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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.

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