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.