Friday, August 30, 2013
We closed out August with a loss as the Dow fell 30 points on light volume. The advance/declines were 2 to 1 negative. Haven't made it through the zero line on the McClellan oscillator after 2 attempts. Next week should tell the story of a collapse or not. I'd still like to get some September OEX puts if we get a weak volume early week rally. There was some interesting market action today as we tried to take out 1630 on the S&P 500. Both times were met with a strong updraft. Perhaps that level is the line in the sand for what I've been looking for. Or I could be all wrong. We'll see. GE was flat on the day but higher early on. Oversold short term and almost there medium term. I don't have any trades in mind here. The gold futures fell over $15 today and a bit more in the aftermarket. The US dollar was just a touch higher. The XAU dropped 1 1/3. ABX, GG and NEM all had fractional losses on lighter volume. The weekly candlestick charts here show bearish pictures. That will have to turn around quickly or we will see more downside for the gold shares. My October ABX calls are still showing a profit but they are well off of their highs. Mentally I'm feeling OK. We still have the zero line in the summation index to contend with and that is the key to what happens next in the stock indices. The short term technicals for the stock indexes are oversold but when the market falls apart, we simply stay oversold. You can make a bullish case here as well with the technical condition. However I would remain cautious. It looks like there is some kind of importance to the 1630 level in the S&P 500. Keep an eye on that. Gold came off of its highs for the week and the gold shares did not fare well. Perhaps I've been in the ABX call trade for too long. We should get a better idea of where we're going after all the players return next week. Gold and the gold shares as always can get volatile. Plenty of charts to check over the long Labor Day weekend along with the geo-political tensions in the Middle east. It is the unofficial last weekend of summer. Friday afternoon and time for a break.
Thursday, August 29, 2013
The Dow managed a gain of 16 points after being much higher during the session. The advance/declines were almost 2 to 1 positive and the volume was light. I could make a positive case for the stock indices here since we haven't just collapsed. We are short term oversold. There also looks to be a five wave down pattern on the S&P 500 daily chart. But we haven't yet made it through the zero line to the upside on the McClellan oscillator. So I'm thinking that perhaps the market will wait for the major players to return after Labor Day to begin where it's going for the September expiration. I would still be cautious. GE was off almost an 1/8 and the volume was very light. GE has been in a drift lower since the middle of July. Gold fell today, losing about $5 on the futures and at least that in the aftermarket. That wasn't too bad considering the strength that we saw in the US dollar today. Not sure what that was about but the GDP revision was higher than expected. The XAU managed a 1/2 point gain. ABX, GG and NEM all had fractional gains on average volume. I still have the October ABX calls and they are still showing a profit. I have a target in mind but we have yet to get there. Mentally I'm feeling a bit tired, did not sleep well. Without a doubt the small stocks have held up better here and that is usually a positive. We are also in an area technically that turns things around. But we have to respect the closeness that we are to the zero line in the summation index. This is an area that we are not usually around. Hence the cautious stance for now. We'll close out the month tomorrow. Gold is overbought on the short term. Sideways would not be a bad thing here. The gold shares have come off of their recent highs. No technical damage has been done to the charts. It is still a good time seasonally for gold. But as I have said before if the market tanks here, the gold shares will go along as well. So interesting times lie ahead. We'll watch the proceedings overnight in the foreign arena and get ready for Friday. I'd expect it to be a light volume pre-holiday affair.
Wednesday, August 28, 2013
Some stabilization today as the Dow rose 48 points on light volume. The advance/declines were positive. I'm still of the thought that it's just a pause in the inevitable coming collapse in prices. The summation index continues lower. Getting ever closer to the zero line in the summation index. Could things turn around? Of course but that isn't the scenario from my point of view. Maybe we can hold on until the big boys get back next week so they can get short. Or we could continue to run on down tomorrow. GDP revision on tap tomorrow. Still oversold on the short term technicals. GE was flat on light volume. Nothing new happening here. Gold was little changed on the futures but off the highs for the session. The US dollar was higher today. The gold shares took another hit today. The XAU dropped 3 points. ABX and GG were off around 1/3. NEM fell 3/4. Volume was average. The question here? Is the rally in the gold shares done? Of course I hope not but it could be. The short term technicals are rolling over for the gold shares. Still in the favorable seasonal period for gold but it doesn't mean things will simply go straight up. Mentally I'm feeling OK. I did place another order for some September OEX puts but it wasn't filled. I don't want to pay too much for the puts but then again I don't want to miss the downside either. I may just wait to the beginning of next week but the market usually doesn't accommodate. Either way I'm sticking with the collapse for the stock indexes coming up sooner rather than later. Caution is still advised. Gold is overbought and due for a rest. Ditto for the gold shares and they have already come off of their highs. We'll keep an eye on events unfolding overnight and go from there.
Tuesday, August 27, 2013
So here we are. Are we going lower? Yes. Much lower? Yes. The Dow fell 170 points today on increased volume. The advance/declines were 4 to 1 negative. The summation index continues lower and will be penetrating the zero line. The headlines don't really matter. The technical condition of the market does. We are in the area of a collapse and that doesn't happen often. Any kind of rally can be shorted. But I wouldn't expect any rallies from here. I did place an order for some September OEX puts today but it wasn't filled. I'll keep trying if we see any positive action. Margin calls will be coming and everything will be sold. It doesn't look like we will hold up until Labor Day. Even some pros will have to miss this one. GE was down 3/8 and the volume was good. We are about to break the rising trend line from the start of this year. The 200 day moving average comes in at about $22.50. Gold was up over $25 on the futures and the US dollar dropped. Syria is now trouble that lies ahead in the Middle East. It's nice to finally see gold move in tandem with the news. It's been a while for that. No help for the gold shares though as the XAU fell 5 points. That's a negative as the gold shares could not follow gold higher. The daily candlestick chart is now pretty bearish as well. ABX off 3/4, GG down 1 1/3 and NEM dropped 1 1/8. Volume was good here. Plus we opened higher and closed lower. So near term weakness can be expected for the gold issues. My October ABX calls lost some ground to day but are still profitable. Looks like I'll be holding them longer than I expected. But I do expect this trade to work out OK. I could be wrong. Mentally I'm a bit dissatisfied with myself for not already owning some index puts. I should have reacted better yesterday I suppose. Regardless, the volatility will create opportunity. No doubt we're heading lower though. Things will get interesting. Gold has risen above $1400 and higher prices are coming. We are short term overbought though. I expect the gold shares will eventually catch up with the metal itself. Probably not anytime soon though. We'll see how much the foreign markets react to todays negative US action. I'll be looking to buy some September OEX puts when I can because this decline is going to be much bigger than anyone expects.
Monday, August 26, 2013
We had a one day reversal to the downside today as the Dow opened higher and closed lower. The most watched index fell 64 points on very light volume. The advance/declines were negative. We fell apart in the final hour and that isn't bullish. It is entirely possible that the snap back is over and we fall hard from here. The McClellan oscillator almost made it back to the zero line. The trouble here is that there is no volume. I'm also still thinking that there will be a chance for the major players to get short when they return next week. But I could be wrong. The window for collapse remains open. GE was off over 1/8 and the volume remains light here as well. Still below the 50 day moving average here. Gold was off a couple of bucks on the futures but rose some in the aftermarket. The US dollar was little changed on the session. The XAU was up 7/8. ABX, GG and NEM all had fractional gains on light volume. Maybe a week or two left for the gold share rally in my opinion. We are getting almost overbought medium term here. If stocks drop hard here, they will take the gold shares with them. Still in the favorable seasonal period for gold. Stalling here at the $1400 level and that is to be expected. Mentally I'm feeling a bit tired. It's summer, the volume is light but we are in a precarious position. I do not want to sound like a broken record but the summation index is very close to the zero line and if we break that line, the market will fall apart. I'm still looking to buy some September OEX puts. Gold rose in the aftermarket today and it is possible that we could see a flight to safety if things get crazy. Or we could see everything sell off in a massive decline and margin call. Or none of that could happen and we move to new highs. There are always numerous scenarios in this game. I'm sticking with the call to be careful here and expect some pretty good downside for the stock indices. We'll keep an eye on things overnight and go from there.
Friday, August 23, 2013
Pretty much a drift higher on a quiet Friday summer afternoon. The Dow rose 46 points on light volume. The advance/declines were 2 to 1 positive. We are getting a move back to the upside that should give an opportunity to purchase some September OEX puts. If that is the proper play. The stock indexes are trying to hold on here and they might. After todays price action we should be closer to the zero line in the McClellan oscillator. The small stocks are acting better than the big caps. That is usually a positive. There are down trend lines in place for the major indices. The small caps on the other hand have simply moved sideways. But we are still in a danger zone of collapse according to the summation index. The zero line there looms. GE was flat on the day and the volume was very light. No trades there for now. Gold broke out of the week long consolidation to the upside. The futures jumped $25. The US dollar was a bit weaker. The XAU rose 3 points. ABX and GG were up 1/2, while NEM tacked on 7/8. Volume was about average. I don't know how much longer the rally in the gold shares can go on. It has been a nice run up since the beginning of July. Just about overbought on the weekly charts though. I am really going to have to think about taking the profit in the October ABX call trade. Mentally I'm feeling OK. As always the question is what happens next in the stock indices. The ideal scenario would be to get back to the down trend line in the S&P 500 at 1680 on light volume and get some puts. If we break to the upside from there, you take the small loss. If we drop from there it will be big. Some economic data out next week but it is the last week of summer and the major players will still be on vacation. Gold has made it to $1400 and a pause would not be a surprise here. Short term overbought and getting there medium term. No negative divergences in place that I can see. Ditto for the gold shares. Plenty to think about over the weekend. A lot of charts to check out as well. For now it's Friday afternoon and time for a break.
Thursday, August 22, 2013
We needed to see some rally today to avoid disaster and we got it. The Dow rose 66 points on light volume. The advance/declines were 5 to 1 positive. We did have a very short term positive divergence occur in the McClellan oscillator yesterday. The jury is still out on whether the decline has run its course. I don't believe that it has. However todays action in the face of a market shutdown at the NASDAQ due to technical problems was impressive. The summation index is still heading lower. I think the key to what happens will be determined when the McClellan oscillator gets back up near the zero line. A failure at that point will lead to the collapse that I've been talking about. The conditions are in place for something like that to happen. But it doesn't mean a crash will happen. Normally the conditions for such an event are not in place. Caution is still warranted. GE was up over 1/8 on what passes for average volume these days. Below the 50 day moving average here. The gold futures were flat on the session, with a slight gain in the aftermarket. The US dollar was slightly higher. The XAU gained 2 points. ABX, GG and NEM had slight fractional gains on very light volume. Consolidating the recent gains for the gold shares. As long as we don't roll over here, there could be some more upside. Gold so far has been moving sideways all week. Mentally I'm feeling OK. Really a good time to keep a close eye on things. The TRAN had a great day and could lead us higher. The small stocks are acting better here as well. However the volume is light. We are in a precarious position. My guess is that it will all get sorted out after Labor Day. Still oversold on the short term technicals for the stock indexes. Gold is digesting the good gains of last week. The favorable seasonal period for gold remains in place. But if the stock market tanks, the gold shares will go with it. We'll close out the trading week tomorrow.
Wednesday, August 21, 2013
It was a very volatile session for the stock indices. We were down over 100, rallied back up to be positive and then sold off in the final hour once again. The Dow fell 105 points on light volume. The advance/declines were almost 3 to 1 negative. Unless we get some kind of move to the upside tomorrow, the market will collapse. The conditions for that type of event are present. We are moving closer to the zero line in the summation index. The stock indices are oversold and staying that way. It appears that I will not have a chance to purchase some September OEX puts. Trading is never easy and very frustrating at times. But what can you do? GE was off another 1/8 and the volume was average for summer. No trades in mind for GE here. Gold was off a couple of bucks for the futures in the regular session and a few more in the aftermarket. The US dollar was higher today. The XAU fell 4 1/2 as the gold shares dropped with the overall market. Consolidation is in order here. A significant drop would not help my October ABX calls. But anything is possible. ABX off 3/4, GG lost 1 1/2 and NEM shed a buck. Volume picked up to the downside and that isn't a good sign for the bulls. If and when the overall market starts to crash, the gold shares will go with it. Then why not just sell the October ABX calls now? Because there's also a chance that there will be a huge flight to safety and gold could fill that bill. Mentally I'm feeling as though I'm about to miss a huge opportunity. Granted, trading the stock indexes is a lot harder than trading the individual issues. But the seeds of collapse have been sown so to speak. I suppose I'm hoping that the powers that be will hold things up until the major players return. But that looks like wishful thinking at this juncture. A market that can't rally when oversold is dangerous. That's where we are at. Gold itself seems to be holding up here but that isn't helping the gold shares. The US dollar will rise in a flight to safety as well. So we could see some crosscurrents in the gold market moving forward. It will be interesting to be sure but we really only care how to trade and profit from the price movements. We'll watch how the overseas markets react to todays US developments and take it from there.
Tuesday, August 20, 2013
We tried to rally on the Dow but fell apart in the final half hour. The most watched index lost 7 points on light volume. The advance/declines were 3 to 1 positive though. The overall market was much stronger than the Dow as well. We were overdue for a bounce and if this is all we get, the stock indices are truly in trouble. The summation index continues lower. The McClellan oscillator got very oversold and below -300 yesterday. I am still a believer in getting some September OEX puts but the premiums didn't lower much today. Fed minutes due tomorrow and that should be the story for the session. I'd still advise caution at this juncture. GE was off another 1/8 and we have broken the up trend line that has been in effect since late April. Volume was light here. There is stronger, longer term support for GE at $23. Gold was up $7 on the futures as the US dollar had a weak day. The XAU gained 3 1/2 and outperformed the metal once again. ABX, GG and NEM all had fractional gains on light volume. I do think that we need to digest the recent gains in the gold shares. Some consolidation would be a positive moving forward. But I could be wrong. Perhaps gold will collapse with the overall market, if that occurs. The technicals for gold and the gold shares are short term overbought. Mentally I'm feeling OK. We're still in a light volume summer mode but the tone of the market is negative. I'm thinking that we will hopefully get some kind of snap back rally to get short. The pros that have been on vacation need a chance to establish positions. But the market will go where it wants. I'm guessing much lower from here. Gold is hanging in there, still above $1350. I'm looking for $1400 in the near term. The foreign markets had a rough night yesterday. We'll watch the markets reaction to the Fed minutes tomorrow and hopefully see some upside.
Monday, August 19, 2013
Continuing lower as the Dow fell 70 points to start the week. The advance/declines were almost 5 to 1 negative and the volume was light. Oversold, staying there and that is not a good sign. We should have seen a bounce by now. The stock indices are on the verge of simply falling apart in my opinion. There may not be a bounce to buy the September OEX puts. We are heading towards the zero line in the summation index. It is getting to be a dangerous situation for the bulls. We will need to turn things around in a hurry. Conditions for a collapse are present. It isn't everyday that you can say that. Extreme caution is advised. GE was off 1/8 on average volume. Still holding the 50 day moving average here. Gold was off $5 on the futures and was $15 lower than the overnight highs. Some consolidation here is expected. The US dollar index was off just a touch. The XAU fell almost 2 points. ABX, GG and NEM all had fractional losses on light volume. If the stock market falls apart here, I expect the gold shares will go with it. The gold shares are due a rest after the recent run up as well. We'll possibly see some decent price action after the Fed minutes on Wednesday. That's a guess as usual. Mentally I'm a bit concerned that I won't be able to take advantage of the negative price action, after waiting for it for so long. But chasing things on the way down isn't the greatest strategy. So I'll wait for a bounce. Gold is due for a rest. If we can get through this week without a major drop, that would be a plus. I will say that these are interesting times in the marketplace. The summer doldrums are over in my opinion. We'll once again see if the foreign markets follow the US lower tonight. Maybe we'll see some buyers tomorrow.
Friday, August 16, 2013
We ended the week lower as the Dow fell 30 points on light volume. The advance/declines were 2 to 1 negative. Some of the indicators that I follow are the most negative that they've been all year, so some kind of bounce is expected. I'll be looking to get some September OEX puts if that happens. Short term oversold for the stock indices. The medium term has room to go lower. Not a lot of fear out there yet so the bottom is still out there somewhere in the future. An extra week in the September option cycle. GE was off a nickel and the volume was nothing special. Holding at the 50 day moving average for now. Gold was up $10 on the futures and the US dollar was a bit higher as well. The gold shares did not follow as the XAU lost 1 3/4. ABX, GG and NEM all had fractional losses on good volume. This would be a spot for the gold shares to take a rest and consolidate the recent gains. Overbought on the technicals short term. Seasonality is still in golds favor but if the market really starts to fall apart it would probably take the gold shares with it. Remains to be seen. Mentally I'm feeling a bit tired, did not sleep well. The decline has begun and how low do we go? I certainly don't know. The negative RSI divergences on the stock indices were correct this time. I think there is more downside to come. You can debate the reasons but it doesn't matter. Trying to profit from whatever outcome occurs is why we play the game. I'm looking for a bounce to get short. The ideal scenario would be the McClellan oscillator bouncing back up to near the zero line. Not a lot of economic data out next week but there will be some Fed speak. Gold had a very good week and is due to take a pause. The near term target is $1400 and then the moving averages after that. But we all know things could change there in a hurry as well. Right now I'm planning on holding the October ABX calls until September. But you never know. I'll be checking the charts over the weekend to figure out the game plan for next week. It's a summer Friday afternoon and time for a rest.
Thursday, August 15, 2013
No upside expiration bias for August as the Dow fell 225 points on average volume. The advance/declines were 5 to 1 negative. We broke the important support of 1685-1680 on the S&P 500. The trend is down. The summation index continues lower. There is no doubt about what we are in for now. Rallies can be shorted. We'll look for a move back to the zero line on the McClellan oscillator to buy the September OEX puts. Of course we'll have to pay more for them but that idea should still work out. The market never makes it easy for you. The economic data reported today had no real surprises. We are both short and medium term oversold and I expect a bounce soon. The S&P 500 is also at its 50 day moving average, which may provide some short term support. GE lost only 7 cents on good volume. We are just about at the 50 day moving average here as well. GE also remains just above a rising up trend line from the end of April. I'd keep an eye on that. Gold saw a flight to safety effect and the futures rose $27. The precious metal got above the $1350 level and I think $1400 will be seen shortly. The US dollar got clobbered which helped the price of gold. We are finally seeing this relationship act as it normally does. The XAU jumped 5 3/4. ABX up a buck, GG rose 1 3/4 and NEM higher by 1 1/4. Volume was heavy. It's been a great week for the gold shares so far but they are probably due for a rest. Overbought here on the short term technicals but not the medium term. Mentally I'm feeling OK. The stock indices are very oversold at this point. We are not in danger of something crash-like just yet but that has a chance to unfold going forward. Keep an eye on the summation index zero line. That will be the key. You can't really predict a crash-like event but you can know when the conditions are present. I'm still a believer that the September puts are the way to go. I could be wrong and often am. Gold is moving higher and the next stop should be $1400. If we could somehow make it through that level, the next levels of resistance would be the 200 day moving average and then the 50 day moving average. That could simply be wishful thinking on my part. My October ABX calls are showing a nice profit. I think that the gains will continue. We'll see. Let's keep an eye on the foreign markets reaction to todays drop here. Expiration Friday will wrap up the week tomorrow.
Wednesday, August 14, 2013
No expiration upside bias yet this week as the Dow fell 113 points on very light volume. The advance/declines were 2 to 1 negative. The summation index continues lower. The 1680 to 1685 level seems to be the line in the sand for the S&P 500. If we break that level, we will begin to head lower in earnest. The McClellan oscillator has been in negative territory for a couple of weeks now. However the market action we have seen has been sideways and not a decline. The last time this occurred we saw a decent rally. I don't know if that will be the case this time. But I would like to see one more run at the highs to get the September OEX puts. GE was off 1/8 and the volume remains light. Heading back to the 50 day moving average here. Gold came back up $12 on the futures as the US dollar was off just a touch. The XAU rose almost 5 points. ABX up 7/8, GG gained 1 1/8 and NEM added 1 7/8. Volume was good once again for the gold shares. The gold shares continue to outperform the metal itself and that is bullish. The volume remains higher on the advances than the declines and that is a positive sign. There is no mention of the recent upside in gold and the gold shares in the media and that is a plus as well. So I'm staying with the October ABX call trade for now. Mentally I'm feeling OK. Still waiting for the break out or break down for the stock indices. The tape action has been really sloppy lately and the negative divergences remain in place. The volume has really been light as well and that indicates no interest. It's summer and the major players are on vacation. That is why taking on a position is even more difficult than usual. It could all change after Labor Day. The gold shares are showing some life. If gold itself can get through the $1350 level, we should see $1400 in the near future. Hasn't happened yet. Loads of economic data out tomorrow including consumer inflation. There will be plenty of reasons for the markets to move. We'll watch what goes on overnight and take it from there.
Tuesday, August 13, 2013
Some upside today and that is to be expected. The Dow gained 31 points on light volume. The advance/declines were negative though. We were higher and lower during the session in a bounce around kind of day. Retail sales were not a real factor. I still think we'll see higher prices this week in the next couple of days. However the breadth has been very weak lately and the summation index is still heading lower. I'd like to see one more run to new highs but the market will go where it wants. GE was down a few cents and the volume remains light. In the third week of a downside drift here. No conviction for a trade in GE yet. The gold futures fell $13 today on a stronger US dollar. The XAU was off 2 1/2. ABX, GG and NEM all had fractional losses on lighter volume. Gold is finding resistance at $1350. Or maybe we are just building a base. Perhaps we are now going to head back down again. Always plenty of questions. The technicals are neither overbought or oversold, so anything is possible. Mentally I'm feeling OK. The stock indexes continue to meander, as it's basically been a sideways affair since mid-July. Tough trading in a summer environment. I'm remaining patient for now. The Bollinger bands have contracted as well, which is a precursor to an above average move. Which way is always the question. Inflation data out for the next couple of days. Perhaps that data will move gold. Volume has been better lately on the advances for the gold shares than the declines. That should bode well for the bullish cause moving forward. We'll see. 3 days left in the August option cycle. We'll watch what transpires overnight and go from there.
Monday, August 12, 2013
Another summer Monday as the Dow fell a few points on very light volume. The advance/declines were positive. A mixed bag today as the NASDAQ posted a gain. I'll be looking for the positive upside expiration bias in the stock indices for this week. After that, who knows? I'm still interested in the September OEX puts but will probably let this week go by before purchase. The summation index is still heading lower though. Plenty of economic data to sift through this week as well. Patience is an overlooked skill. GE was flat on the day and volume remains light. Gold found some buyers as the futures rose over $20 despite a touch of upside in the US dollar. The XAU gained 5 points. It is encouraging for the bulls here to see the gold shares and gold finally move in tandem. ABX up 3/4, while GG and NEM added about 1 1/2. Volume remains goods here and that is a positive as well. We are also breaking out above some down trend lines in the gold shares. I have no reason for the upside at this time but the positive technicals should not be ignored. Of course it could all change tomorrow in this game. Mentally I'm feeling a bit tired. The small stocks continue to outperform here despite negative divergences in some of the major averages. So we are getting mixed signals. I'm still going to be looking to get short above 1700 on the S&P 500. I could be wrong. The other problem we have here is the calendar. It's summer and the major players are on vacation. That's why it doesn't hurt to be patient. Gold is moving higher for some reason and I would only be guessing if I tried to explain it. We'll stick with the technicals and we made it through the 50 day moving average today. If we can get past $1350 then perhaps we can make a run at $1400. My October ABX calls are now back to solidly in the black. But we all know how that can change. We'll keep an eye on overseas developments this evening and then move on to the retail sales report tomorrow morning.
Friday, August 09, 2013
We ended the week on a down note as the Dow fell 72 points on light volume. The advance/declines were slightly negative. A down week for a change and it could be the beginning of something extended. The summation index is still heading lower. However we are getting short term oversold for the stock indices. Not to mention we had pretty negative readings for the McClellan oscillator and have somewhat only moved sideways instead of much lower. So I am still going to try and remain patient before getting some September OEX puts. Again, I already may be too late for this idea. GE was off a few cents on very light volume. No trades here for now. Gold was up a couple of bucks on the futures as the US dollar rose just a bit. The XAU was up 1 3/4. ABX, GG and NEM all had fractional gains on good volume. It was a decent week for gold and the gold shares as they both came back from selling off. What that means going forward remains to be seen. We'll see if there is positive follow through next week. Perhaps the upside bias seasonal factor for gold is beginning to take place. Mentally I'm feeling OK. I'm hoping to see some kind of upside for the stock indices next week to maybe position myself for the September put trade. It is expiration week. Plenty of economic data out as well. Another run above 1700 on the S&P 500 would fit the bill. But the market will go where it wants to as usual. It is also still a summertime market. So there are plenty of questions that remain in the game. But I still say that the upside is limited from here and getting short for the September option cycle is the way to go. Gold and the gold shares managed to hang in there this week. If my prognosis for lower stock prices ahead comes to fruition, gold and the gold shares will probably go with them. My October ABX calls are back in the black but I should really think about dumping them next week perhaps. Something to think about over the weekend. Plenty of charts to go over as well. I can say that there are glaring negative RSI divergences in the major stock indexes but not in the small caps. It's always some type of dilemma. For now it's Friday afternoon and time for a break.
Thursday, August 08, 2013
A weak bounce for the Dow as it gained 27 points on OK volume for summer. The advance/declines were almost 2 to 1 positive. The McClellan oscillator was pretty oversold, so some positive action was due. The overall market was stronger than the Dow. Still a time to be patient in my opinion. The longer it takes for a top to build, the better the upcoming downside. I'm still sticking with the theory of getting short for September. However there is the chance that we rally off of the oversold McClellan oscillator and move well above 1700 on the S&P 500. I'm not a believer of that scenario but it's possible. The Bollinger bands on the stock indices are contracting, which implies some type of strong move coming. You want to be on the right side of whatever happens. GE was flat on the day after being a bit higher. Volume remains summer light. Gold somehow found some buyers today and the futures were up almost $25. Gold is back above $1300. The US dollar remains weak for some reason. The XAU had its strongest session in some time, gaining 7 1/2. ABX rose 1 1/2, GG added 1 7/8 and NEM shot up by 2 1/3. Volume was above average. Price and volume to the upside for the gold shares and that bodes well moving forward. I have no idea where all the interest for the gold shares came from. Maybe the seasonal factor is finally kicking in. One day doesn't make a trend though. My October ABX calls are back in the black. Mentally I'm feeling OK. Trying to be patient for the September OEX put trade attempt. I'll most likely let options expiration week pass next week. The major players are still on summer hiatus. New highs for the stock indexes with a lower McClellan oscillator would be the ideal shorting scenario. Regardless, I still say the upside for stocks is limited here. Gold had a good day out of the blue. We'll see if it can add to todays gains tomorrow. The gold shares were stronger and that is usually a good sign. But it is summer and slow, uneventful trading is generally the rule. We'll close out the first full trading week in August tomorrow.
Wednesday, August 07, 2013
Another loser as the Dow fell 48 points on light volume. The advance/declines were 2 to 1 negative. We closed off of the lows but the summation index is heading lower. The stock indice technicals have rolled over as well. I'll be looking for some September OEX puts on a bounce and I am going to try and wait for the end of next week to purchase them. It might already be too late. We're still in summer doldrums mode as far as I can tell. Regardless, I am going to try the short side sooner or later. GE was flat on the day and volume remains light. Gold was up a couple of bucks on the futures as the US dollar continues lower. The XAU was off 1/3. ABX, GG and NEM all had slight fractional losses on light volume. It looks like gold and the gold shares are going nowhere. Mentally I'm feeling OK. The stock indexes are dropping despite weakness in the US dollar, which is usually bullish for equities. Not sure what to make of that. A very light week for economic data. Just marking time here for the next big move. That is unless we've already begun some sustained downside. Time will tell. Nothing new for gold. At least we didn't have downside follow through but the gold shares weakened at the end of the day. We probably need to get back above $1300 for some buying interest to return. The foreign stock indexes have rolled over as well. We'll keep an eye out on them. It is really still a waiting game for me at this juncture. I'm hoping for some kind of expiration week upside to get the September OEX puts. However the market rarely gives you what you want.
Tuesday, August 06, 2013
Some downside today as the Dow fell 93 points on light volume. The advance/declines were 3 to 1 negative. The summation index is now moving lower with some conviction. Rallies can be shorted from here on out in my humble opinion. We do have negative divergences in place for some of the stock indices. I would still like to go out to the September OEX puts but it looks like August could work too. We'll see if the market gives us a chance to get short with a little snap back rally in the next couple of days. A move back up towards the zero line on the McClellan oscillator would be a bonus. GE was off about 1/4 on very low volume. Low volume equals no interest. It is a summertime trading environment. Gold fell despite a drop in the US dollar. The precious metal futures dropped below $1300 to $1282. The XAU lost almost 5 points. ABX off 3/4, GG shed 1 3/8 and NEM slid 1 7/8. My October ABX calls are right back to about where I purchased them. Obviously they should have been dumped when showing a decent profit. The technicals for the gold shares have rolled over and it looks like lower prices are coming. We may be in the seasonal time of strength for gold but if the markets start to tank, gold will go along for the ride. Mentally I'm feeling frustrated. I had a nice profit in the ABX call trade and now it is gone. I can't say I was greedy but I had the idea to sell them at a profit and then buy them back but I did not follow through. Still plenty of time for that trade but I don't like the prognosis. Gold is dead money. It would have to turn around before the end of the week and I don't see that happening. The stock indices look like they are ready to roll over here. We'll see if we get any follow through tomorrow. There's also a chance that we go into a sideways period as well. If that is the case it will pay to be patient when considering the stock index puts. The game is rarely easy. I'll need to focus and also clear my head of the ongoing ABX trade to have any chance of putting on another trade. We'll keep an eye on developments this evening and take it from there.
Monday, August 05, 2013
Another slow and mixed day as the Dow fell 46 points on light volume. The advance/declines were negative. Small stocks higher, other indices lower. That is bullish moving forward though. No hurry to get the OEX September puts at this rate. It is the summer and not much going on. I still feel that there will be a positive bias going into the August expiration. After that, things could get interesting. Or not. GE was off over 1/8 on extremely light volume. Nothing doing there as far as a trade for now. Gold fell $8 on the futures. The US dollar was flat on the session. The XAU lost 1/2. ABX, GG and NEM all fell 1/4 or so on light volume. My October ABX calls continue to lose ground as the stock drifts lower. Still showing a slight profit though. Mentally I'm feeling OK. Summer doldrums just about sums things up. The stock index technicals are still overbought and staying that way. Some divergences are beginning to appear. I'm keeping an eye on things but it doesn't look like any major downside or upside is imminent. But as usual the market will go where it wants. I'm continuing to try and be patient. Gold is in a drift as well, with no catalyst for higher prices on the radar. Trying to hold the $1300 level here. I'll keep an eye on the overseas markets overnight and go from there.
Friday, August 02, 2013
The Dow closed out the week with a gain of 30 points on light volume. The advance/declines were positive. The jobs report was a bit lighter than expected. The Dow was lower for most of the day but came to life in the final hour. My guess is that this is the last leg up. The breadth is not what it should be for a decent rally. I will get some September OEX puts within the next couple of weeks or so. We're still in a summer doldrums mode. We are starting to see the negative divergences in the RSI and McClellan oscillator. Timing, as usual, means everything. I'll try and remain patient. GE was up a few cents on light volume. The gold futures came all the way back to finish flat after being crushed overnight. The US dollar had a weak session. The XAU did not react well and was off almost 2 points. ABX, GG and NEM all had fractional losses on OK volume. The gold shares have rolled over and there is no catalyst to buy. If a weak jobs number doesn't create interest for gold, I don't know what's on the horizon that will. My October ABX calls continue to lose ground but are still in the black. Mentally I'm feeling tired. There was plenty on the docket in the past week. So where do we go from here? I'd expect more lackluster action with a positive bias until the market drops. That's my guess for now and the question is when does it drop? At some point in August I will want to own the stock index puts. Gold continues to disappoint and I don't know what will get it moving forward. We are in the positive seasonal zone though. I'll continue to keep an eye on it. It's a Friday afternoon in the summer and time for a break.
Thursday, August 01, 2013
No need to wait for tomorrows numbers as the Dow climbed 128 points on good volume. The advance/declines were positive. August has begun with a bang to the upside and new highs for many of the stock indices. The TRAN in particular had an outstanding day. The S&P 500 and the NASDAQ outperformed the Dow. We are above 1700 for the S&P 500. Yes, I am still looking at the September OEX puts. However I am going to try and remain patient. The market may continue to run up into the August expiration. I think we will see a negative divergence in the McClellan oscillator in the coming days. I could be wrong. GE was up 1/4 but finished well off of the highs. Volume was light. Gold was off a buck on the futures but finished well off of the highs as well. The US dollar had a very strong day, which was its best in quite a while. The XAU dropped 2 2/3. ABX, GG and NEM were all fractionally lower again on average volume. The technicals for the gold shares have rolled over. The earnings came out for ABX and they were horrible, including a cut in the dividend. But the stock held up rather well considering. That doesn't mean that it won't follow gold lower, if that is the near term direction. If we see weak numbers tomorrow, that should be supportive for gold. Mentally I'm feeling OK. Stocks moving higher before the jobs number? Perhaps somebody knows something. I certainly don't know much, so we'll keep watching the technicals. They have rolled back to the upside for the stock indexes and I would expect follow through upside tomorrow. Gold couldn't make it through the 50 day moving average. Perhaps it can turn around tomorrow. Holding $1300 would be a step in the right direction for the bulls. All eyes on the employment report in the morning. The blog site continues to malfunction. My apologies for any spelling mistakes etc.