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Thursday, February 20, 2014

Back to the upside today as the market tries to figure out what to do here.  The Dow rose 92 points on OK volume.  The advance/declines were 2 to 1 positive.  The summation index continues higher.  We are at an area in the S&P 00 where some type of hesitation, consolidation or decline would be logical.  I am still a believer that we will see new all time highs in that index shortly.  Expiration Friday tomorrow.  GE was off a few cents and the volume was average.  Gold was off a few bucks on the futures but gained in the aftermarket.  The US dollar was a bit higher today.  The XAU added almost 4 points and reversing yesterday negative action.  The gold shares continue to outperform and that is bullish.  ABX up 1 1/4,  GG gained a buck and NEM higher by 2/3.  Volume was average to good.  I still am interested in the gold share calls but it is hard to chase them here.  Overbought and staying there.  ABX looks ready to break out but it is so overbought that I can't just go ahead and buy the calls here.  However price and volume are a potent combination and ABX certainly has that going for it.  Declines in the gold shares are being bought here but I cannot chase it.  Mentally I'm feeling OK.  It's basically a waiting game for me on the next trade.  Maybe the March OEX calls are the next attempt for me.  We'll have to see if we move sideways and for how long.  There's also a chance that a double top is being put in place.  I'm still leaning bullish though, with the summation index moving up.  The gold shares have had a nice run recently but are overdue for a rest.  I have no idea why gold is attracting capital.  All we need to know is that it is and try to take advantage of it.  I still feel that buying the calls for April or May will be my strategy.  We'll see.  We'll keep an eye on overnight developments and close out the week tomorrow.

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