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.