Monday, September 30, 2013
The decline continues as the Dow fell 128 points on average volume. The advance/declines were negative. Remaining short term oversold on the major stock indices. It appears that a US government shutdown will not be avoided. However the stock market is not in a crash mode. A deal will be struck sooner or later and a rally will ensue. The question could be whether or not to short that rally. I suppose I should have held on to the October OEX puts that I had last week. But my trading hasn't been good this year and that is simply another example. I'd expect some type of upside here soon for the stock market. GE was off 1/8 on average volume. Trying to hold the 50 day moving average here. Gold did not see a flight to safety and the futures here fell $12. The US dollar was a bit weaker as well. If a government shutdown isn't a positive catalyst for gold, I don't know what will be. The XAU was lower by 1/3. ABX, GG and NEM all had slight fractional gains on light volume. My October ABX calls remain solid losers with less than 3 weeks to go. I'm still considering the ABX November calls moving forward. Waiting for what I consider a buy signal. Mentally I'm feeling OK. The small stocks are still holding up rather well and that is one of the reasons that I don't expect a full on market rout here. Also the advance/declines today did not reflect as much weakness as price. The summation index could start to head sideways here. Plenty of uncertainty for the stock market at the moment. However this will all get resolved. Gold is not doing much despite the looming US shutdown. This isn't bullish for the precious metal. The gold shares remain in limbo as well. We'll keep an eye on overnight developments and take it from there.
Friday, September 27, 2013
Still getting a downside bias for the stock indices as the Dow fell 70 points on light volume. The advance/declines were negative. We really should have seen better upside this week considering the short term oversold condition of the stock market. My guess is that a budget deal will be reached and we'll see a rally after that next week. The technicals for the major stock indexes have rolled over. Not so for the small stocks. The summation index is still moving to the upside. The volume has been light lately, which adds to the indecision. We are in a seasonally weak period. GE was off about 1/4 and the volume was very light. The indicators are rolling over here as well. Gold came back a bit on the futures, up $15. The US dollar was lower today. The inverse relationship between these 2 has been in sync lately. The XAU didn't follow gold again and was flat on the day. ABX, GG and NEM were mixed with fractional moves. The volume was light. My October ABX calls are still pretty big losers. I'm still considering the November ABX calls but will wait until next week to make a decision on that trade. Mentally I'm feeling OK. End of the month coming up on Monday and the budget deadline. The weekly chart of the Dow has a bearish look after today in candlestick terms. Also we have an obvious divergence in the RSI vs. price. So even if we get a budget deal and a rally, I don't think it will last. I could be wrong and often am. Gold and the gold shares didn't do much this week. I'm not sure where the next major catalyst will come from. The US budget impasse hasn't caused a rally in the precious metal. Perhaps another gold share trade isn't the best idea. I'll consider all the angles over the weekend. Plenty of charts to go over and keeping an eye on Washington will be in the forefront. Still 3 weeks to go in the October option cycle so opportunity is still there. For now it's Friday afternoon and time for a break.
Thursday, September 26, 2013
Got the expected bounce today as the Dow rose 55 points on light volume. The advance/declines were about 2 to 1 positive. Short term oversold for the stock indices still, even with todays advance. Probably more upside to come. The summation index continues higher. Waiting on a deal for the US budget and when that happens I'd expect some type of rally to ensue. I could be wrong but maybe not in this case. GE was flat on the day with average volume. No trades here for now. Gold fell today on a higher US dollar. The precious metal futures lost $12. The XAU lost 1 1/2. ABX, GG and NEM all had fractional gains on light volume. I did place an order for some November ABX calls during the session. It wasn't filled and I canceled it. I'll consider this trade again tonight. ABX remains above the up trend line from July and the 50 day moving average on the daily charts. My October ABX calls are still showing a big loss. However the weekly candlestick chart for ABX still has the potential reverse head and shoulders pattern. If this pattern plays out, the gains will be substantial but maybe not until November. Mentally I'm feeling a bit tired. We'll finish out the trading week tomorrow. Not a lot to report here really. We've come off of the all time highs set after the Fed meeting. We'll have to wait and see if we get a test of the highs on lighter volume and a lower McClellan oscillator reading. The stock indexes are still short term oversold. Gold has been sideways for 2 weeks and the gold shares appear to be in the doldrums after last weeks huge one day pop. I'll consider chasing the ABX call trade out another month to November tonight. We'll keep an eye on the overseas markets overnight along with any news out of Washington on the budget impasse and go from there.
Wednesday, September 25, 2013
Due for a bounce but haven't seen one yet as the Dow fell 61 points on light volume. The advance/declines were about even. Short term oversold now and that should lead to a positive session tomorrow or Friday. The summation index does continue higher. No positive follow through to the big upside Fed day of last week. That could be a problem moving forward. Perhaps I should have held on to the October OEX puts. Too late now. No real market moving news to speak of. GE was off a few cents and the volume was lighter. The daily candlestick chart here doesn't look bullish. Gold found a bit of life today on a weaker US dollar. The yellow metal futures were up almost $20. The XAU didn't follow as well with a gain of only 1 1/2. ABX, GG and NEM all had slight fractional gains again on light volume. Not exactly a bullish picture here for the gold shares. If we can't get some kind of rally on a $20 up move in gold, then I don't know what it is going to take. My October ABX calls remain losers. Mentally I'm feeling a bit tired, did not sleep well. 5 days down in a row for the Dow but the smaller stocks have held up much better. That is usually a positive going forward. Waiting on the usual last minute deal for the US government shut down due on Monday. That could produce some kind of rally in the stock indices. A deal probably won't help gold though. The gold shares are going nowhere at the moment. Seems like a pretty quiet week for the markets so far this week. We'll see what tomorrow brings.
Tuesday, September 24, 2013
The market tried to get some sort of rally going today but it fell apart in the final hour. The Dow fell 66 points on light volume. The advance/declines were positive though. Not much traction for the stock indices after the blow off high with the surprise Fed announcement. The second half of September is playing out to be weak so far. The summation index does continue higher. The short term technicals are getting to mid range for the stock indexes. Not exactly sure of what to make of todays action but the small caps were stronger and that is bullish going forward. GE was flat after being higher early on. Volume was average. No trades in mind here for now. Gold fell $10 on the futures as the US dollar was a bit higher once again. The precious metal did come back a bit in the aftermarket. The XAU was off 1/3. ABX, GG and NEM all had slight fractional gains. The volume was nothing special. My October ABX calls remain losers. Will need to see some upside here soon to turn this trade around. Mentally I'm feeling OK. We're still waiting for the next market catalyst. The overall market was stronger than the Dow today so perhaps we'll see some upside tomorrow. Not much to report here really. The final hour swoon isn't positive though. Gold really needs to hold the $1300 level here if it has any chance to show some strength going forward. I don't see any catalysts for movement here either. Perhaps if we get a US government shutdown the flight to safety might come into play. But the odds of that actually happening are slim. We'll see what happens overnight and go from there.
Monday, September 23, 2013
A drift lower today as we did not get the opposite price movement from Fridays expiration. The Dow fell 50 points on light volume. The advance/declines were negative. I don't know where the next catalyst for the stock indices will come from. Not a lot of economic data out this week. The summation index continues to the upside. The short term technicals for the market are still overbought, even with 3 days down in a row. Not much to go on here but a continued rollover would not be a surprise. GE gained 1/4 on OK volume. Perhaps GE is signaling stable prices to come but it could simply have benefited today from a positive article in Barrons over the weekend. Gold fell 5 bucks on the futures while the US dollar was a bit higher. The XAU dropped 1 2/3 and looks like it is breaking the up trend line that started in July. More negative action tomorrow would confirm this. ABX, GG and NEM all lost around 1/4 or so on light volume. My October ABX calls have lost half of their value. I may not be able to wait this week out. Perhaps I'll dump them tomorrow. It looks like another trade gone wrong. That has been the story for me all year so far. Mentally I'm feeling OK. Some profit taking is to be expected in the stock indexes after the nice run to new highs. Whether it turns into something else remains to be seen. All signs seem to be pointing to even higher prices going forward. If the gold shares don't show some upside soon we could be heading back down to test the lows of June. The fact that we could not even hold the gains of last Wednesday is bearish. It looks like another losing trade for me. We'll keep an eye on what happens overnight and take it from there.
Friday, September 20, 2013
To the downside for expiration Friday as the Dow fell 185 points on heavy volume. The advance/declines were about 3 to 1 negative. Not exactly sure what to make of todays price action. There was some Dow re balancing going on along with the quarterly expiration. We'll see what happens Monday. The summation index continues to the upside. The stock indices will have to deal with the threat of a US government shutdown at the beginning of October. This will probably play out as it always does. Lots of talk and then a last second deal. The overall market was stronger than the Dow today and that is bullish moving forward. Perhaps we'll work off the extreme overbought condition for the market here and then head higher. That's a guess as usual. GE was off 1/2 and the volume was good. The short term indicators have now rolled over here. Gold got clobbered today as the futures were off over $35. I found no reasons for the negative price action. The US dollar was only slightly higher. The XAU dropped 6 1/4. ABX down 3/4, GG fell 1 1/3 and NEM off 1 2/3. Volume was good. The gold shares have given back all the gains from Wednesday. That isn't bullish. My October ABX calls have lost half of their value in 2 sessions. This looks like another losing trade. Mentally I'm feeling OK. So perhaps the second half of September will prove to be weaker. Hasn't happened yet. Sometimes the following Monday after expiration we get the opposite of the previous Friday. That's a clue that the Friday action was simply expiration related. I'll keep an eye on that. Plenty overbought on the stock indexes for quite some time. Certainly a pause is overdue. After the Fed on Wednesday what other good news is out there? Gold had a volatile week and will need to turn around next week for the bullish cause to have a chance. The daily candlestick chart doesn't look good after today. The inverse head and shoulders pattern is still alive on the weekly ABX candlestick chart. However we'll need to see some decent upside here soon. I thought it was going to be this week but the last 2 sessions have canceled out that. I might just have to bail out of that trade but there are 4 weeks to go. Plenty to ponder over the last weekend of summer. For now it's Friday afternoon and time for a break.
Thursday, September 19, 2013
Consolidation today after yesterdays rise. The Dow fell 40 points on good volume. The advance/declines were negative. Nothing stopping higher prices at this point. Expiration tomorrow and that could skew things one way or the other. We're still overbought for the stock indices on the short and medium term. Hasn't meant anything. No September swoon so far this year. The summation index continues to the upside. Of course this won't go on forever. GE was off 1/4 and volume remains good. Maybe a pause here now with todays daily candlestick chart bearish dark cloud cover. We'll see. Gold was up a bit on the futures today as was the US dollar. The XAU fell back almost 3 points. No upside follow through for the gold shares. ABX dropped 2/3, while GG and NEM lost 1 1/8. Volume remained pretty good. I went ahead and bought some October ABX calls on the decline. I'm not sure this is the proper trade here but after yesterdays rise on very good volume I decided to try the ABX calls again. The US dollar has also broken some key support so that should be supportive to the price of gold. However the markets will go where they want. Mentally I'm feeling OK. The stock indexes have broken out. They are overdue for some sort of rest. They've remained overbought for quite some time. It's like a broken record but it's true. As long as the summation index keeps heading higher, it's a green light for stocks. Eventually it won't end well. Gold may be at the beginning of another up trend. We are a long way from $1425 but that is the level we'll need to get through. I'm trying the October ABX calls again. Only 4 weeks to go for these options. I'm a believer in this trade for now. Would like to see it move back up tomorrow. We saw the foreign markets rise in sympathy with the US as expected. We'll keep an eye on the overnight action and close out the week tomorrow.
Wednesday, September 18, 2013
It was a blast off to the upside today on the Fed as the Dow gained 147 points on good volume. The advance/declines were 6 to 1 positive. The Fed did nothing today and that was unexpected. We're at new highs for the major indices with no resistance. The summation index continues to the upside. We never made it through the zero line and that provided the support that was needed. My October OEX puts got clobbered and I dumped them for a 70% loss. My assumptions were wrong. My interpretation of the charts and upcoming events was way off. We are very overbought for the stock indexes and simply remain that way. I had not anticipated that. With no overhead resistance I suppose anything goes moving forward. GE climbed 3/8 and the volume was good. It looks like there is no stopping the rise in stocks at this point. The weekly technicals for GE have turned up as well. Gold was a major mover on the day as the futures rose over $50. The US dollar fell hard. Finally this inverse relationship got back on track. The XAU zoomed up 8 1/3. ABX rose 1 3/4, GG added 2 1/8 and NEM jumped 2 1/3. Volume was huge here. I tried to get some October ABX calls but was too slow. However after such a huge move like today, if there is any weakness in ABX I will be getting some calls here again. It still appears that the weekly chart inverse head and shoulders pattern here is intact. Mentally I'm not in a good place. Everything that I have been thinking lately has been wrong. I should have listened to the summation index as it continued higher. That indicator rarely is wrong. The McClellan oscillator is blown out to the upside after today and I would expect the stock indexes to consolidate but who knows? The seasonality for a weaker stock market in September is not happening. However that same seasonality that calls for higher gold prices is back on after today. The US dollar broke some key support today and that should provide a bullish back drop for gold. The kind of volume to the upside that we saw today for the gold shares says the big money is coming back to play gold. I don't like to chase moves but I might have to make an exception this time. Perhaps I'll just purchase some gold share calls tomorrow. I'd expect that we'll see upside follow through around the globe tonight. We'll keep an eye on that and take it from there.
Tuesday, September 17, 2013
The levitation continues as Dow rose 35 points om light volume. The advance/declines were 2 to 1 positive again. Tomorrow will be the key as we are breaking out to new highs today on some of the stock indices. I'd expect some major price movement one way or the other. The summation index continues to the upside and it is hard to fight that. I still think it will be a sell on the news event but what do I know? Not much. The technicals remain overbought and have been. This condition will not last indefinitely. The expiration week upside bias appears to be in place for now. My October OEX puts are showing a loss. I'll have to dump them if we get an upside breakout tomorrow. GE was up 1/3 and the volume was average. We got through $14.25 and it appears that higher prices are in the near future. Those September 23 calls look good at the moment. Opportunity lost there. Gold fell 8 bucks on the futures and the US dollar was a bit lower as well. No normal correlation there lately. The XAU gained 1 1/2. ABX, GG ands NEM all had fractional gains on light volume. I may try the ABX calls again tomorrow if we get some upside in gold itself after the Fed announcement. It will not be an easy trade to make so we'll see. The up trend line for ABX remains in place as it does for the XAU for now. Mentally I'm feeling a bit tired, did not sleep well. So all the players are waiting for tomorrow. Whatever the Fed does, the market reaction is what to watch for. 3 days to go in the September option cycle. Perhaps we will simply run up into the close on Friday. I'm not counting on that though. The stock indexes are overbought and staying there. Gold is oversold and staying there. The gold share indexes have held their up trend lines that began in the beginning of July. That is why I think that if we get a rally in the gold shares tomorrow it could have legs. That's a guess as usual. Tomorrows action should give us a clue as what to expect for the rest of the month. We'll keep an eye on overnight developments and wait on the Fed tomorrow.
Monday, September 16, 2013
A pop to the upside to start off expiration week as the Dow gained 118 points on light volume. The advance/declines were 2 to 1 positive. This was a headline driven move for the major indices. The US has agreed not to bomb Syria for the time being and Larry Summers withdrew from the running for the next head of the Fed. Technically, the summation index remains to the upside and the stock market remains overbought. I was early on the October OEX puts and my position is now showing a loss. Today looks like it was the preferred purchase time. GE was up 1/3 and the volume was average. Getting above $24.25 should lead to higher prices here if it occurs. Gold was up $9 on the futures after last weeks nasty sell off. The precious metal fell in the aftermarket though. The US dollar dropped today and it didn't help gold that much when it should have. The XAU lost 3/4. ABX, GG and NEM had fractional moves one way or the other on average volume. ABX was helped along by a positive article in Barrons over the weekend. The gold shares remain oversold and right at their up trend lines from July. Gold itself has broken that line, perhaps the gold shares can hold up here but I certainly don't know. If they do it may be a spot to try the calls again. Mentally I'm feeling OK. Wednesdays Fed announcement and the market reaction to it is what we are waiting for at this point. I would expect tomorrow to be a wait and see affair. I'm looking for a sell the news event but that's a guess as usual. The market goes where it wants. The small stocks did not lead the way up today. I'm still a believer that the second half of September will be weaker for the stock indexes. Gold has rolled over and is trying to hold at its 50 day moving average. The Fed announcement will probably influence the price of gold as well. In which direction is the question. I'm on the sidelines there for now. We'll keep an eye on the overseas markets and take it from there.
Friday, September 13, 2013
It was pretty much a lackluster session but the Dow did tack on another 75 points to the upside. The advance/declines were positive and the volume was light. The retail sales number was less than expected. Still overbought on the stock indices. The summation index continues higher. It was a good week for the stock indices and we'll just have to wait and see on the Fed next week. I would guess that we'll see volatility pick up but you never know. You could build a case to go in either direction really. The market will let us know what's next. It won't be boring. GE lost a few cents on very light volume. Gold was off another $20 on the futures but came back in the aftermarket. The US dollar finished the session little changed again. The XAU was up 1 1/8 and has yet to break the up trend line that began in early July. Perhaps the gold shares will hold up here. ABX and GG had fractional gains, while NEM was flat. Volume was good. The weekly technicals for the gold shares have rolled over to the downside. Mentally I'm feeling OK. My October OEX puts are at a slight loss. Next week will probably determine the outcome for this trade. A positive reaction after the Fed could lead to new highs for the stock indexes. But as usual the markets will go where they want. But we won't stay overbought forever. Gold had a terrible week for the bulls and broke important support. May need some time to regroup here. Perhaps it's an early warning that the Fed will be coming out hawkish. Or maybe there will not be any military action by the US in Syria. Those are simply speculations. The technicals for gold have rolled over. Plenty of work to do over the weekend and then back at it on Monday. For now it's Friday afternoon and time for a break.
Thursday, September 12, 2013
Some weakness today as we can't expect 100+ point gains every day. The Dow fell 26 points on light volume. The advance/declines were 2 to 1 negative, reflecting a weaker overall market. We were very overbought on some technical indicators for the short term. The summation index is still heading higher though. I may be early but I did purchase some October OEX puts today. I'm a believer in the second half of September weakness theory. I could be wrong and often am. Retail sales should be the catalyst for whatever stock index movement we get tomorrow. GE was off 1/4 on lighter volume today. No trades in mind there for now. Gold was the main story of the day as it broke the up trend line in effect since early July and dropped below the important level of $1350. The precious metal futures fell over $30 and another $10 in the aftermarket. The US dollar was little changed again. The XAU dropped almost 5 points. ABX off a buck, GG fell 1 3/4 and NEM lost 1 1/4. Volume was good. I had to get rid of my October ABX calls since gold itself did not hold up here. The trade produced a profit of 70% but the gains were so much more during the holding period that it feels like a loss. I may try to buy these options back in the next couple of weeks if they return to my original buy price. However if we see a decline in the overall stock market that I'm looking for, the gold shares will follow. I'll try and be patient for now. Mentally I'm feeling tired, did not sleep well. I'd like to see the stock indices build a top here before they decline but a case can certainly be made for a lot more upside as well. The real price movement will probably occur on Wednesday with the Fed announcement. That would give stocks time to work off the current overbought condition and then move higher. I am looking for lower prices myself but we cannot rule out the possibility of an upside breakout for the stock indices. However if we do turn around to the downside here, it has the potential to be a lot more than most expect. That's my view at the moment. Gold had a pretty negative session and the next near term support seems to be at around $1275. Gold can get pretty volatile at times but that makes for good trading if you're on the right side of the moves. In retrospect I should have taken the profit in the October ABX calls a lot sooner. But retrospect always shows better profits and slimmer losses. It means nothing going forward. The next trade is what counts. We'll see what happens overnight and go from there.
Wednesday, September 11, 2013
Three one hundred plus point gains in a row for the Dow so far this week. Today the most watched index rose 135 points on light volume. The advance/declines were positive. I certainly don't know where this rally is coming from but you must respect the price action. The Dow was much stronger than the overall market, so a pause in the run up is to be expected. I did place an order for the October OEX puts but it wasn't filled. Overbought on both a short and medium term basis now. However it looks like markets around the globe are breaking out and in rally mode. The summation index continues to move higher with conviction. I still may try the October OEX puts though. I left in an open order but we closed on the high of the session so I may have to cancel that overnight. GE was up 1/4 on average volume. Short term overbought here now but it looks like we will probably stay that way. Gold was barely changed for the session despite a drop in the US dollar. That usually isn't bullish moving forward for the precious metal. The XAU rose 7/8. ABX, GG and NEM all had fractional gains today. The volume was nothing special. It's been a tough 3 weeks for the gold shares. My October ABX calls are still profitable though. Mentally I'm feeling OK. Could it be that there will be no taper from the Fed in a week? Why would we be getting such a huge move in the stock indices now? Always questions in the game. We'll simply stick with the technicals and we're overbought and staying there. There is nothing that says we can't go higher still. But the TRIN is very overbought and the CBOE call/put ratio is pretty high. I'll probably try the OEX puts tomorrow but it may not be the proper trade. I think that perhaps a strong beginning of September will give way to a weak second half of September. That's my guess at the moment. Gold needs to hold $1350. That is all we need to know there for now. We'll see if the overseas markets follow the Dow overnight and go from there.
Tuesday, September 10, 2013
Follow through to the upside and the volume was good as the Dow gained 128 points. The advance/declines were 2 to 1 positive. The summation index is heading higher. We made it to the 1680 level on the S&P 500 and are plowing ahead. The volume to the upside on the TRAN today was impressive. So perhaps September won't be so bad for the stock market after all. I did place an order today for some October OEX puts but it wasn't filled. Both short and medium term overbought for the stock indices. No sellers to be found though. All technical signs seem to be pointing to even higher prices. Perhaps attempting the OEX puts is the wrong strategy here. GE was up 1/2 on average volume. Looks like it is too late for the calls there now. I suppose the September 23s were the way to go but hindsight is always correct. Gold dropped as peace is now trying to break out in Syria. Well not exactly peace but perhaps no US involvement. The precious metal futures dropped over $20. The US dollar was little changed today. The XAU fell 3 2/3. ABX down 3/4, GG off 1 7/8 and NEM shed 1 1/8. Volume picked up to the downside and that is bearish for the gold shares. My October ABX calls are still in the black but have lost a lot of their former profit. Mentally I'm feeling OK. We are in a rally and I do not know where it came from. Perhaps it is a bounce from the zero line in the summation index. Perhaps we have a long way to go on the upside but I am still inclined to try the October stock index puts. However just because the market is overbought, it doesn't mean that we can't go higher. The foreign stock markets are poised to break out here as well. So maybe we are in some type of liquidity flood around the world. That's a guess and I have no reasons for the upside that we are seeing right now. Gold needs to hold the up trend line that began in July. This means the $1350 level is crucial for gold in the near term. We are oversold so there's a chance that we will hold there. But as usual there are no guarantees. We'll keep an eye on things overnight and decide whether or not to get short tomorrow.
Monday, September 09, 2013
A Monday rally as the Dow soared 140 points on light volume. The advance/declines were 4 to 1 positive. The summation index will now be solidly heading higher. The triple Qs and the COMPQ have broken to new recovery highs. It is hard to be bearish with the developments of today. It looks like the averages have dodged a bullet for now. Short term overbought but we could stay that way. Perhaps it will be the scenario of strong beginning for September, weak end of the month. That's a guess to be sure. I have resistance for the S&P 500 at 1680 and I may try the October OEX puts when and if we get there. However the market is saying that it wants to go higher here and I should listen to that. GE was up 1/4 and the volume was light. It looks as though a short term bottom is in place here. A case could be made for a rally here as we have been dropping for 2 months. Gold was flat on the futures despite a weaker US dollar. That isn't bullish for gold as we should have seen some sort of rally today. But sideways is better than down for the holders of calls. The XAU fell around 3/4. ABX, GG and NEM all had slight fractional moves one way or the other on light volume. I'm still holding my October ABX calls while waiting for the next move higher. Short term oversold here. Mentally I'm feeling OK. It's possible that we are starting the next leg up for the stock indices. Technically it certainly appears that way. However I would like to see what happens when we get to the 1680 level on the S&P 500 first. That could occur tomorrow if we see some decent follow through to todays price action. My call for a market collapse appears to be wrong for now. Gold is still above its rising trend line from July. As long as we are above that line the trend remains up despite the lack of positive action lately. I'd expect some buying in the precious metal if things heat up in Sryia. Hasn't happened yet. We'll keep an eye on the developments overnight and take it from there.
Friday, September 06, 2013
Well we certainly had some volatility today as the Dow moved back and forth throughout the session. We were down well over 100 at one point and back up over 50 at another. The market is simply trying to make up its mind here. The Dow finished the day with a loss of 15 points on light volume. The advance/declines were positive. The employment report was a bit weaker than expected. Now that we've gotten that out of the way, the question is what's next? The stock indices are trying to rally here but it hasn't been much. I would still be cautious because if we do roll over here it won't be pretty. Still hovering around the zero line in the summation index. I might go out to the October OEX puts. As usual there are plenty of questions in the market. GE was flat on the day and the volume was average. I was looking at the September $23 calls here and still am. But I will most likely concentrate on the overall stock market. Gold came back a bit on the weaker jobs number and weaker US dollar. The precious metal futures were up around $15. The XAU rose 1 3/4. ABX, GG and NEM all had fractional gains on light volume. The short term technicals are oversold for the gold shares. I suppose on the next run up to overbought I'll have to dump my October ABX calls. That's the idea at this point. Mentally I'm feeling a bit tired, did not sleep well. The stock indexes had reluctant gains for the week. I really wish that I had some type of conviction for a trade here with two weeks to go in the option cycle but I don't. It looked like we were going to fall apart today at one point but the market came back. A week and a half until the Fed. So do we bide our time until then? It's a possibility but we have the Syria question to deal with as well. Not sure on the exact timing of that. As usual the trading is never easy. Gold and the gold shares were slightly down for the week. It would no doubt be a plus to see some upside next week but we are medium term overbought. There is an outside chance that the weekly gold share charts are forming a reverse head and shoulders pattern. If that turns out to be the case, we would see some huge gains in the gold shares in the coming weeks. Hasn't happened yet and it may not. I'll check out everything over the weekend and try to come up with some type of game plan moving forward. It's Friday afternoon and time for a rest.
Thursday, September 05, 2013
A waiting game today as expected. The Dow rose 6 points on light volume. The advance/declines were negative. All eyes will be on the employment report out tomorrow morning. I could make a case for the market to go either way here. It is tough to trade with a backdrop like that. The summation index has barely turned around to the upside. The stock index technicals have come off of their lows. I will say that if we do start to head down from here, you can just get short. Because the indexes will fall apart. However if we rally tomorrow, that worst case scenario will be off the table for now. I'm not sure what to expect so I did not put any trades on for the OEX. GE was flat on the session after being higher. The technicals here remain oversold. Gold fell again on another good day for the US dollar. The precious metal futures were off around another $20. The XAU was in step with that decline today and fell 3 1/2. ABX down 1/2, GG shed a buck and NEM lost 1 1/3. Volume was average. Probably need to see some weakness in the US dollar tomorrow to stem the negative tide here. Movement should be based on the jobs numbers. Getting short term oversold on the gold shares. We are approaching the up trend line from July in the gold shares. It is important for the bullish cause that we hold that line. Time will tell on that. Mentally I'm feeling OK. Two weeks and a day to go in the September option cycle. With the most watched economic data release out tomorrow. I'd like to feel as if I know what is going to happen but I don't. When in doubt stay out is what I'm doing for now. That could change tomorrow. Gold has lost some luster with a strengthening US dollar and a delay in the conflict involving Syria. We're still in the favorable seasonal time period though. That's one of the reasons why I continue to hold the October ABX calls. However most eyes will be on the stock market tomorrow for its reaction to the employment report. It should make for an interesting day.
Wednesday, September 04, 2013
To the upside today as the Dow gained 96 points on what passes for average volume these days. The advance/declines were over 2 to 1 positive. Todays action should turn the summation index around to the upside. So have we dodged the collapse through the summation index zero line here? Maybe. But we are still in close proximity to the zero line, unless a rally starts from here. But I will say todays price movement to the upside was impressive for the bulls given yesterdays give back of the opening rally. Perhaps we have gotten all the sellers out of the way. That's just a guess. I'm still considering the September OEX puts. GE was up 1/8, volume was lighter than yesterday. The September 23 calls are still cheap here if we do see some upside. Still short term oversold. Gold gave back yesterdays gains and the futures were off over 20 bucks. This despite weakness in the US dollar. The XAU held up though and was flat on the session. ABX, GG and NEM had fractional moves one way or the other on light volume. So perhaps gold will take a much needed rest here. Perhaps sideways is the most I can hope for near term. Mentally I'm feeling OK. I'd expect Thursday to be a waiting game on the employment report. There is still a downtrend line and the 50 day moving average in the S&P 500 as resistance. They come in at about the 1663 level. That would be the next logical place to get short if so inclined. But if we start to see the McClellan oscillator move to the +100 level or more, I would say the decline is over. My scenario of a collapse would be wrong. The jury is still out though. Sometimes a strong beginning to September leads to a weak second half of September. If that is the case the October OEX puts will be in play. Let's first see if we get to 1663 on the S&P 500 and what happens when we do. Gold did not rise with weakness in the US dollar today and that isn't bullish. I'm thinking that we won't drop that much here considering the question marks involving Syria. I could be wrong. My October ABX calls are still in the black. Gold, like the stock indices, will go where it wants. We'll see what happens overnight and go from there.
Tuesday, September 03, 2013
Interesting price action to be sure as the Dow opened the day up over 100 points, eroded all the way back into negative territory before ending the day up 23. The advance/declines were barely positive and the volume was good. A struggle is going on between the bulls and the bears here with all the market participants back in front of their screens. The summation index is still heading lower and we still have the zero line in our sights. I'm still in the cautious camp, since worldwide stock indices have rallied and we can't follow that in the US. The short term technicals remain oversold for the indexes. I would like to say that I know what will happen next but I don't. A market collapse is still a possibility but the longer that it doesn't happen the less the odds become. GE was off a few cents and the volume was good. Very oversold on the short term technicals here as well. Perhaps the September GE 23 calls are worth a look if things don't fall apart here. But it's risky in this environment. Gold picked up $20 on the futures and the US dollar was higher as well. Looks like the flight to safety had wings today. The XAU didn't do as well, only up 1 1/4. ABX and GG had fractional gains, while NEM lost a nickel. Volume was light for the gold shares. I certainly would have liked to see a better performance for the gold issues today, considering the move in gold itself. Plenty of time left on my October ABX calls but they are well off of their highs. Mentally I'm feeling OK. Plenty of uncertainty for now, with the employment report due Friday and the vote to bomb Syria potentially on Monday. The technicals are oversold for the stock indexes and the summation index remains near the zero line. Todays price action was not positive despite finishing the day out of the red. Still plenty of time in the September option cycle to do something. Something profitable would be the preferred course of action. Perhaps todays open was the chance to get short. We'll see. I'd keep an eye on gold tomorrow to see if it can build on todays price gains. The gold shares have worked off their overbought condition for the short term. Some economic data out tomorrow including the Fed beige book. We'll watch what happens overnight and go from there.