Friday, November 29, 2013
Holiday light trading in a shortened session as the Dow fell 10 points. The advance/declines were positive. We dropped off in the last half hour after being positive for the whole day. You can't read anything into todays price action. The volume is too anemic. The small stocks were higher and that is bullish regardless. The trend is up and there is nothing in the way to derail that. GE was off 1/8 on light volume. Getting oversold on the daily technicals here and it might be time to start seriously looking at the January calls. Gold was up 6 bucks on the futures. The US dollar was little changed. Once again the dynamics here are that it was such a lightly attended session that there is nothing to read into the price action. The XAU rose 1 3/4. ABX, GG and NEM all had slight fractional gains on extremely light volume. December may be the time to try the calls again for the gold shares. I'm thinking about it. Mentally I'm feeling OK. Beginning of December coning up on Monday, with 3 weeks to go in the December option cycle. The stock indexes remain overbought on both a short and medium term time period. It's been that way since late October. Perhaps we'll see some consolidation before the new year but who knows? Momentum remains positive. Gold looks like it is trying to hold on to the $1240 level but that doesn't mean that it will. I think I'll wait for $1200 to be tested before I attempt another gold share call trade. I'll check the charts out over the weekend. It's Friday afternoon and time for a rest.
Wednesday, November 27, 2013
More of the same today as the Dow rose 24 points on light volume. The advance/declines were almost 2 to 1 positive. The market is in holiday mode and prices should drift higher. We still have a shortened Friday session to get through to finish out the week. Overbought and staying there for the stock indices. The small stocks are leading the way again. Today should turn the summation index higher. No end in sight for the rally. GE was flat on the day and the volume was light. Still no trade here yet for me. Gold was off $3 as the US dollar had just a bit of strength. The XAU was up 1/2. ABX, GG and NEM were all little changed on the day with light to average volume. I'm still considering the January calls for GG or NEM. However I will not attempt this trade until December, if at all. Still no love for the gold shares. Mentally I'm feeling OK. Not much else to report today. The major players will be off for the rest of the week. It's time to sit back and come up with a strategy for the rest of the year. I'd expect prices to continue to trend higher barring some kind of surprise. Gold continues in its downtrend. It's probably best to wait for the $1200 level to try and get long there. Enjoy the Thanksgiving holiday.
Tuesday, November 26, 2013
We were higher for most of the day before selling off right at the end. The Dow finished basically unchanged for Tuesday. The advance/declines were positive and the volume was average. The summation index is tracking sideways at the moment. The small stocks acted well today and that bodes well for the bulls in the future. Tomorrow and Friday should be very lightly traded sessions and I do not expect a lot of price movement. It is time to be patient. GE was little changed but the volume was average. Waiting for an oversold condition here. Gold finished unchanged on the day for the futures but did bounce around. The US dollar was lower. The XAU fell 1 7/8. ABX off 1/8, GG off 2/3 and NEM dropped around 3/4. Volume was light. I had thought perhaps yesterday we had seen a possible reversal for the gold shares but no. The selling there continues. The gold shares are cheap but they can always get cheaper. Mentally I'm feeling OK. Just waiting for this week to pass by really. Sometimes you have to stay on the sidelines. The rest of this holiday period is a good time to do that. We'll see more action next week with the beginning of the month and the employment report. Gold remains unloved and a negative asset for now. The gold shares are approaching the lows for the year. I'll probably try the January calls there sometime in December. That is the idea for now. Expect slow trading for the remainder of this holiday week.
Monday, November 25, 2013
We're in holiday mode as the Dow rose 7 points on light volume. The advance/declines were negative. We were higher for much of the day but dropped off in the last hour. Not much to report for the stock indices really. The summation index is heading sideways again. This week should be a light volume affair with little movement and an upside bias. In theory at least. GE was off 1/3 on average volume. There is now a bearish candlestick pattern on the daily charts. Perhaps there will be a chance to get the January calls. Gold had an interesting session. It was off $3 on the futures after being much lower. It continued to rise in the aftermarket. The US dollar was a bit higher but finished well off of session highs. The XAU was off 1/4 but finished well off of its lows. A reversal perhaps? ABX was flat on the day, while GG and NEM had slight fractional losses. Volume was better than average for the gold shares. I'm looking at the January calls here again but still think December might be a better time to try a trade here. Mentally I'm feeling OK. I think the prudent trading strategy here will be to let this week pass and try to develop something for the weeks ahead. We are still overbought on the stock indexes. When that technical condition works itself off will be the time to try some calls again. There's no rush. Gold itself looks like it may be trying to put in a short term bottom here but that is a guess as usual. I'd still wait until next week at least before doing something there. We'll keep an eye on things overnight and watch the action tomorrow.
Friday, November 22, 2013
Higher we climb as the Dow gained 54 points on light volume. The advance/declines were almost 2 to 1 positive. The S&P 500 closed above 1800 for the first time. The small stocks are hitting new highs as well. The momentum continues to the upside and with the easy Fed policy, there is no end in sight. It will not end well, that's for sure. But you just don't know how high we will go before it does end. The summation index should be back to the upside after today. Thanksgiving week is coming up and that is historically positive. So sit back and enjoy the ride. GE was up 1/8 or so on very light volume. I'm still considering the January calls here if we see some weakness. Gold held steady today despite a drop in the US dollar. The trend for gold remains lower. The XAU was off 3/4. ABX, GG and NEM all had fractional losses on light volume. The weekly candlestick charts here now look bearish again. We are approaching the lows for the year and will have to see if they hold. Money is going everywhere except into gold. Mentally I'm feeling OK. I'd expect next week to be a light volume move higher for the stock indices. It will be a holiday week for sure and holiday mode trading. Still overbought on the stock indexes in whatever time frame you choose. No overhead resistance and nothing to stop the party from going higher. Gold is going nowhere to lower. I'm still looking at $1200 as the next stop. What happens there will be the key to direction going forward. The overall fundamentals are still lousy for gold. We could see a bounce from time to time though. That's it for this week. It's Friday afternoon and time for a break.
Thursday, November 21, 2013
Back to the upside today and that was not completely unexpected. The Dow gained 109 points on light volume. The advance/declines were almost 3 to 1 positive. This could turn the summation index back to moving sideways. We are still overbought and now staying there for the short term technicals. Plus we have Thanksgiving week coming up which is usually positive. All declines continue to be bought. You cannot fight that. The Dow closed above 16000 for the first time. There is no overhead resistance. As long as the Fed keeps the easy money policy in place, stocks will be where money goes. This may change sometime next year. GE was off a nickel and the volume was light. I might consider the January calls here at some point. Beginning to work off the short term overbought technicals here. Gold was off around $15 on the futures in a hangover from yesterday. The US dollar finished the session little changed. The XAU fell a point but was off the lows of the day. ABX, GG and NEM all had fractional losses on good to average volume. Oversold, staying there and there aren't any compelling reasons to own gold at the moment. I'd expect some more end of the year tax selling for the gold shares in the month to come. Perhaps I'll try the calls again after that. Mentally I'm feeling OK. Every decline that we have seen since September has been shallow. There remains plenty of easy money to go around. Enjoy the ride. There is no upside limit to how far this thing can go due to new highs with no resistance. We have seen some crazy upside euphoric runs in the past. I'm not saying that will be the case this time but the possibility exists in this market environment. Gold looks to be heading down to the $1200 level. Perhaps I'll get some gold share calls there. These stocks are cheap but they can always get cheaper. The fundamentals for gold just aren't there right now. We'll keep an eye on the foreign markets overnight and close out the week tomorrow.
Wednesday, November 20, 2013
Lower again today as the Dow fell 66 points on light volume. The advance/declines were 2 to 1 negative. The stock indices dropped after the Fed minutes were announced. But the decline isn't really aggressive and it looks like we could head back up at any moment. Buyers are there for the dips. We will have to see if that mentality changes. The summation index is heading lower again. The short term technicals have rolled over for the indices. But it doesn't have the feel of a more extended decline coming up, despite the fact that we are overdue for one. GE was little changed on the day and volume was lighter than lately. I'll get some January calls here if we ever get oversold on a daily basis. Gold fell again as the US dollar moved higher on the Fed minutes. The precious metal futures dropped $15 in the regular session and that much again in the aftermarket. The XAU lost 2 2/3. ABX and GG were both off around 2/3, while NEM shed a buck. Volume picked up to the downside and that is never a good sign. No love for the gold shares and the stronger US dollar is no help for the gold bulls. Mentally I'm not feeling 100%. Another trip to the dentist today. Successful trading requires your full attention. There is no doubt about that. The small stocks acted better than the overall market today so perhaps we'll see some positive action tomorrow. That's a guess as usual. The Dow has been put on a temporary hold at the 16000 level. We are way past overdue for some kind of sustained decline for stocks. Gold continues to head lower and it looks like it could head down to the $1200 level. That would be the area to take a chance with the gold share calls again in my opinion. So we'll see about that in the days to come. We'll keep an eye on the overseas markets tonight to see if they follow the US market lower.
Tuesday, November 19, 2013
Sloppy is the way that I'd describe todays market action as the Dow fell 9 points on light volume. The advance/declines were 2 to 1 negative. Once again the overall market was weaker than the Dow. This fact underscores the idea that things aren't as strong as the Dow appears to be here. The small stocks are showing relative weakness and today the TRAN joined them. We are due for some type of decline. Todays market action should turn the summation index back down again. The overall longer trend remains up. However it could be time for a move back to the 50 day moving averages for the stock indices. GE was off around 1/4 on average volume. Due for some weakness here as well. Overdue you might say. Gold was up a buck on the futures, while the US dollar was little changed for the session. The XAU was flat on the day as well. ABX and NEM had slight fractional gains, while GG was basically unchanged. Volume here was light. I'm looking out to the January calls on the gold shares but in no hurry to do anything. Gold itself remains in a funk. Mentally I'm feeling OK. We'll get retail sales, the CPI and existing home sales numbers out tomorrow. We'll see how the market reacts to the data. Still due for some price weakness in my opinion. The Dow is taking the lead lately and that isn't bullish. The small stocks usually lead the way both up and down. They have shown relative weakness lately. Gold isn't going anywhere though it has remained oversold for over a week now on the daily charts. I may be finished trading gold for this year anyway. We'll see what tomorrow brings.
Monday, November 18, 2013
A mixed market indeed, as the Dow gained 14 points on light volume. The advance/declines were negative. The overall market was much weaker than the Dow. The small stocks led the way lower. The sell off was late in the session which doesn't bode well for tomorrow. One day doesn't make a trend but this market has been way overdue for a pullback. The McClellan oscillator did turn positive on Friday though. The short term technicals remain overbought for the stock indices. The Dow did reach 16000 for the first time today, so perhaps that was a nice round number to take some profits. We'll see. GE was flat on the day and the volume was good. This stock probably needs a rest as well. Overbought, staying there and that can't last forever. Gold fell today as the precious metal futures were off $15. The fundamentals here remain bearish. The US dollar dropped just a bit. The XAU lost 1 7/8. ABX, GG and NEM all had fractional losses on average volume. No trades in mind here for now. Perhaps if gold gets back to the $1200 level I'll try the gold shares again. Mentally I'm feeling OK. Plenty of economic data out on Wednesday and Thursday of this week. That could get things moving again one way or the other. I'd expect the major players to do their fair share of trading this week. Next week is a holiday shortened affair with people taking time off. Overdue for some selling for the stock indexes in my opinion. But I've said that before. The overall trend remains up. Gold is still going nowhere fast. The weekly candlestick chart did show some promise but not if we just head back down this week. Not a good start to the week for the gold bulls today. We'll keep an eye on things overnight and go from there.
Friday, November 15, 2013
Another day, another record as the Dow gained 86 points on light volume. The advance/declines were almost 2 to 1 positive. This should turn the summation index back to the upside. Very overbought here on all levels but it doesn't seem to matter. I'm not sure just how long this can go on but it's usually longer than you think. The easy money policy continues to lift equity prices. Until this policy ends, I suppose there is not telling how far we can go. Don't fight the trend. It is hard not to when all the technicals are blown out to the upside. The technicals say get short but that strategy isn't working. No overhead resistance and we are in a favorable seasonal period for stocks. Enjoy the ride. GE was up 1/4 and the volume was good. Short term overbought here for a month and a half. Hard to trade that condition. Gold was little changed on the futures as the US dollar was lower. The XAU fell 1 1/8. ABX, GG and NEM all had fractional losses on light volume. No trades in mind for the gold shares at this time. Still oversold here technically. Mentally I'm doing OK. Expiration week came through with its usual positive bias. I'd say we're due for a rest here but I've been saying that for a while. Money is still finding a home in stocks. All declines are still being bought. I do not see any changes in the near future. Gold may have put in a short term bottom on the weekly candlestick chart but we'll need to see next weeks price action to be sure. Definitely oversold there. The fundamentals however remain negative for gold at this time. I'll be checking the charts over the weekend in hopes of coming up with some ideas for the December option cycle. For now it's Friday afternoon and time for a break.
Thursday, November 14, 2013
More of the same today as the Dow gained 54 points on light volume. The advance/declines were 2 to 1 positive. Perhaps todays action will turn around the summation index. The economic data out today was pretty much in line. The next Fed chief spoke before Congress and the easy money policy doesn't appear to be going anywhere. The stock indices are riding a wave of liquidity and cheap borrowing costs. There is nothing in the way of higher prices going forward. No resistance technically. Enjoy the ride. At some point the ride will end but it's anybodies guess when. GE was off 1/8 on average volume. Gold saw some life on the easy money reminder. The precious metal futures rose $17. The US dollar was up a bit as well. The XAU gained 2 1/4. ABX did not join the rise in prices and finished flat on the day with good volume. The stock dilution story here is still the main driver of price action. GG up 1/2 and NEM added 3/4. Volume was average. No trades in the gold shares here for me but the technicals are coming off of oversold readings. However I've lost enough money trading gold from the long side this year. Mentally I'm feeling OK. The small stocks are lagging the major averages here and that isn't exactly bullish. The relative strength is currently with the big caps. However as long as the buyers remain the trend is up. We are overbought on all the medium term indicators for the stock indexes though. Hasn't meant anything yet. All pullbacks are being purchased. Gold appears to be trying to make a stand at $1260. Not sure if that will be successful. Oversold both short and medium term here but that doesn't mean things will simply turn around. We'll close out the week with option expiration tomorrow.
Wednesday, November 13, 2013
Back to the upside today as the Dow gained 70 points on average volume. The advance/declines were 2 to 1 positive. I thought that we were going to roll over here but the S&P 500 has hit a new high. The positive expiration bias appears to be in place. The summation index hasn't turned around yet but that may happen tomorrow. The Fed liquidity trumps all I suppose. No upside resistance for the major stock indices and the overall market is stronger than the Dow. Money is easy and needs a place to go. Stocks are the choice until further notice. GE up up a touch but the volume was lighter than yesterday. Still overbought on the short term technicals here and have been for weeks. Gold was off a couple of bucks on the futures and came back a bit in the aftermarket. The US dollar was lower today. The XAU gained 2/3. ABX, GG and NEM all had small fractional gains and the volume was light. Still no real interest in the gold shares. The story for gold remains that there is no story. Mentally I'm feeling OK. How much higher can we go for the stock indexes? I don't have any answers. We should have seen some type of decent correction or sell off by now. Hasn't happened. The trend remains up and there is nothing in the way. 2 days to go in the November option cycle. We'll see how high we get by the end of the week. Some economic data to be released before the end of the week but it doesn't look market moving unless there is a big surprise. Gold is a non event. We'll keep an eye on the foreign markets and go from there.
Tuesday, November 12, 2013
The Dow was off over 100 points during the session but made it back for a loss of 32 points on the session. The advance/declines were almost 2 to 1 negative and the volume was light. The small stocks were relatively stronger today. However the summation index is still heading lower. I think perhaps we should take our cues from there even though it is expiration week. Unless we see some strong upside tomorrow my guess would now be that we are heading lower. GE was flat once again on the day but the volume picked up. No trades here for now. Gold continues to drop, off $10 on the futures and more in the aftermarket. The US dollar finished flat on the session. The XAU was off 1 7/8. ABX, GG and NEM all had fractional losses on better volume. There is still no love for the gold shares. Mentally I'm feeling OK. The stock indices are trying to make up their mind here. The technicals remain overbought and with the summation index heading lower, I think that we are going to roll over here. Buyers did come in near the end of the day today, in the last couple of hours. However I'm sticking with a short term bearish stance for now. That could change if the summation index turns around. Gold remains dead money or worse. It looks like we're heading back to $1200 and we'll have to see if that holds. Like I said yesterday, the fundamentals for gold are looking bad at the moment. You can't fight that. We'll see what tomorrow brings.
Monday, November 11, 2013
A semi-holiday in the US today as the Dow rose 21 points on light volume. The advance/declines were slightly positive. The summation index is still heading lower. Not a lot of economic reports for option expiration week. I'd expect a drift higher for now and perhaps that will turn the summation index back to the upside. It is something to keep an eye on. GE lost a nickel and the volume was very light. The short term technicals remain overbought here. Gold fell 3 bucks on the futures and the US dollar was a bit lower as well. the XAU was up 1/4 after being lower early. ABX, GG and NEM basically finished the day flat. Volume was light. The short term technicals here are oversold. I have no trades in mind for the gold shares at the moment. Mentally I'm feeling OK. Not much to report on todays market action. The banks were closed and the major players took a long weekend. There is nothing of note to move the market this week. It should be a slow grind upwards into the expiration but that's a guess as usual. With only 4 days in the November cycle and no clear signal, I'll be on the sidelines. Gold remains in a down trend and an unwanted asset for now. The threat of higher interest rates and a stronger US dollar as the fundamentals doesn't bode well for the bullish cause. We'll follow the overseas action tonight and go from there.
Friday, November 08, 2013
The market exploded to the upside on a better than expected jobs report. The Dow gained 168 points on good volume. The advance/declines were positive but not as much as you would expect with a 168 up move. We basically gained back all of what we lost yesterday. We will be looking for follow through on Monday. It will be expiration week so the usual upside bias should be in effect. I was looking for more of a decline than what we saw yesterday but the market speaks and we must listen. I guess there is so much liquidity out there that it needs a place to go. You cannot fight it. GE was up 3/8 and the volume was lighter than lately. The daily chart now has a bullish engulfing pattern, which implies higher prices. Gold dropped again today on a stronger US dollar. The gold futures fell over $20 and cracked the $1300 level. It was a negative week for gold. The XAU actually gained 3/4 though. Money needs a place to go. There is no other reason for anybody to be purchasing gold stocks when the metal is breaking down. ABX, GG and NEM all had slight fractional gains after selling off early in the session. Volume was average. The technicals for the gold shares are oversold here on a short term basis. Mentally I'm feeling OK. I was looking for a much longer and deeper decline than what we have had here. But with todays market action there is a chance that we are already heading back up to new highs. The summation index hasn't turned around yet though. Maybe we'll hold things up for another week and then see some better selling. That's a guess as usual. The overall market was back in the lead today and that is bullish. Plenty to ponder over the weekend. Gold remains dead in the water. The gold shares did turn around today but I'm not sure if that means anything. I'm reluctant to take on any kind of trade at the moment. Confidence lost is not the way to get ahead in this or any other endeavor. I'm still trying to regroup after the latest ABX trade fiasco. It's been a tough trading year. But for now it's Friday afternoon in the autumn and time for a break.
Thursday, November 07, 2013
Moving to the downside today as the Dow fell 153 points on heavy volume. The advance/declines were about 4 to 1 negative. The summation index is now heading lower. A decline is in order for now as we had the signs of one coming in recent days. GDP was better than expected but the market was in the mood to fall. We will have to see how long it lasts. The small stocks had announced lower prices were on the way. Support comes in at around 1700 on the S&P 500. GE had a one day reversal to the downside. It fell 1/4 on heavy volume. Perhaps we will get a chance to try the calls on a pull back to $25. Hasn't happened yet. Gold dropped as well as the US dollar had a good day despite being short term overbought. The precious metal futures lost $11. The XAU fell 2 1/2. ABX off 1/8, GG dropped 3/4 and NEM shed 5/8. Volume was average for the gold shares. The short term technicals have turned back down for the gold shares. I have no trades in mind here at the moment. Mentally I'm doing OK. One day doesn't make a trend but the feeling here is that this is the start of some sort of decline. I do not know how long it will last. I will say that today a company called Twitter went public and it was all the rage of Wall Street. It traded well above its offering price amidst plenty of hype. This, for a company that is losing money and may not turn a profit until 2015. This is the kind of market action you see at tops, not bottoms. It is not quite the internet frenzy of around a decade ago but you get the idea. We'll see if the employment report tomorrow can turn things around back to the upside. Gold remains unloved and a non performing asset. The gold shares have been laggards all year. The recent upside in the US dollar does not bode well for these issues near term. We saw the reaction to the GDP number today from the market. We'll see what happens with the jobs numbers tomorrow.
Wednesday, November 06, 2013
The Dow led the way today as it rose 128 points on average volume. The advance/declines were slightly positive. The small stocks were lower again today. Breadth hasn't been as good lately and the TRAN was down today as well. It looks to me as if a decline is right around the corner. The summation index though moving sideways, could turn down at any time. We are due for a decline, the technicals are overbought and some big reports are due in the next 2 days. We'll see what happens. GE was up 1/2 and the volume was really good. GE is not pointing to any market weakness if it is a precursor for coming events. Gold gained $10 on the futures today as the US dollar was a bit weaker. The XAU gained a point. ABX was flat on the day, while GG and NEM rose around 1/2. Volume was heavy for ABX. I don't know why. The upcoming dilution of the stock does not make it attractive. It does look like the technicals for the gold shares are starting to turn up though. Mentally I'm doing as well as can be expected considering going to the dentist today. You cannot discount the effect that outside influences have on your trading. The game is difficult on its own. You really have to be in a good frame of mind to get the best results. Obviously some days are going to be better than others. Knowing yourself and keeping yourself under control cannot be under estimated. Considering my confidence level is pretty low here, attempting another trade before the November expiration probably isn't a good idea. The Dow hit a new high today. When the Dow is leading the way, it is getting late at the party. I think a decline will start at any time now. It also looks like gold has a chance to turn around here as well back to the upside. But that is just a guess as usual. The dollar just got short term overbought as well. We'll see how the market reacts to the GDP report and go from there.
Tuesday, November 05, 2013
A mixed market today as the Dow fell 20 points on average volume. The advance/declines were 2 to 1 negative. The NASDAQ was slightly higher today but the S&P 500 was down. The summation index is starting to trend sideways. Although the trend for the stock indices remains up it is starting to appear as though things are getting tired. Waiting on GDP and the employment numbers later in the week. Some of the short term technicals have rolled over so some kind of a decline here would not be a surprise. GE was flat on the day and the volume was light. No trades here for now. Gold was off 6 bucks on the futures while the US dollar was up just a bit. The XAU was lower by a point. ABX and NEM were little changed, while GG lost 1/4. Volume was light. I'd expect some movement from gold and the gold shares when we get the reports due on Thursday and Friday. I could make a case for either direction. Mentally I'm feeling OK. We've been in rally mode for about a month on the stock indexes. Earnings are just about done. It looks like the macro picture will be moving things in the near future. No noise out of Washington most likely until next year. The Fed is on hold. Technically we are due for a rest but as always, the market will go where it wants. Gold remains unloved and the direction is down. The weekly candlestick chart is bearish. Ditto for the gold shares unless there is some huge rally this week. That doesn't appear likely at this point. 8 days to go in the November option cycle. I don't have any pending trades. My confidence is at a low. I don't see any decent set ups anyway. It looks like that I will just sit back and try to regroup for the time being. We'll watch the foreign markets overnight and see what tomorrow brings.
Monday, November 04, 2013
An upward drift set the tone for Monday as the Dow gained 23 points on light volume. The advance/declines were 2 to 1 positive. The small caps had better relative strength today and that is a plus. The short term technicals had rolled over but they're now trying to turn back up. Plenty of economic data to spark trading interest this week. The trend for the stock indices remains up. GE was off 1/8 and the volume was light. Remaining overbought here and that can't last forever. I'd still like to get some calls here if we ever get a pull back.. Gold didn't do much today as the futures rose a buck or so. The US dollar was slightly lower on the session. The XAU bounced back 2 1/3. ABX rose 1/3, GG up 3/4 and NEM was higher by 1 1/3. Volume was good for ABX and NEM. GG had light volume. The gold shares outperformed gold itself today and that is a positive going forward. Mentally I'm feeling OK. The rally in stocks continues and there is no overhead resistance. Money needs a place to go and right now the stock market is where it's going. There is no change in the easy money Fed policy for now. You cannot fight the tape. Momentum runs never end well but you certainly can't predict how far they will go. Gold has had some brief rallies lately but the overall trend remains down to sideways. We also just had the technical death cross on the weekly chart with the 50 and 200 day moving averages. Perhaps I won't be trading gold for a while. I sure have lost quite a lot of money this year getting long the gold shares. It ruins your confidence and without some type of positive atmosphere the trading gets really tough. And it is not at all easy in the first place. We'll keep an eye on the overnight developments and go from there.
Friday, November 01, 2013
Heading back up to start the month of November as the Dow gained 70 points on average volume. The advance/declines were negative. Once again the big caps are leading the way. This occurs usually at the end of a rally. The small stocks are lagging now and that is not a positive. It was a down week for the small stock and a flat one for the major averages. Not to mention that the daily technicals for the stock indices have rolled over. It's something to keep an eye on. GE however, was up 3/8 on good volume and is saying that higher prices are still coming. We never did see a pull back here in order to purchase some calls. Gold fell again today as the US dollar had another good session and is in a short term rally. The precious metal futures dropped $10. The XAU fell 3 points as the short term technicals have rolled over here as well. ABX lost 1 3/8, GG shed 1 1/8 and NEM down 1 1/4. Volume was good with the exception of ABX. The volume there was blown out to the downside exponentially due to yesterdays after hours announcement of the dilution of the stock. I dumped my November ABX calls for a 70% loss. At the close on Wednesday this position had a 200% gain before the earnings report. Just another in a string of bad trades and bad decisions by me this year. Gold looks to go lower now due to strength in the US dollar. Can't fight that. Mentally I'm doing as best I can after yet another losing trade. It's been a horrible trading year for me and I may just put on the brakes for the remainder of 2013. The stock indexes look to be taking a much needed break here near term. The summation index is beginning to trend sideways. There will be plenty of economic data out next week including Fridays employment report. Much for the market to digest. Gold and the gold shares just had a pretty bearish week. The weekly candlestick charts do not look pretty for the bulls. The reverse head and shoulders pattern for ABX on the weekly candlestick chart has been pushed back yet again. The US dollar is holding its long term support at the 79 level yet again. After this week, I don't see any rally anytime soon for gold. I could be wrong but the charts say otherwise. I'm going to have to put the losing ABX call trade on the books and try to move forward. The mental capital involved is always the most important thing about the trade. When confidence is lost, it's hard to get going in the right direction again. Needless to say I've made a lot of mistakes this trading year. But for now it's Friday afternoon and time for a break.