Wednesday, October 31, 2012
We tried to rally but fell off as the Dow dropped 10 points on average volume. The advance/declines were positive. October trading has ended and we're on to November. We've got the employment report on Friday and then the US election on Tuesday. Technically the stock indices are still oversold and I believe that regardless of the numbers, near term we will move higher. The S&P 500 has gone sideways for 4 days in a row. Although the summation index is still heading lower, I expect an upside pop in the major averages within the next 2 days. I could be wrong but I don't think so. GE was off a nickel on about average volume. Short term oversold here as well. Gold moved higher to close out the month. The futures rose $7. The US dollar didn't do much today but had been lower when the US markets were closed. The XAU gained 5 1/2 as it continues to outperform than precious metal. ABX up 1 1/3, GG added 1 /2 and NEM rose 1 1/4. Volume was average for the gold shares. Higher prices were expected in the gold shares and we got them. I ended up getting some ABX November calls before tomorrows earnings report. I'm not a big fan of chasing moves but I think that ABX is going to go higher. I still like the January calls as well if there is some pullback down the road. Of course I could be mistaken and the stock sells off on the earnings report. I have a stop loss order in place. Regardless, it looks like last week was the time to purchase the January calls for ABX. Mentally I'm feeling a bit tired. Oversold on the stock indexes and staying there. That is usually a recipe for disaster but we've only been moving sideways. Perhaps another day of wait and see before the numbers on Friday. It's anybodies guess. Gold moved up today but the gold shares have really been acting well lately. We'll see if that trend continues. I'm not sure how long I will hold on to the November ABX calls. I have a commitment on Friday halfway through the trading day. That will delay the blog posting until Saturday. I will also be away from my desk for a couple of days next week due to a prior engagement. The blog might be late or not posted in the middle of the week. We'll see how ABX reacts to the earnings and go from there.
Tuesday, October 30, 2012
A mini-holiday for those not dealing with the wrath of the storm named Sandy. Wall Street should get back to business tomorrow. The S&P 500 futures sold off over 10 points yesterday but we are back to being a bit higher. I do expect some strength in the stock indices before the employment report on Friday. Gold hasn't done much in the past 2 days. The US dollar however did have some weakness today. The gold shares have made some gains over the past 2 days on the Toronto exchange. I will try and purchase some ABX calls ahead of the earnings that are out early Thursday however the premiums will probably be inflated. It most likely would have been easier to attempt this trade under normal market conditions but that isn't the case. It's hard to say what the conditions will be like tomorrow with the end of the month. Perhaps we'll see some volatility but it's really anybodies guess. The foreign markets have generally been slightly higher the past 2 days. So we'll see what happens tomorrow morning and go from there.
Friday, October 26, 2012
The stock market tried to sell off today but didn't as the Dow gained a mere 3 points on light volume. The advance/declines were negative. We've moved sideways for 3 days and I think we are going higher. We're still short term oversold. My gut feeling is that if we were going to continue lower, we would have already. When the market is in a decent decline, it doesn't hang around for 3 days. It falls and we haven't, even though there has been plenty of bad earnings lately. The GDP report was better than expected but this is a number that will be revised a couple of times. I'm not saying that we will go to new yearly highs but we should rally in the beginning of next week. GE lost 1/8 on average volume. Oversold here as well. No trades in mind at the moment. The gold futures as well as the US dollar were flat on the day. The XAU lost 1 3/8. ABX, GG and NEM all had fractional losses on light volume. I've left in the open order for the January ABX calls. The earnings for ABX are due on November 1st. I believe that I will need to make the purchase ahead of the earnings if GG was any type of indicator. Mentally I'm feeling a bit tired. The stock indices have had every reason to fall after Tuesdays drop and they haven't. That's bullish moving forward. The summation index is still heading down but that could change with one decent up day. We should see higher stock prices in the beginning of next week. The employment report on Friday should be the next major mover. Gold has been in a downtrend for the month of October. The gold shares have basically moved sideways in the same time period. I will be trying to get some ABX calls at a good premium in the beginning of next week. I would like to go out to January because the weekly chart here shows a potentially bullish head and shoulders pattern. Potential because it hasn't happened yet and may not. I may just get the near month for the earnings report but the risk would be much higher. We'll see. Plenty to think about over the weekend. For now it's Friday afternoon and time for a break.
Thursday, October 25, 2012
Got somewhat of a bounce today as the Dow gained 26 points on average volume. The advance/declines were positive. The day started with a nice rise but then the sellers took over for most of the rest of the day. We're still short term oversold. We should move off of the GDP report tomorrow. Which way is anybodies guess. GE was flat on the day with average volume. We have at least stopped going down for now. No trades for GE in mind at the moment. Gold gained $11 on the futures and the dollar was a bit higher as well. The story was in the gold shares as the XAU gained 4 7/8 on a strong earnings report from GG. ABX and NEM were up a buck, GG soared 2 3/4. The volume was light though, however you cannot argue with the price movement. I still have the open order in for the January ABX calls. Earnings are due for both ABX and NEM on November 1st. I will probably want to own the calls before then if todays market action in GG is any indication of the future. Or perhaps I'm too late once again. Mentally I'm feeling tired, did not sleep well. The summation index continues lower but there is the possibility that if we rally tomorrow that the decline is over. That's a guess as usual. There's still a chance that we could unravel as well. That is the type of market environment we are in at the moment. There is no clear picture but we have moved lower lately. Gold has held the level of $1700 so far and that would be a positive going forward if we can hold up. I think the gold share calls can still be purchased for ABX. Perhaps tomorrow if we see some weakness.
Wednesday, October 24, 2012
The Dow closed down 25 points today on light volume. The advance/declines were negative. The Fed came and went with no real market reaction. That was anticipated by most of the players. The stock indices tried to rally today but to no avail. We are short term oversold so some type of bounce should appear. But the trend is down and support lines have been violated. The Dow transportation index was down heavy today. GDP on Friday and that should be the next market mover. GE was flat today on average volume. Oversold here as well. Gold fell again today, off $7 on the futures. The US dollar was flat today. The XAU fell 3 1/8 as near term support appears to have been broken. ABX down 3/8, GG lost 1 1/2 and NEM fell 1 1/4. Volume picked up a bit and that isn't positive going forward. The gold shares look like they're breaking down here on the daily candlestick charts. ABX has held up better than the rest lately, however that could change at any time. I still have the open order in for the January calls there but I might adjust it overnight. Mentally I'm feeling OK. No buyers lately for stocks. I don't feel any sense of impending doom here but the summation index continues lower. Oversold on the stock indexes and that is a condition that needs to change or things could get dicey. Oversold and staying there is a recipe for downside surprise. Gold has gotten to $1700 and it really needs to hold on here. There is some other support at $1675 but I would not like to see that happen. The market will go where it wants though. Commodities in general are falling now. I'll have to ponder the ABX trade tonight and decide what to do. We'll see if we can mount some type of rally tomorrow.
Tuesday, October 23, 2012
There was no upside follow through as the Dow fell 243 points on average volume. The advance/declines were about 3 to 1 negative. After yesterdays nice comeback, the stock indices just could not hold up. We are short term oversold here, so a bounce tomorrow would not be out of the question. The Dow transports actually were higher on the day. The breadth of the market wasn't so bad either considering the magnitude of the decline. The summation index continues lower though. Rising trend lines on many of the stock indices have been broken. We're heading lower and perhaps sideways is the best we can hope for near term. GE fell another 3/8 and the volume was good. This chart has broken down and that doesn't bode well for the overall market. No trades in mind here. Gold fell today as well on a stronger US dollar. The precious metal futures dropped over $15. The XAU fell 5 2/3. ABX off 3/8, GG lost 1 1/8 and NEM led the way down, weaker by 1 2/3. Volume was light. ABX held up considerably well with todays market sell off. I still have in an open order for the January calls here but I may have to adjust it to get filled. The option premiums are staying quite high for the ABX January series, which tells me that this idea may actually work. We'll see. Mentally I'm feeling OK. The tone of the game here has changed. We are heading lower on the S&P 500, perhaps to 1400 or 1380 in my view. Anything below that and we could be in big trouble. I don't see that happening. Gold is getting close to the $1700 level and it will be important to hold that in my opinion. Might get there tomorrow. We've got the Fed tomorrow but there really isn't much to expect from that this time. I could be wrong. We'll see how the overseas markets react to todays decline and go from there.
Monday, October 22, 2012
The Dow made quite a comeback today as we were down over 100 points and came back to finish up 2. The advance/declines were slightly negative and the volume was light. We rallied in the last hour and that is a positive going forward. We'll see if we can follow through to the upside tomorrow. I'm not completely sold on the idea that the recent decline is over though. But it could be as we hover at the 50 day moving average on the Dow. The summation index continues to the downside. We've got the Fed to deal with this week and the GDP report on Friday. GE fell 1/3 on heavy volume. GE cut it's loss for the day more than half as well. However the GE daily chart looks like it is breaking down. If GE is a precursor for the overall market, we'll see lower overall stock prices ahead. Gold gained a couple of bucks on the futures as the US dollar was pretty much flat on the day. The XAU rose 2 1/4. The gold shares continue to outperform. ABX, GG and NEM all were higher by about 1/2 on light volume. I'm leaving in the open order for the January ABX calls. The open interest expanded on the strike prices that I observed on Friday and that's bullish. I would ideally like to purchase some gold share calls this week on weakness. May not get the chance but it's early in the week still. Mentally I'm feeling OK. It was a nice comeback for the stock indices today. Follow through seems to me to be more important than usual considering where we are on many indexes. The over the counter indexes have been weaker and that isn't a good sign for the bulls. But if the major indices can hold up here, perhaps the decline is actually done. I'm not exactly sure but my guess would be lower prices this week. I could be wrong. Gold is right on it's 50 day moving average. The chart on the gold shares has been moving sideways for over a month. I'll be looking for an upside breakout at some point. Hence, I'd like to own some calls before that happens. But the markets will do what they please, as always. We'll see what transpires tomorrow.
Friday, October 19, 2012
An interesting expiration Friday as the Dow fell 205 points on average volume. The advance/declines were 3 to 1 negative. Earnings disappointments were the norm for today. The S&P 500 is right back to the 50 day moving average and the technicals have rolled over. It appears that we are going to head lower. My call for new yearly highs looks like another bad idea on my part. I expected some weakness next week but not of this magnitude. The uptrend line that has been in effect since June has been broken and the next support that I see is at around 1420 and then 1400 if that doesn't hold. Anything could happen but todays action changes the near term tone of the market. GE fell on its earnings report. It was down 3/4 on heavy volume. On the weekly chart here the uptrend line is at $21.50. That line has been in effect since late 2011. It is important that we stay above that level on a weekly closing basis or it could spell trouble for the overall markets. That's my thoughts there at the moment. Gold fell $20 on the futures as the US dollar was higher on the day. However the gold shares did not follow as the XAU only lost 1/4. ABX, GG and NEM were mixed with fractional moves. The volume here picked up and they closed well off of their lows of the day. Money sought the gold shares as a safe haven today in my opinion. I left in the open order for the January ABX calls. I noticed extremely heavy volume in the January 42 ABX calls today. If the open interest expands on Monday it would be a positive sign. The same type of action occurred in the ABX calls prior to the August-September run up. I'm still a believer in the gold shares moving higher in the medium term future. I could be wrong and often am. Mentally I'm feeling OK. Today was possibly a game changer for the overall stock indices. The tech shares are leading the way down. If the bank shares roll over here as well, we will probably be in a longer term decline. Hasn't happened yet. The fact that gold sold off today also makes the possibility of asset liquidation look real. I'm going to try and purchase some gold share calls next week. That is the game plan as of right now. I'll be checking all the charts over the weekend to decide the best course of action. I'll also be watching the financial media to see the reaction to todays sell off. If the tone is bullish then we are most likely headed lower. For now it's Friday afternoon and time for a rest.
Thursday, October 18, 2012
A bit lower today as the Dow fell 8 points on good volume. The advance/declines were slightly negative. The summation index is heading higher. The overall market was weaker than the Dow. Getting short term overbought on the technicals for the stock indices. That doesn't mean that we can't go higher though. The NASDAQ had a big dip thanks to Google. I'm not sure that means anything going forward. I still think that the presidential re-election rally is in place. GE was off 1/8 on average volume. The earnings should be a factor tomorrow. I have no idea what will happen there. Todays daily chart candlestick was bearish though. Gold fell about $8 on the futures as the US dollar was higher. The XAU fell 5 points and closed practically on its low. That's bearish going forward. ABX, GG and NEM all lost a buck or more on what passes for average volume lately. I dropped the strike price on my open order for the January ABX calls. I would ideally like to purchase some gold share calls next week. I believe that we'll see some overall market weakness next week and the gold shares should follow. I could be wrong. That is the game plan at the moment. Mentally I'm feeling a bit tired. Expiration Friday on tap with a bunch of earnings reports as well. Perhaps we'll see some volatility. Otherwise it's a wait and see mode for me at the moment. I might switch to the December gold share calls but that is something that I'll consider over the weekend. We'll see what comes out of Europe overnight and go from there.
Wednesday, October 17, 2012
Just hanging around today as the Dow gained 5 points on average volume. The advance/declines were 2 to 1 positive. The overall market was stronger than the Dow. The summation index is heading higher. The Obama re-election rally lives on. Look for new yearly highs in the S&P 500 in the next few days. The positive expiration week bias remains in effect. No telling how long this uptrend will last but higher is the path of least resistance for now. GE was up 1/4 on light volume. A waiting game on the earnings here. A good number could propel this issue to new yearly highs as well. Gold gained $6 on the futures as the US dollar was lower again. The XAU rose 2 1/8. ABX, GG and NEM all had fractional gains on light volume. I'm leaving in the January ABX call open order for now. Mentally I'm feeling OK. A European summit meeting tomorrow will grab the headlines and could possibly be a market mover. The market is trending higher regardless. We could continue to the upside until the US presidential election. That's a guess as usual. The gold shares continue to outperform the price of gold itself. That remains a positive going forward. We'll keep an eye on the overseas markets and go from there.
Tuesday, October 16, 2012
Continuing higher as the Dow gained 127 points on average volume. The advance/declines were 3 to 1 positive. Getting some OEX calls yesterday was the obvious trade that I failed to do. Once again an opportunity has been wasted because I simply did not want to take the risk. No risk, no reward in this game. The summation index could turn back to the upside with todays numbers. It appears that the stock indices want to rally into the election, which discounts an Obama victory. 2 solid up days are the beginning of a trend, as there are not any apparent sellers so far this week. GE was flat on the day and the volume wasn't anything special. Probably just waiting for the earnings on Friday here. Gold bounced back as the US dollar was weaker today. The yellow metal futures were up over $10 today. The XAU gained 3 3/4. ABX up a buck, GG added 1/2 and NEM led the way higher by 1 1/4. Volume was light but the price action was positive. I've left in the open order for the January ABX calls but we may start to rally in the gold shares as well. The daily candlestick charts look constructive to the upside with todays action. Perhaps the November calls are in order here. Mentally I'm feeling a bit tired, could have slept better. The positive expiration week bias remains as we have gained over 2oo points in the first couple of days this week. Not taking advantage of that is painful. But you have to move on. It looks like new yearly highs for the stock indexes are coming soon. The gold shares are outdoing the price of gold once again and that is a positive moving forward. ABX, GG and NEM should follow the overall market higher unless we see some sort of breakdown in gold but I don't see that happening. Gold is still attracting capital. We'll see what happens tomorrow after tonights second presidential debate. That may or may not influence the price action on Wednesday.
Monday, October 15, 2012
We got a bounce today as the Dow gained 95 points on average volume. The advance/declines were 2 to 1 positive. Some upside was expected and the next question is whether we can sustain it. The market did rally in the last hour which is a positive going forward. We've held the 50 day moving average on the S&P 500 daily charts. The summation index is still moving down but that could change with another day like today. There is a school of thought that says that we will rally into the election because of the re-election of Obama. That could be true. But we'll stick with the technicals and they are oversold and starting to move up on the stick indices. So there is room to go higher. GE was up 1/8 on light volume. No trades here and the earnings are due on Friday. Gold fell today as the futures lost over $20, breaking support. The US dollar was lower as well. The XAU sold off early but followed the overall market back to finished up 1/4. The gold shares outperformed gold itself and that bodes well for the gold shares moving forward. ABX, GG and NEM all had fractional losses on light volume. I still have the open order in for the January ABX calls. I'd like to see it filled before the earnings come out on November 1st. May or may not happen. Mentally I'm feeling a bit tired, did not sleep well. The positive expiration week bias looks intact after todays market action. But we still have the rest of the week to go. Plenty of earnings being reported this week along with a number of economic reports. Time will tell if this is the beginning of a new leg up for the stock indexes. I'm not sure one way or the other but we could rally into the expiration. After that, we'll have to wait and see. Gold broke down today on the daily chart. The technicals are just getting oversold. The 50 day moving average could act as support and that comes in at around $1710. I'm still a believer in higher prices going out in time. But for now it appears that gold is going to take a rest. I'd still like to get some gold share calls though. We'll see if the stock indices can follow through to the upside tomorrow.
Friday, October 12, 2012
We closed the week with a whimper as the Dow gained just 2 points on pretty light volume. The advance/declines were almost 2 to 1 negative, the opposite of yesterday. Summation index heading lower. The overall market was weaker than the Dow. Short term oversold and a bounce is overdue. The S&P 500 is trying to hold its 50 day moving average on a daily basis. The Dow as well is trying to hold on here but it has broken the uptrend line that began in June. The over the counter markets remain above their uptrend lines. It's a mixed bag but we are oversold and expiration week is coming up with its usual upside bias. GE was flat and the volume was light. It's possible that we are trying to put in a short term bottom here at around 22.50. Gold was weaker on the day as the futures fell over $10. The US dollar was weaker as well. The XAU dropped 3 3/8. ABX off 7/8, GG lost 2/3 and NEM down 3/8. Volume was very light. I canceled the open order for the November ABX calls and left in the order for the ABX January calls. I may try the November calls again next week. Earnings for ABX are due on November 1st. Mentally I'm feeling a bit tired, could have slept better. The weekly chart for the S&P 500 now has a bearish engulfing candlestick and the technicals have rolled over. Perhaps we'll see some more weakness next week but I do believe that we will see some type of bounce first. I could be wrong and often am. I'm choosing not to take any risk there for now though. I could change my mind over the weekend. I still like gold for higher prices going forward but if the overall market falls here, the gold shares will probably follow. I don't have any problem going out to January with the options. But like anything else, it's just a guess. I'm willing to take the chance here though. The gold share weekly candlestick charts look bearish here as well, with the exception of NEM. I'll have to double check the charts over the weekend. For now it's Friday afternoon and time for a break.
Thursday, October 11, 2012
We tried to hold onto the gains made early today but could not. The Dow lost 18 points on average volume. The advance/declines were 2 to 1 positive though. Short term oversold and a bounce is coming. The indices were mixed today. I'd expect some type of rally attempt tomorrow into early next week. We are still right at the uptrend line for the S&P 500 and I expect it to hold for now in the short term. But if it doesn't, the game will have changed. Hasn't happened yet. GE had a slight gain and the volume was very light. No trades here for now. Gold was up $5 on the futures as the US dollar lost some ground today. The XAU gained 7/8. ABX and GG had fractional losses, while NEM was up 1/2. Volume remains light here. I adjusted down the price for the November ABX calls again. I also placed an open order in for some January ABX calls. I am now thinking that October could be a consolidation month for the gold shares. That's a guess as usual. Mentally I'm feeling OK. 6 days to go in the October option cycle. If I had the guts, I'd be willing to try the OEX calls tomorrow on any weakness. The problem there is that if we break the uptrend line in the S&P 500, we'll be heading lower rather quickly. The summation index is heading lower as well so I'm not willing to take the risk. Gold is still meandering around here. I'll keep an eye on Europe overnight and take it from there.
Wednesday, October 10, 2012
We are right at the point of ending the months long rally as the Dow fell 128 points on light volume. The advance/declines were negative. The S&P 500 is sitting on the uptrend line that began in June. The summation index continues lower. On the plus side, we haven't broken down yet. We are also short term oversold. Plus the advance/declines for today were not as bad as a down 128 point market. The overall market was stronger than the Dow as well. But we are at a point in time where things might change and we have to be aware of that. GE was off 1/4 on light volume. It looks like we are rolling over here and that would not be bullish for the overall stock indices. Gold was flat on the day as was the US dollar. Waiting on a meeting in Europe tomorrow is my guess. The XAU gained 1 1/3. ABX, GG and NEM were mixed with slight moves one way or the other on light volume. I left in the open order for the November ABX calls after adjusting the price lower. I am also looking at going out to the January calls here. ABX is trying to hold the $40 level and a break of that should take us to the 50 day moving average at the $38.5 level. That may actually be the spot to get long. All just theory there. I remain a longer term believer in higher prices for gold and the gold shares. Mentally I'm feeling a bit tired, did not sleep well. Just as today was important, tomorrow is even more so. We probably should bounce but after that it could get dicey. What I'm saying is that being careful here would not be a bad idea. That said, the decline could also be done and now we rally to new yearly highs. Take your pick but I think we'll know pretty soon what is going to happen. Gold is still holding up pretty good for now as the US dollar is at an important juncture as well. Any strength in the dollar will break through a down trend line that has been in effect since late July. It is something to keep an eye on with respect to gold and the stock indexes as well. We'll see what tomorrow brings.
Tuesday, October 09, 2012
Weakness today as the Dow fell 110 points on light volume. The advance/declines were 3 to 1 negative. The summation index will be back to heading lower. We closed almost on the low of the day for the S&P 500 and that isn't exactly bullish. A decline in the early part of this week was expected. The uptrend line from June comes in at around 1435. We need to hold on there or the game will be changed. Haven't broken it yet but beware if we do. 1435 would be a logical spot to get some calls if you were so inclined. I've had a bullish stance on the overall market for a while but the technicals have rolled over. I'm on the sidelines with regards to the OEX as the time to buy the puts there has probably already passed. GE fell 1/3 on average volume. The same story here as the technicals are heading south. No trades here for me now. Gold fell $10 on the futures as the US dollar had a good day. The XAU dropped 4 points. We've got the technical rollover here as well. ABX off 7/8, GG fell 1 1/2 and NEM down 1 1/4. Volume remained light. I adjusted down the strike price for the November ABX call order. I will have to ponder this trade tonight because if the overall market starts to fall here, the gold shares will most likely follow suit. Mentally I'm feeling OK. Important session tomorrow for the stock indices in my opinion. We're not overbought or oversold at this juncture, so anything is possible. I'd like to see the rally continue but that doesn't mean that it will. So we'll see what happens. I'm still a believer for higher gold prices in the future. However this market can get moving pretty fast one way or the other at times. If we break down from these levels it could get ugly pretty fast. Again, hasn't happened yet and I'm still ready to try the gold share calls here. Perhaps going further out to January is a possible trade. I'll consider that tonight as well. We'll watch how the foreign markets react to todays US stock index action and go from there.
Monday, October 08, 2012
It was a semi-holiday today as the bond market was closed for Columbus Day. The Dow fell 26 points on extremely light volume. The advance/declines were negative. I expect a bit of weakness in the early part of this week. After that, who knows? Not a lot of economic data out this week. The trend is still up. GE fell almost 1/4 on the same very light volume. We're still overbought on GE, so there is room to head lower near term. That doesn't mean that will happen but the technicals won't remain overbought forever. Gold lost $5 on the futures as the US dollar was a bit higher. The XAU fell 1 1/2. ABX, GG and NEM all had fractional losses on the very light volume. Still moving sideways here. I did place an open order for some ABX November calls. This will be my next trade if it gets filled. This is the idea for now but that could change going forward. Mentally I'm feeling OK. I'm still a believer in new yearly highs for the S&P 500 going forward. We've been moving sideways for 3 weeks. No uptrend lines have been broken. Earnings season is upon us. Gold is moving sideways as well. If and when we get through 1800 should signal the next up leg. Patience is required for now.
Friday, October 05, 2012
A mixed market once again as the Dow gained 35 points while the overall stock indices were weaker. The advance/declines were positive and the volume was light. We rallied on a better employment percentage number early in the day and then sold off for the remainder of the session. There was a huge drop in the rate of unemployment but by now we all know that these numbers are byproducts of government. The group in power would like to remain so and an election is imminent. As traders we only care how things affect the market, regardless of the party in the White House. The fact that the rally could not sustain itself could be a negative in the short term. The summation index was higher yesterday but not by much. The stock indexes are approaching short term overbought. GE was up 1/8 on light volume. GE is saying that the rally here still has legs. I can't argue with that yet. Gold fell $15 on the futures and the US dollar closed the day about unchanged. The XAU dropped 2 points. ABX and NEM had slight fractional losses, while GG was unchanged. Volume was very light. I'll be looking at the gold shares closely over the weekend to try and come up with some type of game plan for next week and beyond. I'm still a believer in higher prices for the precious metal shares. Mentally I'm feeling OK. Todays market action does not look positive going forward in the short term. We could not hold the early gains. Of course that could all change on Monday but I really don't think that it will. I could be wrong. I'll be checking the charts closely over the weekend. 2 weeks to go in the October option cycle. Gold had a slight sell off today but the fundamentals remain in place. We've been overbought here for quite a long time and perhaps it is finally time for gold to take an extended rest. We've been moving sideways for 3 weeks. I'm not exactly sure here and will ponder this over the weekend. For now it's Friday afternoon and time for a break.
Thursday, October 04, 2012
Moving back to the upside as the Dow gained 80 points on average volume. The advance/declines were almost 3 to1 positive. We've worked off the overbought condition in the stock indices. Higher prices are the next logical conclusion. Todays action should send the summation index back to the upside. We should hit new yearly highs for the S&P 500 in the next couple of days. I'll go out on a limb and say that tomorrows employment report won't make a difference. We'll probably move higher regardless. That's my guess at the moment. GE was little changed on average volume. No trades there for now. Gold moved higher on a weaker US dollar. The gold futures rose $16. The XAU gained 5 1/2. ABX and GG tacked on over a buck, while NEM added 3/4. Volume was light. It looks as though I've missed the chance for the October gold share calls. The XAU closed on its high and should continue to the upside tomorrow. I still may try the November ABX calls. Mentally I'm feeling OK. The OEX calls a couple of days ago looks like another missed opportunity. Of course that's always easy to say after the fact. Like I've said before, no uptrend lines have been violated in the stock indexes so the trend is up. Gold continues to attract capital. That trend remains in place. The same things that have been working continue to work. We'll look to the unemployment report tomorrow for direction but it may be to the upside now matter what. We'll see.
Wednesday, October 03, 2012
Muddling through the days here as the Dow rose 12 points on what now passes for average volume. The advance/declines were even. The overall market was stronger than the Dow again. We also rose in the final hour and that is short term bullish. Not much for me to say here as it appears that we are simply in a holding pattern awaiting the Friday employment report. I'm sticking with my bullish resolution. I may try the OEX calls tomorrow on weakness. GE was up 1/8 on light volume. Nothing doing here but we remain overbought. Gold was up a bit today as was the US dollar. The XAU fell 2 3/4 as the gold shares diverged from the precious metal. ABX, GG and NEM all had fractional losses on very light volume. I have yet to put in an open order for some calls here as we haven't reached an oversold condition. However I will be getting some calls eventually because the trend here is up and I don't think that it's over. Mentally I'm feeling OK. So we wait for Friday and that is the next market moving event. A little over 2 weeks left in the October option cycle. My thinking remains that higher prices are in the offing but I could be wrong. The summation index continues lower but prices haven't followed. The uptrend lines on the indices have not been violated yet either. The presidential re-election rally remains in place. Gold has been moving sideways for 3 weeks. A rally in the stock market may not mean a rally in gold though. We are almost back to the uptrend line in gold that now is at the 1760 level. We'll see if it holds.
Tuesday, October 02, 2012
Another mixed bag today as the Dow fell on light volume. The advance/declines were positive. The overall market was stronger than the Dow today. I really feel that we are about to take off to the upside soon. We've had plenty of time to fall here but it just isn't happening. I think that I will look at the October OEX calls tomorrow to try and find a trade. We've been moving sideways for a week and it is time to get going. I could be wrong but I don't think so. GE was off a touch on average volume. No trades here for now. Gold fell $7 on the futures and the US dollar was lower a bit as well. The XAU fell 1 1/4. ABX, GG and NEM had fractional losses on light volume. The gold shares have been moving nowhere for a couple of weeks since the huge move that began in August. I'm still a believer in higher prices here. I'm not sure if I'll try the October or November gold share calls though. Mentally I'm feeling OK. It could be that we are just waiting for Fridays employment report at the moment. The summation index continues lower but I am guessing that it will turn around soon. When markets drop, they usually go straight down and we have been hanging around now for a while. A short squeeze rally could be in order. Gold is hesitating but the underlying fundamentals for higher prices haven't changed. We'll see what happens tomorrow.
Monday, October 01, 2012
A mixed market today despite the 78 point rise in the Dow. The NASDAQ showed a slight loss. The advance/declines were positive. Volume was light. We should be seeing a rise here in my opinion, ahead of the employment report on Friday. But the action lately has been sloppy. The summation index continues heading lower. I'm sticking with a bullish stance unless we break the uptrend line in the S&P 500 at 1420. GE was up 1/8 on average volume. As long as GE continues higher it should bode well for the stock indices. Gold was up almost $10 on the futures today as the US dollar was lower. The XAU rose 1 1/8. ABX and GG showed slight gains, while NEM had a fractional loss. Volume was light. I'm still considering the October gold share calls but have not put in another order just yet. I may go out to November here. Mentally I'm feeling OK. It's never a good sign when the Dow is the strongest index and the over the counter market lags. That's what we got today. It's a short term negative in my opinion. The technicals here are getting mixed, which makes for a tough directional call. But like I said before as long as 1420 holds on the S$P 500, I'll still look for higher prices. It's still a presidential re-election rally for now. Gold is still above the uptrend line from mid-August. The short term technicals for gold remain overbought. We'll check the overseas markets overnight and go from there.