Thursday, February 28, 2013
Another one day reversal to the downside as the Dow opened higher and closed lower. The major average fell 20 points on average volume. The advance/declines were slightly positive. Perhaps today was the day to try the March OEX puts as we were up around 75 points during the session. The volume wasn't anything special either. The OEX puts I'm looking at got to just about what I'd like to pay for them but I did not act. Maybe tomorrow. There is a chance that we could move to new all time highs on the Dow here as well. The technicals are mixed at this point, with no clear buy or sell. The GDP revision was a non-event as is the Washington budget mess at this point. GE was off 1/8 on average volume. No trades here for now. Gold continued lower by another $20 today. The US dollar had a good day. The XAU fell 3 points. ABX and GG lost 2/3, while NEM dipped 1/3. Volume was average to good here again. I'm still leaving in my open order for the April ABX calls. May have to rethink this tonight. Mentally I'm feeling OK. A new month starts tomorrow and that should bring in some positive money flows. The summation index should be at about the zero line. What it does here will be key for the near term market movement. I'm still thinking that the OEX puts will be the way to go here. Plenty of bullishness abounds. But I could be wrong and we might make a run at new highs on the Dow. Since the technicals are mixed it is a tough call. Gold is heading back down and $1550 needs to hold there to keep the bullish case alive. My guess is that we will hold since the precious metal is very oversold even with the bounce earlier this week. Two weeks and a day left in the March option cycle. We'll see if there is any news out of Washington tonight and the markets reaction to events tomorrow.
Wednesday, February 27, 2013
Bernanke kept talking and the market liked what it heard. The Dow rose 175 points on average volume. The advance/declines were 3 to 1 positive. This could be the snap back rally that I will look to short. If the volume dries up and we continue higher then buying some March OEX puts would seem to make sense. It is also possible though that the decline is over for now and we continue on to new highs for the major averages. Problems in Europe? Washington budget deadline of tomorrow? The stock indices didn't seem to care about any of that today. Tomorrow could be a different story. Obviously volatility has picked up. I am still inclined to try the March OEX puts ahead of next Fridays employment report. GE was up 1/3 on light volume. There's still a gap to be filled here at around $22.50 or so. The light volume here could be a clue. Or not. Gold headed back down today as did the US dollar. The precious metal futures lost $20, while the dollar gave up what it gained yesterday. No flight to safety for today. The XAU fell 2 1/2. ABX and GG fell 1/3, while NEM dropped 7/8. Volume was good to average. I still have the open order in for the April ABX calls. Mentally I'm feeling OK. After Mondays debacle, the stock indices have made quite a comeback. The transports had a very good day today and they have been leading things. The summation index is still heading lower but could be starting to move sideways after todays action. It is a tricky call one way or the other. Gold reversed back to the downside today. Perhaps it will take some time to build a bottom here as well. We've got the revised GDP number tomorrow and it is the end of February as well. With the recent price gyrations it is especially important to keep a sharp eye on things as we progress. The game is never easy but it presents even more of a challenge in an environment like this.
Tuesday, February 26, 2013
Bouncing back today as we were short term oversold. The Dow gained 116 points on average volume. The advance/declines were 2 to 1 positive. We'll have to see how long the bounce can last. I would still like to try the OEX March puts if we get a move back towards the 1520 level on the S&P 500. The summation index continues lower. Big Ben blabbed today and the stock indices found nothing wrong with what he had to say. Todays up move was narrow though, with the Dow leading the way. That usually doesn't imply a sustained move to the upside. GE was up 1/4 on average volume. There is still a gap to fill here. No trades in GE for now. Gold continues to rally here, up over $25 on the futures. The US dollar was up a bit again on the day. The XAU rose 1 2/3. ABX and NEM up 1/2, GG higher by 7/8. Volume was good. The gold shares didn't move as good as a $25 rise in the price of gold. However I am still looking at getting some April ABX calls and have left in an open order for them. The ticket will need to see some decline in ABX to get filled. Mentally I'm feeling OK. I don't think the decline in the stock indices has run its course. I would ideally like to see more of a top put in here before the employment report next Friday. However there may be some selling if a budget deal isn't reached by this Friday in Washington. I'd expect some kind of last minute "fiscal cliff" kind of agreement but you never know. Gold has had a pretty good bounce here back over $1600. I'm looking for a retest of the recent low in the next couple of weeks. That should be the chance to purchase the April ABX calls if it occurs. We'll see. The overseas markets did drop like the US stock indexes yesterday. We'll keep an eye on things tonight and go from there.
Monday, February 25, 2013
So we got our answer as to what the markets are going to do today. It was a one day negative reversal to the downside as the Dow fell 216 points on good volume. The advance/declines were about 4 to 1 negative. The summation index is heading lower. Europe is back in the picture and that is not a good sign and hasn't been for quite a while. The stock indices forget about it for a while but now it's back. So we're in the headline risk zone again. That doesn't include the Fed speaking the next couple of days or the revised GDP report out on Thursday. The smaller averages have broken their up trend lines. They led the way up and they are probably leading the way down. The up trend lines on the major averages are still intact. I'd short any rallies from here, although the best chance may be gone. GE was down over 1/2 on good volume. There is a gap to fill at about $22.40. The 50 day moving average comes in at about $21.70. I don't have any trades in mind here though at this moment. Gold found a bid and was up $13 on the futures, $5 more in the aftermarket. This despite a higher move in the US dollar today. Perhaps the flight to safety trade is coming back. At least it looked that way today. The XAU was up 1 1/4. ABX, GG and NEM all had fractional gains on good volume. I'm still considering the April ABX calls for another trade even if I manage to get some March OEX puts. Mentally I'm feeling OK. I am disappointed that I did not move fast enough on this mornings rally to buy some March OEX puts. The option premium almost came down to what I was willing to pay. The stock indexes have sped up now and that makes it a tougher game to play. We are short term oversold now on the stock indices. Support for the S&P 500 comes in at 1475 from the up trend line and at 1460 from the previous resistance. One of those areas should hold things for now. Sometime within the next couple of weeks I'd like to purchase the April ABX calls. Even though March is historically the weakest month for the price of gold, I want to put this trade on. We are both short and medium term oversold for the gold shares. Nobody wants them and haven't for quite a while. I could be wrong again on the gold shares though. I lost plenty of money last year trying to time a long entry here. It only worked once. So we'll see. We will have to see if there is rampant selling in the overseas markets tonight. We'll also have to keep an eye out for follow through selling here tomorrow. And we've got Big Ben to deal with too. The Washington budget problem coming on Thursday seems like it's far away. Things are suddenly getting a lot more interesting on Wall Street.
Friday, February 22, 2013
Bouncing back today as the Dow rallied 120 points on light volume. The advance/declines were 3 to 1 positive. More questions than answers here. Is that it for the decline or not? Will we now move on to new highs for the Dow and the S&P 500? Are we about to start a trading range? There is plenty to ponder over this weekend. I'd like to say that I know which way it will all turn out but I don't. However if we continue higher and the volume is light, I'll be inclined to try the OEX March puts. We'll have Washington in the spot light again next week. The mandatory budget cuts are looming unless a deal is struck. It is a rerun of the "fiscal cliff" drama. Markets will respond and react. It's just another thing to deal with in the trading game. GE was up 1/8 on light volume. Could we move higher here? Sure, it's not completely overbought on the weekly charts. But I can't say for sure and have no trades in mind here at the moment. Gold was off $5 during the futures session and made that back in the aftermarket. The US dollar was up a touch today and is short term overbought. The XAU fell 3/4. ABX, GG and NEM all had fractional gains on light to average volume. I'm back to considering the April ABX calls but there is no hurry to buy them. We'll have to see if gold can hold the $1550 level. Mentally I'm feeling OK. Volatility made a comeback this week. We'll see if that continues. I'm not sure what is in store next for the stock indexes. The upwards climb was stalled for the first time this week. However buyers did step in today and that was to be expected. We will have to watch carefully what happens from here. Gold continues to drop. Money has been leaving that sector for weeks on end. I was looking at a five year monthly chart last night for ABX. February will probably end with the RSI indicator being at its lowest level within the half decade. It is also the RSI level from which we have at least seen some kind of monthly bounce. Hence, I'm looking at the calls there for April. I will have to re-check all of the charts over the weekend and try to come up with some type of game plan for the markets next week. For now it's Friday afternoon and time for a break.
Thursday, February 21, 2013
Another downer as the Dow fell 47 points on good volume. The advance/declines were 2 to 1 negative. The summation index has turned down from a sideways congestion zone. The breakout in some of the stock indices on Monday has been negated. We are getting short term oversold in a hurry. If and when we start to move higher from here, that could be the opportunity to get short. Or not. That will be the question in my mind for the March option cycle. I'm leaning towards getting some OEX puts if we see a weak rally from this down draft. So we will need to keep an eye on things as usual. GE was basically flat on the day with good volume. GE hasn't had the decline that we are seeing in the major averages. Perhaps that is a sign of good things to come for the overall market. Or at least that this recent 2 day fall is nothing to worry about. We'll see. Gold was flat on the day but did recover the aftermarket losses from yesterday. The US dollar was higher again. The gold shares finally got a bid with the XAU gaining 2 1/2. ABX, GG and NEM moved just slightly fractionally one way or the other on good volume. I'm considering the ABX April calls as a possible trade. March is historically a poor month for gold though. However December is usually a good month for the price of the precious metal and that didn't happen recently. So we'll see. Mentally I'm feeling OK. Volatility has returned to the stock indexes after what seems to be a long absence. The market had been going up for so long, it seemed like everybody was bullish. Myself included. No important up trend lines have been broken on the major averages. But we do see a break in the trend line for the RUT. RUT led the way to the upside and now we will see if the reverse is true. It is something to keep an eye on. Gold has so far held the important $1550 level for now. Nobody wants gold at this juncture in time. Perhaps that is when we should want it. I certainly don't know, having lost a good amount of money on the long side there in the past few months. I still think $1550 is the level to watch. We'll see how we close out the week tomorrow.
Wednesday, February 20, 2013
An interesting session today as the Dow fell 108 points on average volume. The advance/declines were 3 to 1 negative. Today was the first very negative trading day of the year. No trend lines have been broken to the downside but if the decline continues, the rally from last November will be in question. I would expect buyers to step in on this dip though. After that, I may be looking at the March OEX puts. No real reason for todays decline. We were already heading lower when the Fed minutes took the stock indices south. Evidently a bit of sustained growth in the economy will end the free money game. Hasn't happened yet. The VIX spiked up. GE was off 1/3 on average volume. Perhaps a rest here is in the cards near term. I have no trading ideas for GE at this time. Gold continues to get absolutely pummeled. The precious metal futures fell $25 and another $15 in the aftermarket. We are almost at the critical $1550 level. It looks like a free fall. The US dollar was a lot stronger today. That usually means a decline in stocks but it hasn't really occurred until today. The XAU fell almost 7 1/2. ABX and GG lost 1 1/4, while NEM was down 2 1/3. Volume was heavy. Needless to say the gold shares remain under severe pressure. Money is fleeing this sector. A good time to be short here, which I'm not. Mentally I'm feeling OK. One day doesn't make a trend but today has the potential of the start of a long awaited decline in the stock indexes. There is a glaring negative divergence in the RSI indicator on the daily charts of many stock indices. We'll have to see if there is any follow through tomorrow. I will be looking at the March OEX puts if we start to move back up. Gold is sinking fast. If it doesn't hold at $1550 there is no telling how low it will go. It's possible that the long bull market in gold could be over. That's a guess as usual but we are at a critical juncture there. We'll see if we get any bleed over selling in the foreign stock markets and see what happens tomorrow.
Tuesday, February 19, 2013
Onward and upward as the Dow gained 53 points on good volume. The advance/declines were 2 to 1 positive. The overall market was stronger than the Dow and that bodes well going forward. It appears that we are breaking out to the upside from the recent consolidation. Overbought, staying there and the song remains the same. It is a momentum driven rally for the stock indices. Nothing has changed to derail that fact. Calls are in order until further notice. GE gained almost 1/2 on average volume. I thought GE might pause here given the 5 wave count on the daily chart. It's still possible if we drop from here but that doesn't seem likely after todays action. No trades here for now. Gold continues to languish. The futures fell 5 bucks even with a slightly weaker US dollar. The XAU dropped 1 7/8. ABX, GG and NEM all had fractional losses on good volume. I suppose I'll be looking at the April gold share calls on a drop in the price of gold to $1550. Not sure this is the right idea either. Perhaps I'll simply watch the gold proceedings from the sidelines. Mentally I'm feeling OK. Traders returned in a buying mode after the holiday weekend. We've got some economic data out this week. Inflation and housing numbers are due along with the Fed minutes out tomorrow. So we could see a pick up in volatility. I have no trades on the near term horizon but I am considering some OEX puts if I see a short term top in place. No guarantees that will be my next trade though. We're due to see all time highs on the Dow and S&P 500, since some of the small cap indexes have already done so. I'll be watching and waiting for the next opportunity but nothing at present seems to be viable to me. Plenty of time in the March option cycle as it has just begun. We'll keep an eye on Asia and Europe tonight and go from there.
Friday, February 15, 2013
A mixed bag once again as the Dow gained 8 points on expiration good volume. The advance/declines were slightly negative. The overall market was weaker than the Dow today. Every time the stock indices sell off a bit, buyers step in. This has been the case for quite a while. Until that aspect of the game changes, higher prices are in the near future. You cannot fight that. GE was off 1/8 on average volume. I think GE is due for a rest here. I could be wrong though and might change my mind over the weekend. The daily and weekly charts remain overbought. Gold fell again today, the futures were off around $25. The US dollar was slightly higher. The XAU got pounded again and lost almost 5 points. ABX down 3/4, GG shed 7/8 and NEM lost 1 1/4. Volume was heavy in the gold shares. Money continues to flow out of gold and into something else. I'm looking for gold to head for support at the $1550 level. Mentally I'm feeling OK. The stock indexes have been in a broad advance for weeks. At some point there will be a decline but even if that occurs, I believe it will be a shallow one. Money needs a place to go and it looks like for now the destination is the stock market. Calls are still the way to go. Gold has broken support and puts are in order there. Maybe we'll see a rally once we get down to $1550 but there's also a chance that the bull market there is over. My trading this week was weak. My tactics haven't paid off as they should. I have no trades in mind for the coming week but will have a long weekend to decide what is next. The profit this week could have been so much more and the loss a lot less. But the markets don't care and the markets move on. It is good to have a short memory in this game. I'll check the charts over the next few days and take it from there. For now it's Friday afternoon and time for a break.
Thursday, February 14, 2013
Another mixed session as the Dow lost 9 points with the overall market a bit higher on the day. The advance/declines were about even and the volume was good. Still just moving sideways on most stock indexes and the summation index as well. Overdue for some type of decline but even if we get one it will probably be short lived. Expiration Friday on tap tomorrow followed by a long holiday weekend. Not much else to report for now. GE was up a couple of cents on good volume again. I think we are at the end of a 5 wave move here on a daily basis. However we have broken through the $23 level om good volume. I'd expect higher prices going forward perhaps after a small decline. Just a guess as usual. Gold fell again today and support levels have been broken. The gold futures were off almost $10. The US dollar had a strong day. The XAU was up 1/2 but fell off from higher levels. ABX gained 7/8, while GG and NEM had fractional losses. ABX rallied on its earnings report and the volume was heavy. However it more than cut in half the original gain for the day. I was able to get rid of my February ABX calls for a 99% loss. They could have expired worthless too. The result is the same, losing trade. There is no love for the gold shares. Gold itself has resumed its decline and I suppose $1550 is the next support. Mentally I'm feeling OK. The smaller stocks along with the financials continue to move higher. That is bullish for the overall market. I would expect the major averages to move higher as well. Calls are still the place to be in my opinion. Gold is heading lower and we are moving to the seasonal weak month of March there. No trades in mind right now. On to Friday.
Wednesday, February 13, 2013
A mixed market today as the Dow fell 35 points while the overall stock indices were higher. The advance/declines were positive and the volume was average. The retail sales number was in line with forecasts. The NASDAQ was higher and that bodes well for the bullish cause. The stock indexes remain overbought and moving higher. It is a momentum market to the upside and that hasn't changed despite the recent sideways action. I'm still a believer in higher prices. GE was up over 3/4 on very heavy volume. Positive news from Comcast buying the GE stake in NBC Universal was the catalyst. Of course if I had held onto the calls just one more day the profits from the call trade would have been much better. But I have no inside information. You cannot predict news that comes out of the blue. Trading can be very frustrating at times and that trade, although profitable, fits into that category. You've just got to keep moving forward. Gold fell again today, down around 7 bucks on the session. The US dollar finished the day little changed. The XAU fell 2 1/4 and looks like it is on the verge of a breakdown. ABX off 7/8, with GG and NEM lower by 1/3 or so. Volume was heavy for ABX and light for the others. My February ABX calls will expire worthless. Earnings due for ABX tomorrow but nothing can save this trade. Mentally I'm feeling kind of mixed at this point. The trading so far this year hasn't been all that great. I've sold the winners too early and held on to the losers too long. That is the exact opposite recipe for success. It is a pattern of failure. I'll have to regroup and make sure that the next trade is a profitable one. The stock indices continue to try and grind higher. 2 days left in February option cycle and then a long holiday weekend. I'm thinking that we'll see higher prices going into the close on Friday. We'll see what happens with the earnings form ABX and take it from there.
Tuesday, February 12, 2013
Drifting higher today as the Dow gained 47 points on average volume. The advance/declines were about 2 to 1 positive. Still trying to convincingly move above the recent congestion zone for most stock indices. I do believe that will happen but it is a question of when. Retail sales data out tomorrow and that should provide some direction one way or the other. Short term overbought again but that condition can persist. Only 3 days to go in the February option cycle and the risk increases for any type of short term trade here. GE was up 1/8 on light to average volume. I sold the February GE calls. I could not take the risk of a drop here with such a short time left in this option cycle. I chose the conservative path. The gain was 140%. GE could continue higher into the end of the week as it too is in a congestion zone and looking to break out. $23 would not be out of the question. Gold was up a few bucks as the US dollar was weaker today. Gold is trying to hold around its 200 day moving average but it doesn't look like it will. That's a guess on my part. The XAU was up 1 1/3. ABX and NEM moved fractionally higher, while GG had a fractional loss. Earnings are due this week for both ABX and NEM. My February ABX calls are still dead. They will probably expire worthless. A step backwards for the trading plan this year. Mentally I'm feeling OK. Not much else to report, as the stock indices continue to try and move forward. The financials hit new recovery highs today and that should bode well for the overall market. We'll see. The positive expiration bias should be in effect as well. Gold is doing nothing and the gold shares have been weak for months. I'm not sure when I'll try another trade here. The gold shares always look tempting but they continue to disappoint. Money has been moving elsewhere. We'll keep an eye on the foreign markets and check the US retail sales tomorrow.
Monday, February 11, 2013
We started off down and spent much of the day lower as the Dow closed with a loss of 21 points on very light volume. The advance/declines were negative. Not much to say of todays market action. No buyers but no volume either. It is expiration week and I believe the positive bias will assert itself at some point. Not a lot of economic data out this week. Retail sales on Wednesday is about the most interesting. The summation index is heading sideways. GE was off a few cents and no volume here as well. My February GE calls are still in the black and I'm still waiting for a move towards $23. Hasn't happened yet. I will most likely sell these calls before Friday. It gets very risky in the last week and there is no special situation such as earnings that were out on the final day before expiration like last month. Gold took a hit today and fell below $1660. Gold was off almost $20, with no news to speak of. The US dollar was a bit higher. The XAU fell 3 1/8. ABX, GG and NEM all had fractional losses on light volume. My February ABX calls are dead and will most likely expire worthless. Even the earnings due of Thursday morning won't save them. Mentally I'm feeling OK. It's the middle of February and the volume has been pretty light the last couple of sessions. My guess is still that the market will run up one more time this week and then we'll see what happens after that. Perhaps the retail sales number will be the catalyst higher. Gold remains dead money. We'll watch what happens overnight and go from there.
Friday, February 08, 2013
The Dow gained 49 points to close out the week. The advance/declines were 2 to 1 positive and the volume was weak. We are trying to break through the top of the congestion zone here. Perhaps expiration week will be what we need to get through. If we do rally from here I would guess that it won't last long. The stock indices are long overdue for some type of pullback. Not the sideways action that we are experiencing now. But let's see what happens next week first. GE didn't do much all session and the volume was light. My February GE calls are still in the black but with only a week to go, the risk is elevated. I really need to take some kind of profit here because the ABX trade is going to be a loser. I still think GE will attempt to get to $23, I just don't know if it will be next week. Gold fell $4 on the futures as the US dollar finished the day little changed. The XAU fell 3/4. ABX and GG were little changed while NEM slipped 1/3. Volume was light. My February ABX calls are probably going to expire worthless. I doubt the earnings due next week can save them. There hasn't been any good news form ABX for quite some time and gold remains dead money. Chalk it up as another mistake. Mentally I'm feeling OK. A rally today in the stock indexes on light volume. That really isn't a bullish sign. Perhaps we can blame the volume on an impending snowstorm for the northeast. But with so much of what is traded now done by computer, that argument loses some of its validity. Regardless, there are 5 days left in the February option cycle. Perhaps we can grind higher next week. Gold remains above support at $1660 and below the down trend line that has been in place since last October. Whichever way it breaks should provide a decent trading opportunity. I certainly don't know which way that will be. I'll be going over the charts this weekend to hopefully come up with some type of game plan for next week. It's Friday afternoon in the winter and time for a rest.
Thursday, February 07, 2013
Still in a sideways consolidation as the Dow fell 42 points on average volume. The advance/declines were negative. We sold off early again and tried to come back. That has been the pattern here lately. No real news out of the ECB meeting today. There isn't much to trade on. I'm still going to be a believer in higher prices into the end of next week. The positive expiration week bias should be in effect. But anything can and will happen in this game. GE was up a touch on average volume. The up trend line from the beginning of the year remains intact. I'm still waiting for the $23 level for now. Gold bounced around today and the futures finished the session off $7. The US dollar had a strong day and has had a very good week. This doesn't bode well for gold. The XAU was up 1/4. ABX and GG were flat on the trading day, while NEM rose 1/4. Volume was light to average. My February ABX calls are almost worthless as this trade was a loser from the beginning. I obviously should have cut the loss earlier. But mistakes are part of trading. The ability to move on is a must. Mentally I'm feeling OK. I thought the stock indices were on the verge of breaking out of the consolidation but it didn't happen today. I still feel we are going to break to the upside. I could be wrong. Gold remains dead money. My ABX calls will most likely be total loss. Fortunately there was not a lot of money in that trade. We'll keep an eye on things overnight and see how the week finishes up tomorrow.
Wednesday, February 06, 2013
The Dow finished the day with a gain of 7 points on average volume. The advance/declines were positive. We began the day with a good drop but managed to finish the session in the black. That is a positive one day reversal. We'll see if we get any follow through tomorrow. Declines are being bought and that was the expected near term outlook. The summation index has started to move sideways. I'd still be looking for higher prices into the February option expiration. GE was off a dime on average volume. Sideways here as well. I'm believing that it's a consolidation before we move to $23 here. I could be wrong. Gold was up $5 on the futures even with a stronger US dollar. The XAU was up a point. ABX, GG and NEM all had fractional gains on light volume. Obviously, there is no interest at the moment in the gold shares. My February ABX calls are losers and probably need to be sold this week before they expire worthless. Mentally I'm feeling a bit tired. I'm looking for another leg up on this extended stock index rally. We are just about ready to break out higher in my opinion. We've been moving sideways for about 8 days now. Gold and the gold shares continue to disappoint. That story remains the same. We've got the ECB meeting in Europe tomorrow and that could be the catalyst for the next market move. We'll keep an eye on that and see where it takes us.
Tuesday, February 05, 2013
Back to the upside today as the Dow gained 99 points on average volume. The advance/declines were about 3 to 1 positive. I'm guessing this is going to be a sideways range before we once again move higher but that's just a guess as usual. No technical reason for yesterdays decline or todays advance. Momentum has stalled to the upside here for now. New all time highs were set recently in some stock indices, so I'm assuming that the Dow will eventually follow here. We're only a couple of hundred points away. Declines should continue to be bought if my hypothesis is correct. GE was up 1/4 on light volume. The volume here was lacking and that is a near term concern. Perhaps we will move sideways here before moving higher as well. My February GE calls continue to show a profit. Gold fell a bit today. The futures were off 3 bucks. The US dollar didn't do much today. The XAU was off a touch. ABX, GG and NEM moved fractionally one way or the other on light volume. Still no love for the gold shares. My February ABX calls are still solidly in the red and most likely will be the first losing trade of the year. Mentally I'm feeling OK. A volatile start to the week for the stock indexes. Not a lot of economic data out this week. There is a meeting in Europe later this week that could influence prices. The ECB meeting may also affect the price of gold depending on what comes out of it. I suppose I will wait for that before I sell the ABX calls at a loss. The earnings for ABX are due out next Thursday but I don't even think a good number there will save this trade. We'll see what tomorrow brings.
Monday, February 04, 2013
The first triple digit down day of 2013 today as the Dow fell 129 points on light volume. The advance/declines were about 4 to 1 negative. This should turn the summation index back down. Sideways to lower should be in the near future for the stock indices. I don't think this is the start of any type of protracted move down but I certainly don't know for sure. I would expect buyers to show up at some point before long. The multi-week up trend line from November is still intact. GE was off 1/3 on average volume. My GE February calls are still showing a profit. GE is moving sideways and as long as it holds above $22.20, I think those calls will be OK. But I could be wrong and often am. Gold found some buyers today on the overall stock market decline. The precious metal futures rose 5 bucks despite strength in the US dollar. The XAU was up 1/8. ABX, GG and NEM all had fractional gains. The volume was average with the exception of ABX where it was heavy. My February ABX calls are still solidly in the red with virtually no chance for success. I really should dump them this week, since this trade is a loser and has only 9 days left to go. Mentally I'm feeling OK. The daily S&P 500 candlestick chart looks pretty bearish after todays action. We'll have to see if there is any follow through to the downside tomorrow. The market is long overdue to take a breather. However is usually takes a bit of time to build some sort of top and we haven't seen that yet. Gold is still dead money but it hasn't broken down through the 200 day moving average yet. It also hasn't been able to get through the 50 day moving average to the upside yet either. Perhaps which one breaks first will give us a clue as to the near term direction there. The gold stocks remain lackluster. We'll keep an eye on the overseas market action tonight and take it from there.
Friday, February 01, 2013
The momentum run continues as the Dow soared 149 points on good volume. The advance/declines were 3 to 1 positive. The employment report was the catalyst but the numbers were really nothing special. It was an excuse to move things higher in my opinion. But it doesn't matter what I think. The market goes where it wants and there is nothing to stop this rally here. The summation index should be back to the upside with todays action. If what we saw in the stock indices was a pause this week, it certainly wasn't much of one. So we'll see how much higher we can go. GE was up 1/3 on average volume. I'm still holding my February GE calls. Perhaps I will wait for GE to reach $23. Something to think about this weekend. Even gold went up today. The futures were higher by $8 as the US dollar lost some ground but the dollar finished well off of the lows for the day. The XAU gained 2 1/4. ABX, GG and NEM all had fractional gains on good to average volume. My February ABX calls remain mired in the red. 2 weeks left there and it would take a minor miracle for this trade to turn positive. Mentally I'm feeling a bit tired, did not sleep well. The employment report has come and gone. It is still up, up and away for the stock indexes as money continues to flow into equities. The trend is higher until we get some kind of turnaround. You cannot fight price. The market can stay overbought for quite a while when we get this type of run. I'm still thinking that we'll remain up into the February option expiration. Gold remains the a laggard here. As I've said before, even good news can't get a rally going there. Eventually there will be a move higher but I've been looking for that for months. Dead money. I'll be checking the charts over the weekend to come up with a game plan for next week. For now it's Friday afternoon and time for a rest.