Thursday, March 28, 2013
Another new high for the Dow and the S&P 500 finally reached one too. The Dow was up 52 points on light volume. The advance/declines were positive. The S&P 500 has now reached record territory. I still think we are at a top here. Next week should tell the story unless we just continue to move sideways. So we'll see. The technicals are still both short and medium term overbought for the stock indices. The volume to reach this point has been very weak. That is not a positive going forward. GE had no change on the day with light volume. No trades there for now. Gold was lower today as was the US dollar. The precious metal futures were down over 10 bucks. The XAU was off 7/8. ABX, GG and NEM were all little changed on light volume. My April ABX calls are still big losers. Three weeks to go in the April option cycle. Mentally I'm feeling OK. We've finished the 1st quarter of the year with a great gain for the stock indexes. The gains were some of the best ever for stocks. Will it continue? Time will tell but I'm looking for the start of a decent decline here any day. I could be wrong and often am. Gold remains dead money and the gold shares have completely under performed in the 1st quarter of 2013. We'll see if that continues going forward as well. We are now on the cusp of a long holiday weekend. I'd expect Monday to be a slow session as all the players start to return. I'll be going over the charts this weekend to come up with some kind of plan for next week. Plenty of economic data next week with Fridays employment report at the top of the list. For now it's Thursday afternoon and time for a break.
Wednesday, March 27, 2013
The Dow started off to the downside and stayed there all session. The Dow fell 33 points on light volume. The advance/declines were positive. That reflects the overall market being stronger than the Dow today. All the stock indices opened the day much lower and the NASDAQ made it all the way back into positive territory. Perhaps the S&P 500 can make it to a new all time high tomorrow. Still just moving sideways on the stock indices. It has the feel of wanting to go higher but it is a light volume holiday week that concludes tomorrow. GE was flat and the volume was light. No trades here for now. Gold was up almost 10 bucks on the futures despite a stronger US dollar. Perhaps the flight to safety trade isn't over yet. The XAU was up by 2 1/8. ABX, GG and NEM were all up at least 1/2 on OK volume. We have yet to see a sustained rally in the gold shares for some time. Mentally I'm feeling OK. End of the week, month and quarter tomorrow before a long holiday weekend. Still overbought on the short term stock index technicals. I'm still looking for the end of the rally here even if the S&P 500 makes a new all time high. Gold continues to try and hold on in the $1600 range. The gold shares continue to under perform. We'll keep an eye on the overseas markets tonight and see how we finish things tomorrow.
Tuesday, March 26, 2013
The Dow climbed to a new high today as the most watched index gained 112 points on light volume. The advance/declines were 2 to 1 positive. Follow through upside tomorrow should take the S&P 500 to a new all time high as well. But that should be about it. I don't expect a new leg up here. The volume is light and I do not trust light volume rallies. The transportation index is lagging here and that is not a positive going forward. I will say that I did not expect any 100 point moves in the Dow this week so perhaps my stock market analysis is all wrong here. However I do believe we are in the process of putting in a top at this juncture. The summation index is basically moving sideways. GE was off 1/8 on light volume. Still in a trading range here and no trades there for me now. Gold fell $9 on the futures as the US dollar didn't do much today. Trying to hang around the $1600 level here. The XAU fell a point. ABX, GG and NEM had fractional losses on light volume. I would expect the gold shares to trend lower for the next couple of days with the dumping of losers for the quarter. But that's a guess as usual. My ABX April calls are heading towards worthless. Mentally I'm feeling OK. 2 days to go in March. I would expect a drift higher for the stock indices after todays action. I still think we are at or near the end of the rally that began last November. We'll know if that prognosis is correct in due time. Gold continues to be dead money and the gold shares remain unloved. Looks like another losing trade in the ABX calls. We'll keep an eye on things overnight and go from there.
Monday, March 25, 2013
Another day of marking time as the Dow fell 64 points on light volume. The advance/declines were negative. The overall market was stronger than the Dow and that is a positive going forward. Sideways now for a couple of weeks on the stock indices. Even if we get one final push for new highs in the S&P 500, that should be it for this rally. However I am more of a believer that we will break down from here. No important trend lines have been violated to the downside in the stock indices yet. Or I could be wrong in my assessment of the situation and we rally huge from here. But I doubt it. GE was down 1/8 on average volume. Sideways here for 6 weeks and counting. I have no trades in mind for GE at the moment. Gold was off a touch today as an agreement was hammered out for Cyprus to avoid total financial collapse. But they've come pretty close. The precious metal futures were off a couple of bucks after being down a lot more. Impressive, given the big day in the US dollar. The gold shares lagged as usual though. The XAU fell 1 1/2. ABX, GG and NEM all had fractional losses on light volume. My April ABX calls are still solid losers. One of the problems here is that while being stuck in a losing position, it takes away from what could be a time to look for other trades. Sure you keep an eye out on things but you always come back to the trade you're in. A little less than 4 weeks to go in the April option cycle. Mentally I'm feeling tired, did not sleep well. This week already has the feel of being a wash for the stock indexes. It is a holiday shortened affair with the end of the month and quarter. A lot of players will be out. Some economic data out in the next few days. But I don't expect any big swings in the stock indices. Likewise for gold. Overbought short term here but we could be in a holding pattern. We'll see.
Friday, March 22, 2013
Back to the upside today as the Dow gained 90 points on light volume. The advance/declines were almost 2 to 1 positive. Today was pretty much the opposite of yesterday. Perhaps we can have one final move to new highs for the S&P 500 but that would be about it in my opinion. And that may not even happen. I think we're building a top here and a longer term one at that. But who knows? Maybe we just continue to grind higher into the April option expiration. Or perhaps we return to the April sideways movement in the stock indices due to the tax season as has happened in years before. The technicals in the stock indexes remain overbought and that won't last forever. GE was up 1/4 and the volume was light. No trades here for now. Gold fell $7 on the futures today as the US dollar got clobbered. That isn't bullish for the precious metal going forward. The XAU was off 3/4. ABX, GG and NEM had fractional moves one way or the other on light volume. My April ABX calls remain losers. Mentally I'm feeling OK. We'll hopefully be done with the Cyprus crisis after this weekend. Next week is a holiday shortened trading week. So the volume should be light and the volatility should be muted. That won't help my ABX trade as more time premium will be taken out. Still 4 weeks to go in the April option cycle though. Gold itself has had a small rally but it hasn't really taken the gold shares with it. As I've already said before, I think we are building a top in the stock market here. The longer it takes for the top to build, the stronger the move will be out of it. Or if this is simply a consolidation, the higher we'll move if it breaks out to the upside. But I don't think that's the case. We'll see what happens with Cyprus over the weekend and watch for the markets reaction on Monday. For now it's Friday afternoon and time for a break.
Thursday, March 21, 2013
Today we were lower as the market tries to make up its mind here. The Dow fell 90 points on light volume. The advance/declines were almost 2 to 1 negative. We started the day lower and continued that theme throughout the session. I still think that we are in the process of putting in a top now. I believe the negative RSI divergence on the daily charts will halt the rally that began last November. I also think we have a five wave up pattern in the S&P 500 daily charts and that this is the final wave higher. In fact that 5th wave could be done and we simply decline from here. Or we get more sideways action before heading lower. Of course I could be wrong in my analysis and the stock indices consolidate here before moving forward again. We'll see. GE was off an 1/8 or so on average volume. A negative RSI divergence on the weekly charts here. No trades in mind for GE at the moment. Gold was up 6 bucks on the futures today as the US dollar was a bit lower. The gold shares showed a little life. The XAU gained 3 1/4. ABX, GG and NEM all gained at least 3/4 on good volume. The gold shares are short term overbought here even though they haven't had much of a rally. Perhaps the flight to safety trade can last a bit longer but I certainly don't know for sure. My ABX calls remain solid losers. Mentally I'm feeling a bit tired. It will be interesting to see how we close out the week for the stock indices. Another down day could put some dark cloud cover on the weekly candlestick charts. That remains to be seen. Gold has crossed $1600. I think if we can get past $1620, maybe we can get to the resistance at $1660. That's a guess as usual. There is strong resistance there and I would not expect to just break through on the way to $1700. But the markets go where they want, regardless of what I think. We'll keep an eye on what happens in the foreign markets tonight and see how we finish up the week tomorrow.
Wednesday, March 20, 2013
Back to the upside today as the Dow gained 55 points on light volume. The advance/declines were about 3 to 1 positive. The Fed came and went without any changes in policy. We will have to wait and see how the stock indices finish out the week. I still say that we are building a top here. But I've been wrong before. We're still waiting on the next move in Cyprus. GE was up 1/8 on average volume after being higher earlier. Waiting to see if the overall market will begin to take its cues from GE. Gold was off around $4 in the futures and a couple of bucks more in the aftermarket. The US dollar fell a bit today. The XAU was off 1/4. ABX, GG and NEM didn't close the day much different from yesterday. Volume was light. The gold shares continue to do nothing. My April ABX calls remain losers. Mentally I'm feeling OK. We've gotten the Fed out of the way and now await the next market catalyst. Perhaps it will come from Europe but that's a guess as usual. Maybe we are simply in a quiet digestion period, considering the gains so far this year. That sometimes happens in the April option cycle with the focus shifting to the tax deadline. I'm still calling for some kind of top and a decline from around here for the stock indexes. Gold is dead money with only a slight move higher here so far on the Cyprus crisis. We'll see what tomorrow brings.
Tuesday, March 19, 2013
A mixed market today as the Dow gained 3 points while the S&P 500 and the NASDAQ were lower. The advance/declines were negative and the volume was average. The stock indices are still trying to digest what is going on in Europe. Maybe we can get another push higher with the Fed tomorrow but I'm a believer that we are near the end of the rally. I could be wrong. We will have to see what happens tomorrow. Technically the stock indexes remain overbought but not so much so on a short term basis. The sock market will take its cues from the Fed tomorrow. GE was up almost 1/8 on light volume. No trades here for now. Gold was higher again. The futures here rose 6 bucks. The US dollar was up today as well. The flight to safety trade is attracting capital. As usual the gold shares continue not to participate. The XAU was flat on the day. ABX and GG barely budged, while NEM was up 1/3. Volume was average. I'm still in the April ABX call trade that is a loser. Mentally I'm feeling tired, did not sleep well. The problems in Cyprus appear to be a blip on the radar screen for now. The selling we've seen has been met with buyers. Money continues to flow into stocks. I think we are building a top here. The summation index has rolled over but not decidedly so. The next few days will help tell the story. But I still don't think that it is time to be a buyer of stocks. We'll see. Gold itself has grudgingly moved higher but the gold shares continue to lag. This will end at some point but I certainly don't know when. All eyes and ears will be on Big Ben tomorrow. We'll keep an eye on things overnight and go from there.
Monday, March 18, 2013
We begin the week on a down note as the problems in Europe surface yet again. The Dow fell 62 points on light volume. The advance/declines were negative. It could have been a lot worse since we started the day off by over double where we ended the trading session. But the buyers still believe that the market has nowhere to go but up. I still think we are near or at the end of the months long rally but it will take time to build a top. The problems in Europe are not going to simply go away but the stock indices forget about them at times. We will have to see how the rest of this week plays out in Cyprus. GE was off over 1/8 on light volume. The up trend line on the daily charts from the beginning of the year has been broken here. Not so for the Dow and the S&P 500. We'll see in time if GE is a precursor for the overall market. Gold had a flight to safety day with the futures gaining 12 bucks. The US dollar was higher as well. The XAU only managed a 1/3 point gain though. ABX, GG and NEM only had slight fractional gains on light volume. My ABX calls continue solidly in the red. This trade has to pick up some steam this week or it's dead. If the gold shares can't get a decent rally going on todays news, exactly when can they? Mentally I'm feeling a bit tired. It will be interesting to see what transpires from here as the stock indices are still overbought. The tone is that we are simply going to digest what happens in Europe and continue on to new highs. We've got the Fed announcement on Wednesday and that is probably the next market mover. Unless whatever comes out of there is not a surprise. Then it will simply be a non event. Gold itself is perhaps putting in a short term bottom here but the gold shares remain laggards. We'll keep an eye out on the foreign markets tonight and go from there.
Friday, March 15, 2013
The week ended with a whimper as the Dow fell 25 points on expiration heavy volume. The advance/declines were negative. The summation index continues higher. Haven't gotten to an all time high on the S&P 500 yet but it is probably coming. I still think we are near the end of this great run up in prices that started last November. Bullishness is rampant. But you can't argue with price. The stock indices continue to grind higher. On to the April option cycle and there is an extra week there plus a holiday. GE was off 1/4 and the volume was good. A negative divergence in the weekly RSI indicator but it hasn't meant anything yet. So we'll see. Gold barely moved today despite a good drop in the US dollar. The usual inverse correlation here just hasn't worked lately. I don't know why. The XAU was up 1/2. ABX, GG and NEM finished the day little changed on expiration heavy volume. My ABX calls continue to lose value as time goes on. This trade will be a loser barring some unexpected event. Mentally I'm feeling OK. There are still negative RSI divergences in the stock index daily charts. Unless we power higher here to negate those divergences, they shouldn't be ignored. The market is technically overbought and has been for quite a while. This won't last forever. We've got the Fed next week but I would not expect any major news out of that. I could be wrong. Gold continues to do nothing. I suppose that is better than falling down. The gold shares are going nowhere fast. I'm stuck in yet another losing gold share trade. Perhaps I'll pass on trading gold again and concentrate on the OEX. It's something to ponder over the weekend. I'll be checking the charts again and try to come up with a game plan for next week and the April option cycle. For now it's Friday afternoon and time for a break.
Thursday, March 14, 2013
Another new all time high for the Dow and the S&P 500 is right on the cusp of doing so as well. The Dow gained 83 points on average volume. The advance/declines were 2 to 1 positive. The summation index continues higher. The positive expiration week bias remains. I'm still a believer that we are in the last legs of this uptrend that began November 2012. However if the RSI daily indicator for the S&P 500 powers up to a new high, I will be wrong in my assumption. Hasn't happened yet. We'll see if we get some follow through upside in the stock indices tomorrow. GE was up almost 1/4 on average volume. No trades there for now. Gold was up a couple of bucks on the futures. The US dollar took a hit today but gold itself did not respond. That isn't bullish going forward. The XAU was up 1 1/3. ABX was flat on the day after being higher earlier, while GG and NEM had fractional gains on the day. Volume was average. Still no signs of life for the gold shares. My ABX calls remain solidly in the red. Perhaps I will have to book the loss earlier than I expected. I'll give it another week most likely. Mentally I'm feeling a bit tired, did not sleep well. It's up, up and away for the stock indexes. How long can this go on? Usually longer than anyone thinks. I still believe that we are in the top of the ninth in a nine inning ballgame. Time will tell on that. Gold remains dead money. The gold shares remain total under performers. My trading remains poor at the moment. We'll wrap up the March option cycle and the trading week tomorrow.
Wednesday, March 13, 2013
The Dow managed another small gain as the most watched index was up 5 points on light volume. The advance/declines were positive. We are getting to the end of this rally in my mind. Although the action in the Dow transports today says that we'll get one more push to the upside in the stock indices. But that should about do it. The positive expiration bias remains for a couple of more days. The summation index continues higher. Bullishness abounds. Maybe we can get a new all time high in the S&P 500 by the end of the week. That's just a guess. GE was up a touch on light volume. The volume has dried up in this issue lately. No trades here for now. Gold lost $3 on the futures today, which wasn't all that bad considering the US dollar had another very strong day to the upside. The XAU dropped 3 2/3. ABX, GG and NEM all lost at least 2/3. Volume was average. Unless things turn around quickly my April ABX call trade doesn't have a chance of turning a profit. Gold remains dead money and the gold shares even worse. Mentally I'm feeling OK. The negative RSI divergences remain on the charts for the major stock indexes. Unless there is some strong upside move here, the divergences remain. It is something that I can't ignore. We'll see what happens moving forward. Gold is going nowhere fast and continues to disappoint. March is not a good month for the price of gold. It looks like the ABX call trade will be another loser. My ideas so far this year have been hit and miss. And the misses have cost more than the hits. But there's still over 5 weeks left for that trade and anything can and will happen in the markets.
Tuesday, March 12, 2013
A mixed market today as the Dow managed a gain of 2 points on light volume. The advance/declines were negative. Both the S&P 500 and the NASDAQ showed losses on the day. Perhaps this is a near term top but it is expiration week. The usual positive bias should exist. The summation index continues higher but is getting to the overhead resistance. I'm still a believer that once the top is put in place here, that will limit the gains for a while. Only 3 days to go in the March option cycle and it looks like I won't be trying the OEX puts now again. GE was off 1/4 on average volume. Perhaps GE is the canary in the coal mine. That's a guess as usual. Gold had a decent day, the futures were higher by $13. The US dollar finished little changed on the trading day. The XAU gained 3 1/3. ABX up 1/3, while GG and NEM gained 3/4. Volume was good for ABX, light for the others. ABX needs to get moving to the upside or my April ABX call trade will be another loser. Mentally I'm feeling OK. The stock indices remain very overbought. It doesn't appear as though there is much market moving economic data out the remainder of the week but you never know. The trend remains up but my feeling is that will be changing soon. Expectations are very bullish and there seems to be a quiet complacency tone setting in. The negative technical divergences remain. We'll see. Gold had a nice move today and perhaps there is a small double bottom on the daily chart. Time will tell. Gold has been such dead money for so long that perhaps we will finally see some interest. Or not. March is generally not a good month for the price of the precious metal. We'll see what tomorrow brings.
Monday, March 11, 2013
The beat goes on as the Dow gained 50 points on light volume. The advance/declines were positive. Grinding higher. The summation index is moving upward. We are about as overbought as you can get but that doesn't mean the stock indices won't go a bit higher. There is still a three point negative RSI divergence on the daily S&P 500 chart. It also appears to me that we are in the 5th wave of a 5 wave move up that began last November. What I am saying is that this rally is on its last legs and when we start to move lower it will last a while. Perhaps we can set a new all time high in the S&P 500 but I think that's about it. I could be wrong but the technicals say otherwise to me. GE fell 1/8 on average volume. Not much to say here. A negative RSI divergence here as well. No trades there for now. Gold was pretty much flat on the futures today as the US dollar fell just a bit. The XAU was off 1/3. ABX and NEM finished the day barely unchanged, while GG dipped 1/4. Volume was light. My April ABX calls are still solidly in the red. We are at the point on the weekly RSI indicator for the ABX chart where previous moves higher have begun. Whether or not that happens this time remains to be seen. I'll hold onto the calls for now. Mentally I'm feeling OK. I would certainly like to try the OEX puts again sometime this week but the risk is pretty high. The timing would have to be spot on. After the last losing trade though, I'm more inclined to sit it out and keep an eye on the ABX trade. But we'll see. If we are still higher again tomorrow and the volume is light, I may have to try the March OEX puts again. Gold is going nowhere at the moment. Ditto the gold shares. This ABX trade doesn't look like the smartest thing in the world at the moment either. The usual upside expiration week bias is intact for now. We'll keep an eye on the overseas markets overnight and take it from there.
Friday, March 08, 2013
The employment report came out and it was a strong number. The Dow rallied right away and then gave it all back, only to continue the upward drift for the rest of the day. The Dow finished the day with a gain of 67 points on average volume. The advance/declines were 2 to 1 positive. The summation index continues to the upside. The market can remain overbought longer that I could stick around for the March OEX put trade. I had to sell them today for a 70% loss. With only a week to go in the March option cycle, I didn't want to see another 100% shellacking. Do I think the market will pull back at the beginning of next week? Yes but most likely not enough to make that trade profitable. GE was up 1/8 on light volume. No trades in mind there for now. Gold sold off early on the jobs report but somehow made it all the way back to finish up a couple of bucks. This occurred despite a very strong US dollar. I don't know what to make of it. The XAU was up 2/3. ABX and GG were off 1/8, while NEM fell 2/3. Volume remains good here. My April ABX calls remain losers for now. 6 weeks to go on the April option cycle from here. I'll need to see some more one point up days in ABX for this trade to work. Wishful thinking perhaps on my part as we remain both short and medium term oversold here. Mentally I'm feeling OK. I gave the OEX March puts a try and it failed. Definitely early there and perhaps the stock indices will have their usual upward expiration week bias. But there is still the negative divergence on the daily RSI. Unless we really move higher from here, that divergence cannot be ignored. That said, I think when we do reach the next top, it will be an important one. But none of that really matters now. I booked the loss and it's time to move on. Who knows? Maybe I'll try again next week. Gold had a strange day. It had every reason to sell off hard and it didn't. A very strong jobs number coupled with a huge move up in the US dollar. Usually that would have led to at least a $20 move lower in the precious metal. Didn't happen. Perhaps the gold market is telling us something we don't know yet. Or not. It could just as easy drop on Monday for all I know. The technicals for the gold shares have been begging for some kind of rally for weeks. However it just isn't happening. I've said it a number of times recently, gold is dead money. I'll be going over the charts this weekend to come up with the next idea for a trade. For now it's Friday afternoon and time for a rest.
Thursday, March 07, 2013
Drifting higher today ahead of tomorrows jobs report as the Dow gained 33 points on average volume. The advance/declines were positive. Things could go either way here but there is also a slight chance that we continue to drift. Overbought for sure on the stock indices. The summation index continues to the upside. My OEX March puts are solidly in the red. Unless there is good move to the downside tomorrow, I'll have to dump them at a loss. GE was flat on the day and the volume was extremely light. No trades there for now. Gold was flat on the futures but down from yesterdays aftermarket gains. The US dollar was much lower today and that didn't help gold. That's a negative for now. The XAU dropped 1 2/3. ABX and GG fell about 2/3, while NEM was off 1/8. Volume remains good to average here. My April ABX calls remain in the red. The weekly RSI here is at the point where we should see a bounce at the very least. Hasn't happened yet. Mentally I'm feeling OK. I have no idea what the employment report will bring but the market reaction to it is the key. It will be the excuse to buy or sell for tomorrow. I've made the case for a decline and purchased some OEX puts. However the market goes where it wants and can remain overbought for longer than expected. Gold continues to be dead money and nobody wants it. That is usually the time to step in. March is historically a poor month for the price of gold though. It looks like yesterdays pop in the gold shares was a one day wonder. All eyes on tomorrow morning. We'll take it from there.
Wednesday, March 06, 2013
Another new high in the Dow as the index gained 42 points on average volume. The advance/declines were positive. The Dow remains the leader here as the NASDAQ was slightly in the red for the session. When the Dow leads it usually isn't bullish going forward. There's also a possible 3 time negative divergence for the stock indexes on the daily chart RSI indicator but not on the Dow. My March OEX puts are in the red. There's 7 days to go in the March cycle. I'm still going to wait for the employment report on Friday before doing something with this trade. GE was up a touch on light volume. A negative RSI divergence here as well. However any positive price action going forward would negate the divergence. So we'll see. Gold was flat on the futures but rose $7 in the aftermarket. The US dollar was stronger today as well. The XAU finally had a bounce and gained almost 5 1/2. ABX, GG and NEM all rose by more than a buck on good volume. My April ABX calls are still in the red but not as much. I'm not sure what to make of todays action in the gold shares. It is probably just an oversold bounce as the US dollar was pretty strong today and there was no news to really drive the gold shares higher. Whatever the reason, we'll take it. Mentally I'm feeling OK. My guess is that tomorrow will be a waiting game in the markets for Fridays jobs numbers. Short term overbought here but we could stay that way. Or not. The March OEX put trade will all boil down to the market reaction on Friday. That's my guess for now. Gold held in pretty well today despite the good gain in the US dollar. I certainly can't figure out why but it could be bullish for gold moving forward. The gold shares rallying today might be a precursor to higher prices moving forward. That's all conjecture as usual. We'll keep an eye on things tonight and go from there.
Tuesday, March 05, 2013
A new all time high for the Dow as the most watched index posted a gain of 126 points. The advance/declines were almost 3 to 1 positive and the volume was average. The summation index should turn back up with todays price action. We've broken out from the latest small consolidation in the stock indexes. This is either the last leg up or perhaps we have formed a small bearish megaphone on the daily charts. The next few days will tell. My order for the March OEX puts was filled in the morning. I might be early here as well. The puts are at the price I paid for now. I'm still going to wait for Fridays employment report on this trade unless we get a strong move higher in the next two days. GE was up 1/3 on average volume. We never went back to fill the gap here. It could also be the start of the last leg higher here as well. The daily charts look like that they are beginning the #5 or E move of a 5 wave up. I could be wrong. Gold was up a couple bucks on the futures as the US dollar was a bit weaker today. The XAU was off 1/4 after being higher earlier. ABX, GG and NEM all continued lower fractionally. Volume was average. My ABX April calls have lost half of their value. I'll consider dumping them after the employment report. This trade has all the look and feel of a loser. Mentally I'm feeling OK. There was a chance that the stock indices would break out to the upside again and that is what has happened. There is still a possibility of a 3rd negative divergence in the daily RSI indicator depending on what happens from here. Some of the stock indexes had a gap to the upside today, so follow through higher tomorrow is key. My work calls for some weakness going into next Monday from here though. I could be mistaken there as well. I think the stock markets reaction to the jobs report will be the difference one way or the other. The ABX trade already looks dead. Oversold, staying there and no bounce. If you're long there is no worse scenario. We'll see if the foreign markets ride the coattails of the Dow tomorrow.
Monday, March 04, 2013
We started off the week with a gain as the Dow rose 38 points on lighter volume. The advance/declines were positive. We sold off early and came back once again. That has been the pattern lately and it continues. Perhaps we'll hit new all time highs on the Dow tomorrow. I would still like to try the OEX puts before the employment report due on Friday. I've left in an open order for the March puts. If we get to new highs it may get filled. The summation index continues sideways. We should be short term overbought on teh stock indices by Wednesday if we progress higher. GE was up just a bit on light volume. No trades here for now. Gold was little changed on the futures, with the US dollar down a touch. The XAU got pummeled again though, losing 4 1/8. ABX off 3/4, GG shed 1/2 and NEM fell 2/3. Volume was heavy here again as the gold shares remain in liquidation mode. My April ABX calls are solidly in the red. It looks like I was definitely early on this trade. I may have to bail out soon because there still is no love for the gold shares. Deeply oversold and staying there. I might have to exit on any bounce. Mentally I'm feeling OK. The stock indices have the feel of wanting to move higher here. If the volume remains weak, then the puts will be the proper play. If we continue to rally into Wednesday, then the March OEX puts should work. We will have to see how it sets up in the next 2 days. Gold is dead money and the gold shares are zombie like at this point. Plenty of time for the April ABX calls to work but it isn't looking good right now. We'll keep an eye on the overseas action and see what happens tomorrow.
Friday, March 01, 2013
Today it was a one day reversal back to the upside as the Dow was off over 100 points early but closed the day up 35. The advance/declines were positive and the volume was average. Apparently the Washington budget mess is a market non-event. Moving to short term overbought for the stock indices but we're not there yet. The summation index is moving sideways for now. I'm still inclined to purchase some OEX March puts before next Fridays employment numbers. I'll reconsider this idea over the weekend. GE was off a couple of cents on average volume. More overbought than oversold here. There's still a gap to be filled that is lower than where we are now. Gold was off $5 on the futures, which wasn't too bad considering the continued strength in the US dollar. The dollar is overbought and staying there. The XAU was off a point. ABX down 7/8, GG was up a touch and NEM shed 2/3. Volume was very heavy for ABX and good for the others. My open order for the April ABX calls was filled. It is already in the red. Perhaps I'm early for this idea but we are very oversold on any time frame. But that doesn't mean ABX can't go even lower. Plenty of time for this idea to work though. However my gold share trades for the past year have been losers with one exception. Mentally I'm feeling OK. Although I'm looking for some type of decline in the stock indexes next week, there is a possibility that we will move to new highs on the Dow as well. We could be on the brink of the final leg up from the rally that began this past November. If that is the case buying the March OEX puts will not work. The price action early next week will be the key. Gold continues to be dead money and the gold shares are getting crushed. Why would anybody purchase calls in the gold shares at this point? March is historically the worst performing month for the precious metal. Sometimes you have to do the opposite of the crowd to be successful. I'm not saying that this ABX April call trade will work out. But when all the technicals are very oversold, there is no better time to give it a try. Unless the gold shares are going to crash, I don't see much more downside from here. But I could be wrong and often am. I'll be going over all the charts this weekend to be ready to resume trading on Monday. For now it's Friday afternoon and time for a break.