Friday, September 28, 2012
We closed out the month to the downside as the Dow fell 49 points on light volume. The advance/declines were negative. I would have liked to have seen some follow through to the upside following yesterdays gains. But it didn't happen. I still think higher prices are coming and that we will take out the recent highs in the S&P 500. But I could be wrong. The summation index is pointing down. We are short term oversold here on the stock indices but we haven't gotten a decent bounce. Perhaps the beginning of the month money flows on Monday can get us going to the upside. No major trend lines have been broken so I'm sticking with a bullish stance. GE lost just a touch and the volume was heavy. We're not short term oversold here, in fact it's just the opposite. I'm not looking to trade GE here. The gold futures fell $6 on the day as the US dollar had a decent move to the upside. The fact that gold didn't drop that much lets you know that the money simply continues to flow there despite being overbought. That won't last forever but you cannot fight it. The XAU was off 1 1/8. ABX, GG and NEM all had fractional losses on average volume. I canceled the open order for the October ABX calls. No need to leave that out there over the weekend. I'll consider what to do in the next couple of days and then decide whether to place another order. I'm pretty sure that I will but perhaps at a different strike price or price. Mentally I'm feeling OK. As usual the question is where do we go from here for the stock indexes. I'm still a believer in higher prices. We've got plenty of economic data out next week with the employment number on Friday. So we will see where the market takes us. Gold remains an attractive place for money to go from what I can see. Nothing has stopped that trend yet. I will look over the charts this weekend and try and come up with some type of trade for next week. For now it's Friday afternoon and time for a break.
Thursday, September 27, 2012
Back to the upside today as the Dow gained 72 points on light volume. The advance/declines were 3 to 1 positive. The overall market was stronger than the Dow. I expect further upside tomorrow. The only negative today was the light volume. However positive market action was due and it showed up. We will most likely set new highs for the year in the S&P 500 on this leg up. That is my guess at the moment. With GE having a very good day I believe that this will help lead the market higher. GE gained 2/3 on good volume. Today GE set a new high for the year and I think the overall market will follow. Still overbought on GE but that is a condition that could last for a while. Gold had a good day on the weaker US dollar. The precious metal futures rose $26. The XAU gained 5 2/3. ABX up 7/8, GG higher by 1 1/3 and NEM higher by 1 1/4. Volume was OK here. It looks like that I've missed the chance to get long the gold shares this week as my open order wasn't filled on the decline yesterday. I'm leaving in the October ABX call order for now but I doubt that it will be filled. Mentally I'm feeling OK. The presidential re-election rally is still in place. We should continue higher into the beginning of November. After that, it's anybodies guess. Gold should continue higher as well and it is. We'll probably see new highs on this leg up but I don't know when that will occur. Any pull back in the gold shares looks like it can be bought. The money continues to flow there. We'll end the week, the month and the quarter tomorrow.
Wednesday, September 26, 2012
Continuing lower today as the Dow fell 44 points on light volume. The advance/declines were negative. The overall market was weaker than the Dow. As much as I have remained bullish here and still believe that a decent up day is coming soon, I cannot ignore the recent market action. We're oversold and staying there. That can be a dangerous condition. The summation index is heading lower, implying lower prices. I can't say that I have a good feel for what is happening right now. European worries have finally resurfaced, so we could once again go into a headline driven environment. This is a problem that isn't simply going to go away. I have no OEX trades in mind at the moment. GE was off 1/4 on light volume. I'll hold off on any trades here for now as well. Gold fell $12 on the futures as the US dollar had a bit of strength. The XAU sold off hard early but made it back to finish the day higher by 2/3. ABX was flat, while GG and NEM had slight gains. Volume was average. The fact that the gold shares were able to come back after early morning losses is encouraging going forward. I'm leaving in the open order for the October ABX calls. Gold itself remains above the critical 1740 level. Mentally I'm feeling a bit tired, did not sleep well. The S&P 500 remains above the uptrend line that began in June, so despite the recent swoon no real technical damage has occurred. If we somehow break that line, then the game changes. Hasn't happened yet. Gold is taking a rest here and I expect the uptrend there to continue. The only problem for the markets here is if we would all of a sudden fall apart in an already oversold condition. I think the possibility of that is slim but what do I know? I'll continue to leave the order in for the gold share calls unless we break 1740 in gold itself. If that happens I'll have to reassess the situation. All eyes will be on Europe tonight so we'll see what happens.
Tuesday, September 25, 2012
A one day reversal to the downside today as we opened higher and closed lower. The Dow fell 101 points and the volume was nothing special. The advance/declines were almost 3 to 1 negative. The summation index has turned lower. I was expecting higher prices near term and it hasn't happened. I still think we will see a decent move up within the next couple of days. That's what my technical work is saying. I could be wrong. No real reason for todays lower prices but we fell off in the last hour and that isn't bullish going forward. The uptrend line in effect since June has not been broken. GE was off a touch on better volume. I'll wait until we get back to the 50 day moving average and go from there. Both the gold futures and the US dollar were up slightly today. However the XAU lost 3 1/8. ABX, GG and NEM all had fractional losses on average volume. I'm leaving in the open order for the October ABX calls for now. The uptrend line for the XAU comes in around the 180 level. We aren't there yet. I don't think that we are beginning a huge decline in gold but with gold you never know. Things could get volatile. I'm still a believer in higher prices going forward though. Mentally I'm feeling OK. We'll have to see if we get any follow through to the downside in the stock indices tomorrow. Perhaps my take on things is wrong here but no technical damage has occurred yet. I still think we should rally into the November election. Even if gold decides to take a rest here I think it will be a chance to get the calls once again. On the daily gold chart 1740 looks to be the key level that should hold. If not then I will have to readjust my thinking. We'll see what tomorrow brings.
Monday, September 24, 2012
A lower start to the week as the Dow fell 20 points on light volume. The advance/declines were negative. Still basically moving sideways for the S&P 500. I continue to believe that this is simply a pause before we head higher. I see nothing to change that view for now. Plenty of economic data out this week so maybe that will get things moving. GE was off 1/8 or so on light volume. I'll get the calls here when we get to the 50 day moving average, when and if that happens. Otherwise it's a waiting game. Gold fell today, the futures dropped $13 on a slightly higher US dollar. The XAU lost 6 1/8. The gold shares underperformed today. ABX off 1 1/2, GG down 1 7/8 and NEM lost a buck. Volume was average. The gold shares were due a pullback and this is probably the start. I've placed an open order for the October ABX calls since I believe that we will head back up to test the highs again before the end of the October option cycle. No real hurry though as I have priced the ticket away from todays premium. If ABX continues to drop the order may be filled. Mentally I'm feeling OK. I saw a lot of press this weekend about the divergence of the Dow transports, which I mentioned last week. When everybody sees the same thing in the markets it usually doesn't mean anything. We'll see. The transports got a bounce today. My work actually shows that we should see a move up in the stock indices this week despite the overbought conditions. Time will tell soon on that. Haven't had any news from Europe in a while to get things going. End of the month and the 3rd quarter coming up on Friday. We'll keep an eye on things overnight and go from there.
Friday, September 21, 2012
A slight one day reversal to the downside as the Dow opened higher and closed lower. The major average finished the day with a loss of 17 points on expiration good volume. The advance/declines were positive. I think we are just waiting for the next leg up at this point. I've been expecting some end of September weakness and it is just not happening. The Dow transports continue to fall though. I don't have any trades in mind for the OEX at the moment. GE was up 1/8 on average volume. I'm waiting for an entry point there as we are both short and medium term overbought. Or you could just say that I missed the move higher unless we simply continue to move straight up. Gold gained $7 on the futures as the US dollar lost just a touch. The XAU was up 1 3/4. Remaining very overbought here on a short term basis. I really cannot try the calls here unless we work off some of the overbought condition. ABX and GG had fractional gains, while NEM had a fractional loss. Volume was good. I'm still keeping an eye on the October calls for the gold shares. Mentally I'm feeling OK. There still aren't a lot of sellers of stock here. The presidential re-election rally remains in place. Rallies can last longer than you think and that seems to be the case with this one. Gold continues to move higher and there aren't any sellers there either. I'll simply have to try and remain patient. We'll start the October option cycle on Monday and go from there. It's Friday afternoon and time for a rest.
Thursday, September 20, 2012
Still consolidating the gains here in my opinion as the Dow gained 19 points on light volume. The advance/declines were negative. Sold off early and came all the way back. Overbought, staying there and that hasn't changed. The Dow transports have sold off hard this week while the Dow itself hasn't. That's a divergence that shouldn't be ignored going forward. The fact that oil dropped this week and the transports didn't rally makes you wonder as well. But as long as the stock indices go higher, there is nothing that says they just can't keep on doing that. Any pull back will be bought most likely. GE was up over 1/8 on OK volume. GE continuing to the upside bodes well for the overall market as well. I'd like to get the calls here but not until we get back to the 50 day moving average if and when that happens. Gold was flat today despite a rise in the US dollar. That's bullish going forward. The XAU dropped 1 1/3 though. ABX, GG and NEM all had fractional losses. Volume was average. Like the overall market, there is nothing stopping the gold market from moving higher. We're very overbought here and it hasn't mattered. It will at some point but trying to figure out when that will be is a guessing game. Mentally I'm feeling OK. September expiration tomorrow and my guess is that we'll be higher. Sometimes when the beginning of September is strong the second half is weak. That hasn't happened yet for this year. The gold shares have gone straight up for two months. This won't last forever either. I'm a buyer on a pullback when that eventually happens. For now it's patience and a waiting game for the next trade.
Wednesday, September 19, 2012
We bounced around a little today but not much on the end result as the Dow gained 13 points on light volume. The advance/declines were positive. The technical story for the stock indices remains the same. My thinking is that the recent sideways action is simply another pause before we head higher. But I could be wrong and often am. Still, I think we'll head up from here. GE was up about 1/4 again on light volume. Very overbought here on a short term basis but have been for a while. Won't last forever. Gold was flat on the futures today as the US dollar fell just a touch. The XAU gained 1 3/4. ABX, GG and NEM all had fractional gains on average volume. Very overbought on the gold shares as well but there are no sellers. I'd still like to try the October gold share calls if I get the chance. Mentally I'm feeling OK. The trend remains up for the stock indexes. The summation index is moving higher. There really isn't any overhead resistance and any decline will probably be bought. We should keep moving up into the November election. The market is telegraphing an Obama victory. The market action is consistent with the president being re-elected. The worlds central banks have indicated that they will print as much money as needed to keep the game alive. That is extremely bullish for gold going forward. The gold shares continue to outperform the precious metal. That is bullish for them. Just 2 days left here in option expiration week. We really haven't seen any volatility yet. We'll watch what happens overseas tonight and go from there.
Tuesday, September 18, 2012
Not much volatility yet for expiration week as the Dow gained 11 points on light volume. The advance/declines were negative. I still think we'll go higher this week but there really isn't a catalyst for prices yet. Still overbought on the stock indices. No need to risk a trade anymore in the September option cycle. GE was up almost 1/4 on light volume. Overbought, staying there and who knows how long that will last? October GE calls on a pull back is the plan for now. The gold futures were flat on the day which represented a comeback from the sell off in yesterdays aftermarket. The Dollar showed a gain again today but the precious metal did not sell off. This is a positive going forward. The XAU gained 1 1/2. ABX, GG and NEM had fractional moves one way or the other. Volume was average. Very overbought here but that can last a while in an extended up move. That appears to be what's happening here. Any sell off in gold or the gold shares can be bought. However it seems everybody knows this already, hence no sell off. I'm going to wait for some weakness though. Mentally I'm feeling a bit tired. I'm still in a wait and see mode. I believe that the end of this month will produce some weakness but not necessarily this week. The summation index is still heading higher. Gold is practically going parabolic here and that is a dangerous thing to chase. I have to wait for some weakness here. A quick decline in gold would most likely set things up for the next rise. That's a guess as usual. Gold has gotten a lot of attention lately and that could be a precursor to a cooling off period. We'll see what tomorrow brings.
Monday, September 17, 2012
A weekend hangover Monday as the Dow fell 40 points on light volume. The advance/declines were 2 to 1 negative. We made a bit of a comeback in the final hour. The market still has the feel of wanting higher prices although we remain overbought on a short term basis. Expiration week usually has a positive bias so we'll have to see if it holds true for September. Some economic data out this week. However all the news from the Fed and the ECB is already out. We will have to wait and see where the next catalyst comes from. GE was off a touch and volume was heavy. I'm still considering the October calls here on some type of pullback. Not yet though. Gold was off a couple of bucks on the futures and $10 more in the aftermarket. The US dollar was just a bit higher today. The XAU was down 1/3. ABX and NEM had fractional losses, while GG was flat. Volume was average. Gold really needs to take a rest as it has remained overbought for a couple of weeks. I will attempt the gold share calls again on a pullback but must try and remain patient for now. Mentally I'm feeling OK. 4 days left in the September options and it probably wouldn't be wise to try anything there. I think that I will have to simply let this week go by trading wise. But we'll see. Perhaps if gold takes a rest I can make a trade there. I'm leaning towards a wait and see attitude for now.
Friday, September 14, 2012
The rally continues as the Dow tacked on another 53 points on heavy volume. The advance/declines were 2 to 1 positive. All signs point to higher prices as the stock markets attract capital. Liquidity abounds. There is plenty of money to go around the world. In some sense it doesn't matter what the economy does for a while as long as the flow of money continues into stocks. Price and volume confirm the move higher. I'd expect the upcoming expiration week to have a positive bias. GE up 1/8 and the volume very heavy once again. If we can back back close to the 50 day moving average on a daily basis, I'll probably give the October calls a look. Overbought and staying there for now. Gold was up a bit on the futures. The US dollar has completely broken down. If we get a snap back in the dollar perhaps gold will drop and that could be the next entry point for the precious metal. Or we might just continue going parabolic. The XAU gained 5 1/3. As long as the gold shares outperform the metal itself all systems are a go for higher prices. ABX and GG gained 3/4 while NEM added 1 3/4. Volume was very heavy once again. I'm going to try and be patient before attempting the calls here again. But we are going higher here as well. Mentally I'm doing OK. With only 5 days remaining in the September option cycle I probably will not be trying a short term trade. It is hard to watch the gold shares rally when I sold mine early but I have been down this road before. There will be a reaction and another chance at the calls but I'm going to have to wait for it. I'll be checking the charts over the weekend. For now it's Friday afternoon and time for a break.
Thursday, September 13, 2012
The Fed delivered today as the Dow soared 206 points on good volume. The advance/declines were almost 4 to 1 positive. QE3 has arrived on schedule. Summation index moving higher. Technically there is nothing in the way for even higher prices on the stock indices. Declines can still be bought. We should move up into the September option expiration. Perhaps we'll stall after that but I do not see any huge declines on the near term horizon. I've missed the chance to get the September OEX calls unless we get a short term pullback. There are only 6 days left for the September option cycle, so the risk in any trade there is high. GE was up 1/8 on extremely heavy volume. Overbought, staying there and that sounds like a broken record. We are at $22 for GE now. Perhaps the October 22 calls on a pullback will be the next trade. Gold took off today as the US dollar continues to fall. The precious metal gained $38 on the futures. The XAU rose 8 7/8. ABX up almost 2, GG gained 2 1/3 and NEM higher by almost 3 points. Volume was very heavy, confirming the move higher. I still think the gold shares are going higher but it's getting late in the game for this move. Or not. We could see a parabolic rise and that is what it is starting to feel like. Obviously I sold the October ABX calls way too soon. Mentally I'm feeling a bit tired. Where do we go from here is the next question. All the good news has been announced. Sometimes a strong first half of September leads to a weaker second half. If that happens it could set us up for the October calls. We've got a presidential rally here in my opinion. I think that the market is telling us to look for an Obama victory. If so, we should stay strong into the beginning of November. The fact that the financials have led this rally means that it's for real. Gold is going strong and that trend should continue. I will try and find another place to hop on board. We'll finish off the trading week tomorrow.
Wednesday, September 12, 2012
The Dow gained 10 points today on average volume. The advance/declines were almost 2 to 1 positive. The market was lower but made a final hour comeback. Waiting on the Fed. The market breadth remains in an uptrend. The McClellan oscillator continues to the upside. I think that we will continue to see higher prices going into the September option expiration. It looks to me like that is the set up at the moment. Of course the Fed could move things the other way if the reaction to the announcement tomorrow is negative. But even so, I feel it would be short lived. I could be wrong. GE was up almost 1/3 on average volume. Overbought and staying there for GE. Looks like I won't be able to buy the October calls here as a pullback hasn't materialized. Gold was flat on the day as the US dollar dropped a bit more. The XAU gained 2/3. ABX up 1/4, GG rose 3/4 and NEM added 1/2. Volume was good here. The gold shares sold off early and came all the way back. Still overbought here but trying to go higher. I'm still interested in the October gold share calls if I get the chance to re-enter. Mentally I'm feeling a bit tired, did not sleep well. I'm guessing things will get a bit volatile with the Fed news tomorrow. It could be a triple digit day either way. I have a couple of trading ideas but I will let the news pass before attempting the next trade. All eyes on the Fed tomorrow.
Tuesday, September 11, 2012
Back to the upside in a Fed waiting game market as the Dow gained 69 points on average volume. The advance/declines were 2 to 1 positive. We get a ruling from Germany on the ECB bailout tomorrow and the Fed announcement on Thursday. Those will be the near term drivers for the markets. The trend is still up in my opinion. The uptrend line that began in the beginning of June for the S&P 500 on a daily basis remains in place. I may try the September OEX calls before next weeks expiration. GE was up an 1/8 on light volume. Again, I might go out to the October calls here on a pullback. Gold was up a few bucks on the futures. The US dollar had a bad day but gold did not rally as much vs. the movement in the dollar. That isn't bullish for gold. The XAU moved up 2/3. ABX and GG had very slight fractional gains, while NEM was up 2/3. Volume was light. I'm waiting on the gold shares here for some type of short term correction. I'll then probably try the October ABX calls again. The Fed announcement should provide some movement here. Still overbought on the gold shares. Mentally I'm feeling OK. The stock indexes are overbought and staying there. This is a technical condition that could persist. I am probably going to wait for the Fed and the market reaction before I make my next trade. That goes for the gold shares as well. Sometimes you have to be patient. Not to mention that the risk level will be elevated due to the uncertainty. Although most believe that QE3 is coming, it may already be discounted or not happen at all. So I'll stay on the sidelines until the news is out and then go from there. We'll see what happens in Germany tonight.
Monday, September 10, 2012
We started the week off on a weak note as the Dow fell 52 points on light volume. The advance/declines were negative. Digesting the recent gains in my opinion as we wait for the Fed later in the week. I might be looking at the September OEX calls for a short term trade here if we get oversold. I do not think this is the beginning of anything big to the downside. As usual, I could be wrong. GE was off 1/8 and volume was light. I am looking at the October calls here on a pullback. I think I will wait on the Fed first though. The gold futures were off $8 and a bit more in the aftermarket. The US dollar only had a slight gain. The XAU was lower by 2 7/8. ABX, GG and NEM all had fractional losses on light volume. I'm still looking at the October gold share calls again. Once again the volume and open interest expanded on the ABX October 40 calls. That could be the next trade. Again, waiting on the Fed is my preferred way to go at the moment. Mentally I'm feeling OK. No real reason for todays decline and there wasn't much conviction in the move. The trend for the stock indices remains up. Gold is taking a slight breather but I do believe that there is more room to the upside there as well. We've got some economic data out this week but all eyes will be on the Fed. I'm guessing it will be a sell on the news event but we'll see. I'll keep an eye on Europe tonight and go from there.
Friday, September 07, 2012
It was a sideways trading day with a bit of a pop at the close. The Dow was higher by 14 points on better than average volume. The advance/declines were 2 to 1 positive. The employment numbers were weak but the market didn't care. We're heading higher. There is no overhead resistance. We should at least run up into the September option expiration. Declines can be bought. If we get to short term oversold, I might try the OEX calls. However people will be buying nay dip because they have missed the move, so getting oversold would be difficult. GE was up 1/4 on lighter volume. It is the same story here, we've broken out above resistance. Calls are the trade here. I'll check the option premiums over the weekend. Gold had a stellar day as the US dollar broke a longer term uptrend line that was a year in duration. The gold futures were higher by $34. The XAU gained 5 1/2. ABX up 1 1/8, GG rose 7/8 and NEM added 3/4. Volume was good. I'll be looking to buy the October gold share calls again if we see some pullback. Overbought and staying there. All signs point to higher prices for gold as well. Mentally I'm feeling a bit tired and of course discouraged for selling the October ABX calls yesterday. But you have to keep moving on in the game. The stock indices have broken out to the upside and we'll have to see how far they can run. We might get a pullback to the breakout point but we also might not. I'll be looking for long entries over the weekend. We've got the Fed next week and that will be the catalyst for the next move in the markets. There was heavy volume in the ABX October 40 calls yesterday and today. That was a precursor for higher gold share prices when it happened with the October ABX 34 calls in August. It appears to be the case again. I'll try to come up with a game plan over the weekend to get some gold share calls again. For now it is Friday afternoon and time for a break.
Thursday, September 06, 2012
We got the resolution to the direction of the market today as the Dow climbed 244 points on good volume. The advance/declines were 4 to 1 positive. The ECB spoke and the markets liked what they heard. It doesn't really matter if it works or not. The market has spoken and we should listen. We broke through the 1420 level on the S&P 500. There is nothing in the way of higher prices. We will get the employment report tomorrow but even if we drop, I think that any decline can be bought. The McClellan oscillator will be moving back to the upside after todays action. GE was up almost 2/3 on good volume. The 50 day moving average held once again. I may try the calls here despite the good move up today. The weekly chart for GE is looking constructive. Gold rallied as well. The futures were up over $10. I would have liked to see a better move in gold today. The US dollar was slightly lower. The XAU rose over 4 points and is at the 200 day moving average on the daily charts. ABX was up 7/8, while GG and NEM gained 1 1/4. Volume was good. I sold my October ABX calls. The profit was 160%. I could be early to exit here. I noticed that the volume expanded at the close on these options. The last time that happened with the ABX October 34 calls, we saw higher prices in the near term. We also closed on the high of the day for ABX and that is usually bullish. Mentally I'm feeling OK. The markets powered higher today. Shorts were squeezed. The Dow transports haven't confirmed the move higher but could in time. Gold though overbought is still a buy in my opinion. The gold shares outperformed gold itself today and that is a positive going forward. I will try and buy back some gold share calls cheaper in the days ahead. I am going to stick to the October series for now. We've got the employment number tomorrow and that should be a mover as well. Stay tuned.
Wednesday, September 05, 2012
A waiting game as the Dow rose 11 points on average volume. The advance/declines were slightly negative. Today the overall market was weaker than the Dow. Nothing to do but wait for the ECB tomorrow. I still think that we will take another shot at 1420 on the S&P 500 in the near future. As always, I could be wrong and often am. GE was up 1/8 on lighter volume. Still holding at the 50 day moving average on the daily charts. Gold was little changed today as the US dollar didn't do much either. The XAU was off 1/4. ABX, GG and NEM all had fractional moves one way or the other on light volume. The same wait and see attitude going on here as well. Mentally I'm feeling tired, did not sleep well. If we don't get moving tomorrow on the ECB, we should get going off of the employment numbers on Friday. That's the idea for now. My ABX October calls are still in the black and the price isn't moving much. We'll see what happens tomorrow and go from there.
Tuesday, September 04, 2012
Welcome back everybody is what the markets would like to say as the summer has now passed on by. It was a mixed market as the Dow fell about 55 points on light volume. The advance/declines were positive. The overall market was stronger than the Dow. We were lower during the day but made some what of a comeback. There will be an ECB announcement on Thursday and we've got the employment number on Friday. The technicals on the stock indices are oversold here short term so I'm still in the bullish camp. GE was lower by over an 1/8. Volume here looks to be average and the recent uptrend line has been violated. We are at the 50 day moving average on the daily charts and we'll see if that holds. Gold gained $8 on the futures, which was a carryover from Friday. The US dollar was a bit higher today. The XAU was flat. ABX and GG had fractional losses. NEM led the way lower by 7/8. NEM leading the way down isn't usually bullish for the gold shares going forward. Volume was light. My October ABX calls are still in the black. The gold shares are overbought here short term. My guess is that near term gold will do the opposite of what the US dollar does. The US dollar is right at a longer term weekly uptrend line that has been in effect for a year. Things will get interesting for this ABX trade. Mentally I'm feeling a bit tired, did not sleep well. The stock indexes are waiting for the next bit of news and we'll have to see what the reaction is. I'm going to remain bullish for now but of course, anything can happen. The ABX October call trade is still showing a profit. Gold has had a nice near term run here and I would expect it to take a rest. The timing of that is the question. Plenty of time on the ABX trade but that doesn't mean it will remain profitable. Always plenty of questions in this game. We'll keep an eye on things overnight and see what develops tomorrow.