Monday, December 31, 2012
It was quite a final day for 2012 as the Dow rallied 166 points on better volume than we have seen lately. The advance/declines were 6 to 1 positive. The tax deal is finally coming together but it hasn't been finalized as of yet. Investors are front running the expected beginning of the year positive money flows. I did want to get some January OEX calls but the premiums were so inflated that I stepped aside there. Today stops the down trend for now but the volatility has definitely picked up. We should rally when the markets reopen on Wednesday. What happens after that is the main question. GE had a huge move, up 55 cents on good volume. We should be able to build on that going forward as well. Gold was up as well. The precious metal futures rose almost $20. The US dollar was little changed on the day again. The XAU gained 5 points. ABX, GG and NEM were all up at least a buck on average volume. I did place an order during the day for some January ABX calls again but it wasn't filled. I believe that money will make its way into the gold shares at the beginning of next year as well. I may try the ABX calls again on Wednesday if we get some weakness early. We'll see. I haven't done too well with this trade lately. Mentally I'm feeling OK. We are getting the expected pop in the stock indexes with the resolution to the tax situation. The over the counter stocks are moving even better to the upside and that is a positive going forward. The stock indices were also short term oversold, so a move higher is no surprise. Gold had a decent day but we will have to see if there is any follow through to the upside. Gold has been dead money for quite a while. I do think that I will try the January ABX calls again though. It's a holiday tomorrow and perhaps the tax deal will be done by the open on Wednesday. Most foreign markets are closed tonight as well. So we'll take a day off and keep an eye on the news out of Washington. A Happy and Prosperous Trading New Year to all.
Friday, December 28, 2012
Another down day for the Dow as we did not build on yesterdays comeback. It was important for the bulls to have some follow through to the upside today and we didn't get it. These are very thinly traded markets in a holiday week. The Dow fell 158 points on light volume. The advance/declines were 2 to 1 negative. The summation index continues lower. Still waiting on Washington to come up with a tax deal but it hasn't happened yet. Might not happen before the end of the year deadline and not many expected that. The stock indices are now short term oversold. Any sign of a tax deal should spring some type of rally. The OEX options are richly priced here though, with 3 weeks left in the January cycle. GE fell 1/4 on light volume. The 200 day moving average may provide some support at the $20.25 level. Oversold short term here as well. Gold fell $7 on the futures today as the US dollar was little changed. The XAU dropped 1 1/2. ABX, GG and NEM all had fractional losses on light volume. The bollinger bands are converging on the daily charts for these gold stocks. That usually implies a major move is about to occur. Which way is the question. I just might try the ABX January calls again if we get some decline next week. The gold shares are getting short term oversold once again. That hasn't led to any type of sustained rally for the past couple of months though. Mentally I'm a bit tired, did not sleep well. The stock indices are in decline due to the uncertainty coming out of Washington. Headline risk remains firmly in place. The trouble is that this dilemma could be solved overnight. That will have quite an impact on the markets and trading. The risk level in the game right now is very high. However with risk there also comes reward. It is something to think about over the weekend. Gold continues to languish and still appears to be dead money. I'm thinking that some money could flow into the gold shares early next year due to there low prices. But as usual I could be wrong and I was wrong quite a lot this year, especially with the gold shares. My trading account for 2012 ended the year with a loss of 11%. I have already began to regroup for next year, which begins next week. We will have to keep our eyes peeled for the news out of Washington over the weekend. The stock indexes are still being held hostage by the politicians. There is some support for the S&P 500 at the 1390 level, which is the 200 day moving average. We are already oversold and a break of that could take us back to 1350 rather quickly. But any announcement of a deal should rocket the indices back to the upside. The game is never easy. But for now it's the last Friday afternoon in December. Time for a break.
Thursday, December 27, 2012
Lower again today but the market did make quite a comeback as the Dow fell 18 points on light volume. We were off around 140 points during the session. The advance/declines were negative. The summation index is heading lower. Still waiting on a tax deal in Washington. Todays candlestick chart for the Dow could be a bullish hammer but we will have to wait and see what transpires in the next couple of trading days. Some kind of deal will get done sooner or later. GE was off 1/8 and the volume was average. Perhaps it's time to try the calls there. I remain on the sidelines though. Gold was up $3 on the futures and the US dollar rose slightly as well. The XAU gained 7/8. ABX, GG and NEM all had fractional gains or losses on OK volume. Gold continues to look like dead money. There is a lot of uncertainty in the marketplace right now and there is no flight to gold. Perhaps that will change next year but for now gold remains an under performer. Mentally I'm feeling a bit tired, did not sleep well. Even though it is a holiday week, tomorrow could be important. If we continue to rally it would be a positive sign on the charts. If not, then we would probably be heading into an extended decline. That is my best assessment at the moment. There will be some kind of tax deal sooner or later. The key I think will be how the market reacts after that. Gold continues to disappoint on the upside but I am still looking at the gold share calls. If we get a drop to the $1620 level on gold, that may take out the rest of sellers. Just a guess as usual. We'll monitor the news overnight and take it from there.
Wednesday, December 26, 2012
Holiday light trading is the theme as the Dow fell 24 points on half of a normal days volume. The advance/declines were negative. No Santa Claus rally so far this year with the troubles out of Washington. The tax issue should be resolved within the next week. We'll watch for the market reaction after that event. Until then it is simply a wait and see environment. I have no OEX trades in mind for now. If we get short term oversold I may try the January calls. GE was off just a touch again on very light volume. Nothing doing there really. A lot of companies are in a holding pattern. Gold was up a buck and the US dollar fell just a bit. The XAU gained 3/4. ABX and GG were up 1/3, while NEM gained 7/8. Volume was light. The gold shares outperformed gold today. However we are in such a lightly attended point in time, it's hard what to make of it. Perhaps this is the start of the rally in the gold shares that I've been looking for. But I have already tried and failed here so much that I probably will not try again here. Mentally I'm feeling OK. Just 3 trading days left this year. The stock indexes are waiting on Washington. We normally get a nice rally when the new year begins. If we get a tax deal as well, it could be quite a bump up. But that is just another guess. Technically the stock indices are no longer short term overbought but they're not oversold yet either. Gold is still trying to hang on at the 200 day moving average. Expect more light volume trading tomorrow.
Monday, December 24, 2012
The markets closed early today in a holiday shortened session. The Dow fell 51 points in a very thinly traded, light volume affair. The advance/declines were negative. It doesn't look like there will be any buyers until we get something positive out of Washington. There will be some kind of tax deal sooner or later. We'll watch for what the markets do after that for a better idea of where we're headed. GE was off a touch on very light volume. No trades there for now. Gold and the US dollar were basically flat on the day. The XAU was up 1/3. ABX and GG had fractional gains, while NEM had a fractional loss. The gold shares remain oversold. I think we could see a decent rally there at any time. However I have tried the gold share calls a few times lately and they simply have remained oversold. Mentally I'm feeling OK. The market remains hostage to the situation in Washington. This will resolve itself eventually and probably pretty soon. Until then the stock indices should be on hold or move lower. Gold is trying to hold at its 200 day moving average. We'll have tomorrow off and then back to it on Wednesday. It should be a very light volume holiday week for the markets.
Friday, December 21, 2012
It's all about the headlines coming out of Washington at this point. The Dow fell 120 points on expiration heavy volume. The advance/declines were 2 to 1 negative. No tax deal yet and the stock indices are now nervous. I still think they will get something done by the new years deadline. It is how the market reacts after that which is what you should be watching. We're still overbought on the short term technicals. GE was off a bit over 1/8 and the volume was very heavy again. Getting oversold on a daily basis here but it's not all the way there yet. I have no trades in mind here at the moment. Gold bucked the trend and rose $14 on the futures even with a stronger US dollar. An oversold bounce or the flight to safety? I certainly don't know which it was. The usual inverse relationship between the dollar and gold remains not to be in place. It's been that way for a while and I don't know what to make of it. The XAU was up 1/4 today. ABX and GG had fractional losses, while NEM had a fractional gain. The same results as yesterday. Volume was very heavy. I would like to try the calls on ABX again but it hasn't worked lately. It is both short and medium term overbought. That hasn't meant much lately though. I'll ponder it over the weekend. Mentally I'm feeling OK. Had some internet issues during the trading day and that is never a good thing. Some of the stock indexes had gaps lower today and that isn't a positive sign for the bulls. However in this headline driven atmosphere, and announcement of a tax deal could send us back to the upside in a hurry. We'll find out in a matter of days. It's a holiday week next week and that could skew things with the lack of volume. Even with todays move higher, gold hasn't been acting well lately and we broke the support at $1680. The gold shares are still oversold and have been for a while. Yet there hasn't been any rally. So we'll see. I'll go over the charts this weekend and keep an eye out on the news from Washington. For now it's a December evening and time for a break.
Thursday, December 20, 2012
The Dow gained 59 points today on average volume. The advance/declines were 2 to 1 positive. One minute there is a tax deal and the next minute there isn't. That is the type of environment we are in for now. Eventually a deal will get done. The question is what happens after that? We're still overbought on the stock indices. That hasn't seemed to matter lately. The summation index continues higher and the trend remains up until further notice. GE was up 1/4 on better than average volume. I'm not sure that I'm going to try anything with GE right here. Gold fell again as we have broken through support earlier this week. The precious metal futures fell another 20 bucks today. This, despite the US dollar moving lower yet again. The XAU is outperforming the metal here but that means that it is dropping less, relatively. It fell 7/8 today but there is a potential hammer or morning star on the daily candlestick chart. ABX and GG had fractional losses, while NEM was actually up 1/3. Volume was good for the gold shares. Nobody wants gold at the moment. Usually a good time to buy things is when nobody wants them. But that is a longer term strategy. For trading purposes gold broke support at $1680. The next support is $1620 followed by around $1550. The gold shares are oversold, remain oversold and have been a place to be short, not long. As long as the relationship between the dollar and gold is inverse to what it should be, it probably isn't time to get long. But my ideas and thinking haven't been working lately. So consider that as well. Mentally I'm feeling OK. Still at the mercy of headline risk in the stock market. Money seems to be flowing into stocks regardless for now. We've got the positive holiday bias coming up and the start of the new year as well. Expiration Friday tomorrow and then we should be going into holiday mode for next week. But we still have Washington and the tax deal to get through. We'll see what happens tonight and what is announced before the weekend.
Wednesday, December 19, 2012
A reversal of sorts today as the Dow fell 99 points on average volume. The advance/declines were about even. Headline risk is going to be the norm from now on until Washington sorts out the tax deal. Today the news was negative and down we went. The stock indices were short term overbought anyway, so some decline could be expected. Some of the technicals, such as the trin, were and are very overbought. Things can turn on a dime now as we head closer to the end of the year. I'm still going to be looking for some type of Santa Claus rally next week. GE fell 2/3 on very heavy volume. This was a pretty big move for GE. If GE is a harbinger of things to come, we could see a nasty decline in the overall market. I would expect to see some support here at the $20 level if the fall continues. Gold fell a couple of bucks on the futures as the US dollar finished the day little changed. The XAU was off 1 2/3. ABX, GG and NEM all had fractional losses on light volume. I'm considering trading a basket of the gold shares, GDX, when I'm ready to try gold again. Perhaps at the beginning of next year. The gold shares remain oversold. Mentally I'm doing OK, considering having to book yesterdays loss. I should be done for this years trading with less than 2 weeks to go in 2012. We are at the mercy of Washington even more so than usual until a tax deal is settled. I do think some kind of agreement will be reached before the end of the year. The market reaction will be key. We will all have to be ready to trade off of that news when it happens. Gold continues to languish as it is holding at the 200 day moving average. A break of that level could take us down to $1620 in a hurry. Hasn't happened yet. We'll keep our eyes and ears open for the next sound bite out of Washington.
Tuesday, December 18, 2012
The rally continues as the Dow gained 115 points on good volume. The advance/declines were almost 3 to 1 positive. The up move has legs. Overbought and staying there. The summation index is now moving higher. Whatever negative chart patterns we had last week have been negated. The transports have broken out above some longer term resistance and that bodes well for the near future. Closer to a tax deal in Washington has been the excuse for the move up. You can't fight price action one way or the other. GE fell 1/4 on heavy volume, bucking the trend. There was some specific news on GE today that was considered bearish. GE finished well off of its lows though. Gold got clobbered today as it fell over $25 on the futures and broke the support level of $1680. The US dollar was lower as well. This relationship between the dollar and gold has been going on for a while now. They are moving lower together and that is the inverse of what is usually suspected. It isn't bullish for gold. The XAU held up rather well considering. It dropped 2 1/2. ABX, GG and NEM all had fractional losses again on average volume. I dumped the January ABX calls that I had for an 80% loss. This trade was never in the black and it was one of the bigger losers of the year. I added to it on lower prices and that is usually always a recipe for disaster. This trade will also increase my trading loss for the year. I'll tally the final numbers there before the end of the year. Gold continues to be dead money here. Even worse it is losing value. Mentally I'm feeling OK despite the loss. The stock indices are in rally mode. It is expiration week and the usual positive bias is evident. Throw in some good news out of Washington and we are heading higher. Gold had a horrible day and we are at the 50 day moving average. The precious metal will need to stop its decline here or things could get ugly. I still do like the gold shares. They are oversold on a short and medium term basis. However my biggest losses in the past year have been there so I will probably be steering clear of them for a while. Money is leaving both gold and the US dollar lately. The flight to safety play is off for now. I probably won't be making any more trades this year. There are only 3 days left on the December option cycle and next week is a holiday week. We'll see what tomorrow brings.
Monday, December 17, 2012
A positive start to option expiration week as the Dow gained 100 points on light volume. The advance/declines were 2 to 1 positive. This should send the summation index higher. No technical reason for the rally. The tax problem in Washington looks like it is almost being solved. Of course that could change tomorrow but some kind of deal will be reached. We will see if todays action has some legs. GE was up 1/3. Short term overbought here. Gold and the US dollar both didn't do much today. The XAU was up 1/3. ABX, GG and NEM all had fractional gains on light volume. Unless we get some type of rally in ABX, I will have to dump the January calls that I own at a loss. That is the most likely outcome. Mentally I'm feeling OK. The stock indices continue higher and are getting short term overbought again. We have a holiday week next week. All of the major trading for the year will be done in the next 4 days. Perhaps we will run things up into the expiration but that is just a guess. Gold at around $1700 remains dead money and I don't see a catalyst in the near future. We'll keep an eye on the action overseas and go from there.
Friday, December 14, 2012
Continuing lower as the Dow fell 35 points on light volume. The advance/declines were negative. The summation index is flattening out here. The weekly S&P 500 candlestick chart now has a potential evening star as well. So the rally from mid-November could be in jeopardy. The daily technicals on the stock indices have rolled over. I'm sticking with a best case scenario of sideways for the market at this juncture. We do have option expiration week coming up and that usually has a positive bias. But until we get some clarity from Washington on the tax picture, whatever gains we do see from here will be muted. GE was flat on the day and the volume was average. No trades here for now. Gold had a lackluster session even though the US dollar was lower once again. The precious metal futures finished the day basically unchanged. When gold cannot rally despite dollar weakness, it isn't a good sign for the bulls. I certainly don't know why gold just can't catch a bid here with a bullish dollar backdrop. The XAU was up a point today. ABX, GG and NEM had fractional moves one way or the other on light volume. My ABX January calls continue to languish in a losing position. If I don't see some upwards movement in ABX next week, I'm going to have to dump them for another loss. Mentally I'm feeling OK. The over the counter stocks have been weaker in the past couple of days and that usually isn't a good sign moving forward. We're still at the mercy of headline risk out of Washington. The question is once we're done with that, then what? We'll follow the technicals and let that guide us. Gold continues to disappoint and it looks like there is no rally forthcoming. It has all the signs at the moment of dead money. When whatever you're trading can't rally on good news and bullish developments, then that trade is in trouble. Of course things can turn on a dime sometimes but that is the exception to the rule. I'll need to cut this ABX call trade loose next week most likely. It's a Friday afternoon in December and time for a rest.
Thursday, December 13, 2012
We lost some ground today as the Dow fell 75 points on light volume. The advance/declines were 2 to 1 negative. The overbought condition of the stock indices needs to be worked off and this is the beginning. Whether or not it turns into a full on rout has yet to be determined. I don't think that it will but what do I know? The daily candlestick chart on the S&P 500 now looks bearish with the pattern of a white candle, followed by an evening star and a black candle. So I think that near term we will probably be in a down to sideways pattern. GE was off 1/8 on light volume. Still above the 50 day moving average here. Gold fell $20 today on the futures as there was no follow through to the Feds action yesterday. That isn't bullish. The US dollar was a bit higher. The XAU reversed yesterdays positive action and was down 4 1/8. ABX off 3/4, GG and NEM fell 1 1/4. Volume was light to average. My ABX January calls remain mired in the red. Mentally I'm feeling OK. Still plenty of talk out of Washington and no action. We remain hostage to that situation but eventually it will clear. Headline risk is still in place. 6 days to go in the December option cycle. Gold continues to simply be dead money. I thought after yesterday that perhaps we would get a multi-day rally but it was not to be. I'm going to have to consider when to take the loss there unless there is a dramatic turn of events to the upside in gold. We'll see what tomorrow brings to end up the week.
Wednesday, December 12, 2012
A one day reversal to the downside for the Dow as we opened higher and closed lower on the Fed announcement. The Dow lost 3 points on average volume. The advance/declines were negative. The stock indices actually rallied after the Fed but then gave back all of the gains on the day. The daily candlestick chart for the Dow now looks like an evening star, implying lower prices ahead. That would not be out of the question since we are still very overbought both short and medium term now on the stock indexes. I don't think it would be the beginning of a major decline but some backing and filling perhaps. I could be wrong. GE was up 1/4 on average volume. We just got above the 50 day moving average here on the daily chart. Gold managed to gain $8 on the futures but sold off a bit in the aftermarket. The US dollar was lower again. I would have expected gold to rally today off of the Fed but we didn't see much. Gold also hasn't rallied with the weaker US dollar lately either. These are not bullish signs for gold. I do not know the cause. The XAU managed a nice gain of 4 1/4 today though. ABX and GG both gained over a buck, while NEM rose just 1/4. Volume was average. Perhaps this is the beginning of a rally in the gold shares for a change. Or not. We'll have to see how the week closes out. My January ABX calls gained some ground but that trade is still a loser for me. Mentally I'm feeling OK. So we got the Fed out of the way and now we move on to what's next for the stock market. We still have to deal with the tax issue from Washington, most likely before the end of the year. I would be looking for near term weakness for the stock indices and then we'll see where we go from there. We'll see how the foreign markets react to what Big Ben had to say today.
Tuesday, December 11, 2012
Overbought yet continuing higher as the Dow gained 78 points on average volume. The advance/declines were 2 to 1 positive. The summation index continues higher. We'll get the Fed tomorrow and we'll see what happens with that. Obviously the trend remains up. We just got through the 50 day moving average on the major stock indices. That's a positive moving forward. Perhaps we are beginning the Santa Claus rally. Of course, that could all change tomorrow. GE was up 1/8 on good volume. No trades there for now. Gold was lower by about 5 bucks on the futures despite a weaker US dollar. Gold and the dollar have not had their usual relationship lately and that is troublesome going forward. The XAU lost 1/2 today. ABX, GG and NEM were mixed with fractional moves one way or the other on light volume. Gold will probably move off of the Fed announcement tomorrow. That should give us the near term direction for the precious metal. We'll have to see how the gold shares react. Mentally I'm feeling a bit tired, did not sleep well. The stock indexes continue higher as the rally lives on. Overbought, staying there and that is a condition that lasts in bull moves. Gold seems to be dead money at the moment. Unless we see some kind of move following the Fed, that could be the case for a while. If gold can't rally on a weaker US dollar then something is wrong somewhere. My January ABX calls remain losers. We'll see what tomorrow brings.
Monday, December 10, 2012
Still a meandering market as the Dow gained 14 points today on light volume. The advance/declines were positive. Waiting for some kind of catalyst one way or the other. The Fed meets this week and maybe they can get things going. However the market seems to be on hold until Washington figures out the tax situation. This could go on until the end of the month. Technically the stock indices are short term overbought. The summation index does continue higher. GE lost a few cents on the trading day and the volume was very light. Getting to the 50 day moving average here. Gold was up $8 on the futures as the US dollar was weaker today. The XAU rose a couple points. ABX, GG and NEM all had fractional gains on light volume. Perhaps we'll see something out of the Fed to get gold moving to the upside. The technicals for the gold shares are short term oversold. Mentally I'm feeling OK. Not the most dynamic trading environment with just less than 2 weeks to go in the December option cycle. However the rally that started in mid-November remains intact. Gold is perhaps putting in a short term double bottom here but we will need to see the volume pick up to the upside for this to be true. I'm still holding my January ABX calls at a loss. We'll keep an eye on the overseas action tonight and go from there.
Friday, December 07, 2012
The employment report was better than expected and the Dow rose 81 points today on light volume. The advance/declines were positive. It was a mixed market once again as the NASDAQ finished the session lower. The Dow has been leading things here and that usually isn't a bullish sign. We started the morning off higher and then just drifted for the rest of the day. I really don't see any conviction to this rise in prices recently. But you can't argue with price and we are moving higher. The summation index remains positive as well. GE was up a nickel on very light volume. Still below the 50 day moving average here. Gold was up 3 bucks on the futures and the US dollar was higher today as well. The XAU was up 1 1/2. ABX, GG and NEM all had fractional gains on light volume. I'm still holding the January ABX calls at a loss for now. However I've been waiting for some type of rally in the gold shares and it hasn't happened. Oversold on the gold shares and they are simply moving sideways or lower. I will have to see some type of positive action next week or I will take the loss. Mentally I'm feeling OK. The employment report came and went. It wasn't really a market mover. The bigger cap stocks are in the lead here and more often than not that precedes a decline in the overall stock indexes. Not always but the odds lean that way from my experience. So I would be careful on the long side here. Gold isn't really doing anything and that isn't helping my case with the January ABX calls. 6 weeks left in that trade but it isn't looking like it will be a winner. There's really only a couple of weeks left of regular trading before the holidays take effect. It looks like I am going to have to dump that trade as the final loser of the year. The weekend is here and it's time for a break.
Thursday, December 06, 2012
Drifting higher before the employment report as the Dow gained 39 points on light volume. The advance/declines were slightly positive. We closed almost at the high for the day and that is sometimes bullish going forward. The summation index continues higher as well. We'll see what happens tomorrow but the market has the feel of wanting to move higher. GE was up 1/8 on lighter volume. Still below the 50 day moving average here but the chart is looking constructive right now. Of course that could all change tomorrow. Gold was up around $8 on the futures despite a good gain in the US dollar. This relationship hasn't been correlating as usual lately. The XAU was up 1/4. ABX, GG and NEM were little changed either way on light volume. We'll see if we get some kind of move in gold tomorrow off of the employment report. But like I have mentioned earlier, gold at the moment could just be dead money. Mentally I'm feeling OK. We'll see what the reaction is to the employment numbers and go from there. Still overbought short term on the stock indexes but that condition could last for a while if we are in rally mode. Tomorrow will go a long way in determining that. My January ABX calls are way in the red and a decision on dumping them could come tomorrow. Looks like just another loser at this point. On to tomorrow.
Wednesday, December 05, 2012
A mixed bag today as the Dow gained 82 points on good volume. The advance/declines were slightly positive. The overall market did not fare as well. The S&P 500 only gained 2 points and the NASDAQ was negative. Still waiting on Fridays jobs numbers. The summation index continues higher but the S&P 500 is stalling at the 50 day moving average. We should get a clear direction of things are Friday. Hopefully at least. GE rallied today, up 1/3 on average volume. I still have no trading ideas here. Gold finished the day just about flat on the futures as the US dollar had a bit of a rise. The XAU got clobbered, down 6 1/2. Most of this was due to FCX. But the gold shares reversed as well. ABX off 3/4, GG and NEM down 1 1/8. Volume was average. No love for the gold shares here and it looks like I will have to abandon the January ABX call trade. It is an over 50% loser at the moment. Unless there is a reversal on the gold shares after the employment report, I'll probably exit this trade. Mentally I'm feeling a bit tired. The over the counter market was weak and that is not a positive going forward. The short term technicals remain in the overbought zone for the stock indices. The gold shares look as though they are breaking down after todays price action. That will not help any gold share call trades and it looks like I'll have to add another loser to the 2012 trading ledger. I'll give this trade until Friday but I'll need to see some type of reversal to stick around. We'll keep an eye on what happens overseas tonight and go from there.
Tuesday, December 04, 2012
Another day of going nowhere as the Dow lost 14 points on light volume. The advance/declines were slightly negative. Not much else to say about today as we wait for the employment report on Friday. It is curious that the US dollar has been heading lower here and we cannot get some type of stock market rally. The summation index continues higher though. GE was flat on the day and the volume was average. No trades there for now. Gold was lower again today despite the weaker US dollar. This is not the usual relationship. The precious metal futures were off $25. The XAU however was actually up 1/8. ABX and GG showed fractional gains, while NEM had a fractional loss. Volume was average for the gold shares. Perhaps we are at the beginning of the gold shares starting to outperform the metal itself. But one day doesn't make a trend and it is probably just wishful thinking on my part. I still own the January ABX calls at a loss. Mentally I'm feeling OK. Not exactly sure where the stock indices head from here but the technicals still remain overbought short term. We are probably being held hostage by the waiting game for Friday. We are also at the mercy of the headline risk out of Washington. But that could move things either way. So we stay tuned and keep a close watch on things. Gold hasn't been acting well with the weaker US dollar and that is a problem going forward. We will need to see gold hold the $1680 level or things will most likely head south rather quickly. Hasn't happened yet. We'll see what tomorrow brings.
Monday, December 03, 2012
A weak beginning to December as the Dow fell 60 points on pretty light volume. The advance/declines were negative. We are due for some downside to work off the overbought condition of the stock indices. The question is if it turns into a retest of the November lows. The summation index continues to the upside and that is a positive. All eyes will be on the employment numbers Friday but that may not be as reliable as usual due to the big east coast storm last month. GE was off 1/3 on light volume. If GE is a precursor for the overall market as it usually is, then we will be heading lower this week. If todays action is any indication. Gold was up 7 bucks, which wasn't much considering the drop in the US dollar. The XAU followed the overall market lower, down 3 1/3. ABX off 3/4, GG fell 1 1/4 and NEM dropped 1 3/8. Volume was relatively better in the gold shares and that is a negative. When the US dollar is lower and the gold shares can't rally off of that, then we are most likely heading lower. My January ABX calls are still in the red and losing more money. Perhaps it is time to say goodbye to this trade but I will give it until the end of the week. The gold shares would have to turn around soon to keep this trade viable. Because at this point they look like dead money. Mentally I'm feeling OK. We've started the week lower for the stock indexes. No beginning of the month money flows today. Could be an interesting week. Gold isn't looking so good after todays non action. Could be that I will have to book the loss in the January ABX call trade and move on. We'll see. It hasn't been a good trading year for me and this trade would simply add to that fact. We'll keep an eye on what happens overnight and take it from there.