Thursday, January 31, 2013
The Dow dropped 50 points today on good volume. The advance/declines were positive though. Simply waiting for tomorrows employment numbers. This is the first time we've had 2 days in a row down since the beginning of the month. Still overbought on the stock indices so we'll need to see some more downside before another run higher or at least some sideways price movement. We will have to see what the numbers are tomorrow and the markets reaction to them. GE was flat on the day after being higher. Volume was average. My February GE calls are still positive but have lost some value. I will probably dump them sooner rather than later. Gold fell back today after yesterdays gains. The precious metal futures lost $20. The US dollar was a bit weaker as well. The XAU was off 1 1/4. ABX, GG and NEM all had fractional losses again on average volume. My February ABX calls are almost worthless. I doubt even the earnings report in a couple weeks can save this trade. It was wrong from the start and I should have simply bailed out of the position the day after I bought it. Mentally I'm feeling OK. How much will tomorrows numbers matter? Probably just a day or so. This is a momentum rally and I would expect after we take a breather, the prices will head back higher. Most likely moving up into the February option expiration. After that, perhaps things will change. Gold remains dead money. Even bullish news doesn't do much except for a one day rally. The gold shares have gotten pummeled. How much lower can they go? We'll get some rest tonight and it's on to the jobs number to wrap up the week.
Wednesday, January 30, 2013
Really, the market goes down too? The Dow fell 44 points on average volume. The advance/declines were about 2 to 1 negative. GDP was weaker than expected and there was no new news from the Fed. The stock indexes have been overbought for weeks. Perhaps now we will see some decline/consolidation. It is way overdue. One day doesn't make a trend though. We've still got to get through the employment report on Friday. My thinking at the moment is that any decline will be bought. Todays action may stop the climb of the summation index and that is something to keep an eye on. GE fell 1/4 on light volume. Perhaps $23 is not in the near future as I had thought. My February GE calls are still in the black but by not as much. I may have to consider getting rid of them if we get another run to $22.50. The daily candlestick chart doesn't look so bullish after todays action. Gold had a strong session, up $18 on the futures. The US dollar was weaker. The inverse relationship between the dollar and gold is back on track. The gold shares continue to disappoint as the XAU fell 3/4. It seems that nothing can get the gold shares moving to the upside. ABX, GG and NEM all had fractional losses on good volume. My February ABX calls are still very much in the red. It appears that this trade will be a loser, barring an unforeseen spike in ABX. 2 days and 2 weeks left in the February option cycle. The earnings for ABX are due the Thursday of expiration week. I don't think I'll still be in the trade at that point but you never know. Mentally I'm feeling OK. Some weakness today in the stock indices but the rally still seems intact. No trend lines have been violated and really, it is only one day of decline. We will have to see how the rest of the week plays out. There is no love for the gold shares as they continue to drift lower despite higher gold prices. I have no idea when that will change. The Gold/XAU ratio has been deep in the buy zone for weeks on end. It just doesn't seem to work anymore. It has certainly cost me money. Overall I think tomorrow will be a holding pattern in the various marketplaces as we await the employment report. We'll keep an eye on the overnight sessions and go from there.
Tuesday, January 29, 2013
Higher and higher we go as the Dow gained 72 points on good volume. The advance/declines were positive. What more can I say? The market doesn't go down anymore. But we all know better than that. The summation index continues higher. GDP out tomorrow and the Fed statement. That should get things moving perhaps. It has been a great momentum run and there are no signs of it stopping at this point. But it will eventually. GE was flat on the day and the volume was light. My February GE calls remain in the black. I would still like to wait until GE hits $23 to cash out on this trade. But nobody cab predict the future. GE remains overbought. Gold actually went up today. The futures rose 7 bucks on a weaker US dollar. The XAU was higher by 2 1/2. ABX, GG and NEM all had fractional gains on good volume. Could this finally be the bottom for the gold shares? I certainly don't know but it could be the snap back attempt after the recent drop. My February ABX calls are still solidly in the red. This is a cut the loss trade now unless we see some big turnaround this week. Doubtful. Mentally I'm feeling OK. The stock indices remain very overbought yet continue to move up. You cannot fight price. I have no idea how long this can last but it has certainly lasted longer than I expected. Perhaps tomorrows data or the Friday jobs report will be the catalyst for a breather. Gold is once again trying to hold on at its 200 day moving average at $1660. We'll see. A weak GDP plus an accommodating Fed should be positives for gold tomorrow if that is indeed the case. We'll watch what happens overseas tonight and go from there.
Monday, January 28, 2013
A slight move lower today as the Dow fell 12 points on light volume. The advance/declines were negative. The stock indices are overdue for a pause or decline here but we are probably in a waiting pattern until the Fed announcement on Wednesday. No reason to think the recent momentum rally is over. We're still overbought on both a short and medium term basis. I am still thinking that it is possible to see some volatility this week since it has been quiet for some time now. We'll see. GE was up almost 1/4 and the volume was good. My February GE calls are in the black as GE broke out and continues higher. I probably should have bought more contracts but hindsight is usually never wrong. In fact you could probably buy those same calls now and still show a profit before expiration. I'm going to try and hold on until GE reaches $23. Gold fell again today, off about $4 on the futures. The US dollar didn't do much today. The XAU dropped another 1 2/3. ABX, GG and NEM all had fractional losses on light to average volume. My February ABX calls are negative and have lost over 1/2 of their value. I'll wait for the Fed announcement and go from there on this trade. This was a loser from the start and I probably should have taken the loss early and been done with it. We broke out of the consolidation to the downside and getting the calls there was a mistake. I'll look for a snap back to the breakout to dump this trade for a loss. May or may not happen. Mentally I'm feeling OK. The markets are extended and have been for at least a couple of weeks. I'm not going to guess when it will end because I haven't been able to yet. So enjoy the ride. Gold is going nowhere and the gold stocks have tanked. My only hope for the ABX trade at this point is some type of rally off of the Fed announcement, followed by a weak jobs report. Hope has no place in trading. Tomorrow should be more of the same for the markets as we wait for the Fed.
Friday, January 25, 2013
The climb continues as the Dow gained 70 points on average volume. The advance/declines were positive. Nothing technically has changed. Still overbought all the way around and staying there. It is the energizer bunny rally, it just keeps going and going. Nothing to do but enjoy the ride. We do know it can go on longer than most would expect. We also know that it won't last forever. GE was up 1/4 on average volume. Overbought here as well. My GE February calls are solidly in the black. I'll be holding onto them for a while, with 3 weeks left in this option cycle. The only thing besides Apple that isn't going up is gold. The precious metal futures fell another $13 today despite weakness in the US dollar. This usual inverse relationship between the dollar and gold hasn't taken place for weeks. Perhaps that was a sign to simply stay away from trying to trade gold here. The XAU fell 4 points and was crushed on the week. ABX off 1/2, GG down 3/4 and NEM dropped 2/3. Volume was good to the downside. My February ABX calls are solidly in the red. This trade is going to be a loser and it is in the cut the loss mode already. ABX is oversold at this point so I'll expect a bounce at some point next week. That may or may not happen. Gold remains dead money. Mentally I'm feeling OK. Perhaps some volatility will return next week as there is a plethora of economic data to decipher. And a Fed meeting. The trend remains up though and it would take a lot to change that. The stock indices haven't seen any measurable decline so far this year. Gold itself needs to hold the $1650 level of support, which is just below the 200 day moving average. The gold shares have already broken down so that may not be a good sign. A reversal next week would be the only way to salvage the current ABX trade but that is just wishful thinking on my part. There is no place for wishes in trading. It's Friday afternoon and time for a break.
Thursday, January 24, 2013
The Dow continued higher yet again today but it was a mixed market to be sure. The most watched index gained 46 points on average volume. The advance/declines were slightly positive. The S&P 500 was unchanged on the day and the NASDAQ was lower. Still both short and medium term overbought and I'm still expecting some sort of weakness or consolidation for the stock indices at this point. Hasn't happened yet. The summation index remains in a solid uptrend. GE gained about a dime on OK volume. My GE February calls are slightly in the black. GE probably needs to digest its recent gains here and a sideways channel would not be unexpected. I'm looking for GE to reach the $23 level before February expiration. That's my guess at the moment. Gold took a hit today as the futures lost $16. The US dollar was barely higher today. The XAU dropped 5 points. The gold shares have broken their channel to the downside today. ABX and NEM both fell 3/4, while GG shed a buck. Volume was good. I adjusted down the price for the open order for the February ABX calls and it was filled this morning. It is already in the red and it already appears that this trade will be a loser unless we see a reversal tomorrow. That doesn't look very likely. Yesterdays bearish engulfing patterns on many of the gold share stocks signaled more weakness to come. In retrospect, I simply should have canceled the ABX call order. Mentally I'm feeling OK. The stock indexes continue to defy gravity and that usually doesn't end well. You cannot fight the trend here though. I'd expect a quiet end to the week tomorrow but that's a guess as usual. Gold has lost its luster and continues to be dead money despite the recent $50 move to the upside. The gold shares are leading the way down here and that is not bullish going forward. I'll probably be holding on to the February ABX calls into next weeks Fed meeting though. We'll keep an eye on the foreign markets overnight and take it from there.
Wednesday, January 23, 2013
It's the rally that never ends as the Dow gained 67 points on average volume. The advance/declines were slightly negative though, so perhaps we'll finally see some decline tomorrow. Or not. The summation index continues higher. Very oversold both short and medium term. This condition cannot last indefinitely. If we do see any selling though, I believe that buyers will step up rather quickly. It is that kind of market at the moment. GE was off a few cents after being off as much as 1/4. My order for the February GE calls was filled. It is about at break even. My thinking is that the price action here in GE is the snap back to the breakout. I may be early though. Still three weeks left in the February option cycle. Gold was off $6 today on the futures as the US dollar was slightly higher. The XAU however dropped 4 1/3. The gold shares continue to under perform here. I may have to reconsider my order for the February ABX calls. ABX off 3/4, GG down a buck and NEM shed 7/8. Volume was average. These issues are trying to break through their 50 day moving averages to the upside but are failing once again. Gold itself is being turned back by the 50 day as well. I still have in the open order for the February ABX calls but I may have to adjust or cancel it tonight. Mentally I'm feeling OK. A rally today but the breadth did not confirm. So perhaps we'll get some weakness tomorrow. GE has pulled back a bit on lighter volume. I still think getting the calls here would be a good idea. We'll see. The gold shares had a very weak showing today. If there is follow through tomorrow I may have to cancel the ABX call order. Or at the very least adjust the price that I'm willing to pay for the calls. It is something to ponder this evening. We'll see what happens tomorrow.
Tuesday, January 22, 2013
Continuing higher as the Dow gained 62 points on average volume. The advance/declines were 2 to 1 positive. Overbought and staying there. It seems that even the slightest decline finds buyers these days. I'm not sure how long this can last but you cannot fight the trend. I would expect to see some weakness here but I've expected that more than once this year and it hasn't happened. The summation index continues to the upside as well. The momentum rally is intact for now. GE lost a nickel on good volume. I'm leaving in my open order for the February GE calls. Still waiting for the snap back from breaking above the declining tops line from October. If and when that occurs, then the order will probably be filled. Gold is in rally mode as well. The futures gained $6 as the US dollar was lower today. The XAU followed the market, higher by 2 7/8. ABX and NEM up 3/4, and GG gained 1 1/8. The volume was good to average. I'm also leaving in the open order for the February ABX calls as well. The gold shares have been moving sideways for about 3 months. The breakout should be a pretty good move once it gets started. The question is, which way? Mentally I'm feeling OK. The stock indices have been going practically straight up since 2013 began. How much longer can this last? I don't know. Not a lot of economic data out this week. Money continues to flow into stocks. Gold has rallied back to the 50 day moving average. That could provide some near term resistance. We'll keep an eye on overseas markets overnight and go from there.
Friday, January 18, 2013
Continuing higher for expiration Friday as the Dow gained 53 points on average volume. The advance/declines were about 2 to 1 positive. The summation index continues higher. We're still overbought and still moving higher. My guess is that declines will be bought. There is nothing to stop the rally at this point. I do however expect some weakness early next week as we do need a pause. That would be a chance to get some calls as the uptrend continues. GE reported earnings today and the market liked what it heard. The stock rose 3/4 on extremely heavy volume. My GE calls turned a 125% profit but it could have been much better as I sold early in the morning at the worst possible time. The trading is never easy. I could have done another 75% to 80% if I would have held on longer. Doesn't matter now. We have a valid break out through the downtrend line on the daily charts. The next technical expectation would be a snap back towards that line before moving higher. I'll probably try the February GE calls here on the snap back if it occurs. Gold was off 4 bucks on the futures as the US dollar had a strong session. Once again we should have been much worse on gold for the day with such dollar strength. The inverse correlation between these two just isn't happening now. The XAU was off a fraction. ABX and GG were little changed while NEM gained 1/2. Volume was light. I am leaving in the open order for the February ABX calls however I adjusted the price lower. I'll have to reconsider this trade over the weekend because gold still continues to be dead money even with this weeks $20 gain. Mentally I'm feeling a bit frustrated as the GE trade was a winner but the lousy exit leaves me with mixed feelings. On the one hand it starts the year off right with a winner. However since the gains should have been much more, it leaves a lot to be desired. My trading is always a work in progress. The stock indices continue to the upside and there seems to be nothing coming up to derail the party. We'll see if we can continue the bash next week. Gold had a good week but the gold shares were actually lower on the week. Perhaps I should focus my energies elsewhere. It will be another thing to ponder over the long weekend. For now it's Friday afternoon and time for a break.
Thursday, January 17, 2013
A nice move higher today as the Dow gained 84 points on average volume. The advance/declines were 3 to 1 positive. A day late from what I expected but that means nothing now. We were up over 100 during the session. Overbought, staying there and the summation index continues to the upside. This won't last forever but we can enjoy it from the call side while it does. Expiration tomorrow and anything can happen. GE was up over 1/8 on heavy volume. We were much higher but came off of the best levels of the day. My GE calls are still in the black but that could change with the earnings out tomorrow morning. We did break through the downtrend line that has been in place since October but fell right back down. Tomorrows price action will determine the outcome of this trade. Gold was higher again today, up $7 on the futures. The US dollar was a bit lower today. The XAU dropped 7/8. ABX, GG and NEM once again had fractional moves one way or the other on average volume. My open order for the February ABX calls was almost filled this morning. Perhaps this trade will get done next week. Mentally I'm feeling OK. The trend remains up and the small stocks are leading the way and that is bullish. One day left in the trading week before a long holiday weekend. The GE trade will be completed tomorrow. Earnings will determine the outcome. It could go either way. Gold has had a nice week so far but the gold shares have not participated. That usually isn't bullish going forward. I'm leaving in the open order for the February ABX calls regardless. The gold shares remain oversold and that condition won't last forever. On to expiration Friday.
Wednesday, January 16, 2013
I expected a decent move to the upside today and we certainly didn't get it. The Dow fell 23 points on light volume. The advance/declines were negative. It was a mixed market to be sure, with the NASDAQ moving slightly higher. The stock indices have been milling around since the huge fiscal cliff spike to the upside. The summation index continues higher but price is lagging here. The technicals remain overbought. I'm still looking for higher prices ahead but not with the same conviction that I had before today. When the market doesn't do what you expect, then something else is going on that you obviously don't know about. GE fell a touch on average volume. Looks like this GE trade will depend on the earnings and that is always just a 50/50 proposition. The technicals here are mid-range, so just about anything can happen. Gold was little changed on the futures and the same for the US dollar. The XAU lost 1 1/8. ABX, GG and NEM were all lower by 1/3 or so on light volume. I'm still leaving in the open order for some February ABX calls. The technicals for the gold shares remain more oversold than overbought. Mentally I'm feeling OK. 2 days remain in the January option cycle and I decided not to try the OEX calls here. I expected market strength today and we didn't get any. So I'm not exactly sure now where we go from here. GE is simply an earnings play now. Not exactly my favorite kind of trade. Gold remains dead money but I'll try the ABX calls if my price is hit for the options. Hasn't happened yet. We'll see what tomorrow brings.
Tuesday, January 15, 2013
A day similar to yesterday as we sold off early and then made it all the way back. The Dow gained 27 points on light volume. The advance/declines were positive. Still overbought and moving higher. I would expect a decent move to the upside tomorrow, according to what I'm looking at. The expiration week positive bias is just one of the reasons. You never really know though, as the recent ascent has been on pretty light volume. We'll see what happens. It is probably too late for the January OEX calls. GE didn't do much today and the volume was light. The GE calls I have are still slightly in the black. It looks like it will all depend on the earnings report due Friday. However if we do have a good upside day tomorrow, perhaps GE can break through the downtrend line on the daily charts. Wishful thinking perhaps. Gold moved nicely higher again today, up $14 on the futures despite strength in the US dollar. This relationship continues to baffle me as it has not acted in the normal pattern for some time now. I do not know what it means going forward. The XAU only rose 7/8. ABX, GG and NEM had fractional moves one way or the other again. The volume was nothing special. I almost bought some February ABX calls but didn't. I am leaving in the open order for the February ABX calls that I already have opened. Once again I'll need to see some weakness in ABX for this order to be filled. Didn't happen today. Mentally I'm feeling OK. The market has the feel of wanting to go higher here and I'm in that camp for the short term. But after this week, who knows? Waiting on the GE earnings at this point. Gold looks like it is going to hold its 200 day moving average here and that is usually bullish going forward. However that doesn't mean that the gold shares are going to rally. We've been moving sideways to lower in the gold shares since mid-November. Gold has been dead money for quite a while. I'm still willing to try the February ABX calls if we get some pullback though. May just be another mistake. Time will tell. On to Wednesday.
Monday, January 14, 2013
Running in place it seems as the Dow gained 18 points on light volume. The advance/declines were about even. Sold off early and then came back throughout the trading day. The summation index continues to the upside. I expected some weakness early this week and we may have seen it this morning. I would expect a pretty good move to the upside within the next 2 days. It is expiration week. GE was flat on the day with light volume. My January GE calls are still slightly positive. It looks like I'll be holding them into the earnings report on Friday. We still need to get through the downtrend line from last October. Hasn't happened yet. Gold rose $8 on the futures as the US dollar was flat today. The XAU lost 3/4. ABX, GG and NEM had fractional moves one way or the other on light volume. I'm leaving in the open order for the ABX February calls. I'll need to see some weakness in ABX for this order to be filled. Mentally I'm feeling OK. Still overbought on the stock indices. Regardless, my technical work shows that we will most likely see a pretty good upside move within the next couple of days. I could be wrong. ABX is stalling at its 50 day moving average. A move above this line would be a positive sign. 4 days left in the January option cycle. We'll keep an eye on what transpires overnight and go from there.
Friday, January 11, 2013
A scant higher drift as the Dow gained 17 points on light volume. The advance/declines were slightly positive. Just marking time here or so it seems. We opened lower and spent the rest of the session getting back to break even. I'm looking for weakness at the beginning of next week, followed by some type of move higher. That's my guess for now. With only a week to go in the January option cycle the risk obviously increases. I still may try the OEX calls if conditions come up ideal. They rarely do. GE lost a few cents and the volume was average. Still can't get through the down trend line on a daily basis. If we do, my GE calls will be profitable. If we don't, the opposite. Earnings on expiration Friday. Gold fell today, off $17 on the futures despite weakness in the US dollar. This relationship continues to be dysfunctional. I'm not sure what it means but it isn't bullish for gold. At some point it will change but it has been a while. The gold shares are outperforming gold itself here. However in this environment that means they are just going down less. The XAU dipped 1/4 today. ABX, GG and NEM all had fractional losses. The volume was light to average. I replaced my open order for the February ABX calls with the original trade, moving to a lower strike price. I may simply try and enter this position on Monday if we see some weakness. Mentally I'm feeling OK. The stock indices are overbought and staying there. The summation index continues higher. It's my belief that we'll hold up into the expiration and then we'll see what happens after that. I'll probably hold the GE trade into the earnings report but that could change if GE rallies next week. Gold continues to frustrate as it hovers along its 200 day moving average at $1660. This has gone on for 3 weeks. It will be decided which way we are going sooner or later. I'm still inclined to try the gold share calls again. That's it for this week. Friday afternoon and time for a break.
Thursday, January 10, 2013
The Dow moved to a new high for the year as it gained 80 points on good volume. The advance/declines were almost 2 to 1 positive again. I expected more consolidation before moving higher but that is not the case. The summation index continues to the upside. It looks like it is probably too late to try the OEX calls for January. Unless we see a sharp pullback, I most likely will not attempt that trade. We are on the way to being both short and medium term overbought on the stock indices but aren't there yet. GE was up 1/4 on light volume. My GE January calls are now slightly in the black. If we can get through the down trend line that has been in effect since October on good volume, I'd expect GE to approach $22 in a hurry. That line is around the 21.45 level. I'm still likely to hold onto this trade into the earnings on expiration Friday, unless we run up before that report. Gold had a good day as the US dollar got crushed. Talk out of Europe sent the euro higher and the dollar lower. The gold futures rose $22. The XAU gained 3 3/4. ABX up 7/8, GG higher by 1 1/2 and NEM up a buck. Volume was average for the gold shares. This could finally be the start of an extended move higher for the gold shares but it hasn't happened yet. I canceled my open order for the February ABX calls and replaced it at a higher strike price since the premiums moved away from my previous order. I may have to adjust as we move forward and I also may already be too late. Mentally I'm feeling OK. The stock indexes continue higher and I expect that to be the case into next weeks expiration. The over the counter issues lagged today, so maybe we will see some backing and filling in the next couple of days. That's just a guess as usual. Gold finally moved in tandem with weakness in the US dollar, so perhaps the normal inverse relationship will be back in play with these two. A weaker dollar would also be supportive to higher equity prices as well. We'll see how we close out the week tomorrow.
Wednesday, January 09, 2013
Back to the upside today as the Dow gained 61 points on light volume. The advance/declines were 2 to 1 positive. I think that we are still in a consolidation mode until next week. I would expect a bit more weakness moving forward before we see another leg up. I'm still looking at getting some OEX January calls at the beginning of next week. The summation index is moving higher. GE was up a bit on light volume. My GE January calls are about break even. I'll be holding this trade into next week, perhaps all the way to the earnings report at the end of next week. Gold was off $6 on the futures as the US dollar was higher today. The XAU fell 3/4. ABX, GG and NEM moved fractionally one way or the other on what passes for average volume these days. Still not much going on in the gold market. I've left in the open order for the ABX February calls. Mentally I'm feeling OK. The markets are actually pretty quiet so far this week. Not really a lot of movement and the VIX is very low. Hopefully we aren't getting too complacent because that could eventually lead to volatility. I'm sticking with the game plan in place for now. Hold the GE calls and attempt some OEX calls early next week. I'm leaving the gold trade order out there in case we see some more weakness in ABX. That potential trade also has a lot more time on it if filled. We'll see what Thursdays trading brings.
Tuesday, January 08, 2013
Another loser today as the Dow fell 55 points on light volume. The advance/declines were about even. Weakness or sideways action is to be expected this week. I'm sticking with that thesis for now. I still think expiration week will be positive. I'll be looking at the OEX January calls later this week or on Monday for purchase to be held into the end of expiration week. The summation index is still heading up. GE was off 1/4 on light volume. It is trying to hold at the 50 day moving average. My open order for the GE January calls was filled in the morning. They are showing a slight loss. 8 days to go in the January option cycle. I'll probably hold onto these calls until next week. Earnings due on expiration Friday. Gold rose $15 on the futures and the US dollar was up a bit as well. The XAU only managed a gain of 1/3 though. ABX off 5/8, GG higher by 7/8 and NEM up 1/2. Volume was OK for the gold shares. I still have the open order in for the February ABX calls. It might get filled tomorrow if weakness persists in ABX. I'm not exactly sure if this trade is worth doing since gold has been dead money for so long. But I guess I'm willing to try it one more time. Mentally I'm feeling OK. I still think we are in a digestion period from the recent huge gains in the stock indices. The rally has been led by the small cap stocks and that implies higher equity prices moving forward. The first trade of the year has been filled with the January GE calls. We'll see what happens. Gold is trying to hold at its 200 day moving average at around $1660. Whether or not it does will determine how any gold share trade does in the near future. We'll keep an eye on the markets overnight and take it from there.
Monday, January 07, 2013
We started off the week with a whimper as the Dow fell 51 points on light volume. The advance/declines were negative. I would expect some decline this week or sideways at best. We need to digest the recent huge gains in the stock indices. I would look for higher prices in expiration week. I am looking at getting some OEX calls for next week. Perhaps later in this week. There is not a lot of economic data out this week but it is the start of earnings season again. GE was down a bit but closed off of its lows for the day. I am looking at the GE January calls. I did place an overnight order for the January GE 21 calls. We'll need to see some decline for the order to be filled. Earnings are due expiration Friday. Gold was off just a couple of bucks despite a big drop in the US dollar. The usual inverse relationship here hasn't materialized for the past few weeks. It isn't a positive for gold in my opinion. I am still looking to get long the gold shares though. The XAU fell 2 1/3. ABX and GG fell 1/2 and NEM dropped 7/8. Volume was light. I placed an open order for the February ABX 35 calls. As with the GE open order, ABX will need to see some decline for this order to be filled. The gold shares are getting short term oversold once again. This is a trade that I have tried numerous times in the preceding months. It hasn't worked yet. Mentally I'm feeling OK. I would expect the stock indexes to slosh around here this week. I do not expect any dramatic moves one way or the other. Obviously the trend is up but we are extended in the McClellan oscillator. I'll be looking to purchase some January OEX calls later this week. Nobody likes gold for now and sometimes that is when you have to like it. I'll ponder this idea tonight. It is entirely possible that I should simply let gold do what it does and concentrate my energy elsewhere. We'll see what happens in the foreign markets and go from there.
Friday, January 04, 2013
A good end to the first week of trading in 2013 for the bulls as the Dow gained 43 points on light volume. The advance/declines were 3 to 1 positive. The summation index is heading higher. The employment report came in as expected and it really wasn't much of a market mover. The stock indices are short term overbought but they could stay that way. I think any declines will be bought here. You cannot argue with price and the market is moving higher. I still think that we will see more gains heading into the option expiration in 2 weeks. GE was up a bit and the volume was light. I would like to see more participation here from GE but it isn't happening yet. If we can break through the declining tops line at around $21.50, we should see GE move up. I am still considering the January calls here. Gold had a roller coaster type of session. The futures closed down $25 and they were lower than that during the morning. But gold made a comeback in the after hours trading. I'm not sure what to make of todays action. The US dollar opened higher but closed well off of the highs for the day. The XAU was actually up 1/3 as the gold shares performed pretty good considering the drop in gold. This is a positive for the gold shares. ABX, GG and NEM all had slight fractional gains on average volume. I'm not exactly sure what to do with the gold shares here. The are still medium term oversold and due for some type of rally. The daily technicals are more overbought than oversold though. I'll probably be looking elsewhere for the next trade. Mentally I'm feeling OK. The stock indexes are overbought. I'll will look to get some calls next week perhaps if there is a pullback. The Dow transports have broken out and it is up to the industrials to follow. I may get some GE January calls next week. The only caveat is that the earnings are due on expiration Friday. We'll see. Gold is acting volatile to start the year. I would still like to get long there at some point. Perhaps I'll move out to the February option cycle there. Plenty to consider over the weekend. For now it's the first Friday of the new year and time for a break.
Thursday, January 03, 2013
Digesting the recent gains today as the Dow fell 21 points on average volume. The advance/declines were positive. After moving straight up around 500 points, some consolidation is to be expected. A larger pull back isn't expected for now. But that doesn't mean it won't happen. The Fed minutes released today implies the soft money policy might end sooner rather than later. That would be a negative going forward. However we are in a very positive time frame calendar wise. My feeling is that we will stay with a positive bias into the January option expiration. We'll see what happens with the employment report tomorrow. GE was off 1/4 on good volume. GE is not acting well here and has been stopped at its declining tops line that began in October. I am considering the January GE calls here though. I could be wrong. Gold had a tough day as the futures fell $14 and another $10 in the aftermarket. The US dollar rallied. The news of the Fed minutes pushed gold down and the dollar up. The gold/dollar inverse relationship is back in place. The XAU fell 6 1/3. ABX down a buck, GG lost almost 2 and NEM slipped 1 1/4. Volume was average. My idea for the January ABX calls was wrong. Of course things could turn around tomorrow with a weak employment report but I'm inclined to look elsewhere for the next trade. Mentally I'm feeling OK. We got the huge rally after the tax deal. Now it will be important to see what happens from here. The technicals imply higher prices after a breather. I might wait things out for a few days and then try the OEX calls for January. Or not. We'll see what the employment report brings. Gold was weak today and I expected more money to flow into there due to the beginning of the new year. I'm laying off any trades there for now. We'll look for the foreign market reaction to the Fed minutes if there is one and move on to Fridays employment report.
Wednesday, January 02, 2013
We had a huge rally to begin 2013 as the Dow gained 308 points on good volume. The advance/declines were almost 10 to 1 positive. The tax deal is done and it is off to the races. The small stocks are leading the way higher here, so it appears that this move higher could have legs. It is too late for any stock index calls right now in my opinion. The buy signal was a couple of days ago but the market opened up strong on Monday which rose the value of the calls. Perhaps the next trade will be getting short when we get short term overbought. The employment report is due on Friday. Some stock indices are breaking out into new highs and we had some huge upside gaps today. Expect higher prices going forward. GE was up 1/3 on good volume. Too late for the calls here as well in my opinion. Gold moved higher today as well, gaining $13 on the futures. The US dollar bounced around but ended the day little changed. The XAU rose 2 7/8. ABX, GG and NEM all had fractional gains on average volume. The gold shares are getting short term overbought. I still might try the January calls though. Money is flowing into all assets at the moment. Mentally I'm feeling OK. We have seen the expected rally following the resolution of the tax stand off in Washington. Were we go from here is what matters next. It looks like we are going to go higher regardless of the economic numbers. We'll see how the rest of the week plays out. Gold has found some buyers this week as well. I'm not sure how long that will last but I might be willing to try a short term trade there. The January ABX calls are still on my radar. We should see the rally continue overseas tonight and tomorrow here as well.