Tuesday, December 31, 2013
We finished off the year with a new closing high as the Dow gained 72 points on very light volume. The advance/declines were 2 to 1 positive. We'll take a day off tomorrow and then begin trading for 2014. The stock indices remain overbought on a short and medium term basis. A decline is due at any time. We most likely will continue a bit higher in the next few days but caution is advised. The summation index is heading higher and that is bullish. GE was up 1/8 and the volume was OK. We've reached $28 here. Gold was up a bit on the futures as was the US dollar. Gold was lower early in the session but came back. The XAU rose 1 3/4. ABX up 1/2, GG gained 3/4 and NEM added 1/8. Volume was good for the gold shares. I did place an overnight order for the January GG calls but it was not filled. There is now a bullish engulfing candlestick for the daily GG chart. If we get some weakness on Thursday here I may still attempt this trade, however it may be too late. Mentally I'm feeling a bit tired, did not sleep well. How long can this rally last? Longer than I think perhaps. But I must say some of the technicals are really over extended here and the bullishness is extreme by some accounts. The stock indexes are overdue for some decline. Gold is trying to hold the $1200 level and has succeeded so far. Any gold share trade now has to be short term. I'll check the charts here again with the day off tomorrow. We'll keep an eye on any overseas developments and be back at it on Thursday in the new year. 2013 is a year that I'd like to forget. My trading account shed 30% and my win % was worse than that. I'll start 2014 with a clean slate and try to get things right again.
Monday, December 30, 2013
A mixed bag today as the Dow gained 25 points on light volume. The advance/declines were barely negative. The overall market was weaker than the Dow. I thought the main players would return this week but that is not the case. We are still in holiday mode. Perhaps things will change with the new year on Thursday. Still technically overbought and staying that way. I do expect some kind of push higher for the beginning of the new year. After that, who knows? GE gained a few cents on light volume. No trades in mind here for now. Gold fell $10 on the futures and a bit more in the aftermarket despite a weaker US dollar. I would think that the year end selling would be over here but maybe I'm wrong again. The XAU fell almost 2 points. ABX off 1/3, while GG and NEM dropped 2/3. Volume was almost average here despite fewer players. I may try the January gold share calls tomorrow on weakness if we get any. Oversold on the technicals but not all the way yet short term. We also could be starting another leg down for gold and the gold shares as well. Mentally I'm feeling OK. It is beginning to look like this week may be a light volume holiday affair as well. It makes for tough trading. I still think that we'll see plenty of cash flow into stocks the first couple of days for 2014. I'm guessing that some of that money will go to the gold shares as well. I could be wrong. After such a lousy 2013 trading year, I'd like to start next year off in a positive fashion. The game plan at the moment is to get some January gold share calls tomorrow and then sell them by the close on Friday. I'll rethink this idea overnight.
Friday, December 27, 2013
Running in place today as the Dow lost a point or so on extremely light volume. The advance/declines were slightly positive. Still overbought on the stock indices. The summation index is still moving higher. Only two days left for 2013. The small stocks were under performers today but it is hard to read anything into a holiday biased session. We certainly won't go up forever. I think that we are closer to a top than most people think. But I could be wrong and often am. GE was flat and volume was light. Gold was up a buck on the futures and the US dollar was slightly lower again. The XAU rose a point. ABX, GG and NEM had slight fractional gains on light volume. It looks like it may be too late to try the gold share call trade for January. I'll have to see some pullback on Monday or Tuesday to attempt this trade. Mentally I'm feeling OK. It has been a great year for the stock indexes. Everybody is expecting a nice pop to start the new year, myself included. After that, who knows? We are overbought both short and medium term. Perhaps we will see some beginning of the year blow off top. But the upside from here is limited in my opinion. Some of my technical indicators are getting off the charts overbought and warning of some negative action to come. At the very least some sideways activity. So I really do not want to go chasing things on the upside here. Gold is hanging in there above the $1200 level. However this is such a light volume limited participation week, it is hard to say a bottom is being put in. That said, it is possible that the precious metal is just about sold out for now. That's a guess as usual. I'm still interested in the gold share calls for the beginning of next year but I may go out to the February contract. It is something to think about over the weekend. Most of the major players should be returning to their desks next week as we close out the year and begin the trading for 2014. For now it's Friday afternoon and time for a rest.
Thursday, December 26, 2013
Up, up and away we go as the Dow soared another 122 points on light volume. The advance/declines were slightly positive. Overbought and staying there. The summation index continues to the upside. There are no sellers in sight. I'm not sure how far this can go but the volume is light and that is not a good sign despite it being a holiday week. The advance/declines today do not support a plus 100 points upside move. There remains no overhead resistance but this has the look of an upside blow off. GE was up 1/4 on light volume. The short term technicals and the medium term technicals are overbought for GE. I'm probably not going to try the calls here for January. Gold rose $9 on the futures as the US dollar was a bit weaker. The XAU was up 1/2. ABX, GG and NEM were little changed on the session. I'd still like to try the gold share calls for January if we drop a bit from here. Mentally I'm feeling OK. It's a holiday for many of the world markets today. So the overall trading is skewed. You can't argue with higher prices but some kind of rest is due for the stock indices. If we continue to simply go up it won't end well. Gold is holding the $1200 level for now. Three days to go in the trading year. I'd expect a lot more of the major players to return next week. Sometimes it's a waiting game and patience is required. Now seems to be one of those times. We'll finish off the week tomorrow.
Tuesday, December 24, 2013
Still moving higher in a holiday shortened session as the Dow gained 63 points on extremely light volume. The advance/declines were 2 to 1 positive. The summation index continues to the upside. The Santa Claus rally is in full swing and even higher prices are probably coming. There is nothing in sight to derail the rally at this time. Overbought, staying there and that is the characteristic of bull markets. GE was up almost 1/4 and the volume was really light. Might be too late to try the calls here now. Gold gained back what it lost yesterday and the US dollar didn't do much. The XAU rose 2 1/3. ABX, GG and NEM all were up over 60 cents. Volume was anemic. Might be too late here as well for the calls since todays upside increased the option premiums. The daily technicals also finally got moving to the upside for the gold shares. But it is hard to read much into a holiday light volume move. Mentally I'm feeling OK. We'll take tomorrow off and see how things pan out when we open on Thursday. Thursday is also a holiday for many people around the world. I'd still like to try the gold shares from the long side at some point before the new year begins. So we'll see what happens. Happy Holidays everyone.
Monday, December 23, 2013
A nice start to the holiday week as the Dow gained 73 points on light volume. The advance/declines were better than 2 to 1 positive. The summation index is heading higher. The holiday rally is in full swing. I don't know how high this market can go but the trend is up and there is nothing in the way. We are short term overbought for the stock indices but can remain that way in an uptrend. There will be an early close for the exchanges tomorrow. GE was little changed and the volume was light. I'm still considering the calls here for January. Gold was off 6 bucks on the futures and the US dollar was slightly weaker as well. The XAU ended the day flat. ABX, GG and NEM had little movement on light volume. I'm still looking for the gold shares to pop at the beginning of the new year. I'm considering the ABX or GG calls. Looking to purchase them this Thursday or Friday. Mentally I'm feeling OK. As expected the volume this week will be light and the trend will be for higher equity prices. Weakness can be bought in my opinion. Gold is going nowhere fast. It is really a waiting game for most of this week. Sometimes you just have to be patient. I'd like to start the new year on the right track. We'll see what happens going forward.
Friday, December 20, 2013
The Dow gained 42 points today on option expiration heavy volume. The advance/declines were 3 to 1 positive. The summation index is now heading higher. There is no overhead resistance. Look for higher prices heading into the new year. The Santa Claus rally lives on. Look to buy calls before the start of 2014. GE was up around 1/8 and the volume here continues to be heavy. January calls are in order if we get some pullback. Gold was up 10 bucks on the futures as it tries to stabilize. The US dollar was a bit weaker on the session despite a higher GDP revision. The XAU was flat. ABX, GG and NEM had slight fractional moves one way or the other on average volume. I'll be looking to try the gold share calls before the end of the year. I think we'll see some money go into this group at the start of the new year. Mentally I'm doing OK. Another great opportunity was missed this week with respect to the OEX calls. But that has been the story of my trading year. Too little, too late and terrible trading was the theme for me this year. I'll try and get things right going forward. I'm looking to get some calls before year end for the anticipated rally to begin 2014. Gold remains unloved and it broke the $1200 level this week. There is a chance that we could just keep going lower here. The fundamentals for gold remain bearish. Next week should be a light volume, little movement affair. Most of the major players will be off. I may try and purchase some calls towards the end of the week. I'll be checking the charts over the weekend. For now it's Friday afternoon and time for a break.
Thursday, December 19, 2013
Digesting yesterdays huge gains as the Dow 11 points on average volume. The advance/declines were negative. The overall market was weaker than the Dow. The summation index has turned back to the upside. Bur todays session was probably a preview of things to come in the near term. Lackluster trading with no real direction. I'd expect a drift higher in the days to come before the new year. Options expiration tomorrow. GE was up 1/8 and the volume was good. The January calls should work here but I'd wait for a pullback to purchase them. Gold was off sharply today and not only broke support at $1220 but also closed below $1200. The precious metal futures declined over $40. The XAU however only fell 1 1/8. These stocks could be pretty much sold out at this point. ABX, GG and NEM all lost around 1/3 on good volume. I'm still considering some gold share calls for January or February. Purchasing them after Christmas is the idea for now. Or not at all depending on what happens between now and then. Mentally I'm feeling OK. I'm expecting somewhat higher prices tomorrow to close out the week. The trend is up and getting some calls before the new year begins is the strategy for now. I did notice some extreme volumes in the January GE calls yesterday but it did not equate with an increase in open interest. Not exactly sure what the implications there are. GE is very overbought on the medium term but it appears that there will be one more leg up in the following weeks. The 27 or 28 strike price should work. Gold looks like it is about to take out the years low at $1180. The gold shares are already at this years low. I might be able to play some bounces but that's about it. I do not see any sustained rallies there until the fundamentals improve. When that is, is anybodies guess. Perhaps I'll just stick trading the OEX. We'll see what the expiration does tomorrow.
Wednesday, December 18, 2013
The great taper has begun. I mean the media loved the name Great Recession so let's call this the great taper. The Fed has slowly begun to reign in the easy money policy but it was a token gesture to begin with. At first the markets sold off but then came a huge reversal since most of easy money remains in place. The Dow soared 292 points on very heavy volume. The advance/declines were 4 to 1 positive. Todays price action should move the summation index back to the upside. We hit a new closing high for the Dow. The small stocks are lagging just a bit here but that shouldn't be a problem. The Santa Claus rally is in full swing. Once again there is no overhead resistance and we'll just have to see how far we can go. GE was up 1/3 and the volume was pretty good. A new closing high here as well. Probably too late for the January calls now but we'll see. Gold was up $4 on the futures as the US dollar rose slightly. Gold looks to be falling in the aftermarket. Todays Fed announcement can't possibly be seen as a positive for gold. We are still above the $1220 level for now. The XAU fell a point after being higher before the Fed. ABX and GG had slight fractional losses, while NEM was flat. Volume was good for the gold shares. If and when we get to an oversold level in the gold shares, I might try the calls. But there is no hurry at this point. Mentally I'm feeling OK. So we got the Fed announcement and the next leg up has begun. Any weakness can be purchased in my opinion. The holiday rally is in full swing. I'd probably think that it is prudent to let next week pass before taking on any option positions. The volume will most likely be pretty light. I guess I'll be looking at the GE January calls if the opportunity presents itself. Gold remains in the dumps. Perhaps we'll get a final washout move down now. Or maybe it will just be a slow grind to nowhere. The fundamentals for gold remain negative in my mind. Better trades from the long side will probably be found elsewhere. The Fed is now out of the way. It remains a time to be patient though as we need to get through the holiday trading of next week. We'll see how the foreign markets react to todays big US rally and go from there.
Tuesday, December 17, 2013
Some weakness ahead of the Fed as the Dow fell 9 points on light volume. The advance/declines were slightly negative. I don't expect any changes from the Fed but who knows? I could be wrong. The summation index is still heading lower. I'm still of the opinion that the Christmas rally will begin at any time now. But anything goes if we get any surprises from Big Ben. Technically we're more oversold than overbought for the short term. Things will all get sorted out after tomorrow. GE was flat on the day and the volume was light. Still a wait and see attitude for me towards GE. Gold fell $14 on the futures today. The US dollar finished the session little changed again. The XAU was off 1/3. ABX, GG and NEM had slight fractional moves one way or the other on light volume. It is a waiting game here as well. As long as gold holds $1220 it should be OK. If we break that level another decline would be in the works. Mentally I'm feeling OK. 3 days in the December option cycle and a Fed announcement tomorrow. Whatever volatility we get should happen in the next 3 days. Then it's holiday mode for a week or so. So taking on any trades now has more risk than usual I think. Plus there will be the time decay of a week of light trading. I think that I'll be on the sidelines until after Christmas. Gold looks like it is trying to form a base but there is no real buying interest that I can see except for ABX perhaps. I'm trying to be patient here and have been so far. We'll see what tomorrow brings.
Monday, December 16, 2013
Some upside to start off the week as the Dow gained 129 points on light volume. The advance/declines were 2 to 1 positive. We were short term oversold on the stock indices so some positive price action was expected. I'd expect tomorrow to be a holding pattern prior to the Fed on Wednesday. There is a good chance that the decline is now over and we will head up to new highs on the major stock averages. That's my guess for now. The summation index has yet to turn back to the upside but another day like today and it will. GE was up 1/8 or so on average volume. No trades here for now but perhaps I'll try the January calls before the end of the month. Gold was up almost $10 on the futures as the US dollar was a little weaker on the session. The XAU rose 3/4. ABX and GG were up 1/3, while NEM slipped 1/8. Volume was average. ABX has shown good relative strength lately, probably due to a positive article in Barrons last week. I'm still considering the January gold share calls. I might try the GDX index this time. We'll see. Mentally I'm feeling OK. I'm expecting the usual holiday rally to begin and today was probably the start. The only thing that could change things is a very negative day tomorrow or a surprise from the Fed. I do not expect the Fed to do anything different on Wednesday. Gold had a positive start to the week but came off of the highs. As long as $1220 holds for gold I'll continue to consider the gold share calls. The timing as always is key. Next week will be a holiday week and the major players will be out. So any option purchases should probably be delayed for now until the end of December, barring a decent technical signal. Perhaps I will heed my own advice for a change. We'll keep an eye on the overseas markets overnight and take it from there.
Friday, December 13, 2013
We got very slight upside today as the Dow gained 15 points on light volume. The advance/declines were positive. We are trying to stabilize here in my opinion since we are at the 50 day moving averages in some of the stock indices. Plus we are now short term oversold. One week left in the December option cycle and it is possible that it is time to try the OEX calls. The problem is the summation index that continues lower. Of course the market will turn to move this indicator back up but picking when that happens is the key. The summation index could just continue to head lower. I'm guessing the Fed announcement on Wednesday will be the key. GE was up 1/3 and the volume was good. Maybe the strength in GE is letting us know that the market is poised to move higher near term. That's a guess as usual but it's something to think about over the weekend. Gold was up about 10 bucks on the futures. The US dollar was little changed at the end of the day. The XAU only managed to gain 1/3. ABX added 1/4 but GG and NEM finished almost unchanged. The volume was light. Not sure what to do here now. The open interest in the GG January call that I was considering contracted quite a bit yesterday. Whoever had put on such a large position took a lot of it off. Putting on a gold share call trade here is something else to think about over the weekend. Mentally I'm feeling OK. Most of the stock indexes had a negative week. Is this the beginning of a protracted decline? Could be but this time of the year is usually positive. If we don't rally from here soon the implications for next year would be bearish. We are short term oversold though and I will consider some December OEX calls over the weekend. Gold has held the $1220 level so far and has a potential double bottom on the weekly charts. There remains little interest there though as we rallied early in the week and then gave it all right back. Medium term oversold for the gold shares. The short term technical picture there is mixed. I'll be checking the charts here over the weekend. Next week will probably be the last week of decent volume before the beginning of next year due to the upcoming holidays. If I do decide on a trade it will have to be put on early in the week most likely. So we'll see what happens. Plenty to ponder in the next couple of days. For now it's Friday afternoon and time for a break.
Thursday, December 12, 2013
Continuing lower as the Dow fell 104 points on average volume. The advance/declines were negative. The underlying market action was better than a 100 point loss day would imply. The small stocks were acting better today and I would expect some upside tomorrow due to the short term oversold nature of the stock indices at the moment. The summation index is still heading lower though. Certain stock indexes are trying to hold their 50 day moving averages. They have so far. The late day weakness again doesn't spark confidence though. GE was off a few cents and the volume was average for lately. I still don't have any trades in mind here for now. Perhaps the January calls. Gold got pounded today as the futures fell over $30 on a stronger US dollar. The gold shares fared much better, only off a point. That's bullish for the short term. ABX, GG and NEM had fractional moves one way or the other after being lower early on. Volume was light. I'm back to considering the January gold share calls but probably not until next week. Mentally I'm feeling OK. The McClellan oscillator is getting pretty oversold at this point. That doesn't mean that it can't go lower but the odds favor some type of bounce there. After that we could head on back down again but we'll have to see what kind of bounce we get. A lot will be determined by the Fed next week. Any surprises there could ramp up the volatility. Gold had a bounce early in the week and has since given everything back. That isn't a good sign. We did hold the $1220 level but perhaps a test of $1200 is still in the works. The gold shares are still holding their lows from last week so far as well. The Fed should play a role in the movement for gold as well. If they begin the tapering in December, conventional wisdom says that won't be positive for the price of gold. We'll watch what transpires overnight and finish off the trading week tomorrow.
Wednesday, December 11, 2013
Some steam to the downside today as the Dow fell 129 points on average volume. The advance/declines were 4 to 1 negative. The summation index continues lower and that is what we will keep our eye on. It has kept me defensive on the stock indices here and rightfully so. But in this game that could all change tomorrow but I don't think that it will. No real reasons for todays decline as we challenge the 50 day moving averages on some of the stock indexes. The smaller stocks have been relatively weaker here and that is a negative. GE was off 1/2 on better volume. Still above the 50 day moving average here. Gold was off $4 on the futures and another $5 in the aftermarket. The US dollar was slightly lower. The XAU dropped 3 points, giving up what it gained yesterday. ABX and GG fell 1/2, while NEM lost 3/4. Volume was light to average. The price of gold held up pretty good today but not the gold shares. If we do get more decline in the stock market, the gold shares will most likely follow. I'm not sure if I'll try the GG January calls right now but it's something to ponder this evening. Mentally I'm feeling OK. Weakness prevails here so we'll have to see if the 50 day moving averages provide support. Still no data to move things but perhaps downside momentum will take over. Gold had a pause in the recent strength today. We'll see if the weakness continues tomorrow. As always we'll keep an eye on the foreign markets to see if they mirror the US action today.
Tuesday, December 10, 2013
Just a downside drift today as the Dow fell 52 points on light volume. The advance/declines were negative. The stock indices are trying to make up their mind here. But we could just see sideways price action for a while. However the summation index is pointing lower. I still think I'll take my cues from that and look for lower prices until that turns around. Not much data to move prices around this week. The short term technicals for some of the indices are back in the overbought zone. GE was off a nickel and the volume remains tepid. No trades for GE right here as it looks like the price could go either way. Gold was the story of the day again in my mind as the futures gained $25. The US dollar was slightly weaker. There are no fundamental reasons for gold to rise here. There is a potential double bottom in place on the weekly charts. If the bottom is for real, the target would be $1600. But that remains to be seen. The XAU jumped 3 1/3. ABX up 7/8, GG gained 3/4 and NEM added over 1/2. Volume was good for the gold shares. My January GG call order was never filled and I canceled it. Might be too late here but there is a chance that I'll still try this trade. ABX has shown the best relative strength here so far. I don't know if actual real interest is being shown for the gold shares. It could simply be short covering. However the specific option on GG that I was trying to trade had a huge expansion of open interest last week. That should say something. Mentally I'm feeling OK. RUT is under performing here and that isn't a positive for the stock indexes. More negative price action would not be a surprise in my opinion. New price highs would. 8 days left in the December option cycle. Gold is showing some signs of life but I don't know if it is for real or not. That said, I'm still keeping a close eye on the GG call options. I'm still a little gun shy after all of the losing trades over the past year. We've also already moved up from the technically oversold condition of the gold shares as well. So we'll see.
Monday, December 09, 2013
Slight upside today as the Dow gained 5 points on light volume. The advance/declines were just about even. Not much to report about todays session. The summation index is still heading down. I'm expecting weakness in the coming days and I am not looking for a break out to new highs yet. The volume on the rally is light. I do not trust light volume rallies. GE was up another 1/4. The volume was nothing special. If GE is a proxy for the overall market then we should see higher overall prices moving forward. That remains to be seen. Gold was up $5 on the futures with a slightly weaker US dollar. Gold continued to rally in the aftermarket. There was a lot of chatter over the weekend about gold being sold out along with a possible double bottom being put in. The XAU rose 1 2/3. ABX and NEM were up over 1/2, while GG was flat. Volume was light. I did place another open order for the January GG calls. We'll see if it gets filled this time around. I'm thinking that we'll see more sideways price action for gold near term. Mentally I'm feeling OK. Not much economic data to go on this week. It could be a quiet time for the stock indexes. That doesn't do much for trading options. However sometimes you have to be patient. The fundamentals for gold haven't changed, so I really don't see any big rally coming up anytime soon. Perhaps the gold share call trade isn't the best idea for this time. I'll reconsider it overnight. We'll keep an eye on the overseas action and take it from there.
Friday, December 06, 2013
A huge move back to the upside today as the Dow gained 198 points on light volume. The advance/declines were almost 3 to 1 positive. The employment report was better than expected and the stock indices took off. We were short term oversold so some upside was due. The only caveat is the light volume. We'll see if we get any follow through next week. The small stocks were relatively weaker today and that could mean something in the days ahead. We've got the Fed in a couple of weeks and things could get dicey if there are indications that the easy money policy is going away. I'm not really a believer in todays rally until the summation index turns back up. GE was up 1/2 but the volume was pretty light. Maybe this is the beginning of a nice move to the upside but without conviction I can't back that theory. No trades in GE for now. Gold was off $3 on the futures despite a good jobs number. The US dollar didn't do much today. Interesting market action on the release of an important employment report. There was some volatility in gold but at the end of the session, not much changed. The XAU had a slight loss. ABX, GG and NEM had slight fractional moves one way or the other. Volume was good for NEM, light for the others. I did not place another order for the GG January calls. Still oversold for the gold shares and I may try the calls next week. Mentally I'm feeling OK. So the jobs report is out of the way and we go from here. All appears to be fine for the stock indexes and there isn't a lot of economic data due next week. It looks like new highs are in the offing. However I just don't feel like todays move up will last. The short term oversold condition has been alleviated and we'll see where we go from here. Gold had an interesting session today but there is still no love for the metal itself or the gold shares. There is a chance that we are trying to put in a bottom at the $1220 level for gold but we could just as easily head down to $1200 as well. I'm still considering the GG January calls but this could be the wrong idea as well. However somebody has taken a huge position there for whatever reason. I'll be checking all the charts over the weekend. The next two weeks will see the majority of trading being completed for the year as the holidays will once again soon be upon us. For now it's Friday afternoon and time for a break.
Thursday, December 05, 2013
Still heading lower as the Dow fell 68 points on average volume. The advance/declines were 2 to 1 negative. Overdue now for a bounce on the stock indices. Perhaps the employment report will bring back the buyers. Short term oversold on the stock market right now. The data appeared stronger than expected. Perhaps the market is pricing in the end of the easy money game. The decline hasn't really been volatile to this point. The summation index is heading lower and does imply lower values moving forward. So even if we do see some upside tomorrow it may not be the beginning of another leg up. We'll see. GE was off about 20 cents and the volume was light. I'm still going to be patient with regards to the January calls here. Oversold on the short term here as well. Gold dropped back $15 and a bit more in the aftermarket. Negative price action despite a drop in the US dollar. The XAU gave back the 2 points it gained yesterday. ABX fell 1/4, while GG and NEM both lost 2/3. Volume was light to average. I canceled the open order for the January GG calls. I'll watch tomorrows open and decide whether to put on the trade again. Oversold and staying there for the gold shares and that could be dangerous despite the fact that they've been decimated already this year. Mentally I'm feeling OK. I've called for a bounce since Tuesday and it hasn't happened. Perhaps there is something happening under the surface but the decline so far has been muted. We should get decent market movement tomorrow, one way or the other. I'll take my cues from the summation index for now. So a defensive posture is warranted for the near term. Gold has moved both up and down this week instead of just down. It will be interesting to see what transpires with gold tomorrow. I might try the GG calls but I may just do nothing at all. There really is no interest in owning gold in this environment. We'll see what tomorrow brings.
Wednesday, December 04, 2013
The expected upside today did not materialize as the Dow fell 25 points on good volume. The advance/declines were negative. We were down over 100 during the session but made made a mid day comeback. Perhaps we'll see some upside tomorrow. The economic data was both positive and negative depending on the stat. The summation index is trending lower now. However the daily candlestick charts for the stock indices appear to have put in a hammer. That may provide some short term support. Not completely oversold technically yet on a daily basis. GE had a pretty good reversal on the day and finished positive by a few cents. We are short term oversold here and today may have been the place to get the January calls. Time will tell on that. Gold had a good session, up a bit over $25 on the futures. Short covering in my opinion since the volume wasn't all that much. The US dollar didn't do much today either. The XAU rose 2 1/8. ABX up 1/8, while both GG and NEM gained 1/2 or so. Volume was better than average for the gold shares. My open order for the GG January calls wasn't filled and the premiums have moved up. The open interest for the particular contract that I'm looking at went up ten fold overnight after yesterdays action. Obviously somebody is interested in this trade. If I get a chance in the next few days to buy the options at a reasonable price I'll do it. Mentally I'm feeling OK. We are still overdue for some type of decline or pause for the stock indexes. I'm not sure if the past few days are just going to be it. We should see some movement with Fridays jobs numbers. At this point I'm guessing that they will be viewed as a positive. We'll know in short order. Gold has a nice move higher but it can only be viewed as a bounce unless we get some follow through upside. We might be putting in a double bottom on the weekly charts but it is too early to know for sure. The potential is there but the fundamentals for gold right now are still negative. We'll keep an eye on the overseas action tonight and go from there.
Tuesday, December 03, 2013
Still lower today as the Dow fell 94 points on average volume. The advance/declines were negative. We finished well off of the lows for the day. Still not a major decline here and the summation index is moving sideways. The short term technicals have rolled over for some of the indices. The overall market was stronger than the Dow here. After three negative sessions I'd expect tomorrow to be to the upside. Lots of economic data on board for the next three days. The VIX has spiked up but we really haven't seen any drastic price erosion. Not sure what that implies. GE was off a dime and the volume was average. Might try the calls if the price reaches the 50 day moving average on the daily charts. Not there yet. Gold stabilized today at the $1220 level. The US dollar was weaker on the session but gold did not respond. The XAU was off a point. ABX was flat, while GG and NEM had fractional losses. Volume was average for ABX and above average for the others. I did place an overnight order for some January GG calls but it was not filled. Despite the loss for GG today, the option premiums barely budged. However the volume for the calls I wanted to purchase exploded. It was 10 times the open interest. I don't know if positions were being outright opened or the calls being written to collect the premium. We'll see how much the open interest expands tomorrow. I left the open order in overnight. Mentally I'm feeling OK. Expect a bounce tomorrow for the stock indexes. That is the guess here. After that, who knows? The employment report on Friday should be a market mover. The European markets got hit hard overnight. We'll see if they follow through lower tomorrow. I'm still waiting for gold to get to $1200 and we are almost there. My open order for the January GG calls reflects this. They are priced accordingly. Let's not forget though that the fundamentals for gold right now are not positive. Any longs should be trades only. We'll see what tomorrow brings.
Monday, December 02, 2013
A down day to start the week and month off as the Dow fell 77 points on light volume. The advance/declines were about 3 to 1 negative. Todays action may turn the summation index back down again or produce a sideways chart pattern. We fell apart in the final hour again and that isn't a positive. However the volume is light and perhaps all the players haven't returned just yet. Plenty of economic data from Wednesday through Friday capped off with the employment numbers. We're overdue for some weakness but we've been that way for quite some time. We will have to see if there is any follow through downside tomorrow. GE was unchanged on the day and the volume was average. I'm not in a hurry to get the January calls here but I'm keeping an eye on things. Gold was one of the stories today as the futures fell almost 30 bucks on a stronger US dollar. We are getting closer to the important support level at $1200. The XAU shed 4 1/2. ABX, GG and NEM all lost a buck or so on slightly better than average volume. The fundamentals for gold remain horrible. However the technicals are blown out to the downside and I am considering getting the January GG calls tomorrow. Or at least placing in an order overnight. Some of the longer term technicals for GG are in the spot where previously there has been some type of bounce. I will check things out again tonight. Mentally I'm feeling OK. The small stocks fell today as well so maybe we will finally see some sustained negative price action. Hasn't happened yet though but all the pieces are in place. But like I've said before, one day doesn't make a trend. Tomorrow should be interesting. Gold had a negative session and closed near its lows. Ditto for the gold shares. Perhaps this is an area I should just steer clear of. Something to ponder tonight as I check the gold share charts. We'll see how the foreign markets react to todays stock index and gold declines. That should provide a clue for tomorrows open.