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Tuesday, August 21, 2012

Movement to the downside today as the Dow fell 68 points on light volume.  The advance/declines were negative.  The overall market was weak but not as much as the Dow.  I do not think this is the beginning of some long, protracted decline.  The stock indices are overbought and need to take a rest.  I don't see any huge rally in the offing either.  Of course I could be wrong on both counts.  It wouldn't be the first time.  I still think that nothing of great consequence will happen until all the traders return to the game after Labor Day.  GE was off a bit again on light volume.  Still in a sideways holding pattern with regards to GE.  We still need to see a break through $21 on good volume to resume the uptrend there.  Gold had a good day on a weaker US dollar.  The precious metal futures rose almost $20.  The XAU gained 4 1/3 but was higher.  ABX, GG and NEM all had fractional gains on better volume.  These issues were higher as well but fell back during the day.  My ABX October calls are now in the black.  I am seriously considering selling them this week but the weekly charts on the gold shares still have plenty of room to run.  However I think that selling them soon and trying to buy them back cheaper may be the best move for now.  We'll see.  Mentally I'm feeling OK.  A pullback in the stock indexes today and we've been waiting a while for that to happen.  My technical work suggests that it won't last long or be too deep.  It's still a slow summer trading environment.  Gold broke above the resistance at $1625 and we will have to see how far it runs.  The favorable seasonality factor of August and September is on golds side.  However volume has been light.  We'll have to see if there is any follow through tomorrow. 

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