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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. 

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