Thursday, May 31, 2012
We bounced around today ahead of tomorrows employment report and finished the day with a loss of 26 points on the Dow. The advance/declines were slightly negative and the volume was pretty good for a change. Perhaps due to the end of the month but that's just a guess. We were down 100 points early and made it all the way back to positive territory before falling once again. The US economic data was weak and there was no new news out of Europe. Anything can happen tomorrow and I certainly don't know what will occur. However I'm still a believer that there will be higher prices coming soon. There is way too much bearishness around. GE was up a touch on average volume. I'm still considering the July calls here. Gold lost just a buck after coming back from its early lows. The US dollar was a touch higher today. The XAU fell 1 1/2. ABX was flat while GG fell 1/2 and NEM dropped 2/3. Volume looked to be average. I'm still leaving in the open order for the June ABX calls. The relative strength of ABX lately has been strong for the gold mining stocks. I would like to do this trade but I am not going to press the issue. If the price ABX declines to fill my option order, I'll take it. If not I'll be looking elsewhere. Mentally I'm feeling tired, did not sleep enough. So we'll get the jobs report, the market will react and then what? We're still at the mercy of Greece, Spain and whatever else happens in Europe. There is no easy solution there and no quick fix. A tougher than usual trading environment. Technically it looks like some of the stock indices are trying to put in a short term double bottom. Time will tell on that. We'll get through tomorrow and go from there.
Wednesday, May 30, 2012
European worries are back on center stage as the Dow fell 160 points on light volume. The advance/declines were 6 to 1 negative. Headline risk remains the variable here for trading. The economic data out today in the US was weak but everything seems to take a back seat to Europe. Know the trading environment and act accordingly. I am still of the belief that we are not on the verge of some type of major market collapse here. I could be wrong and often am. GE was off 1/3 on average volume. I'll probably be getting some July calls here if we work our way back to around $18.50. No rush to purchase at the moment. Gold was higher on safe haven buying, with the futures up about $15. The US dollar was up as well as it continues to set new highs not seen since 2010. The XAU was off 1/3. AB and GG had slight gains while NEM had a fractional loss. Volume was a little less than average. My open order for the ABX June calls wasn't filled and I'm leaving it out there. I'm also still a believer in the gold shares for now due to the uncertain conditions around the globe. But anything can and will happen. Mentally I'm feeling OK. The summation index has probably turned back down with todays market action. We could just be forming a bottom in this this indicator and that is what I suspect is happening. However we are at risk of some kind of event that hasn't been discounted yet. Interesting times but we're only concerned with how to trade for profit. There's nothing wrong with waiting things out on the sidelines as well. Money needs a place to go and I think that gold will be supported here as a place to hide for now. That's why I'm continuing to try and buy the June calls for ABX. We'll see what happens.
Tuesday, May 29, 2012
We began the shortened week with a rally as the Dow gained 125 points on light volume. The advance/declines were 4 to 1 positive. With so much bearishness, some type of advance almost had to occur. Getting short term overbought now for the stock indexes. However todays action will turn the summation index back to the upside. I'm still a believer in higher prices going forward but the problems in Europe are not just going to go away. I'd be nimble here as we are still at the mercy of headline risk. GDP and employment reports in a couple of days. GE was up almost 1/4 on light volume. I'm still looking at the July calls here on a pullback. May or may not happen. We are approaching a down trend line that has been in effect since the beginning of March and the 50 day moving average line. Perhaps we'll stall here. Gold took a hit today as the US dollar had some strength. The precious metal lost over $20 on the futures. The XAU only fell 2 1/8. ABX off around a buck, GG fell 1 1/3 and NEM dropped 2/3. Volume was average. I placed an order for some June ABX calls again and I'm leaving it in overnight. I'm not exactly sure that this is the right trade but we did break the down trend line in ABX on good volume last week. We should drop back towards that line and that is what I think is happening now. Once that takes place we should resume the move to the upside. Sounds good in theory but the reality of things doesn't always match up. Mentally I'm a bit tired, did not sleep well. We've begun the week with a light volume rally and those are the types of rallies that can never be trusted. It's also possible that a lot of the players haven't returned to the game after the long holiday weekend. So we'll see. There is some data out this week that should move the stock indices but Europe and its problems will continue to be in the mix. I'm maintaining a positive outlook for the stock indexes for now. It looks like I'll be trying the gold shares again unless we get a complete breakdown in gold itself. I don't anticipate that happening though. We'll see what happens overseas tonight and take it from there.
Friday, May 25, 2012
We ended the week with a whimper as the Dow fell 75 points on extremely light volume. The advance/declines were slightly positive. The overall market was stronger than the Dow. Nobody is really going to commit any money to this market ahead of a long holiday weekend. We have worked off the recent short term oversold condition but the price gains haven't been that much. The longer this continues, the less bullish my opinion gets. GE was off a touch on the same very light volume. I have no open orders here but will remain in the camp of looking at the July calls. Gold was up $11 on the futures and a bit more in the aftermarket. The US dollar was up a touch today. Thin markets all the way around. The XAU gained 3/4. ABX, GG and NEM all had fractional gains on light volume. I canceled my open order for the June ABX calls and I'll try again next week. Any pullback in the gold shares can be purchased in my opinion. If ABX comes back to the trend line that it broke this week, that will be the time to buy the June calls. May or may not happen. Short term overbought on the gold shares here. Mentally I'm doing OK. The stock indices are in a wait and see mode as the problems in Greece continue to dominate trading decisions. We'll get some important US economic data next week but it may not matter if something big happens in Europe. It's a tougher than usual trading environment. I'm still a believer that a crash is not coming anytime soon. But perhaps sideways will be the trend and not the advance that I previously thought. Time will tell. I'll be checking the charts over the long weekend in hopes of coming up with some type of game plan for the coming week. For now it's Friday afternoon and time for a rest.
Thursday, May 24, 2012
The Dow gained 33 points today on light volume. The advance/declines were positive. We spent much of the day in negative territory but rose in the final hour. The overall market was weaker than the Dow. Still a lot of bears out there but believe it or not we are approaching short term overbought for the stock indexes. The markets are being held hostage once again by the problems in Greece and the election there isn't for another 4 weeks. I'm still a believer in higher prices short term but that could change. Maybe we'll simply move sideways for a while. It's a guessing game sometimes when the volatility expends. GE was up 1/8 on average volume. I'm still looking at the July calls here but will be looking for a better entry point. Gold rose $10 on the futures today but was much higher as the US dollar gained a bit. The XAU was up 1/8. ABX, GG and NEM all had slight fractional moves one way or the other on good volume. I've left in an open order for some June ABX calls but we'll need to see some weakness in the stock to get filled. The gold shares are acting extremely well here. I think any weakness can be bought although the ideal time for purchases has passed. Mentally I'm feeling OK. I still think the stock indices will be moving to the upside here. There are still too many bears. One thing is certain though. The troubles in Greece are not going to just go away. Whatever happens with the election in June doesn't change the fact that Greece is bankrupt. How and when the markets sort that out is probably the underlying theme for the markets recent movement. I try and go by the technicals and they got blown out to the downside recently. However we did not really see a stock market crash. So I'm thinking we should start to move higher. I could be wrong. The gold shares have acted really well lately and still have plenty of room to move to the upside via the weekly charts. I think that will be the next trade if I get the chance. We'll simply get through tomorrow before a long holiday weekend and go from there.
Wednesday, May 23, 2012
Quite a day in the markets as the Dow was down almost 200 points during the day but came back to only post a loss of 6 points. The advance/declines were positive and the volume was good. Plenty of short covering in front of a meeting tonight in Europe. The problems in Europe are not going away despite what comes out of this meeting tonight. However the stock indices got very overbought and in my opinion we are going to head higher. There are too many bears and the opportunity for an actual crash has passed. I could be wrong. I did look at the technicals in the past when we have reached the oversold levels that we are seeing today. The odds favor some type of rally here, not a collapse. GE was flat on the day after being down 3/8. I did put in an order for some July GE calls but it wasn't filled. I am probably too late here at this point. I wasn't quick enough with the order because by the time I finally decided to try it we already started moving off of the lows. Gold fell $28 on the futures and was lower than that early on. It started making a comeback in the aftermarket despite strength in the US dollar that took it over the 82 level. However even with the weakness in gold, the gold shares were moving higher. Last night I placed an overnight order for some June ABX calls but it wasn't filled. I was once again too slow when I saw buying in the gold shares but weakness in gold. I am still leaving in an order for the ABX calls but it once again is probably too late. The XAU rose 6 points today. ABX up 2, GG rose 2 1/3 and NEM higher by 1 1/3. Volume was good. ABX is breaking to the upside from a down trend line that has been in effect since the beginning of March. If we get a pullback to the trend line, which is the next technical expectation, that will be the opportunity to get some calls. It may or may not occur. Getting overbought now on the gold shares but that may not matter. Mentally I'm feeling tired. Interesting times in the marketplace at the moment. Volatility has picked up substantially. There are opportunities now as I think the risk of moving much lower from these levels is nominal for the stock indices. Unfortunately for me, I'm still kind of reeling from the last huge loss in the ABX call trade. The mental capital is always the most important. There's so many bears out there now that the market should move higher. Gold made a nice comeback today and should now be moving higher as well. We'll see how the markets react to whatever kind of statement that comes out of Europe tonight. But don't be surprised if we get some type of rally tomorrow no matter what the news is.
Tuesday, May 22, 2012
We were higher for most of the day but fell off in the final hour to basically finish the day unchanged. The Dow fell a point and change on good volume. The advance/declines were slightly positive. Worries from Europe were the excuse for the fall from the earlier highs. We got the bounce and now we'll see what happens. The ideal scenario would be for a lower low in the indices and a higher McClellan oscillator. However ideal scenarios rarely pan out. So I'm not sure exactly what to expect but I'm going to be looking at calls since it seems the whole investing world is bearish at the moment. I could be wrong and often am. GE was actually up a touch on better volume. Looking out to the July calls here. No trade is imminent here though. In fact there's a chance that we remain sideways for an extended period here and in the stock indexes as well. But nobody can predict the future. Gold fell $12 on the futures and more in the aftermarket as the US dollar had a very good day. That in itself may be more telling of things to come. Money is still seeking a safe dollar haven. The XAU dropped 1 2/3. ABX shed 1/2, GG lost 3/8 and NEM fell 1/8. Volume was good. So the gold shares held up pretty well for a change despite the drop in gold. That is usually bullish for this group going forward. I'm looking at the June ABX calls again. However if GLD decisively breaks the 150 level and stays there, then all gold share call trades are off. There is a potentially huge head and shoulders bottom in the US dollar on a weekly basis chart. If this pattern is triggered by the dollar breaking out above 82 on good volume, gold should drop even further. Hasn't happened yet but it could. Mentally I'm feeling tired, did not sleep well. Tomorrow should be interesting in the stock indexes because if we are going to head lower again, it should start to happen now. We got the long overdue bounce and the key is what happens next. I can only guess at what happens next but with so many calling for a crash, I doubt that's going to be the outcome. We'll see. I'm feeling better about making some kind of trade here and that's good for the confidence level going forward. I may just try the ABX calls again. Or not. We'll follow the overseas markets for clues to tomorrow and take it from there.
Monday, May 21, 2012
Finally a bounce today as the Dow gained 135 points on light volume. The advance/declines were 6 to 1 positive. No real news today but the oversold condition was so drastic and had lasted so long that this positive action was long overdue. The question now is what's next? There are so many bears out there that I would guess that we're going higher. I think that the opportunity the market had to crash is gone. A huge down move is still possible but I think that the odds for that have diminished. I could be wrong. We'll have to see if we get any follow through upside tomorrow. There is a chance that this was simply the opposite of expiration Friday and the prevailing trend, which was lower, ensues. That does happen at times. But I think the bulk of this decline is over. GE was up an 1/8 or so on light volume. No trades there for now but I am looking at the July calls. Gold lost a couple bucks despite the US dollar being lower. The XAU followed the overall market higher by 4 2/3. ABX up a buck, GG higher by 3/4 and NEM led the way with a gain of 1 3/4. Volume was light. It's usually a positive sign when NEM leads the gold shares higher. I might try the June gold share calls if we go back and test the recent lows. Hasn't happened yet. Gold itself has so far been successful at holding the $1500 level. We'll see. Mentally I'm feeling OK. We got a nice bounce today as there was no news out of Europe today to derail the rally. The bounce is coming from extreme oversold levels. I'd still be careful here but my gut feeling is that the bulk of the decline, if not all of it, is over. Perhaps waiting for a positive divergence on the McClellan oscillator, if it happens, is the way to go. We've just begun the June option cycle so premiums are high. I've got a couple of ideas now for the next trade so we'll see what happens.
Friday, May 18, 2012
We closed out the week with yet another down day as the Dow fell 73 points on good volume. The advance/declines were 3 to 1 negative. Even option expiration week couldn't help this market to even bounce. We are at an area technically that it is a surprise that we haven't just collapsed. The McClellan oscillator is very oversold and staying there. The summation index is heading lower and we are about to pass through the zero line. I would still be very cautious here. Some indices appear to be in free fall. TRAN is in a rapid decline despite the drop in oil. There's something going on here under the surface and I certainly don't know what it is. GE was flat on the day and the volume was good. I'm still looking at the July calls but I'm in no hurry. Gold was higher again, this time up $17 on the futures. It was a good week for gold. The US dollar was lower today for it's first real loss in 3 weeks. The XAU was flat on the day after being much higher early. ABX, GG and NEM had fractional moves one way or the other on good volume. These issues also opened much higher and sold off for the remainder of the trading day. I may try the June calls here if we sell off into this weeks lows again with a higher RSI reading. Or not. I will have to look at the charts over the weekend. There is also the possibility that what we saw in gold and the gold shares this week is simply a dead cat bounce. Mentally I'm feeling OK. It seems like the stock indexes have been moving in a straight line down since the beginning of May. We are in a dangerous place technically that should resolve itself in a hurry. As I said, I'm surprised that we haven't fallen further and faster. There are no buyers. Next week should be interesting. Gold finally found a bid and we will have to see if that is for real. If the stock market continues to be shaky though, I'd expect more money to flow into the US dollar. We'll see. There's always the chance of some unexpected developments out of Europe as well. That's it for this week.
Thursday, May 17, 2012
Well it wasn't a multi-hundred point loss but we were on our way as the Dow fell 156 points on heavy volume. The advance/declines were 6 to 1 negative. Oversold, staying there and beginning to unravel. Summation index heading lower. We are way overdue for a bounce but at this stage that's probably all it would be. Perhaps if it wasn't for expiration week we would be even lower. We're in a technically precarious position and caution is advised. I don't know what the root cause is but the market is speaking and we must pay attention. I'm on the sidelines for now. GE was off 1/8 on good volume. Looks like GE is not a proxy for the market here. I'm still back to considering the July calls. But no trades for now. Gold finally bounced as the futures gained $38, even with the US dollar moving higher. The XAU rose 5 1/3. ABX up 2 1/8, GG higher by 2 and NEM gained 1 3/4. Volume was good. I'm looking at the June calls here on the bounce. But I'm in no hurry after the last ABX call trade debacle. However if the technicals cooperate I may try a trade here within the next couple of weeks. Mentally I'm feeling OK. Anything could happen tomorrow since we closed on the lows for the day. We are getting the Facebook IPO on Friday and that may help stabilize things for a day. Option expiration as well. Interesting times but we really only care about making money from trading. The problem is that it is really tough in times like these. Opportunities are out there but I'm currently at a loss to discover them. I don't have a decent handle on what's going on with the markets at the moment. I only know that being careful here is probably the most prudent course of action. Gold and the gold shares should have bounced weeks ago and they finally did today. Will the same thing happen to the stock indexes? Stay tuned.
Wednesday, May 16, 2012
Once again we tried to rally but to no avail. The Dow fell 33 points on good volume. The advance/declines were 2 to 1 negative. Summation index continues lower. The Fed minutes didn't do much and the problems in Europe remain center stage. My technical indicators are so oversold at this point that I believe one of 2 scenarios is about to happen. The stock indices are either going to begin multi-week rally or we are going to see a quick multi-hundred point decline. We do not reach these technical levels very often. I still believe that it's a time to be cautious. GE was up 2/3 on very heavy volume. GE announced that it is in the process of reissuing its dividend. If GE is a proxy for the overall market, then a rally is imminent. However one day does not make a trend. I am once again looking at the July calls here. Gold remains in liquidation mode as the futures fell $20. The US dollar was higher again. The XAU was up 3/4 but finished well off of the highs. ABX, GG and NEM all had fractional gains on good volume. We finished well off the highs here as well. The gold shares showed a brief pop after the Fed minutes but that was about it. No trades in mind here yet but I will get long again at some point. Mentally I'm feeling OK, slept well enough. The stock market is still being held hostage by the problems in Europe. Once again, there are no quick or easy solutions there. We move from headline to headline. It is a tough trading environment. There's no shame in conserving capital with this type of situation. That said, you don't make any money either. But I still think it is a time to be safe rather than sorry.
Tuesday, May 15, 2012
The stock market tried to rally today but failed. The Dow lost 63 points on average volume. The advance/declines were almost 2 to 1 negative. Summation index continues lower, implying more decline. Oversold technically and staying there which could mean even bigger trouble ahead. I really think it's a time to be cautious. The problems in Europe are center stage again and there is no easy fix there. We should have had some kind of triple digit oversold bounce by now. I'm on the sidelines. Even the usual expiration week positive bias isn't working. GE was off about 1/4 on average volume. Looks like a breakdown out of the congestion zone here. No trades in mind for GE at the moment. Gold simply continues to fall, down $4 on the future and another $15 in the aftermarket. The dollar remains in rally mode and was higher today. The XAU dropped 5 2/3. ABX down 1 1/2, GG fell a buck and NEM lost 1 1/4. Volume was good. Breaking to new lows on the gold shares and no end in sight. There is something going on here but I certainly don't know what it is. I'm guessing money needs to be raised and gold is something to sell. There will be a time to buy the gold shares and I believe that time is way overdue. But I would only be guessing at when that time is. The technicals and indicators that usually work here are blown out to the downside. I remain on the sidelines. Mentally I'm feeling OK. We are in the process of breaking down in the stock indices. Anything could happen. Buying interest has dried up. Once again it is a time to be careful in my opinion. Gold is still dead money unless you are on the short side. We'll see what tomorrow brings.
Monday, May 14, 2012
We appear to be starting another leg down as the Dow fell 125 points today on light volume. The advance/declines were 6 to 1 negative. Summation index heading lower. Oversold and staying there. No interest in buying stocks at the moment. Expiration week and it could get volatile. I'm on the sidelines with no OEX trades in mind. We should have had some kind of decent bounce by now. I think it's time to be careful on the long side. GE dropped 3/8 on average volume. The same holds true here. It looks like we are heading lower. I'm not considering the July calls anymore. Gold fell again, off by over $20 on the futures as the rally in the US dollar continues. Gold is not getting the same flight to safety money inflows as the US dollar is here. Commodities are dropping. The XAU 4 points. ABX down 1/2, GG lower by 1 1/3 and NEM lost 2/3. Volume was average. The gold shares continue to be beaten up and there is no end in sight. Considering the last horrible ABX call trade, I have no idea as to when to try the gold shares on the long side again. Same very oversold and no bounce scenario. Mentally I'm feeling OK. It looks like we're breaking the necklines on the stock indices. That means lower prices ahead. No upside bias to expiration week yet. However we could go lower in a hurry. It's a time to rather be safe than sorry. Gold continues lower. It looks like things are being liquidated for whatever reason. We'll see what happens tomorrow.
Friday, May 11, 2012
We bounced around today as the Dow lost 34 points on light volume. The advance/declines were negative. The stock indices tried to get something going to the upside after dropping at the open but there was no interest. Still very oversold here both short and medium term. I think it means that we are either going to start a decent rally from here or we are about to have a pretty good and fast decline. I don't think there is any middle ground. Normally I would say we are going to rally at this point but the fact that we haven't yet is worrisome. So we will wait to see what happens next week. GE was flat on very light volume. We're at the bottom of the trading range here. No trades for now in GE. Gold fell again, down $11 on the futures. The US dollar had a slight gain. ABX off 3/4, GG fell 1/2 and NEM lost 7/8. Volume was light. The weekly charts are oversold on the gold shares and the decline has gone on since February. I suppose I'll be in a wait and see mode here. We didn't get any type of rally in the gold shares when we should have and that is the same thing that I'm seeing in the stock indexes right now. Mentally I'm feeling OK. Not exactly sure what to expect next week but there should be some volatility with expiration week upon us. There's usually a positive bias. For me at the moment it's probably better to wait things out on the sidelines until I see a decent technical set up and some confidence returns. I think the way things are in the stock market at the moment that it could go either way. Gold still appears to be dead money. I'll be checking the charts over the weekend as usual. For now it's Friday afternoon and time for a break.
Thursday, May 10, 2012
Well we got a bounce today but it wasn't much of one as the Dow gained 20 points on light volume. The advance/declines were positive. We opened much higher and gradually sold off for the remainder of the day. Still oversold but now both on a short and medium term basis. The summation index continues lower. We're still on the cusp of something here but what that is, I don't know. Teetering on the neckline of potential head and shoulders tops for some of the stock indices. GE was up about 1/8 on light volume. It looked like we were going to break out to the downside in the trading range but we are back stuck in the range. No trades in mind here really but I'm still looking at the July calls. Gold didn't do much today and neither did the US dollar. The yellow metal was up a buck on the futures. The XAU was flat on the day. ABX up 1/8, GG off 1/4 and NEM dropped 1/3. Volume was light. The weekly candlestick charts are starting to look constructive for the gold shares. There is a possible hammer/morning star pattern developing. The weekly technicals are blown out to the downside as well. Mentally I'm feeling OK. We really need to see more of a bounce for the stock indexes here in my opinion or we are on the verge of sharply lower prices. That's my best guess right now. I think we are at a point where anything can happen. The market will go where it wants. The problems in Europe seem to be taking center stage again. I've been pretty much wrong on the gold shares lately and it was costly mentally and monetarily. No trades there for now but I will attempt to trade there again. We'll see how the week closes out.
Wednesday, May 09, 2012
Still moving lower as the Dow fell 97 points on good volume. The advance/declines were 2 to 1 negative. Even more oversold now on a daily basis. Summation index still heading lower. I still expect a bounce here but that might be about it. However my ideas have been wrong lately. European worries continue. GE lost 1/3 on heavy volume. The question here is if this the beginning of a break to the trading range or a downside washout. Time will tell. Gold fell another $10 on the futures as the rise in the US dollar continues. However the XAU gained 2 1/2. ABX up 7/8, GG rose a buck and NEM higher by 1 3/4. Volume was good. Perhaps this is finally the end of the gold share decline. It is the first out performance for the gold shares in a long time. We'll see. Mentally I'm feeling tired, did not sleep well. I still feel that we are at a very important point in the stock indexes. How the week ends will be telling. I expected a bounce today and I think the odds of that happening tomorrow are very good. What happens after that will be key. Stay tuned.
Tuesday, May 08, 2012
We sold off hard early in the day but made a comeback to finish with a loss of 76 points on good volume. The advance/declines were negative. Todays action was what I expected for yesterday. Not exactly sure where we are heading from here. Short term oversold on the stock indices right now. However the summation index is heading lower. But the McClellan oscillator is showing a potential positive divergence. We now have lower lows in some indexes but a higher McClellan oscillator reading. I suppose the key word there is potential. So the technicals are somewhat mixed but I would expect some type of bounce here. I thought that yesterday as well. My take on things lately has been way off. GE was off 1/8 on light volume. Nothing new to report here. No trades in mind at the moment. Gold took a hit today as the US dollar strength led to a commodity sell off. The precious metal fell about $35 on the futures. The XAU dropped 5 points. ABX lost 1 1/4, GG fell 1 2/3 and NEM shed 1 3/8. Volume was good. Gold and the gold shares continue to be liquidated. I have no idea why they are being sold off. I can only guess that money needs to raised overseas or the big players are still getting out. Very oversold and the Gold/XAU ratio remains off the charts. I dumped the remaining ABX May calls for another over 90% loss. I now have no open positions. The ABX trade was sobering. But it means nothing now. I try and make the proper adjustments going forward. Mentally I'm feeling OK. The stock indexes need to hold on here for the bulls to still be in control. We are right at the necklines of some possible head and shoulders tops reversals. This is an important point in the stock market and will set the tone for the rest of the month in my opinion. But I could be wrong and often am. Gold broke down from the recent support on good volume and that is bearish despite being very oversold. It looks like support comes in around 1550 but who knows if that will hold. I'm on the sidelines for now until I can sort things out. I doubt I'll be attempting any trades in the remaining May option cycle. We'll see what goes on tomorrow. A bounce is due.
Monday, May 07, 2012
A lower start to the week as the Dow fell 29 points on light volume. The advance/declines were positive and the overall market was stronger than the Dow. The S&P 500 futures sold off big on Sunday night after the election results from overseas. However there was no follow through downside when the markets opened up today. We had every reason to sell off this morning and we didn't. That usually is a sign that the stock market wants to go higher. The daily technicals on the stock indices are now more oversold than overbought. GE was flat on the session with light volume. Still in the trading range here. Gold dropped $6 today as the US dollar was higher. However the dollar was much stronger early in the day and came back well off of the highs. The XAU was off 7/8. ABX and NEM were both flat on the day while GG lost 3/8. Volume was light. I still have some May ABX calls open that are losers. I'll be selling them this week but am waiting for some kind of bounce to perhaps cut the loss. The gold shares are oversold and have been for a couple of months. Gold and the gold shares are dead money. My trading account died a bit with them. Mentally I'm feeling OK. 9 days left in the May option cycle. I don't see myself doing any trades after the ABX call trade debacle. If anything I'd be looking at the OEX calls here. But my confidence is shot, so the sidelines seem like a good place to be for the moment. Not a lot of economic data out this week, so there won't be much to trade off of. We'll see what goes on tonight and take it from there.
Friday, May 04, 2012
It was an employment downer as the Dow fell 168 points on a weaker jobs number. The advance/declines were 3 to 1 negative and the volume was average. The summation index is back to moving lower. Some of the daily charts on the stock indexes have potential head and shoulders tops on them. If they break the necklines, things could get ugly really fast. That has yet to happen. I thought prices would continue higher for the stock indices but whatever I've been thinking lately has been wrong. We will have to wait and see what happens on Monday. Todays developments were anything but positive. GE was off 1/4 on light volume. Still in a range and no trades for me there. Gold held up pretty well despite a rise in the US dollar. The precious metal futures gained $10. The dollar rose despite the weak jobs report as the troubles in Europe are back in the trading picture. Perhaps gold will be perceived as a safe haven again. Todays gains didn't help the gold shares as the XAU ended flat. ABX off 1/8, GG up 1/8 and NEM rose 1/2. Volume was average. I sold most of my position in the May ABX calls for a 95% loss. I held on to the later lower strike price calls. I will probably sell them next week. Just trying to cut the loss there if we see some strength in gold early next week. Gold has been moving sideways for 2 months but the gold shares have tanked within the same time period. Building a position in the May ABX calls was obviously the wrong move and lack of discipline just compounded the mistake. I'll have to put it behind me and move on. Mentally I'm feeling a bit tired, did not sleep well. I think it will be interesting to see how Monday turns out after todays decline in the stock market. I'm not exactly sure what is going on in Europe besides the election in France but we'll have to just wait and see. The weekly technicals for the stock indexes have rolled over. Gold has been dead money for a while. Perhaps that will change if we get a good dose of fear. It won't matter for the May calls that I had. That was one of the all time worst trades I've ever done and I will probably need some time to recover. Confidence is gone. My mental capital has dried up. But I'll still be checking the charts over the weekend and continue to do the work necessary to lead up to the next trade. Friday afternoon and time for a break.
Thursday, May 03, 2012
A bit more to the downside before tomorrows much anticipated employment report as the Dow fell 62 points on average volume. The advance/declines were 2 to 1 negative. The summation index is still trending higher. The technicals for the stock indices are in overbought territory. Tomorrow will set the tone for the next extended move in my opinion. But that's a guess as usual. GE was off 1/8 on light volume. Still stuck in the range between 19 and 20 on the daily charts. No trades here for now. Gold fell $20 on the futures and the US dollar finished the day with a slight gain. The XAU lost 5 3/4. ABX off 1 1/3, GG fell 1 3/4 and NEM lower by 1 1/2. Volume was good. The gold shares have been beaten down to a level not seen since 2010. Oversold and staying there. Gold itself has held up much better. Regardless of the employment report tomorrow, my ABX calls are dead. Mentally I'm feeling OK. Tomorrow should be interesting and I have no clue as to which way things will turn out. We will simply have to wait for the markets reaction to the numbers. I have no trades in mind for the May option cycle after the debacle with the ABX trade. I will have to take a step back and reassess my own trading tactics because obviously what I've been doing lately just isn't going to work. With the exception of the first trade of the year, my results have been horrible. Confidence is a key factor for success and right now it is an area that I'll need to work on. My mental state is in a down mood because I did not have the discipline to simply take the loss early. I definitely put too much emphasis and money on the ABX trade. It cost me both mentally and monetarily. I'll need to regroup. We'll see what happens tomorrow.
Wednesday, May 02, 2012
The Dow opened lower and stayed in the red all day. We finished the day with a loss of only 10 points though. The advance/declines were negative. The NASDAQ was higher on the day and that could bode well for the bullish cause going forward. The summation index is moving higher. The short term technicals are still overbought here though. It's a mixed bag technically. Waiting on Fridays employment report. GE was pretty much flat on the day after being lower early. No trades there for now. Gold fell on the strength of the US dollar. The dollar rose due to European worries again. The gold futures fell 8 bucks. The XAU lost 2 7/8. ABX off 1 1/8, GG dropped 1/2 and NEM fell a buck. Volume was light with the exception of ABX which was a bit above average. The ABX earnings were a bit less than expected and the stock dropped from the open. My ABX calls are losers. The lower strike price later purchase is now in the red as well. This trade will be a big loser as I built a position and was wrong. As I said yesterday, waiting for the earnings report is never a good strategy. Mentally I'm feeling tired, did not sleep enough. The stock indexes are holding up pretty good here despite lackluster economic numbers of late. We still have to wait on Friday though. However it seems at the moment the market wants to move higher despite the numbers. As for the ABX trade, it's a loser. There was no discipline and the stop loss order was never put in. These are mistakes that should never happen. You've got to keep moving forward though. I'll simply have to regroup and move on to the next trade. Confidence will be the issue for me going forward. The technicals were oversold for ABX and the Gold/XAU ratio was in the buy zone. The trade still didn't work. I should have cut the loss early but didn't. It isn't the first time and it probably won't be the last. It will end up being close to a 100% loss. That is inexcuseable. But the markets move on. We'll see what happens overnight and go from there.
Tuesday, May 01, 2012
We finished with a gain of 65 points on the Dow but finished well off of the highs for the day. The advance/declines were almost 2 to1 positive and the volume was light. The economic data reported today was stronger than expected and that was the catalyst for todays rally. Beginning of the month money flows was also probably a contributing factor. Where we go from here is the next question which should be resolved on Friday. Probably a waiting game until then. GE was up 1/4 on light volume. It looks like we've been stuck in a range between 19 and 20 for the past 2 months on the daily chart. We will have to see which way it breaks but my guess would be to the upside. Gold lost a couple bucks on the futures as the US dollar was a bit higher today. The XAU was up 1/2. ABX was flat ahead of the earnings release, while GG and NEM rose around 1/3. Volume was light. My ABX May call trade will all depend on the earnings tomorrow. That is not really the position that I would like to be in. I'll simply hope for the best and see what happens. That is no way to trade. Mentally I'm feeling tired, did not sleep well. The short term technicals for the stock indices remain overbought. Todays fade away from the highs isn't exactly bullish. The coming employment report looms large so I doubt we'll see any major movement before then. I could be wrong. I'm waiting for tomorrow mornings ABX earnings announcement and I'll take it from there.