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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.

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