Wednesday, July 31, 2013
We got the Fed and the GDP report out of the way but the market action is more of the same. The Dow fell 23 points on good volume. The advance/declines were slightly positive. Each time we rallied today, we sold back off. The market is trying to make up its mind here on which way to go. Throw in the fact that it's summer and we might be in for an extended period of indecision. It is not the greatest trading environment. There's nothing wrong with sitting on the sidelines for now. I'd still like to get some September OEX puts if the opportunity presents itself. GE was off 1/8 and the volume was good. Steady grind lower here for a week and a half. Gold fell over $10 on the futures but came back in the aftermarket. The US dollar was a bit lower. The XAU was off 3/8. ABX, GG and NEM all had fractional losses on good volume. Maybe the employment report can get the gold shares moving again. ABX earnings out tomorrow. Mentally I'm feeling a bit tired. The summation index has rolled over but it hasn't done so in earnest yet. But it is something to watch. I'm still holding out for a move above 1700 on the S&P 500 but that may be the wrong strategy. We'll see. We are in the seasonal strength period for gold. My October ABX calls are still in the black but that won't last forever without some more upside. However we could very well be in a doldrums period for gold here as well. Many players in all the markets won't be back until after Labor Day. Maybe we can get some beginning of the month money flows tomorrow. The ECB will be having a meeting as well. But it will probably be just another day of the waiting game for the employment report. We'll keep an eye on the foreign markets and go from there.
Tuesday, July 30, 2013
Once again, minor problems with this blog site. More of the same for the markets today as the Dow was off a point on better volume. The advance/declines were barely positive. It's a waiting game on the Fed and that will end tomorrow. We could go either way here and that doesn't help much. I'm still waiting for a move above 1700 on the S&P 500 and that may not happen. I do not want to miss the next downside opportunity but there is the chance that we will rally up one more time to screw whoever is getting short now. That's a guess as usual. It is also possible that tomorrow just comes and goes. It is the summer. But I don't think that will happen. GE was flat, volume was light. Gold fell about 5 bucks on the futures. The US dollar was a bit higher. The XAU fell 7/8. ABX and GG fell 1/3, while NEM was flat. Volume remains light here. The technicals are rolling over for the gold shares here. We will need to see a rally in a hurry or they will take out their 50 day moving average to the downside. My October ABX calls are still profitable but have lost some ground. Earnings or lack there of on Thursday. Mentally I'm feeling OK. GDP in the morning and the Fed in the afternoon. I would expect to see volatility increase but who knows? The small stocks have held up pretty good here, so I still have to be a believer in one more run up. But everything could change tomorrow. Gold has been sideways for a week. We should see some movement tomorrow. It is the summer and perhaps moves will be muted due to the lack of real players. Time will tell on that. Even after tomorrow we have the ECB on Thursday followed by the jobs numbers on Friday. We'll keep an eye on the overseas trade tonight and go from there.
Monday, July 29, 2013
A negative start to the week as the Dow fell 36 points on light volume. The advance/declines were 2 to 1 negative. Todays action should turn the summation index lower. Now is this the beginning of the decline that I've been looking for? It could be but I am not completely sure. I'd really like to see one final move up past 1700 on the S&P 500 to buy some September OEX puts. That could simply be wishful thinking on my part. I do think that the upside is limited from here though. The technicals for the stock indices are rolling over and the TRAN has already broken down somewhat. Plenty of Fed, ECB and economic data this week. GE was off 1/8 or so on very light volume. No trades in mind here for now. Gold was up a bit on the futures as was the US dollar. The XAU fell 7/8. ABX, GG and NEM all had fractional losses on light volume. Gold and the gold shares are waiting on the Fed and the reports as well. Overbought on the short term for the gold shares here still. Mentally I'm feeling OK. I'd expect Tuesday to be more of the same waiting game. Wednesday is the close of the month of July as well. Obviously the market could go either way here. I'm still trying to remain patient but I do feel that once the decline begins in earnest, it will be one worth being short for. Gold has had a nice move higher off of the recent lows. It is now hovering at the 50 day moving average. If we can break above that level it would spell good news for my October ABX calls. ABX is due out with its earnings report on Thursday. I can't see anything good coming from that but perhaps all the bad news is already baked into the stock. The overall outlook for gold after this weeks data and announcements will be more important. If the market behaves as I'd like it, I'll sell the October ABX calls within the next couple of weeks and concentrate on the September OEX puts. The market rarely goes where you'd like. It's a waiting game for another day.
Friday, July 26, 2013
The Dow made an impressive comeback after being lower by 150 points during the session. The most watched index finished the day with a gain of 3 points on very light volume. The advance/declines were negative. The market is acting as though it wants to move higher here. Perhaps next week we can get above 1700 on the S&P 500 and start looking for some OEX puts. Maybe some negative divergences will start to appear. Hasn't happened yet. Today was interesting to be sure, even with the light volume. GE was flat on the day with volume nothing special. Gold was off about 8 bucks on the futures, with the US dollar slightly lower. The XAU was up almost a point. ABX, GG and NEM all had fractional gains to the upside. Volume was heavy in NEM which reported lousy earnings. NEM sold off and then came all the way back plus some. The gold shares are holding up here despite bad news. That is a positive moving forward. My October ABX calls are still in the black. Mentally I'm feeling OK. Plenty going on next week for the stock indices. We've got the Fed, plus GDP and Fridays employment report. So things could get interesting. I'm not sure exactly what to expect. I'm hoping for one more run to the upside but the markets always go where they will. TRAN was higher today and that could be an indication of things to come. We're still short term overbought for the stock indexes. Gold had and OK week but it seems like we are stalling here. Same action in the gold shares as well. ABX reports earnings next week and we all know they will be bad. We'll see if the stock can hold up like NEM did today. It's anybodies guess really. I'm going to try and hold on to this trade but you never know. Plenty of charts to check over the weekend and potentially a big coming week for the markets on tap. For now it's Friday afternoon and time for a break.
Thursday, July 25, 2013
More of the same today as the Dow rose 13 points on about the same level of volume as yesterday. The advance/declines were positive. The overall market was much stronger than the Dow, led by earnings from FB. I'm still going to wait for the S&P 500 to get above 1700 before buying the OEX puts. I am also considering going out to the September contract. Of course I could simply be wrong here and the market continues to rally far past 1700 on the S&P 500. The market goes where it wants to. The short term technicals for the stock indices have worked off the overbought condition and are now mid-range. GE was up a few cents on light volume. No trades in mind here for now. Gold came back about $10 on the futures as the US dollar took a good drop today. I would have liked to see more rally for gold today. The XAU was only up a point. The gold shares were mixed. ABX, GG and NEM had fractional moves one way or the other on average to good volume. GG had a lousy earnings report but the stock did not fall apart. That's a plus for the gold bulls going forward. Mentally I'm feeling OK. Timing is everything and we are not yet halfway through the summer. I'm trying to remain patient. I still think that the upside for the stock indexes is limited here. That said, I would not be surprised by new highs in the coming days. I could be wrong and often am. No technical divergences just yet. It was good to see gold hold its own today and not have any downside follow through. We've still got to get through Friday though. We'll keep an eye on the markets overnight and close out another summer week tomorrow.
Wednesday, July 24, 2013
Another mixed session for the stock markets as the Dow fell 25 points on almost average volume. The advance/declines were 3 to 1 negative. Perhaps this is the beginning of the anticipated downside. But I'm hoping for one last run above 1700 on the S&P 500 to get short. It may or may not happen. The small stocks held up better today but AAPL had a lot to do with that. Still overbought on the stock indices. I'm going to try and be patient here to buy the OEX puts. The game is never easy. GE was off a few cents and the volume was light. No real follow through so far to the good day on Friday. Gold got slammed today as the futures were off by $15 after being higher earlier in the session. The XAU was even weaker, losing 4 5/8. ABX lost 7/8, GG and NEM fell 1 1/2. Volume was good. The US dollar was a bit higher. Hopefully it was simply profit taking for gold today but it is still overbought here. My October ABX calls remain in the black but lost value today. GG and NEM are out with earnings tomorrow. GG before the bell and NEM after the close. This news should set the tone for the gold shares tomorrow and Friday. I really can't see any good news coming out of theses reports with the drop in the price of gold over the recent quarter. So we'll see. Mentally I'm feeling OK. Today was the first real downside day since the end of June. Seasonality says that we won't be going much higher from here. It will be interesting to see if there is any follow through tomorrow. I would advise anybody who is looking to trade the stock indexes to be sure and keep a close eye on things here. We could be simply heading into a period of the doldrums for a couple of weeks. But if we are not, things could get interesting very quickly. I would like to say I have conviction one way or the other but there are no divergences yet in my opinion. I'm still looking to trade the downside though. Gold did not have a good day but the near term up trend line is still intact. However if the stock market rolls over here soon as I expect, it will probably take the gold shares with it. We also had a nice gap to the upside on the weekly gold share charts to start things off this week. If we fall back the next couple of days as well, the weekly charts won't look so bullish. We'll keep an eye on things overnight and take it from there.
Tuesday, July 23, 2013
More of the same today as the Dow gained 22 points on light volume. The advance/declines were positive. The overall market was weaker than the Dow with both the NASDAQ and S&P 500 lower. Low volume and lackluster trading are the norm here so far at the end of July in the summer. I'd still like to wait and see the S&P 500 get over 1700 before trying the OEX puts. The summation index continues higher and you can't ignore that. The daily and weekly technicals remain overbought for the stock indices. That condition has lasted far too long in my opinion. But you can't fight the trend and the trend remains up. GE was off 1/8 on light volume. I don't see any catalysts for this stock now that the earnings have come and gone. GE will probably follow the overall market from here. The gold futures were a touch lower on the session as the US dollar was lower as well. The XAU however climbed 3 1/4. That remains a positive development for gold followers as the gold shares out perform the metal itself. ABX, GG and NEM were all up 1/2 or more on good volume. Short term overbought for the gold shares now but we have broken the first down trend line in numerous issues. Mentally I'm feeling OK. I'm still going to try and be patient here for the next trade. I'm going to purchase some OEX puts for either the August or the September option cycle. Like I've said before the ideal set up will be with a negative divergence in the RSI or the McClellan oscillator. Hasn't happened yet. Gold is showing signs of life and we decisively broke through the $1300 level to the upside. But gold can be volatile, so keeping the profit is sometimes hard to do. My October ABX calls are showing a nice profit but we all know how that can change. AAPL reported earnings after the bell today and it looks like it's getting a pop in the aftermarket hours. Perhaps that will lead to some type of rally tomorrow. We'll keep an eye on things overnight and see what happens tomorrow.
Monday, July 22, 2013
A typical summer Monday session as the Dow finished little changed on the day. The most watched index rose a point on light volume. The advance/declines were positive. The overall market was stronger than the Dow implying higher prices to come. I still like the idea of some OEX puts at some point when we get over 1700 on the S&P 500. But perhaps the market won't wait for me. Not a lot of economic data out this week. It might be a good time to watch and wait. GE was up 1/8 on average volume. No overhead resistance here but there is a possible negative RSI divergence on the weekly chart. No trades here for now. Gold was the story of the day as it broke through the $1300 level convincingly. The precious metal futures gained over $40 on the session. The US dollar was weaker. The XAU rallied 5 1/2 and broke through the first down trend line on the daily charts, as did some of the individual gold shares. ABX rose a buck, GG and NEM each added over 1 1/2. Volume was strong to the upside which confirmed the breaking of the down trend lines for the gold issues. My October ABX calls are solidly in the black. The question now is when to sell them. Overbought on the short term for both gold and the gold shares now. Mentally I'm feeling OK. At this point you can't help but wonder how much longer this rally has to go. I am still going to try and be patient to wait for some negative divergences before I buy some index puts. Easier said than done sometimes. I'm still guessing that this is the 5th wave up of a 5 wave move. I could be wrong. Gold had a very strong session and that bodes well going forward. The gold shares were leading the way before today and that is positive moving forward as well. I am going to have to consider taking the profit on the October ABX call trade and perhaps buying them back cheaper later. However the last time a gold share call trade worked for me, I sold the options way too early. Plenty to ponder as usual and the trading is never easy no matter which way it goes. We'll follow what happens overseas tonight and take it from there.
Friday, July 19, 2013
A mixed bag for expiration Friday as the Dow fell 5 points on light volume. The advance/declines were barely positive. The NASDAQ under performed with weakness from MSFT and GOOG due to their earnings reports. Good earnings from GE helped the Dow. I'm still guessing that we'll see on final move up here in the next couple of weeks and that should do it. I could be wrong and often am. The summation index continues higher. The short and medium term technicals continue to be overbought. Todays weakness in the small stocks could be the first sign of a change in the wind coming. We'll see. GE had a strong day and gained 1 1/8 on very heavy volume. Yesterdays candlestick pattern didn't matter. Calls were the way to go here but I was indecisive. You cannot make money by staying on the sidelines. That is stating the obvious. Gold was up $8 on the futures as the US dollar fell back a bit today. Still below the important $1300 level for the precious metal. The XAU is finally out performing here and gained 3 3/8. That is usually bullish going forward. ABX and NEM rose 3/4, while GG tacked on another buck. Volume was average. That's 2 good weeks in a row for the gold shares. My October ABX calls remain in the black. Mentally I'm feeling OK. We are now on to the August option cycle. If we can get above 1700 on the S&P 500, I will be buying some OEX puts. Could be next week. It would probably be best to wait for a negative divergence in the McClellan oscillator or the RSI. But who knows? Maybe we will just continue to move higher, staying overbought for weeks on end. It's happened before. However the seasonality factor says that is not likely. Gold has had a bounce and now we will have to see what happens with the $1300 level. The daily short term down trend line of resistance comes in around that level. Even if we drop back here, I still believe that the bottom is in at the $1200 level. Time will tell on that. One thing to remember here as well for all the markets is that we are in the middle of the summer. I would not be surprised to see things slow down for a while. That won't be a plus for options trading. At any rate, it's Friday afternoon and time for a break.
Thursday, July 18, 2013
More new highs as the Dow closed higher by 78 points on average volume. The advance/declines were 2 to 1 positive. The beat goes on and on. Summation index continues to the upside. Bernanke finishes his speeches and says all the right things. No overhead resistance and the small stocks continue higher as well. Maybe I'm just all wrong trying to look for a short entry here. However on the S&P 500 daily chart this looks like the 5th and final wave up from the lows of June. My guess is that getting some August puts if and when we get over the 1700 level will be just fine. We'll see. GE was up just a touch after being higher earlier in the session. Volume was average. The daily candlestick for today looks ominous but that could all change with the earnings for tomorrow. Or not. Perhaps the overall market will follow the lead of GE on Friday. I did not try any trades here. Gold was up $6 on the futures and the US dollar saw a little bit of strength today. The XAU was off 1/8. ABX, GG and NEM had slight fractional moves one way or the other on lighter volume. Hopefully we are just working off some of the short term overbought conditions here before heading higher once again. That's the hope at least. The markets always go where they want. Mentally I'm feeling a bit tired, did not sleep well. We're still overbought both short and medium term for the stock indexes. Of course I've been saying that a lot this year. We really haven't had a decent downside move in quite a while. The May to June swoon does count for something but it wasn't much in percentage terms. My guess is that we will get something trade worthy in the next couple of option cycles. Gold is now moving sideways before the next directional take off. Which way is the question. Short term overbought here on some of the technicals and that could be enough to send it lower near term. I'm going to have to seriously consider getting rid of the October ABX calls before they turn into losers again. We'll get through expiration Friday tomorrow and call it a week.
Wednesday, July 17, 2013
Kind of a drift to todays price action as the Dow gained 18 points on light volume. The advance/declines were almost 2 to 1 positive. Still overbought on the stock indices and perhaps we'll hold things up until expiration. The summation index continues higher. Bernanke spoke and it didn't have much of an effect on the markets. I'll be looking for August OEX puts from here on out. As usual, timing is everything. GE was up 1/8 and the volume was light. Earnings due Friday. No trades here for me. Gold fell today as the futures dropped $13. The US dollar was a bit higher. The XAU was off 2 1/2. ABX, GG and NEM all had fractional losses on OK volume. The gold shares could be in for a rest now, the technicals are dropping from overbought. My October ABX calls are still in the black. Mentally I'm feeling tired. Overbought, staying there and it is the same old tune for the stock indices. Seasonality from here is unfavorable though. There will be a time to own puts in the next couple of months. When the summation index rolls over again, that will be the time to act. For now patience is required. Gold rallied for a couple of weeks but now there is strong resistance at $1300. If we can get through that it will paint a better picture for gold. 2 days left in the July option cycle. We'll see what happens tomorrow.
Tuesday, July 16, 2013
Finally a bit of downside as the Dow fell 32 points on light volume. The advance/declines were almost 2 to 1 negative. I did not attempt any OEX put trade today and I'll be waiting for the August option cycle to maybe try out that idea again. The market should move off of whatever Bernanke has to say tomorrow. We're still overbought for the stock indices. This could be the end of the rally but that remains to be seen. It is a possibility though. GE was off almost 1/4 today and the volume picked up a little. Things still could go either way here on the earnings report due Friday. Gold was up $6 on the futures today as the US dollar took another steep drop. The gold shares out performed for a change as the XAU rose 4 1/2. ABX up a buck, GG gained 1 3/8 and NEM added 7/8. Volume was good for the gold shares. My October ABX calls are in the black. GG is clearly leading the way here though. Mentally I'm feeling OK. We'll see where we go from here but I think it is no secret that any upside would be limited from here for the stock indexes. We are in the seasonally unfavorable period for the stock market. When this summer rally ends there will be opportunity in buying puts on the indices. The ideal scenario would be with a declining summation index. I believe that at some point in the next couple of months that will happen. So will will wait and see. Patience is required for now but when the time comes you'll have to be ready to strike. Gold is showing a little life here but we don't know if it is for real or simply a dead cat bounce. I am sticking with my guess that the lows are in for gold at around the $1200 level. The gold shares are acting better but that could change at any time as we all know. I'm going to have to consider selling my October ABX calls at a profit for once. We'll keep an eye on the overseas markets tonight as we wait for Bernanke tomorrow.
Monday, July 15, 2013
Still problems with the blog site. The Dow rose 20 points today on very light volume. The advance/declines were positive. I placed an open order for some OEX puts at the price I was willing to pay but it wasn't filled. It's probably too late for this trade now but if we get some early strength tomorrow perhaps I'll try it again. Only 4 days to go in the July option cycle. We are very overbought both short and medium term and there will be some downside this week in my opinion. You'll have to be nimble to make this trade work. The summation index continues higher. The small stocks continue to lead the way. GE was off a few cents on average volume. Still time here to go either way on the earnings report Friday. I'll most likely just step aside. Gold gained 5 bucks on the futures as the US dollar showed a slight upside bias. The XAU was flat on the session. ABX, GG and NEM all barely moved on very light volume. My October ABX calls are still in the black. Some inflation data out here tomorrow and Bernanke blabs on Wednesday. Perhaps these events will move gold. Mentally I'm feeling OK. I would have liked to have gotten the OEX puts today but it was not to be. The light volume upside continues and it has lasted long enough without some type of profit taking or downside. So we'll see. Today was your typical summer Monday. Gold needs some type of catalyst here for higher prices but it is still out of favor. I do believe the ABX calls I own have a chance to be a profitable trade though. I may have to sell them and then try and buy them back. But that's a guess as usual. We'll see what happens overnight and go from there.
Friday, July 12, 2013
The blog site here continues to malfunction. I may have to move it and I will let you know here if I do. Hopefully it will return to normal soon. The Dow was negative for most of the session and then popped up in the final half hour. It finished the day with a slight gain of 3 points on light volume. The advance/declines were about even. It felt like a summer Friday as it should. The overall market was stronger than the Dow once again, implying higher prices. I canceled my July OEX put order but may try it again early next week. However I could also make a case for just sitting out next week and waiting until the August option cycle. Overbought, staying there and there is no overhead resistance for most of the stock indices at this point in time. The summation index continues higher. The small stocks are leading the way and that is bullish. GE was lower by 18 cents today. Volume was average for summer. We're below $24 and the resistance comes in at $24.25. You could make a case to go either way here before the earnings in a week. I will probably sit this one out. Gold was off a couple of bucks on the futures as the US dollar was higher on the day. The XAU dropped 2 1/4. ABX, GG and NEM all had fractional losses and the volume was lighter than it has been. My ABX calls are still slightly in the black. Gold and the XAU finally had a positive week but you can't make much more of it than that. Mentally I'm feeling OK. Higher we go with a summer rally and there doesn't seem to be anything in the way to stop it. Plus the positive expiration week bias will be upon us. I've been looking to buy index puts and we have done nothing but rally so I've been wrong again here as well. At least it hasn't cost me any money just yet. Plenty of economic data out next week so perhaps we'll see some volatility. The markets won't go straight up forever. Gold found a bid this week and I still think the lows are in at the $1200 level. I could be wrong and often am. The gold shares haven't taken the lead here so perhaps this week was just a dead cat bounce. That's a guess as usual. Once the gold shares start to out perform gold itself, we should see a sustained rally. My apologies for the sloppiness of the blog this week but I cannot control the functioning of this site itself. Spellcheck isn't working properly along with the posting page. As I said before hopefully things will return to normal next week. I'll be checking the charts over the weekend to decide whether trying the OEX puts in the next 5 days is viable. For now it's Friday afternoon and time for a break.
Thursday, July 11, 2013
This site has not worked properly all week. The blog must go on though. The Dow had a huge rally today as it gained 169 points on average volume. The advance/declines were almost 7 to 1 positive. My idea to purchase the July OEX puts has obviously been wrong. The market remains overbought and staying there. The summation index continues higher. The small stocks have led the way here and thankfully I was keeping an eye on that. So why not try the calls instead over the past week? The volume has been light. Today it picked up a bit at least. Perhaps we simply continue to rally. We are at new closing highs for some of the major indices now and there is no overhead resistance. You could make a case that we broke out from the multi-year resistance, fell back to it with the recent decline and are now off to much higher prices. I did put in another open order for the OEX July puts though. GE was up 3/8 on OK volume. We have earnings to deal with in a week here. I'm not sure that I will attempt a trade for GE. Gold rallied as the US dollar took another spill today. The precious metal futures were up $32. The XAU finally followed along and gained 6 points. ABX rose 1 1/4, GG gained 2 and NEM added 1 1/2. The volume continues above average here. My October ABX calls are now in the black. Could this be the start of some klind of sustained rally in gold and the gold shares? Hasn't happened yet. Mentally I'm feeling OK. Perhaps I will simply cancel the OEX July put order tonight. The technicals are overbought and it doesn't mean anything yet. Perhaps the best course of action here would be to wait for the August cycle. Maybe the sidelines are the place to be before the July expiration. There are always many questions in the game. Gold and the gold shares are having a good week so far but they remain mired in a steep downtrend. A bounce is underway but how long it lasts is the question. GG is by far the out performer among the gold shares right now. That is probably where I should have tried the calls. It is always easy to second guess your trades. Much more difficult to get them right to begin with. I'll be checking the charts tonight to see if I'd like to continue searching for an entry point for a July OEX put trade. We'll see if the foreign markets follow the lead of the US stock indexes overnight.
Wednesday, July 10, 2013
Still having problems with this site. We got some volatility after the Fed minutes but it wasn't all that much. The summer crowd reactions are usually muted. The Dow fell 8 points on light volume. The advance/declines were positive. The overall market was stronger than the Dow. The summation index continues higher. Still overbought and still staying there. I canceled my open order for the July OEX puts before the Fed minutes. I might try again tomorrow but who knows? We seem to be in some sort of upwards drift for the stock indices at the moment. So the question is why even take the risk on an option trade here? 7 days left in the July cycle. GE was off a few cents and the volume was light. No trades in mind here at the moment. Gold was only up a buck on the futures after being much higher. The US dollar got crushed on the Fed minutes. As usual the XAU didn't do much and was off 1/4. ABX and GG were little changed, while NEM fell 1/2. Volume continues to be above average for the gold shares. Either positions are being built or there are way more sellers here than normal. This, after these issues have already gotten walloped. My October ABX calls are in the red. Mentally I'm feeling OK. Well I've been patient to try and put on this OEX July trade. However it may not even be worth it. The rally is still a light volume one and it will fail in my opinion. The question is when? As long as the small stocks are in the lead, there is a positive bias to the stock indexes. I would like to try something before the expiration though. Gold and the gold shares continue to go nowhere. Perhaps this October ABX trade was not a good idea again. Time will tell. We'll keep an eye as usual on the overnight price action and see what tomorrow brings.
Tuesday, July 09, 2013
Once again this blog website is malfunctioning. Hopefully this writing will be posted. The light volume rally continues as the Dow gained 75 points. The advance/declines were almost 3 to 1 positive. Overbought and staying there. This rally has lasted longer than I thought it would as we have now broken through the declining tops lines on the major indices. How much longer will it last? Usually longer than you think. I adjusted my open order for the July OEX puts and it hasn't been filled yet. I will have to keep adjusting it to a higher strike price the longer the advance goes on. I'm still a believer in this trade because the volume here has been anemic. We've got the Fed minutes out tomorrow and that could cause some volatility. So we will have to wait and see. GE was up 1/3 on the usual light volume. I'm not exactly sure what to do here next so I will probably pass on the July option cycle. However with the earnings due on expiration Friday, I could change my mind. Gold was up over $10 on the futures despite another strong day in the US dollar index. It looks like gold pulled back in the aftermarket though. The XAU only gained a point. ABX, GG and NEM all had fractional gains on good volume. My October ABX calls are slightly in the red. Gold and the XAU continue going nowhere. Mentally I'm feeling a bit tired. RUT hit another new high for the year and that could be a precursor for the overall stock market. That's a guess as usual and if true, buying OEX puts would probably be a failure. I am still going to try them here at some point in the July option cycle. 8 days to go there. Gold continues to languish after the recent debacle. Base building is what is needed here. We'll keep an eye on what happens tonight and try for the OEX July puts again tomorrow.
Monday, July 08, 2013
I am having trouble with the blog website today. Hopefully this will post. The Dow gained 88 points today on average volume. The advance/declines were positive. It still has the feel of wanting to move to the upside to me. We are right at the declining tops lines for the major indices and it looks like they will break through. Regardless, I have an order in for the July OEX puts. We're short term overbought and I believe that we'll see some sort of pull back this week. This trade is strictly short term. Perhaps the open order will be filled tomorrow. GE was up a few cents on increasing volume. Plenty of time to take a position one way or the other here. We'll see some kind of move on expiration Friday next week with the earnings due. Gold gained over $20 on the session with the US dollar finishing the day weaker. I'm still expecting the $1200 level to hold for gold but that's a guess as usual. The gold shares went the other direction, losing 1 1/2. ABX was flat, while GG shed 1/2 and NEM dropped 3/4. Volume continues to remain pretty good for the gold shares. My October ABX calls are showing a slight loss. Mentally I'm feeling OK. The stock indexes are now overbought but they could stay that way as has happened quite often this year. However I never trust light volume rallies and this one certainly fits the bill. It is just a matter of it it drops here or goes to the old highs. The RUT has made a new high and when the small stocks take the lead it is bullish. The summation index does continue higher as well. So we'll see. I could be wrong about trying the OEX puts here. Gold and the gold shares continue to not be on the same page. Eventually they will get going together. They have only gone the same direction when it's been down lately. The fundamentals for gold really look like they continue to erode. Contrary to popular opinion puts you long gold here. We'll keep an eye on the foreign markets tonight and go from there.
Friday, July 05, 2013
A continuing light volume levitation as the Dow gained 147 points on lackluster activity. The advance/declines were positive. Not all the players are here due to the long holiday weekend. We are almost to the declining tops lines for the major stock indices. The scenario is playing out almost ideally for the OEX puts at some point next week. The trouble is that the small stocks are acting much better here and that they usually lead the way. The RUT closed at a new high for the year and that is worrisome for the short side. Perhaps we are going to retest the old yearly highs in the major averages as well. Getting short term overbought on the technicals for the stock indices but not all the way there yet. The jobs number was better than expected and the news out of Europe was for continued low interest rates. The summation index continues to the upside. GE was up 1/3 on light volume. I still haven't made up my mind on exactly what to do here. Perhaps I'll simply pass on this trade. Gold got clobbered again as the US dollar was higher. The precious metal futures fell about $30. We did finish off of the lows and the $1200 level is still holding for now. The XAU finished off its lows as well, down 2 7/8 on the day. ABX lost 7/8, GG down 3/4 and NEM shed 1 1/4. Volume was good here though despite the holiday atmosphere. My October ABX call trade was filled today and the calls are right where I bought them. I've attempted this trade numerous times with nothing but disastrous results. We'll see what happens this time. Nobody wants the gold shares or gold here. Oversold and staying there for weeks on end. That condition won't last forever. Mentally I'm feeling a bit tired, did not sleep well. Stocks continue to rise and we are approaching the second line of resistance for the major stock indexes. The 50 day moving average was penetrated to the upside today. Next up is the declining tops line. After that will come the old highs if we get that far. I'll have plenty to ponder over the rest of the weekend. I'd still like to give the OEX puts for July a chance. We'll see. I would feel a lot better about the put trade if the small stocks were not so strong here. Gold remains unloved and the gold shares remain strong under performers. I'm in the ABX call trade now though. Earnings due on August 1st. The fundamentals for gold look horrible here as well with a stronger US dollar. Not to mention civil unrest around the world and gold can't even catch any kind of rally. As I said before getting long gold here is the ultimate contrarion play. We'll see if it works. I'll be checking the charts for the rest of the weekend. Time to take a break on a Friday afternoon in the summer.
Wednesday, July 03, 2013
It was a shortened pre-holiday session as the Dow gained 56 points on very light volume. The advance/declines were negative. Not much to read into todays market action but it has the feel of wanting to go higher to me. The employment report on Friday will be the next catalyst one way or the other. If we continue to drift higher near term, that would give the July OEX put trade a chance sometime next week. The 50 day moving averages have kept a lid on the major indices for now. GE was flat on light volume. I'm still considering the July calls here but there is no urgency to this trade right now. Earnings due on expiration Friday. Gold was up $8 on the futures today with a weaker US dollar. The XAU gained 1 2/3. GG rose 7/8, while ABX was up a bit and NEM down a bit. Volume was good considering the early close. I still have the open order in for the October ABX calls. Mentally I'm feeling OK. So we'll see what kind of numbers come out early Friday morning and the markets reaction to them. It will be a thinly traded day though. The foreign markets will remain open tomorrow and we'll see what happens there. Otherwise it will be a day off in the US as we wait for the employment report.
Tuesday, July 02, 2013
A one day reversal to the downside as we opened higher and close lower. The Dow fell 42 points on light volume. The advance/declines were negative. The overall market fared better than the Dow. Once again the 50 day moving average has turned back prices. The summation index continues higher though. Plus the RUT average of small stocks is closer to breaking out to new highs for the year than the other major indices. I'm not exactly sure what to make of that. I'd expect tomorrow to be a pre-holiday slow and light volume session. Then we get the employment report on Friday. It doesn't look like I'll be getting the July OEX puts before then. Perhaps we won't make it back to the declining tops lines for the major indices. I'm on the side of caution for now. GE fell 3/8 and the volume was good. Perhaps GE is a precursor for the overall market here. Trying to hold the 50 day moving average support. The July GE calls are certainly cheaper now but I'm not biting. Gold fell back today as the US dollar was stronger. The gold futures were off $12. The XAU dropped as well, losing 3 3/4. ABX off 3/4, GG lost 1 1/2 and NEM slid a buck. Volume remains pretty good here. Nothing but bad news for the miners and the fundamentals at the moment are working against them. Technically still oversold and blown out but we still do not see any signs of a sustained rally. I adjusted down the strike price for my open order on the October ABX calls as we hit another new low there today. I'll still give this trade a shot despite the negative outlook and environment. It is the ultimate contrary play at this point. Mentally I'm feeling OK. Stocks are a bit short term overbought here and I doubt we will see a lot of buyers ahead of the employment report. The market reaction to that number will bear watching. It should be a thinly traded affair though with the holiday on Thursday contributing to a longer than normal weekend. I'm being cautious here for now and I'm still favoring puts over calls for the stock indexes. Gold had a bounce and it stalled today despite civil unrest in Egypt. Nobody wants the precious metal but I'm still saying the bottom is in at around $1200. The gold shares continue to be unloved. The Shanghai market continues to bounce back from its collapse and that is a positive overall for the stock indices for now. We'll keep an eye on things overnight and go from there.
Monday, July 01, 2013
We begin the holiday week to the upside as the Dow gained 65 points on light volume. The advance/declines were almost 3 to 1 positive. We were up at least twice as much as the close. However the light volume rise is what is preferred for now as we look for a point to purchase the July OEX puts. Ideally I'd like to see the OEX get up to the 740 level. The summation index continues higher so the threat of collapse through the zero line here is gone for the time being. However the OEX was turned away at the 50 day moving average for the second time. Ditto for the S&P 500. GE was up 1/8 after being higher during the session. I'd still like to try the July calls here before the earnings report but the preferred trade is the OEX. Gold continued its rebound from the $1200 or so level. The precious metal futures soared $32. The US dollar was a bit weaker. The gold shares did not follow as the XAU only showed a gain of 1 1/3. ABX fell 1/2, GG gained 3/4 and NEM was up 1/4. Volume remained heavy for the gold shares. I'm still leaving in my open order for the ABX October calls. Although there is a distinct possibilty that the summer could be a dead zone for gold. I'm still pondering the merits of this trade. Mentally I'm feeling OK. A nice rise to start the day in the stock indices but then the rally lost all of its steam. That isn't bullish. Perhaps the remaining couple of sessions before the holiday will be a wait and see type of affair. The employment report on Friday looms. Not to mention a lot of players won't even be around that day. It probably isn't a wise time to make any major trades. The small stocks are acting pretty good here so maybe my idea of shorting any rally isn't correct. Time will tell on that. Gold has had a couple of up days but that doesn't mean a rally is starting. Regardless, I'm calling for the bottom to be here at around $1200 and I'm sticking to it. We'll keep an eye on what happens overnight and go from there.