Friday, January 31, 2014
Up and down here on a daily basis as the market is trying to make up its mind here. The Dow fell 150 points on pretty good volume. The advance/declines were shy of 2 to 1 negative. We dropped in the final hour and that isn't bullish. The summation index continues lower. My open order for the OEX puts wasn't filled but I'm leaving it in over the weekend. I'll need to see some upside to hit my purchase price. The overall market was not as weak as the Dow but that hasn't meant anything lately. I think we are still headed lower and if we break 1770 on the S&P 500 things will unravel in a hurry. I would like to take advantage of that. GE was off over 1/3 and the volume was average. No trades in mind here. Gold bounced around on the futures but finished the day little changed. The US dollar continued higher. The XAU was down 1/2. ABX was little changed on the session. GG rose 3/4 but the story was with NEM. It got clobbered on its earnings report and lost 2 1/2 on very heavy volume. That points out the problem with trading the individual issues sometimes. News can move it violently either way. Happened with ABX last year. If you are on the right side of the move it's great. If not, you lose everything. The trade off of trading the gold share indices is less price movement of the option premiums. But the odds of getting wiped out are diminished. Perhaps I'll try the GDX. Something to think about over the weekend. Mentally I'm feeling OK. It's entirely possible that the major stock indexes are putting in a flag formation here, which would be a precursor to more downside action in price. If that is the case my open order for the OEX puts will not get filled. Yes, I'd like to see some upside early next week but the market rarely accommodates what I want. The short term technicals are oversold but in down markets they stay that way. I'll try and figure it out over the weekend. Beginning of the month coming up so perhaps there will be some money flows into stocks. The employment report in a week will certainly be a mover. Gold looks to be approaching a point for a decent move one way or the other. The bollinger bands are starting to converge. We saw what that led to in the stock indices in the past two weeks. Maybe it is time to just go ahead and buy some February gold share calls. I'm really late with this trade and I have nobody to blame but myself. The recent rise in the US dollar isn't really bullish for gold though. Plenty to ponder. There's still three weeks to go in the February option cycle so opportunity is out there. Whether or not I can take advantage of it is the question. Lots of charts to go over this weekend.despite the Super Bowl. For now it's Friday afternoon and time for a break.
Thursday, January 30, 2014
Back again to the upside as the market tries to stabilize in this area. The Dow gained 109 points on average volume. The advance/declines were 3 to 1 positive. The medium term technical picture was at a juncture that suggested that we'd see some upside. How long it lasts is another question. I think about 1810 on the S&P 500 is the best case scenario if we can even get to there. That would be a good place to purchase some index puts in my opinion. We are short term oversold on some of the technical indicators as well. Europe was mostly positive overnight and the GDP report was viewed as good. Now is this more than just a bounce and possibly the beginning of another leg up? That's the question to be answered in the days to come. The summation index continues lower. For me, I've got an open order in to buy some February OEX puts. GE was up about 1/4 and the volume was light. The daily chart has a 5 wave down type of structure to it with the last wave down yet to be completed. It looks like that to me but really anything can happen. Gold got hit today as the US dollar was stronger on the GDP report. The yellow metal futures lost almost 20 bucks. The XAU fell 2 points. ABX off 1/3, GG lost over 1/2 and NEM shed 3/4. Volume was average. Am I still considering the February gold share calls? Yes but I'm not as much in a hurry to buy them. I'm also considering going out to the April contract. We'll see. Mentally I'm feeling OK. It would be great to see some more upside tomorrow but today could actually be all we get. It is possible that the 1770 level in the S&P 500 will hold. I don't think that it will but I'm wrong a lot of the time anyway. But I'm right once in while too. We'll have to see if there is any follow through tomorrow and what the medias take of the situation is. There are now more bears out there and that isn't a positive for the downside. A light day tomorrow for economic data. Even though gold fell today there wasn't much volume. That is a positive. The gold shares also have continued to hold up rather well. An extended rise in the US dollar would be a headwind though. If the stock market continues to drop it should provide a bid for gold. I'm still probably going to get some gold share calls in the near future. We'll close out the week and the first month of 2014 tomorrow.
Wednesday, January 29, 2014
Heading lower as the Dow fell on heavy volume. The advance/declines were 3 to 1 negative. We are trying to hold the 1770 level on the S&P 500. I expect that it won't hold. Pretty oversold here so perhaps the market will hold up short term and give a chance to purchase the OEX February puts. But if not then that will be another opportunity that was missed. The Fed announcement came out and the taper continues. The summation index continues to head lower. The volume on the declines has been pretty good so you know that this move lower is the real thing. Liquidation is in progress. No point in trying to pick the bottom just yet. GE was off 1/8 or so and the volume was lighter than we have seen there lately. Pretty oversold here and I'm guessing that we have further to go on the downside as well. Gold continues to attract capital as the futures rose $18. The US dollar finished the day little changed again. The fact that gold rose despite the fact that the Fed is tapering says a lot. I thought we would get some decline on the announcement which we did but it was short lived. The XAU rose 2 points. ABX up 3/4, GG higher by 7/8 and NEM added 1/4. Volume remains good here. It looks like I have missed the boat here for the February gold share calls. NEM is lagging here but I probably won't try the calls there. ABX or GG are the preferred options to try in my opinion. Fear is taking over the markets and gold is the safe haven choice for now. Mentally I'm feeling frustrated as I have no positions despite the correct hypothesis on the stock market and gold. There is still a lot of time in the February option cycle. However when the markets start to head lower, they do so in a hurry. You really have to be both quick and true to your conviction. I certainly haven't been quick. Maybe we can get some bounce off of tomorrows GDP report. Gold continues to move higher and remains overbought on the short term. Perhaps I'll just get some gold share calls tomorrow anyway. The trend is up. I do not like to chase things but perhaps in this case I should. The markets are full of uncertainty and gold should continue to benefit from that. We'll keep an eye on the overseas action tonight and go from there.
Tuesday, January 28, 2014
We got some bounce today as the Dow rose 90 points on light volume. The advance/declines were 3 to 1 positive. Some upside was expected and we should see some more in the next couple of sessions. The NASDAQ was relatively weaker and that is not bullish. I'm sticking with my scenario to get some February OEX puts in the next two days. The summation index is heading lower even after todays numbers. There is always a chance that the decline is over and my prognosis is wrong. We'll get the Fed announcement tomorrow and the markets should move off of that. The stock indices are short term oversold. GE was up 3/8 on OK volume today. Just as GE led the way down it began to stabilize yesterday before the overall market. I do not have any trades in mind for GE at this juncture but will be keeping an eye on it as usual. Gold fell over $10 on the futures but came back a bit in the aftermarket. The US dollar was again little changed. The dollar should move on the Fed tomorrow. The XAU bounced back 1 1/2. There still seems to be interest in the gold shares. I did place an open order in overnight for some February GG calls but it was not filled. ABX up 1/4, while GG and NEM gained 1/2. Volume was light though. I'm still interested in getting in a gold share call trade for the February option cycle. Mentally I'm feeling OK. So far everything is lining up as planned in an attempt to try the February OEX puts. Additional light volume upside in the next couple of days will seal the deal. However the stock market rarely cooperates with the best laid plans. I will try to remain nimble and open minded about the situation. But if we see a strong rally after the Fed tomorrow, I may just purchase the puts. The gold shares outperformed gold itself and that is bullish moving forward. The Fed announcement should move the price of gold as well. The gold shares have come off of overbought technical levels short term. Who knows? Maybe I'll attempt a trade there tomorrow as well. We'll look for upside follow through in the overseas stock markets overnight.
Monday, January 27, 2014
Another downer as the Dow fell 41 points on heavy volume. The advance/declines were about 3 to 1 negative. We had a rally during the session but fell back hard in the last hour. Hopefully that won't be the only bounce that we see this week. I do think that we should see some upside on Wednesday and Thursday according to my work but you never know. The market goes where it wants to. The summation index is heading lower. I will be purchasing some February OEX puts this week if we get some upside. GE was up 1/8 and the volume was heavy. GE led the way down so todays action looks good for some type of rally for the stock indices during the week. GE is now oversold on a short term basis and due for some positive action. I would not be looking to buy any calls here though on GE. Gold was off a few bucks on the futures but fell around $10 in the aftermarket. The US dollar was little changed on the day once again. The XAU fell 3 1/8. ABX was lower by 1/2, while GG and NEM dropped around 3/4. Volume was light. I'm still a believer in the February gold share calls. I will most likely wait for the Fed announcement on Wednesday before attempting to purchase them. But who knows? If we see another drop tomorrow like what we saw today I may just go ahead and get them. I'm looking at the GG February calls. Mentally I'm feeling OK. Volatility has really picked up here and that is something to contend with. However I am sticking with the plan of purchasing index puts on a bounce higher this week. The Fed announcement on Wednesday should be another catalyst one way or the other. There is a decent amount of economic data out this week as well. I'd like to at least see higher stock prices tomorrow. May not happen. Gold was lower today but the recent up trend line remains intact. We'll see if any buying comes in tomorrow for gold. Still plenty of time in the February option cycle. To me it seems as though there will be money to be made near term if you're nimble enough. Hopefully I'm up for the challenge. We'll keep an eye on the foreign stock markets overnight and go from there.
Friday, January 24, 2014
The Dow got clobbered today as the most watched index fell 318 points on very heavy volume. The advance/declines were about 7 to 1 negative. We knew it was coming and now it is here. If we get any rally you can simply buy index puts. The summation index will be heading lower after todays action. The bollinger bands converging let you know a major move was about to occur. Support for the S&P 500 is first at 1700 and then the 50 week moving average at 1675 or so. That's just my opinion as usual. I don't own any OEX February puts but I will get some probably next week if the market cooperates. GE was off 7/8 and the volume remains very heavy. GE was the precursor to events as we thought it may well be. It always pays to keep an eye on this particular stock and that is why we do. Gold held up rather well again today as the futures rose 5 bucks. The US dollar finished the session little changed. The gold shares held up pretty good as well. The XAU only dropped 3/4. ABX was flat, GG was up 1/8, while NEM shed 1/4. Volume was once again good for the gold shares. It was a volatile trading session for the gold shares. I'm still inclined to purchase some February calls here if I get the chance. Mentally I'm feeling a bit frustrated for not already owning some index puts. However if the market pans out as I expect, there will still be time to make some profits. I do expect some kind of snap back attempt next week for the stock indices and that will be the opportunity hopefully to purchase some puts. If I already owned some at this point it would be simply a matter of holding on until we reach the previously mentioned potential areas of support. The gold shares have come back to life. That is the case with any trading vehicle when it is left for dead as these stocks were at the end of last year. I still think there can be profits had in the February option cycle on the call side. Perhaps the Fed announcement next week will throw some cold water on the recent rally and give us a chance for purchase. Plenty of time in the February option cycle as we still have four weeks to go. The trading will have to be nimble though as the recent volatility does not favor long holding periods. As usual I'll be going over all the charts this weekend and keeping an eye on how much press todays decline gets. The ideal scenario would be some kind of relief rally next week and the thought that this downside move is over. However as always, the markets will go where they want. For now it's Friday afternoon and time for a break.
Thursday, January 23, 2014
We got some movement today as the Dow fell 176 points on heavy volume. The advance/declines were 2 to 1 negative. Global economic worries was the excuse for todays downturn. Plus some negative earnings reports. It appears the breakout that we were looking for will be to the downside. Index puts are in order. The summation index hasn't turned around yet but when it does the decline will continue in earnest. Yes I am late in purchasing the puts but there is still probably time to get in on some profits. Plenty of time left as we have just begun the February option cycle. GE was off over 1/8 and the volume was heavy again. Maybe a short term bottom for GE here but the target is around $24. Gold rallied today as the US dollar got clobbered. The precious metal futures were higher by $25. We are right at a daily down trend line that has been in effect since late August. Look for a breakout to the upside. The XAU rose 2 1/4. ABX up 1/2, GG gained 7/8 and NEM added 3/4. Volume was good. The technicals here have reversed yesterdays downside rollover. I'll be looking to get some February gold share calls as soon as possible. However I may wait until the Fed announcement next week as another taper should drive prices lower short term. We'll see. Mentally I'm feeling tired, did not sleep well. We are at the lower end of the recent trading range for the major stock indices. A break lower here will really get things moving down. I do anticipate that will happen. The Dow is trying to hold its 50 day moving average. The small stocks have held up better here. That is usually bullish but perhaps not this time around. The TRAN was positive today and hit a new all time high but it has yet to be confirmed by the Dow. I don't know what is going on there. I do know that the tone of the stock market has changed. Puts are advised. Gold appears to have found some buyers since the start of the new year. The gold shares have led the way higher and that is bullish moving forward. I'll be getting some February gold share calls at some point. We'll see if the foreign markets follow the US lower and finish out the week tomorrow.
Wednesday, January 22, 2014
Another day of mixed results as the Dow fell 40 points on light volume. The advance/declines were almost 2 to 1 positive though. The NASDAQ and the S&P 500 were both positive. The summation index continues higher. I am still looking at the February OEX puts. We are going sideways in the S&P and I believe the breakout will be negative. I am even firmer in my commitment to this idea after looking at the option premiums for the OEX February cycle. The puts are priced much higher than the respective calls. The market knows more than we do. I could be wrong but I'll probably be leaving in an overnight order. GE was down again, off another 30 cents. The volume was lighter than it has been but GE is probably telling us something here. It could be a warning of things to come for the overall market. That's a guess as usual but it may be correct this time around. Gold was off a few bucks on the futures while the US dollar was a bit higher. The XAU dropped 2 1/3. That is a change from the recent gold vs. gold share relationship. ABX, GG and NEM all fell around 1/2. Volume was lighter on the decline and that is a positive. I'm still considering the GG February calls but will probably wait to purchase. Something to think about tonight. Mentally I'm feeling OK. The market seems to be going nowhere at the moment. We are simply building up to the next sustained move either up or down. It will be a trade worthy event to be sure. An extra week in the February option cycle so the premiums are still high. The market will not wait though so we have to be ready when things get going. The short term technicals for the stock indexes remain overbought. Gold is right at its 50 day moving average and the short term technicals have appeared to roll over. The XAU had its technicals roll over today as well. Perhaps patience is needed here. We'll keep an eye on what develops overnight and come up with a strategy for tomorrow.
Tuesday, January 21, 2014
Another session with a mixed picture as the Dow fell 44 points on good volume. The advance/declines were 2 to 1 positive. The overall market was much stronger than the Dow. Some small stock indices hit new highs. The summation index remains to the upside. The large cap stock indices are still moving sideways though. I'm still a believer of a top being put in place. I am looking at the purchase of February OEX puts in the near future. GE was off over 1/4 and the volume was good. We have a bearish crossover here on the weekly MACD. Support comes in at the 50 week moving average at $24. Gold fell $10 on the futures and the US dollar was a bit lower as well. The XAU rose 1 1/4 though as the gold shares are outpacing the precious metal. ABX, GG and NEM all had fractional gains to the upside despite lower gold prices. Volume was good. If and when we see some pullback here, that will be the time to purchase some February gold share calls. The tide has turned for the gold shares. The only caveat will be if we don't see a pullback. Then it will be too late for this move. Mentally I'm feeling OK. A short trading week and not a lot of economic data to boot. It could be another time to just be patient. The bollinger bands on the stock indexes are converging, so a decent sized move one way or the other is coming in the near future. I'm still leaning towards the downside for the breakout. However the overall market performance lately seems to be pointing higher. We'll see. The gold shares have come to life with a slow grind higher. We are overbought there on a short term basis to be sure. However markets can stay overbought when they are in an uptrend. I'll be keeping an eye on it. We'll see what transpires in the overseas markets tonight and go from there.
Friday, January 17, 2014
Once again a mixed bag for the stock market. The Dow gained 41 points on good volume. The advance/declines were negative though. The overall market was much weaker than the Dow via the S&P 500 and the NASDAQ. We are still in a sideways configuration for the most part. The breakout will occur in the February option cycle which also carries an extra week in it. I still think we are about to have some downside for the stock averages. I will be looking at the February OEX puts for purchase. GE dropped 2/3 and the volume was extremely heavy. The street did not like the numbers out from GE today. This could be a precursor for the overall market going forward. I believe that it is. Gold keeps moving higher. The precious metal futures rose $13 despite a higher US dollar. That has been the theme lately with both gold and the dollar moving up on the same day. Could it be a defensive allocation of funds that nobody has picked up on yet? Maybe. The XAU gained another 2 1/2. ABX and NEM were up over 1/2, while GG added 7/8. Volume was good. Short term overbought to be sure for the gold shares. I don't think that it is too late for the February calls here still but we'll need to see some pullback in order to purchase. The ideal scenario would be for the gold shares to drop with the overall market in the coming weeks. That may simply be wishful thinking on my part. Mentally I'm feeling OK. It looks like I'll try the OEX February puts next week if we get some rally. It is a holiday weekend so there will be plenty of time to decide exactly what to do. The summation index is still moving higher and it is usually not wise to go against that. But you must admit that the tone of the market has changed. We are not simply going up all the time anymore. I'll be checking the indicators over the next three days. Gold has grudgingly moved higher since the beginning of the year. The gold shares have also shown relative strength vs. the overall stock market since then as well. I do not think that this is widely known yet. Many are skeptical of gold after the very poor showing last year. So we'll see where it goes. I still think that short term trades from the long side are still viable for the gold shares. I'll be looking at the February calls here over the weekend as well. Plenty of ideas to ponder for the next trade. For now it's Friday afternoon and time for a rest.
Thursday, January 16, 2014
A mixed bag today as the Dow fell 65 points on average volume. The advance/declines were positive. The overall market was stronger than the Dow, with the NASDAQ finishing the day positive. However the TRAN was weaker today. The summation index is still moving up. The signals are kind of mixed here really. I'm still saying that a top is in the process of forming. I would advise caution against anything other that short term long positions. GE was off 1/8 and the volume was light. We'll get some movement off of the earnings tomorrow to be sure. Could go either way and I have no idea which. We're still holding the 50 day moving average for now. Gold rose $3 on the futures as the US dollar was a bit lower. The XAU gained 7/8. ABX, GG and NEM had small fractional gains on light volume. No a lot of interest here for the gold shares as we grind our way higher. Mentally I'm feeling OK. Option expiration tomorrow plus some big name company earnings reports, INTC and GE. We've really just been going sideways for the major stock indexes for about a month now. I'm expecting that the resolution will be lower prices but I could be wrong. Gold continues to hang around its 50 day moving average. I'm still considering the February gold share calls if we see some decline in the near future. Haven't seen much interest there lately though. We'll get through Fridays expiration tomorrow and see where we stand.
Wednesday, January 15, 2014
Continuing higher as the Dow gained 108 points on good volume. The advance/declines were 2 to 1 positive. It looks like I may be wrong in my top building prognosis for the stock indices. The small stocks are breaking out to the upside and that is a positive. The summation index continues higher. The expiration week positive bias seems to be taking hold. We'll have to see how the rest of the week goes though. But higher prices on expanding volume is usually a positive sign. GE was up over 1/3 on average volume. The earnings due on Friday will probably be the next catalyst. Gold was off $4 on the futures but closed off of its low. This, despite a higher US dollar. Not sure exactly what that implies. The XAU rose 1 1/4. ABX and NEM had fractional gains, while GG was off a few cents. Volume was light. Not a lot of interest in the gold shares today with the market moving higher by over 100. I'm still considering the February calls here but probably after this week. Mentally I'm feeling OK. It looks like buying some OEX January calls on the decline Monday was the way to go. Hindsight is always profitable. Where we go from here is the next question. The short term technicals could support some more upside. However I have to say that prices for stocks are over extended in my opinion. I remain cautious for the stock indexes even if we hit new highs. We are closer to a top than to a bottom. Gold is hanging around the 50 day moving average. $1280 remains the near term target but the move higher recently has been anemic. I'm still keeping an eye on GG. We'll see what happens overnight and go from there.
Tuesday, January 14, 2014
Back to the upside today as the Dow gained 115 points on average volume. The advance/declines were over 2 to 1 positive. The small stocks were particularly strong today and that bodes well for the near term. The summation index is still heading higher. I still believe that we are in a top building phase of the market for now. That takes time. We may hit nominal new highs but I do not think that we will see a sustained rally from here. We could drift higher into option expiration but I do not see any bold moves upwards for the stock indices. I could be wrong. GE was up 1/4 today but the volume was light. Earnings due on Friday. Gold dropped a bit on the futures during the session, off 5 bucks. The US dollar was a bit higher. The XAU was down 1 1/3 after being higher early on. ABX fell 1/3, GG off 3/4 and NEM shed 1/2. Volume was light to average. The short term technical indicators for the gold shares appear to be rolling over to the downside here. I still may attempt the February gold share calls when we reach oversold levels. Mentally I'm feeling OK, much better than yesterday. It is wise to remember that trading the financial markets requires all of your undivided attention. Anything less than that will put you at a disadvantage with the other players in the game. It was a nice bounce back today for the bulls and we'll see if they can build on it. The TRAN has set a new high in the past few days so we will see if the industrials confirm it. I'm still advising caution though as the sentiment remains extremely bullish. Gold took a rest today as we are at around the 50 day moving average and the $1250 level. The fundamentals here remain weak in my opinion. However that does not mean that it can't be traded from the long side now and then. Short term time frames are the best chance for profit here I believe. February gold share calls remain on my radar for now. We'll keep an eye on the overnight action and go from there.
Monday, January 13, 2014
A negative day in the markets as the Dow fell 179 points on average volume. The advance/declines were almost 3 to 1 negative. The short term upside that I was expecting has not materialized. The summation index was heading higher but another day like today will change that. No expiration week positive bias to speak of. Caution will have to remain the main theme here. GE was off 1/4 on average volume and was the forerunner of the move down. Gold was up $4 on the futures and the US dollar was a bit lower today. The XAU rose 2 points. ABX, GG and NEM all sold off early and practically came all the way back. Volume was average. Perhaps I could have picked up some GG calls today but I was not physically or mentally in the game really today. I had some minor surgery performed in the middle of the trading session and I'm still not up to par right now. I'm cutting the blog short today and I'll hopefully be feeling better tomorrow.
Friday, January 10, 2014
We got the employment report today but we still have yet to see some strong movement one way or the other for the stock indices. The employment report was much weaker than expected. The Dow finished the session down around 8 points on light volume. The advance/declines were over 2 to 1 positive though. The small stocks and the overall market was higher. The summation index continues to the upside. I looked at the OEX January calls today but did not purchase them. That would be the short term play here with only a week to go in the January option cycle. Regardless, longer term I remain cautious. GE was off 1/4 on average volume. We're back to the 50 day moving average here and that may provide some support. Earnings due here in a week. Gold found a bid today on a weaker US dollar. The precious metal futures rose $17. The XAU gained 2 7/8. ABX up almost 1/2, GG added 3/4 and NEM higher by almost 2/3. Volume was OK. GG has broke through the resistance line on the daily charts. It appears that I've missed the January call trade here as it is too late. I'll still be looking out to February for the gold share calls on a pullback. Mentally I'm feeling OK. It is puzzling to me that we haven't seen the usual beginning of the year rally in stocks. Perhaps my prognosis of a top being put in place will prove correct. I do expect some short term rally here though. Perhaps the positive expiration week bias will be in effect. The OEX January calls near the money would be the preferred option choice. Gold had a nice session to the upside and $1280 remains my near term target there. No mention of gold in the media, so it has the potential to keep moving higher in my opinion. However the stock market has a strange feel to it so far this year and if we do see a significant decline, the gold shares will probably go along for the ride down. So we'll have to keep an eye on things and see what happens. I've already missed a decent trade in GG and I'm not happy about that. My mind is a bit preoccupied though so I can't beat myself up too much about it. Maybe I'll try the OEX calls on Monday but today was probably the time to do that. I'll be checking the charts over the weekend. For now it's Friday afternoon and time for a break.
Thursday, January 09, 2014
Still no rally for the Dow as we fell 18 points on average volume. The advance/declines were slightly positive. Tomorrow we will see some movement as the employment report is due. I'm expecting a rally due to the technical condition of the market at the moment. We are overdue for some kind of short term upside. I still do not expect any sustained move higher. We'll see. GE was flat on the session after being lower early. Still no trades in mind here. Gold was up $3 on the futures as the US dollar was slightly lower. The XAU dropped 1 1/2. ABX and NEM lost 1/4, while GG bucked the trend by closing up 1/4. Volume was good for GG as it announced some positive results for the year 2013. I did place another open order for the January GG calls but it wasn't filled. With only 6 days to go in the January option cycle, I'm going to head over to the February cycle. The risk is too high for the January options at this point. I'll be waiting for a signal to get the GG calls. We still haven't gotten through the resistance from the down trend line from last August. Mentally I'm still feeling tired. I expect to see some upside here on a short term basis. The catalyst will be the employment report one way or the other. Gold should be moving tomorrow as well. It could get interesting.
Wednesday, January 08, 2014
A mixed market today as the Dow fell 68 points on average volume. The advance/declines were negative. We did come back in the final hour and that is positive. The small stocks were higher on the session and that is positive. So is the summation index still in a rising mode. I do expect more upside in the coming days for the stock indices. The employment report should be the next catalyst for market movement. We got the Fed minutes today with no real surprises. Technically getting more oversold on a shorter term basis somewhat. Regardless if we do see some rally here it should be sold into. Closer to some kind of top in my humble opinion. GE was off a dime and the volume was light. If GE is a precursor of events we'll be heading lower sooner rather than later. Gold dropped again today, another 5 bucks or so on the futures. The US dollar was slightly higher. The XAU fell 1 1/8. ABX and GG were down 1/3, while NEM shed 1/2. The daily technicals for these stocks have now rolled over to the downside. I did once again place an order for the January GG calls but was not filled. It is looking like this trade is not the way to go here. I may go out to the February contract or simply pass on this idea. I need to check the charts tonight again. Mentally I'm feeling tired as my daily schedule has been changed for this week. It is important to be in the best physical and mental shape as possible to play this game. It seems to me that the stock indexes are about to head higher in the short term. We've had plenty of time to digest the gains of late December. Even if we do hit new highs in the next few days, I don't think that it will last. Gold had a bounce and now we are drifting lower. Attempting a trade here with only 7 days left in the January option cycle is pretty risky. I still may give it a try. The gold shares remain near the resistance down trend line at around 87 for the XAU. A break above that area will mean higher prices rather quickly. However we haven't gotten through there yet. Points to ponder this evening. If a trade is to be done, it will have to happen before the employment numbers on Friday I feel to have the most effect. I could be wrong and often am. I'll decide what to do tonight. We'll keep an eye on the foreign markets overnight and go from there.
Tuesday, January 07, 2014
Some upside progress today as the Dow rose 105 points on average volume. The advance/declines were 2 to 1 positive. We were short term oversold and today helps alleviate that condition. Perhaps we can get some more rally here but I am not looking for anything that is sustainable. The overall technical conditions remain in an area that is closer to a top than a bottom. We are in some cases getting extremely overbought which isn't bullish. I do not want to sound like a broken record but caution here is advised. GE was flat on the session after opening higher. No trades here for now. Gold was off $8 on the futures after a slightly stronger US dollar. The XAU sold off a bit but came all the way back to almost break even. ABX and NEM had slight fractional losses, while GG was unchanged. Volume was light. These issues also sold off during the day and made back most of the ground they lost. The price action is bullish. I again had an order for the January GG calls but we did not make it down to my price. Running out of time for this trade with only 8 days to go in the January cycle. Mentally I'm feeling OK. So we got some nice positive action in stocks today and it would not be a surprise to see some more upside in the coming days. However that would be a chance to take some of last years profits in my opinion. We are most likely building some sort of top here in the stock indexes. Taking long positions should be for short term trading only. Gold fell today. My near term upside target remains at $1280 unless we break down from here. A break down is possible since the technicals are overbought in the short term. However the technicals can sometimes remain overbought as we all know. I'll have to check things out again tonight for the gold shares to see if a January option trade is viable. We'll watch the foreign action overnight and await the Fed minutes tomorrow.
Monday, January 06, 2014
Everybody should be back to work by now but they're not buying as the Dow fell 45 points on light volume. The advance/declines were negative. Getting short term oversold now for the stock indices. The small stocks are leading the way down though and that isn't bullish. I do expect some upside here soon. We get the Fed minutes on Wednesday but the big mover should be the employment report on Friday. No idea here what to expect so we'll stick with the technicals for the stock indexes and they are mid-range and pointing down. Even if we get some rally here, we are over extended and the risk is to the downside. My humble opinion. GE was off 1/4 and the volume was light. Heading lower here now is my guess. The upside move has completed. Gold was flat on the session after bouncing around. The US dollar was lower. The XAU was up 1/3 but the resistance is still in place. ABX, GG and NEM all had slight fractional gains on lighter volume. I did place another overnight order for some GG calls but it was not filled. Only nine days to go in the January option cycle. I am not sure if I will continue to attempt this trade. Perhaps going out to February is the way to go. Mentally I'm feeling tired, did not sleep enough. I'm still waiting for the beginning of the year rally. It hasn't happened. Perhaps it isn't coming. The transports were pretty weak today and they are sometimes the leaders of direction. The summation index continues to the upside though. I still think that it is a time to be cautious. Gold was somewhat volatile today but ended little changed. That sometimes means a change in direction so perhaps we'll be heading lower there in the near term. That's a guess as usual. I'll check the charts later this evening to see if it is still worthwhile to put on the gold share call trade for January. We'll keep an eye on the overnight developments and go from there.
Friday, January 03, 2014
A mixed bag today as the Dow rose 28 points on light volume. The advance/declines were almost 2 to 1 positive. The overall market indices were weaker than the Dow. The NASDAQ was lower once again. When the small stocks are leading the way lower it isn't bullish. We're still overbought on most of the technical indicators. I believe that we are in the beginning of building a top. I would expect that we will see some upside at the beginning of next week. However that market will go where it wants. GE was flat on the day. No trades there for now. Gold continues to the upside as the futures gained over $10. The US dollar was higher again as well. Gold has broken out above a down trend line of the past two months. The next line of resistance comes in at $1280. The XAU fell 7/8 and has stopped at resistance. ABX off 1/8, GG down 1/3 and NEM was flat on the session. Volume was lighter on the decline. I placed another order for the January GG calls and wasn't filled. I'll probably try again on Monday. Mentally I'm feeling a bit tired, did not sleep well. Next week will bring the return of all the players on Wall Street. So we'll get a better idea of where things are headed. But I'll say it again. We are closer to a top than we are a bottom. Getting long stocks here should be a short term proposition. Some of the technicals are still wildly overbought and that is not the best place to be to get long. So we'll see. Gold has found a bid but with the strength in the dollar I'm not sure how long that can last. That said, I'd still like to try a short term trade in the gold share calls if we see some weakness at the beginning of next week there. However the optimum time to enter that trade has passed. It is something to ponder over the weekend. I'll be checking the charts again in the next two days to come up with something for the January option cycle. For now it's Friday afternoon and time for a break.
Thursday, January 02, 2014
We started off the new year with a whimper as the Dow fell 135 points on light volume. The advance/declines were 2 to 1 negative. I did not expect the negative action that we saw today but the market has been very overbought any way you look at it. I do not think that this is the beginning of a major decline just yet though. It takes a little time for a top to be built. I believe that this is the beginning of the building. We may still yet see new all time highs in the coming days but we are near the top for stocks, not near the bottom. Any calls buying should be short lived in my opinion. GE dropped 1/2 and the volume was good. The last six months on the daily charts have the look of the A-B-C-D-E 5 wave up move for GE. That move is now over. I am not considering the January GE calls anymore. Gold is now in rally mode as the futures gained over $20 despite strength in the US dollar. The theory of money coming into gold and the gold shares at the beginning of the year is valid. The XAU rose 3 1/3. ABX up 1/3, while GG and NEM gained almost a point. Volume was good for the gold shares which validates the move higher. Any move lower for the gold shares should be bought for a short term trade. I'm still considering the January calls here. However I am late here as my order wasn't filled on Tuesday morning. Mentally I'm trying not to let the unfilled order for the GG calls bother me. You have to be nimble and make adjustments in the game. It isn't always easy. Usually the first day of the new year is positive. I'm not saying today is an omen for the rest of the year but I will say I doubt we will see the size of last years gains again. 2015 will be a good year for stocks though. I'm sticking with my prognosis of a top being put into place in the beginning of the month and we'll see where we go from there. Gold and the gold shares are on the move higher. We are right at a down trend line on the daily charts for the XAU that has been in effect since September. We may pause here but a break through that line will bring even higher prices. Hopefully it's not too late to make some money there. The January calls are the way to go I think, even though there is only two weeks left in that option cycle. We'll keep an eye on developments overnight and take it from there.