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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.

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