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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. 

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