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Friday, February 28, 2014

A volatile end to the month as we were up over 100, then turned negative and finally finished the session with a gain of 49 points on good volume.  The advance/declines were positive.  Interesting price action to be sure.  The small stocks were lower today and that is not a positive.  There are also some possible negative divergences being set up on some of the indicators.  The McClellan oscillator to name one.  However as long as price keeps moving higher, I have to remain in the camp for more upside.  We are still overbought on the short term technicals on the stock indices.  A roll over there will be the warning that lower prices lie ahead.  Hasn't happened yet.  GE was little changed and the volume was light.  No trades for me there.  Gold fell $10 on the futures despite a big drop in the US dollar.  Not sure about what to make of that.  The XAU was off 1/2.  Once again ABX, GG and NEM had fractional losses on light volume.  The short term technicals have started to roll over here.  That is what I'd like to see to set up the next trade for the April or May option cycle.  Patience is required.  Mentally I'm feeling OK.  Volatility today and that sometimes is a warning of a change in trend.  We'll have to see how that plays itself out in the coming days.  I'm still in the bull camp for the stock indexes for now.  Gold is taking a well needed rest and that should continue into the month of March.  The large drop in the US dollar today did nothing for gold and that is not the usual inverse relationship that we've seen here lately.  The gold shares did hold up pretty good today.  I'll most likely be getting some gold share calls in March.  Plenty of charts to go over this weekend and perhaps a game plan for the March option cycle.  For now it's Friday afternoon and time for a rest.

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