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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.   

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