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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. 

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