Friday, May 31, 2013
An interesting end to the month of May as the Dow fell 209 points on good volume. The advance/declines were 6 to 1 negative. Still oversold and even more so. The summation index continues lower and we will take our cues from there. I'd expect a bounce on Monday but the breadth of the market has changed. Momentum moves never end well and I think we are seeing that now or will see that here in the near future. There is no sense of a trend change and the complacency is still obvious. I'm considering the OEX puts ahead of next weeks employment report. GE was off 1/4 on average volume. Nothing doing there. Gold fell today as well. The futures were off around $20 and more in the aftermarket. The US dollar bounced back a bit today. The XAU fell 2 1/8. ABX, GG and NEM were mixed with fractional moves one way or the other on good volume. Considering the drop in gold, the gold shares performed quite well. That is bullish for the gold shares moving forward. June is historically a poor month for the price of gold though. Mentally I'm feeling OK. The stock indices are very oversold after todays price action and a bounce to the upside will be expected on Monday. I am not exactly sure what is happening here but perhaps the market is beginning to factor in the end of easy money. It won't be pretty if that is the case. The end of easy money will occur at some point though. We'll stick with the technicals and they are oversold short and medium term for stocks. The price action after a bounce will tell us a lot about where we're headed. Gold fell back today and we could be headed to more sideways action here. That's a guess as usual. As long as the crash lows hold, I'm still constructive moving forward for gold and the gold shares. My October ABX calls are still in the black. The month ended up pretty good for ABX and that was what I was looking for. However the markets will go where they want. Plenty to ponder over the weekend. For now it's Friday afternoon and time for a break.
Thursday, May 30, 2013
A slight bounce in the Dow today as it gained 21 points on average volume. The advance/declines were positive. The overall market was stronger than the Dow. The McClellan oscillator reached a very oversold level yesterday so some type of positive relief was due. The stock indices are still on the oversold side here though. However the anemic reaction to the oversold condition has me concerned for the bullish cause here. I'm guessing that we should move higher in the coming few days but that may be an opportunity to purchase some OEX June puts. We'll see. GE was flat on the session and the volume was light. We've had a nice run since the end of April for GE. Perhaps it's time for a pause. Gold rallied again on the weaker US dollar. The precious metal futures rose $20 as the dollar had another very weak day. The XAU came to life again with a gain of about 5 1/2. ABX and GG rose 1 1/2, while NEM tacked on 1 1/4. Volume was good for the gold shares implying that the move higher has legs. My October ABX calls are solidly back in the black. Mentally I'm feeling OK. The GDP revision was only adjusted down slightly but that was enough to start the day with a rally. But the day ended on a weak note and the tone of the market seems to have changed. That could all change with a couple of solid up days. However the summation index is still trending down and that cannot be ignored. Gold is right at a declining tops line on the daily chart that began in mid April. The gold shares have already broken through that line and we'll see if gold itself can follow. A strong close of the month tomorrow for ABX will put that trade in a better position going forward. Money has flowed into the gold shares the past couple of days. We'll see if that continues. We'll watch the foreign trading overnight and close out the month tomorrow.
Wednesday, May 29, 2013
Back to the downside today as the Dow fell 106 points on average volume. The advance/declines were 4 to 1 lower. The summation index continues lower and we should probably take our cues from that. We've stopped going straight up for now but whether that means a decent decline is in the works is the question. Perhaps we are in the beginning of some type of distribution top but that's a guess as usual. The momentum to the upside will need to reappear rather quickly to be relevant again. Still short term oversold on the stock indices here and waiting for some type of upside action. Maybe tomorrow. GE was up a bit on lighter volume. Basically sideways since we saw new highs. No trades in mind here. Gold bounced back, up $12 on the futures. The US dollar reversed and gave back all the gains from yesterday. The XAU showed some life, gaining 4 points. ABX, GG and NEM were all up around a point or so. I'd like to see some kind of upside for gold going into the end of the month. 2 days left, so we'll see what happens. Mentally I'm feeling OK. The GDP revision is due tomorrow and that should provide some market direction early. I'm expecting some type of upside regardless, due to the oversold market condition. If we continue to decline then I would say that the game has changed. Gold is still holding above the crash lows for now. A rally from here would certainly help my October ABX calls. An end of the week close for gold above $1400 would be a step in the right direction I believe. We'll see what tomorrow brings.
Tuesday, May 28, 2013
We started off the week with a positive day as the Dow gained 106 points on light volume. The advance/declines were positive. We were up over 200 during the session. Not exactly sure what that means. The summation index continues lower. Perhaps we are forming some sort of distribution top but that has yet to be seen. The majority is still bullish here and until we see some type of decline the trend remains up. It's a short trading week leading up to the end of the month on Friday. Not a lot of economic data, with the GDP revision probably the most watched. GE was up a bit on good volume. We closed off of the highs here as well. No trades in mind for GE right now. Gold fell $15 on the futures as the US dollar had a strong day. We really still need gold to hold the crash lows for the bullish cause. The XAU only fell 1/2. ABX, GG and NEM were mixed with fractional moves on lighter volume. My October ABX calls are at break-even. Some kind of rally in ABX to close the month is really needed here for this trade to have a decent chance of working out in my opinion. Mentally I'm feeling OK. The stock indices are now oversold for a change. Not drastically but enough to support some type of rally. Gold had a down session and if the US dollar continues its rally that will not bode well for the price of gold. The fundamentals seem to favor a stronger US dollar at this time. We'll keep an eye on the overseas action and go from there.
Friday, May 24, 2013
We had a sell-off early but then a steady grind back to the upside as the Dow finished the day with a gain of 8 points on light volume. The advance/declines were negative. The technicals for the stock indices have rolled over but we are not getting much of a decline. The summation index is heading lower and prices are holding up rather well. Perhaps the price action this week is simply a pause in the momentum run up. It sure feels that way. Money is buying whatever dips we get. We'll have a long weekend to figure out a game plan for next week. GE was off 1/8 on average volume. The technicals have rolled over here as well after hitting a new yearly high. No trades in mind for GE. Gold fell $5 on the futures and a bit more in the aftermarket. The US dollar was a bit weaker today as well. The XAU was off 1 1/4. ABX, GG and NEM all had fractional losses on lighter volume. ABX was actually halted from trading today for 3 hours due to an unfavorable ruling and fine from one of its mines in Chile. Considering the stock did not just fall apart when it re-opened is a good sign going forward in my opinion. Of course owning the ABX October calls does sometimes create a bullish bias when I look at this stock. At any rate gold still needs to hold above the crash lows and it has so far. Some type of rally would be nice but a sideways consolidation is another possible outcome as well. Mentally I'm feeling OK. A down week for the stock indexes but it isn't a negative trend yet. The medium term technicals here remain overbought. Unless we get a strong break to the downside, the trend remains up. But we have to keep in mind that this has been a momentum driven move. When it does end, it won't be pretty. Gold has the opposite picture. Medium term oversold here and below the 200 day moving average. Same story for the gold shares. Perhaps buying the longer term ABX calls was a mistake. I still need to see where we close out the month there to determine my time frame for selling them. They are still somehow slightly in the black. Plenty to think about over the extended weekend. But right now it's a Friday afternoon and time for a break.
Thursday, May 23, 2013
Another down day but we finished well off of the lows. The Dow fell 12 points on average volume. The advance/declines were negative. Working off the extreme overbought condition here. So far this still looks like just a blip in the momentum rally. The summation index has turned lower though. No trend lines have been violated to the downside yet on the stock indices. So we will have to give the benefit of the doubt to the bulls for now. I expect a slow pre-holiday Friday session tomorrow. GE was off 1/4 and the volume was good. We've fallen back after making new yearly highs. That isn't really a bullish scenario. A better picture would have been even higher prices. I'll keep an eye on it because GE sometimes gives clues to the overall market direction. Gold rallied back up today, gaining almost $25 on the futures. The US dollar had a very weak day for a change. The XAU didn't follow gold today and only managed a 1/2 point gain. That isn't bullish for the gold shares going forward. ABX, GG and NEM all had slight fractional gains on light volume. We could be in for a sideways malaise for the gold shares if this keeps up. Mentally I'm feeling a bit tired, did not sleep well. Volatility has somewhat returned to the stock indexes with the anticipation of easy money from the Fed coming to an end. It hasn't stopped the money flow yet but eventually the manipulation of interest rates will be coming to an end. This week is the first taste of what will happen when it does. We also should not forget this is a momentum driven rally in stocks which never ends pretty. So we will keep a close eye to the ongoing developments as usual. Gold has held up well this week but the gold shares are lagging once again. Could be a long summer for my ABX October call trade if that keeps up. We'll keep an eye on things overnight and then close out the week tomorrow.
Wednesday, May 22, 2013
Plenty of Fed speak and we got some volatility. The Dow fell 80 points on heavy volume. The advance/declines were about 4 to 1 negative. It was a one day reversal to the downside as we opened much higher on the stock indices. Could this be the start of some kind of pullback? That remains to be seen. If you want buy a dip, we got one today. The Fed might start to ease up on the easy money that has helped fuel the rally and that had the players spooked today. We'll see if we get any follow through to the downside tomorrow. Todays action should turn the summation index lower. One day doesn't make a trend though. GE was up 1/4 on heavy volume. We made a new yearly high today for GE. We did take out the $23.75 level but finished well off of the highs for the day. The fact that GE made a new high today says that a decline in the overall market is not imminent. We'll see. Gold had a one day reversal to the downside as well, as the futures dropped $10. Gold was up over $1400 early on. The US dollar was stronger on the Fed. The XAU gained a point but was well off the highs for the day. ABX, GG and NEM all had fractional gains on heavy volume. The gold shares held up pretty well today despite the negative tone. That could bode well going forward. I'm still waiting to see how the month of May ends up for ABX. That will determine how long I stay in that trade. My October ABX calls are still slightly in the black. Mentally I'm feeling OK. So we got the Fed out of the way and we will have to see how things pan out from here. 2 trading days left before a long holiday weekend. I don't expect any huge decline to take place here. The market was falling today but came back in the last half hour. Perhaps this stalls the upside momentum for a couple of days. Or maybe the long awaited correction is about to begin. It's really all a guess right now. Gold did not have a positive session but it could have been worse. As long as we stay above the crash lows the potential double bottom in gold remains. We'll see how the overseas markets react to todays US price action.
Tuesday, May 21, 2013
The Dow gained 52 points today on average volume. The advance/declines were slightly positive. The overall stock indices were weaker than the Dow. Waiting on the Fed here. Tomorrow should be a market moving day. Which way is the question. The summation index continues higher. Still no overhead resistance for the stock indexes. Overbought, staying there and that condition persists. GE was up a dime on light volume. We made it to $23.75 today and we'll see what happens from here. A break to the upside would be bullish for the overall market. Gold fell back today as the futures lost 6 bucks and about that again in the aftermarket. The US dollar finished the day a bit higher. The XAU fell 2 7/8. ABX, GG and NEM all had fractional losses on good volume. No follow through to yesterdays gains in gold. My ABX October calls are slighty in the black. Mentally I'm feeling a bit tired, did not sleep well. Bernanke will blab and the Fed minutes will be released tomorrow. So there is potential for some volatility. There has been no stopping this rally and probably tomorrow won't matter either. It is a momentum driven move. Gold is still trying to hold the recent crash lows and so far it has. There are possible positive RSI divergences on the gold charts. If things hold together here, some type of longer term rally in gold could take place. We'll have watch what happens here closely. We'll see what happens in the overseas markets and take it from there.
Monday, May 20, 2013
A one day reversal to the downside for the Dow today as we opened higher and closed lower. The Dow fell 19 points on light volume. The advance/declines were positive. I'm not sure this is the end of the rally and it probably isn't. The momentum run to the upside won't be stopped by just one day of decline. Still overbought on all time frames. Summation index still to the upside. We've got Bernanke flapping his gums on Wednesday and the release of the Fed minutes that day too. So Wednesday looks like the day for some market movement. GE was up 1/8 and the volume was light. We'll need to see a solid break above $23.75 to get bullish here. Gold had a one day reversal to the upside as it sold off early and then came all the way back. The precious metal futures gained $20 as the US dollar was weaker on the session. Gold needs to hold up here for a successful retest of the crash lows. So far so good but it remains to be seen if the lows will hold. The XAU rose 5 1/2. ABX, GG and NEM were all up more than a buck on good volume. My ABX October calls made it back into the black. Would really like to see ABX close out the month of May with a solid gain for these calls to work longer term. Mentally I'm feeling OK. Perhaps tomorrow will be a waiting game on the Fed. Not much else to report for today. Gold had a nice comeback for the bulls today but gold can be very volatile in both directions. This weeks action is important. We'll keep an eye on the foreign markets and take it from there.
Friday, May 17, 2013
It's like a runaway train as the Dow continues to climb. The most watched index gained 121 points on average volume. The advance/declines were almost 3 to 1 positive. The summation index continues higher. No overhead resistance for the stock indices. I keep thinking that a pause is in order due to the extreme overbought condition and that just isn't happening. It's been quite a bull market run so far this year. Money continues to flow into stocks. It is a massive momentum driven run. Who knows how high it will go? I'm done guessing. When I see some kind of top in place, I'll look to play the OEX puts. Nothing looks like a top yet. GE was up almost 1/4 on good volume. Overbought here as well but that doesn't seem to mean anything. No trades in mind here. Gold took a hit thanks to the much stronger US dollar today. The gold futures lost over 20 bucks and more in the aftermarket. The XAU fell 3 1/3. ABX down 2/3, GG dropped a buck and NEM shed 3/4. Volume was good. We are at the retest of the crash lows for gold and I am assuming that they will hold. Todays price action looks like they won't. Next week will be very important for gold. My October ABX calls are now in the red. Obviously I should have sold them at a profit on the first snap back and then bought them back here. But I decided to just keep them. Everything is in rally mode with the exception of the gold shares. Another key factor here in my mind is how ABX closes out the month of May. That close has longer term implications for the direction of ABX. Mentally I'm feeling OK. There isn't much more I can say about the stock indexes that I haven't already said. Overbought on every time frame and it doesn't seem to matter. The runaway train analogy is appropriate because when the train goes off the tracks, it isn't going to be pretty. But who knows when that happens? The sell in May and go away theory isn't holding up so far this year. How much longer can the rally in stocks go on? Of course I'm sitting here with a losing position in the ABX calls. My trading confidence isn't what it used to be and I have been in a trading slump for months. Money is continuing to come out of gold as the US dollar looks like it is breaking out to fresh multi-week highs. As I said before, this will be an important week for the price of gold. It needs to hold the crash lows or it will be heading to $1300 or lower. I'm not sure what will happen. There was a time when a stronger US dollar led to weaker stock prices. I suppose during a rip roaring bull run, it doesn't really matter. Enjoy the ride. For now it's Friday afternoon and time for a rest.
Thursday, May 16, 2013
We hit new highs today and then sold off as the Dow fell 42 points on average volume. The advance/declines were negative. About as overbought as you can get when we started the trading session, so some of that has been relieved with todays action. But we're still short and medium term overbought. Todays inflation data was benign and the economic numbers were a bit weaker than expected. It has been quite a momentum rally and one down day doesn't change that. But this can't go on forever and we are in the seasonal period of weakness for stocks. Momentum moves can go on longer than you think but in my opinion the upside is limited from here in the near term. I could be wrong. GE was flat on the day and the volume was light. No trades here for now. Gold continues to weaken, losing another 10 bucks on the futures. The US dollar bounced around but finished the day basically unchanged. The XAU was up 1/3 as the gold shares are now outperforming the metal itself. That is bullish for them going forward. ABX, GG and NEM all had fractional losses on good volume. We'll see how the week closes out for these issues. My October ABX calls continue to lose ground but are still slightly in the black. Mentally I'm feeling OK. Expiration Friday coming up. It's been a positive week so far. Nothing has changed for the stock indices. The summation index continues higher. However I do think a pause is about to be upon us. Whether it develops into an actual decline remains to be seen. Whether it even occurs also remains to be seen at this point. Gold has resumed its decline to test the crash lows. I'm of the belief that the lows will hold. Time will tell on that. We'll close out the trading week tomorrow.
Wednesday, May 15, 2013
Bouncing around today but the moving higher theme remains intact. The Dow gained 60 points on average volume. The advance/declines were positive. The momentum remains but it looks like it may be getting weaker here. Less advancing issues as we move higher now. But that could change tomorrow. Still short and medium term overbought. We've been in that condition for a long time. It won't last forever. The economic data today showed no inflation and slightly less economic data measurement than expected. All news is being construed as bullish for stocks. Only two days left for the May option cycle. No OEX trades in mind here as of yet. GE was up 1/4 on average volume. Finally made it past the 50 day moving average. The next upside target is around $23.75. Gold headed lower today on the stronger US dollar. The precious metal futures dropped $28 during the session and more in the aftermarket. The retest of the crash lows is the current price scenario. The XAU fell 4 1/4. ABX and NEM dropped a buck, while GG lost 1 1/2. Volume increased to the downside for the gold shares. My ABX October calls are now just slightly in the black. I'm still a believer in this trade going further out in time. However if the crash lows in gold don't hold, this trade will be a loser. Mentally I'm feeling OK. Still up, up and away for the stock indexes. The summation index continues higher. There is no overhead resistance for the stock indices. These conditions persist and until they change you cannot fight the tape. Gold is back to the downside in a big way this week. We will need to see 1350 or so hold this decline or gold will be heading lower. The way the US dollar is acting here is implying that the crash lows won't hold. But again, that could all change when we reach those levels. As always, the markets will go where they want. We'll keep an eye on things overnight and take it from there.
Tuesday, May 14, 2013
It's momentum, it's to the upside and that is all we need to know for now. The Dow gained 123 points on average volume. The advance/declines were 2 to 1 positive. We opened higher and kept on going. New highs all around. The summation index continues to the upside. The positive option expiration bias is in place. I suppose we will see just how far this rally can go. No sign of a top in the game now but the momentum runs to the upside never end well when they do. For now we simply enjoy the ride. GE was up 1/8 or so on average volume. Still hanging around the 50 day moving average. GE isn't at a new high and that could be telling going forward. Or not. Gold wasn't participating in todays rally as the precious metal futures fell 10 bucks. The US dollar had a good session to the upside. The XAU fell 1 1/8. ABX, GG and NEM had fractional moves one way or the other on light volume. The money flows are not to the gold shares right now but at least they aren't going straight down anymore. I still consider the recent action in the price of gold as the start of a retest of the crash lows. This process could take a couple of weeks or more. Mentally I'm feeling tired, did not sleep well. New highs in the stock indices sometimes on a daily basis. There is no overhead resistance. It continues to be a great rally. There is no fighting the flow of money into stocks. Perhaps the 12 year sideways movement in stocks is over. It sure feels that way. Gold continues to be unloved but there is plenty of time for the ABX October call trade. It remains profitable for now. Plenty of economic data in the next 3 days. We'll see what happens tomorrow.
Monday, May 13, 2013
A mixed bag to start expiration week as the Dow fell 26 points on light volume. The advance/declines were negative. The NASDAQ had a slight gain while the S&P 500 was flat. I'm still expecting some type of run up into Fridays option expiration as a positive bias usually exists. Plenty of economic data out this week as excuses to go one way or the other. No OEX trades in mind at the moment. GE was flat on the day and the volume was light. Still making a decision here at the 50 day moving average. Gold fell a couple bucks on the futures and a little more in the aftermarket. The US dollar was little changed on the session. The XAU fell 2 3/4. ABX, GG and NEM all feel at least 1/2 on lighter volume. Gold has rolled over here and should head down to retest the crash low. What happens there will be the medium term key on direction. Mentally I'm feeling tired, did not sleep well. We're still over bought on the stock indices. It looks like the recent price action is a small consolidation before we move higher. That's my guess for now. Gold is heading lower near term. We'll wait it out there for now. Not much else to report on this slow news spring Monday. We'll keep an eye on the overseas markets tonight and go from there.
Friday, May 10, 2013
It was a quiet session for most of the day but we came alive in the final half hour to finish the day with a gain of 35 points on the Dow. The advance/declines were positive and the volume was light. Still overbought and still moving higher. I'm still expecting higher prices next week into the May option expiration. It is a momentum move up for now in the stock indices. You cannot fight that. As long as the money continues to flow into equities, the upside is the only way to go. GE was up 1/8 on light volume. GE is still deciding what to do here at its 50 day moving average. Gold took a hit today as the US dollar had another very strong day. The gold futures fell over $30. This is probably the move down to retest the recent crash lows. I think the lows will hold. The XAU was only down 1/3. This is the kind of price action that I'd like to see from the gold shares. When the relative strength vs. gold is higher for the gold shares, that is bullish going forward. ABX, GG and NEM all had slight fractional losses on average volume. Buyers came into the gold shares after they sold off early in the day. My October ABX calls are still in the black. Mentally I'm feeling OK. Stocks moving higher as the song remains the same. No overhead resistance. Momentum runs never end pretty but they can go on for longer than expected. No end in sight right now. Gold started to break down again today and we'll see if there is follow through next week. The stronger dollar was most likely the catalyst. One week to go in the May option cycle and I doubt I'll have any trades next week. Plenty of charts to check out over the weekend. For now it's Friday afternoon and time for a break.
Thursday, May 09, 2013
Really, the stock market can go down too? As sarcastic as that might sound, it seems to be the prevailing attitude at the moment. The Dow fell 22 points today on average volume. The advance/declines were negative. We're still very overbought both short and medium term for the stock indices. I've been saying that for quite some time now. Perhaps we are getting near to some type of consolidation or setback. However I am still of the thought that the market will run up into the May expiration. After that, we'll have to wait and see. The summation index continues higher. GE was off 1/4 on light volume. Hesitating here at the 50 day moving average. The gold futures were off $5 in the regular session, another $15 in the aftermarket. The US dollar had a very strong day to the upside. The XAU was off 1 2/3. ABX, GG and NEM were all lower by at least 1/2. Volume here remains good. If the US dollar begins to rally here, it will not help gold and the gold shares. My October ABX calls are still in the black but fell back pretty good today. Mentally I'm feeling OK. We had weakness in the second half of todays session and we'll see if that is bought tomorrow on the open. The trend remains up. I have no OEX trades in mind for now. Gold is moving sideways after a nice run up from the crash low. We'll see how that works itself out in the near future. The gold shares have acted better recently and that is a plus for the bullish cause. I still need to see how the month ends before I figure out what to do with the October ABX calls. We'll close out the trading week tomorrow.
Wednesday, May 08, 2013
It is a momentum move to the upside as the Dow gained 49 points on average volume. The advance/declines were 2 to 1 positive. It seems like there is no stopping the stock markets now but we know that attitude can be dangerous. The summation index continues to climb higher. All the stock indices are in sync to the upside. Overbought, staying there and this condition remains. Enjoy the ride. GE was up 1/3 on average volume. Right at the 50 day moving average now. I still have no trading ideas regarding GE for now. Gold moved back to the upside today as the US dollar fell. The precious metal futures rose $25. The XAU finally went up with the price of gold as that index gained 5 1/3. ABX up 1 2/3, GG higher by 1 3/4 and NEM tacked on 1 1/2. Volume continues to be extremely heavy in ABX, just average for the other two. The October ABX calls I own are solidly in the black after todays action. But we all know how that can change. However the medium term technicals for the gold shares remain oversold so we could have more room to run up here. That's a guess as usual. Mentally I'm feeling OK. It has been quite a rally for stocks since November and there seems to be no end in sight. Buying the dips remains the theme. I am certainly surprised by the length and strength of this rally. Gold has had a very nice recovery from the crash of 3 to 4 weeks ago. This leads me to believe that was a washout event and we have seen the lows for gold this year. Gold has also held at the 200 day moving average on the medium term charts. I still think the low will be tested at some point but it will hold in my opinion. Any retest would be a chance to go long again. That's my guess at the moment. We'll see what happens on Thursday.
Tuesday, May 07, 2013
Continuing higher as the Dow closes above 15000 for the first time in history. The most watched index gained 87 points on light volume. The advance/declines were 3 to 1 positive. Overbought and staying there on a short and medium term basis for the stock indices. The summation index continues higher. Nothing to stop this rally as there is no overhead resistance. It won't go on forever but you cannot fight the trend. It is a momentum run that we are on now. GE was up a touch on light volume. Stalling below the 50 day moving average here. No trades for now. Gold fell today, off $20 on the futures. The US dollar didn't do much today. The XAU fell 2 1/2. ABX, GG and NEM all had fractional losses of 1/2 or so. Volume was average but remains above average for ABX. It is expected for gold to retest its recent lows and the same goes for the gold shares. What happens after that will be the key for the October ABX call trade. It remains in the black for now. Mentally I'm feeling OK. It looks like another leg up has begun on the rally that began last November. Most stock indices are making new highs together and that is nothing but bullish. I certainly did not see this kind of up move coming when the year started. We'll see how long and how far it can go. Any decline continues to be bought. Gold was lower today and we'll see if there is any follow through tomorrow. Same goes for the gold shares. The best case scenario here for the bulls would be a sideways consolidation to work off the overbought condition. We'll see. As usual we'll keep an eye on things overnight and go from there.
Monday, May 06, 2013
A mixed market to begin the week as the Dow fell 5 points on light volume. The advance/declines were positive. The NASDAQ and S&P 500 were higher on the day. The trend remains up. The summation index is moving higher. I would expect the Dow to close above 15000 at some point this week. I have no OEX trades in mind for now. May consider the puts again at some point before expiration. GE was flat on the day and the volume was very light. No trades here for now. Gold was a a few bucks on the futures and the US dollar was higher as well. The XAU was flat on the session. ABX gained 1/3 on good volume, while GG and NEM were little changed on light volume. Could be a week for consolidation in the gold shares but that is simply a guess. My October ABX calls continue to show a profit. Mentally I'm feeling OK. Just a pause in the rally today for the stock indices. Not much in the way of economic data out this week. We should drift higher in my opinion. Today the Dow transports confirmed the new high in the Dow. Gold has had a nice run higher since the crash 3 weeks ago. I'd still expect the recent lows to be tested at some point here though. Not sure how long I'll hold on to the October ABX calls. However if the low has been put in there, we should see a bullish monthly candlestick for May. We'll keep an eye on the foreign markets overnight and go from there.
Friday, May 03, 2013
The employment report was better than expected and the market took off to the upside from the opening bell. The Dow gained 142 points on average volume. The advance/declines were almost 3 to 1 positive. New all time highs for some of the stock indices. The summation index continues higher. There is no overhead resistance for the Dow and the S&P 500. I dumped my May OEX puts at the open for a 65% loss. This trade was in trouble yesterday when we rallied instead of getting some downside follow through to Wednesdays declines. Not to mention an over 100 point rally the day before the employment report. The smart money telegraphed todays move. In retrospect, Wednesday was the day to get long. Overbought both short and medium term now but that can persist. We'll have a closing Dow 15000 celebration next week. GE was up 1/4 on average volume but well off of the highs for the day. No good ideas there for me at the moment. Gold lost a bit on the futures as did the US dollar. Considering the strong employment report it could have been a lot worse for gold. The XAU was up 1/2. ABX, GG and NEM all had fractional gains on average volume. My ABX October calls are still in the black. I should be holding on to them for a while. Mentally I'm feeling OK. Chalk up another losing trade for me with the OEX put loss. Not a lot of money involved but the mental capital is always more important. You've got to keep moving ahead though. 2 weeks remaining on the May option cycle. I might try another trade before expiration. The June cycle has an extra week. What looked like the beginning of an extended move lower for the stock indexes on Wednesday has completely turned around. It now looks like a question of how high can we go? Of course that could all change next week but I doubt it. Gold was basically flat on the week but has recovered pretty good from the April crash. I'd expect those lows to be tested again at some point. The gold shares have at least stopped going down. They remain oversold on a medium term basis. There is a chance that I'll sell the October ABX calls and then try and buy them back again later. I'll be checking the charts over the weekend to try and come up with the next trade before the May expiration. It's a warm, springtime Friday afternoon. Time for a rest.
Thursday, May 02, 2013
Back to the upside today as the Dow gained 130 points on average volume. The advance/declines were 3 to 1 positive. The market is trying to make up its mind which way to go here and tomorrow should decide that. The summation index continues higher. The stock indices have the feel of wanting to move higher here. My May OEX puts are back in the red. If we break out to the upside tomorrow I will probably have to dump them at a loss. The technicals for the stock indexes are still short term overbought but that condition could continue while moving higher. The NASDAQ is moving to new highs for the year and that's bullish. GE was up 1/8 on light volume. No trading ideas there for now. Gold moved back to the upside as well, gaining $20 on the futures. This happened despite a very strong upside move in the US dollar. The XAU was off 1/8 as gold and the gold shares remain out of sync. ABX, GG and NEM had fractional moves either way. Volume was average. GG announced their earnings and there wasn't much of a reaction. My October ABX calls remain at a profit for now. Mentally I'm feeling tired, did not sleep well. Employment numbers tomorrow and it would not surprise me to see the market rally. Money continues to flow into US stocks. I get the feeling now that the stock indexes will run higher into the May expiration. I hope I'm wrong for the sake of my OEX put trade. The technicals could point in either direction now. Europe cut rates overnight and their markets barely budged. The money is coming here. Gold has held up well since the crash but that could all change in a day. We'll see if there are any surprises in store tomorrow morning and check out the markets reaction to the numbers.
Wednesday, May 01, 2013
The Dow headed lower today as it fell 138 points on average volume. The advance/declines were almost 3 to 1 negative. We were short term overbought, so a decline here would be in order. How much of a decline is the question. The Fed came and went with no real market impact. There was nothing new in the Fed announcement and rates remain as low as they can go. The Dow transports and the RUT were especially weak which tells me that the decline could have legs. My May OEX puts are in the black. I'll hold them until the employment report at least. We'll see how the weekly charts look on Friday. GE was off 1/8 on average volume. No trading ideas there for now. Gold headed lower today as well, off $25 on the futures. It made up a little ground in the aftermarket. The US dollar was a bit lower today. The XAU fell 2 1/8. ABX down 1/2, GG off 3/4 and NEM was up an 1/8 or so. Volume remains better than average for the gold shares. My October ABX calls are still showing a profit for now. Mentally I'm feeling a bit tired. Lower today on the stock indexes but we all know that the market can turn on a dime. I would expect Thursdays trading to be a wait and see game. The next big market mover should be Fridays employment report. Anything goes there. I have no idea what the numbers will be but the market reaction will be what's important. Gold itself looks like it has rolled over here. We'll see if the recent crash lows hold. I think that they will given the extended snap back rally we've seen there. But anything can happen. We'll see if the overseas markets follow the Dow lower overnight and go from there.