another day like today will reverse that. Hasn't happened yet. When gold sold off early today, the gold shares didn't follow. That could indicate positive action coming up for the gold stocks. Or not. I'm still a believer in getting long the gold shares here but I've been wrong before. Quite often this year with the gold shares as well. We'll see if the foreign markets follow us higher tonight.
Monday, April 16, 2012
A mixed day in the markets as the Dow gained 71 points on light volume. The advance/declines were positive. The overall market was much weaker than the Dow and that usually isn't bullish going forward. The technicals are still more oversold than overbought. Summation index heading lower. It's option expiration week. GE was flat on the day and the volume was very light. Could be in a holding pattern until the earnings report on Friday. That's a guess. No trades here for me at the moment. Gold fell $10 on the futures with the US dollar lower as well. Not exactly sure what that means. The XAU dropped 2 1/3. ABX off 3/4, GG fell about 1/4 and NEM down by 1/2. I tried to add to my ABX May call trade but my order was only partially filled. The ABX calls are in the red but I still think this trade is the way to go. I'm not sure if I'll try and complete the rest of todays partial fill tomorrow. We'll see. Mentally I'm feeling OK. I get the feeling the stock indexes could go either way here. I think that I would still wait for a positive divergence on the McClellan oscillator before trying the OEX calls. However there are only 4 days left for the April option cycle. The Gold/XAU ratio is at the point where the risk/reward for trying the gold share calls clearly favors an attempt. That's one of the reasons I'm giving them a shot. Plenty of time for the trade to work is another advantage in trying them here and now. We'll see what happens.
Friday, April 13, 2012
Back to the downside today as the Dow closed the week with a loss of 137 points on light volume. The advance/declines were 3 to 1 negative. We got an oversold bounce and it now looks like we'll head back to test the recent lows early next week. We are still more to the oversold side on the daily stock index charts. The summation index continues lower. I'd like to think that I have an idea of which way we are going but I don't. I will probably look for a positive divergence on the McClellan oscillator next week and perhaps trade that. However it will be option expiration week. That usually brings with it an upward bias but with the recent volatility, anything goes. GE was off 3/8 on light volume. Earnings out in a week and I'm most likely not going to trade this issue in the near term. I was fortunate to get out of the GE trade that I did this week without a loss. The weekly technicals have rolled over to the downside here. Gold fell $20 on the futures today as the US dollar had a good day to end the week. The XAU fell 2 3/4. ABX off 5/8, GG dropped 1/3 and NEM lost 7/8. Volume was light. I bought some ABX May calls this morning. I'm a believer in this trade. The gold shares are oversold both short and medium term. Going out to May gives this trade plenty of time to work. I might even add to the position next week. Todays gain in the US dollar could be a problem for golds bullish case and it will have to be kept an eye on. As usual my idea here could be completely wrong as well. Mentally I'm feeling OK, slept better for a change. Volatility has returned to the stock market for whatever reasons. There may be something going on here that we will only find out about later. Trading could be even trickier than usual. I'm trying the gold share calls again and that hasn't really worked well for me so far this year. I'll go over the charts again this weekend and take it from there. It's Friday afternoon and time for a break.
Thursday, April 12, 2012
A huge day for the stock market as the Dow gained 181 points on light volume. The advance/declines were about 5 to 1 positive. The sellers have disappeared for now. This bounce seems like it is the beginning of a move to new highs with todays action. Time will tell. No reason that I can see for such a huge move except for moving off of an extreme oversold short term condition. We'll see how we end the week tomorrow. GE was up almost 1/3 on light volume. I dumped the GE calls that I bought earlier this week for a slight 10% gain. The volume on the bounce here has been very light. This trade might be worth holding on to but I'm gone. The entry was early and this wasn't the most well planned idea. Gold gained $20 on the futures as the US dollar fell today. The XAU soared 6 points. ABX up 1 1/8, GG added 1 1/3 and NEM higher by 1 1/2. My order for the ABX May calls wasn't filled. I'm leaving it in overnight. This is a trade that I would really like to be in and I hope that I'm not too late. Gold is moving higher for no apparent reason and now the gold shares have taken notice. Mentally I'm feeling tired, did not sleep enough. The stock market has bounced pretty strong here. I did not expect it. The volume has been light though. My mind was taken up with the GE trade and I should have been paying attention to the gold shares. I was but it's better for me to do one trade at a time. There's still time for the gold share trade in my opinion but I should already be there. The small profit in GE is better than a small loss. However you don't trade options for small gains. I'll keep moving on to the next trade. 6 days to go in the April option cycle. We'll see what tomorrow brings.
Wednesday, April 11, 2012
We got a bounce today but finished off the highs as the Dow gained 89 points on light volume. The advance/declines were about 4 to 1 positive. I'm not convinced that this is anything but a bounce due to the light volume. But I could be wrong. We're still oversold in the short term for the stock indexes. The McClellan oscillator is bouncing as well. Tomorrow could tell a lot, one way or another. We haven't been as oversold on the stock indices since November. However if this is going to be a multi-week affair to the downside, the oversold condition will persist. It's really anybodies guess. GE was up 1/4 on light volume. The April calls I bought yesterday are slightly in the red. They were back at break even early in the session. This is a trade that I do not want to hold into the earnings report next week. I'll have to see how we open tomorrow and go from there. Gold was flat on the day and the US dollar was off a bit. The XAU fell 2 3/4. ABX off 3/8, GG down 7/8 and NEM lost a buck. Volume was light. My open order for the ABX May calls wasn't filled and I have left it in place. No interest in the gold shares today. I'm still probably going to try this trade if we see some weakness tomorrow. Mentally I'm feeling OK. Inflation data on tap for the next couple of days. I'm going to have to do something with the GE trade by the end of this week or I'll be holding it longer than I want. Hopefully if it moves into a profit tomorrow, I'll dump it. I'll be keeping an eye on gold overnight and be ready for the gold share calls tomorrow on any weakness.
Tuesday, April 10, 2012
The market got clobbered today as the Dow fell 213 points on good volume. The advance/declines were 6 to 1 negative. Oversold and staying there. That hasn't happened for a while and it certainly isn't bullish. The McClellan oscillator is now even more oversold than yesterday and a bounce is imminent. But it is probably going to be nothing more than that. Something has changed here and I don't know what. We've broken the 50 day moving average on the S&P 500 daily charts and that is another negative. Earnings are starting to come out and perhaps the market knows they won't measure up. GE fell about 1/2 on good volume. I bought some April GE calls this morning and they are firmly in the red. This is a trade that probably isn't going to work. I don't think that I'll be waiting for the earnings report next Friday. If we bounce I will probably simply take the loss. I do not want to be wrapped up in this trade for long. Gold had a good day on the flight to safety. The precious metal gained another $15 on the futures. The US dollar didn't do much today. The XAU was higher by 1 1/8. ABX up 1/2, GG rose 3/8 and NEM led the way with a gain of a buck. Volume was good as money moved into the gold shares. The gold shares should be the next trade. Going out to May is the idea here. I'm leaving in an open order for some May ABX calls. The Fed is out with some words tomorrow and perhaps that will lower the price of the gold shares. That's a guess as usual. Mentally I'm feeling tired, did not sleep enough again. The stock indexes are practically in free fall. I'm not sure what is going on. Taking on the GE trade today was a mistake. I'll need to exit with any rebound there. I'm going to try the gold share calls again. It hasn't worked lately. We'll probably see some weakness in the foreign markets but I expect some type of rebound at some point tomorrow in the US. That's a guess as usual. It is probably a time to be careful as volatility has returned.
Monday, April 09, 2012
A downside start to the week as the Dow fell 130 points on light volume. The advance/declines were about 4 to 1 negative. Summation index continues lower but the McClellan oscillator is at an area where a bounce can be expected. We are also short term oversold on the stock index technicals. I think any downside tomorrow can be bought for the short term. Beyond that, who knows? It should be an interesting week. GE dropped 1/3 on light volume with a gap to the downside. Oversold on the short term here as well. Not exactly sure what trade to take here but I'm now leaning towards the April calls. This would be a trade that hinges on the earnings that are due on expiration Friday in 9 trading days. Risky is the key term here. I do not think that I'll be trying the May calls here as previously planned. We'll see. I could change my mind tomorrow. Gold was up about $14 on the futures as the US dollar dropped a bit today. No real interest in gold here it seems to me. The XAU was up 2/3. ABX, GG and NEM were all up around 1/4 on light volume. The gold shares are blown out to the downside and I am considering the May ABX calls here even though my last few trades here haven't worked. The Gold/XAU ratio is off the charts and in the past that has been a reliable buy signal. I'm a believer that you have to buy things when nobody else wants them and that is certainly the case with gold at the moment. I could be wrong and often am but I still think this is a trade that I'm going to put on this week. Mentally I'm feeling a bit tired, did not sleep enough. Haven't really seen 4 days in a row to the downside for stock since last year. Is it the beginning of something longer to the downside or is it time to buy? Everyone is looking for the answer to that question. I do expect a bounce in the next couple of days. It's what happens after that to keep an eye on. Gold is going nowhere and the gold shares are in a funk. I still think that going out to the May calls there has a chance to work. We'll see how the overseas markets react to todays negative US stock market action and go from there.
Thursday, April 05, 2012
Kind of a waiting game for the stock market today as the Dow fell 14 points on holiday light volume. The advance/declines were negative. Summation index still heading lower. The technicals for some of the stock indexes are finally getting oversold on a daily basis. However tomorrows employment report should set the tone for the open on Monday. I have no idea what that will bring. We'll see what happens in Europe tomorrow, have a long weekend and go from there. GE was off 1/4 today on light volume. The weekly charts appear to have rolled over here. That would not bode well for the overall market if it continues. I will have to reassess my idea for the May calls here. Getting oversold on the daily charts. Gold bounced back a little over $15 today and the US dollar was higher as well. The XAU was off 1 3/4. ABX down 5/8, GG fell 1/3 and NEM dropped 3/4. Volume was still pretty good despite the holiday mode of the markets. The gold shares are very oversold and the Gold/XAU ratio is off the charts to the buy side. I will have to consider getting the calls here again but that hasn't worked lately. Mentally I'm feeling OK. I will be going over the charts this weekend and try to come up with some type of game plan for next week. 2 weeks to go in the April option cycle. My trading hasn't been very good lately and that will have to change for the better. It's a long weekend and time for a rest.
Wednesday, April 04, 2012
It looks like perhaps we're in store for an extended sell-off as the Dow fell 124 points today on average volume. The advance/declines were 4 to 1 negative. We did finish off of the lows but the action was decidedly negative. Yesterday we were down but did finish well off the lows. However today did not follow through to the upside. The summation index continues lower. We would have to have the stock indexes hold right where they are for the action to remain sideways. Doesn't feel like it. GE was down 1/4 on average volume. The May calls have gotten cheaper and may even get cheaper still. I will probably try this trade when the technicals get oversold. We're almost there. Gold continued lower, falling over $50 on the futures due to the Fed fallout from yesterday. The dollar also gained more ground today. The XAU dropped 6 1/3. ABX down 1 2/3, GG fell 2 3/8 and NEM off 1 7/8. Volume was heavy and it could have been a downside blow-off. Or not. GLD broke the near term support at 158. I will have to rethink my overall scenario for gold and the gold shares going forward. Obviously my thoughts here have been bullish but that has been wrong. Mentally I'm feeling tired, did not sleep enough. The stock indices are perhaps on the verge of an extended decline. That's a guess as usual. Some of the daily charts have pulled back to their 50 day moving averages. It will be telling if they hold or not. Gold is falling apart here and I don't think I'm ready to step in just yet. One trading day left in the week and the employment report coming out on the holiday. Things seem a bit more interesting than usual.
Tuesday, April 03, 2012
A downer for the markets today as the Dow fell 65 points on slightly better volume than yesterday. The advance/declines were about 2 to 1 negative. The Fed beige book was a mover today as we sold off on the expectation that the easing is done. Well rates are at zero, so the easing has been done for a while. But the markets need excuses to move and that was todays. We were off more than 100, so a comeback was made. The summation index is still trending down. I expect the rest of the week to be quiet but I thought that yesterday as well. GE fell a touch on light volume. The technicals have rolled over here and I'm still looking for an entry point for the May calls. The game plan is to own the calls before the earnings report on expiration Friday. We'll see. Gold got hammered today after the Fed minutes. The precious metal was down $7 on the futures but lost another $25 in the aftermarket. The US dollar in contrast had a very strong day. This doesn't bode well for gold in the near term. The XAU fell 5 1/2. ABX off 1 1/4, GG shed 2 1/2 and NEM dropped 1 3/4. Volume was good to the downside. I had to dump the ABX April calls for a 30% loss. What had been a profitable trade turned into a loss rather quickly. However I was slow to get out as well. I'm still interested in the May gold share calls but I'm going to have to see how todays negative action plays itself out. Mentally I'm feeling OK, slept well enough. Although I'm still looking for higher prices here for the stock indices there is a possibility that we simply move sideways for a time. The month of April sometimes plays out like that. The technicals for the stock indexes are either overbought or mid-range. I'm still a believer for the GE May call trade for now. The recent ABX trade loss could have been avoided with better timing and tactics but that is always the case. The entry there was lazy and the exit wasn't quick enough. That is a recipe for failure. I'll have to regroup and try to do better the next time. If GLD breaks through 158, then I think the time for being long gold will have to wait. So I'll keep an eye on that. The Gold/XAU ratio has remained in the strong buy zone for so long that it is beginning to seem irrelevant. I'll probably stay on the sidelines for the rest of this week and go from there.
Monday, April 02, 2012
The Dow started off the shortened holiday week with a gain of 52 points on light volume. The advance/declines were about 3 to 1 positive. No news to speak of today. The technicals are still overbought for the stock indexes. However I'm still looking for higher prices going forward. I suppose we'll simply wait for the employment report on Friday although the markets are closed that day. Could be interesting. GE was off a touch on light volume. I'm waiting on the May calls there to get to a price that I'm willing to pay. Gold was up around $7 on the futures as the US dollar was lower. The XAU gained 3 1/2. ABX up 3/4, GG rose a buck and NEM added 7/8. Light volume here. My ABX calls are still in the black but the option premium is not moving as much as I would like or expect. Perhaps this is simply a case of it being a holiday week and the major players have found other ways to occupy their time. That's a guess as usual. The technicals have turned to the upside for the gold shares and that's a positive going forward. I'd still like to try the May gold share calls if the opportunity presents itself. I'm holding the April ABX calls for now but may simply dump them this week. Mentally I'm feeling OK, slept well enough. Perhaps todays market action will turn the summation index back to the upside. The positive beginning of the month money flows should stave off any major decline this week but you never know. We've got the Fed beige book tomorrow but the last time we got this, it was a non event. The Gold/XAU ratio is still in the buy zone but it has been for weeks. I'll be watching how the ABX calls move and take it from there.