Monday, March 31, 2014
We finished the month off with a rally, as the Dow gained 134 points on average volume. The advance/declines were 3 to 1 positive. Todays market action should turn the summation index back to the upside. It appears as though we will be making a run at new highs again for the S&P 500. That is the feeling I get after today. But I would not be trusting whatever rally we see here. The small stocks are well off of their highs and would not confirm new highs in the major indices. Perhaps the small caps can make it to new highs as well but that has yet to be seen. The short term technicals for the stock indexes have turned back to the upside. GE was flat on the day and the volume was average. No trades here for me yet. Gold fell 10 bucks on the futures and the US dollar was a bit weaker as well. The XAU dropped 2 1/8. ABX and NEM were off 1/2, while GG fell 2/3. Volume was light. I placed another order for the May ABX calls and it wasn't filled. I still think this is a trade that is worth attempting, so I'll probably try again tomorrow. Gold itself is oversold, staying there and just about where I think the support lies at $1280. The gold shares remain oversold on a short term basis as well. Mentally I'm feeling OK. Beginning of April tomorrow so we could see some positive money flows coming in for stocks to begin the 2nd quarter. It now looks like the major stock averages are on the verge of breaking out of the recent sideways pattern to the upside. Of course things could change tomorrow but with the technicals now moving higher and the summation index no longer falling, the odds favor higher prices near term. I could be wrong. Gold and the gold shares remain unloved at this point. My guess is that gold will find support here pretty soon. Perhaps between $1280 and $1260, not exactly at $1280. Nothing is ever exact in this game anyway. I like to buy when nobody wants things and right now nobody wants gold. The technicals are certainly oversold but can remain that way in sustained down trends. I'm going to try the ABX calls again here at some point and going out to the May option cycle gives that idea plenty of time to work. But that doesn't mean that it will. We'll watch the overnight developments around the world and start the new month and quarter tomorrow.
Friday, March 28, 2014
More of the same as the Dow gained 58 points on light volume. The advance/declines looked good as they were better than 2 to 1 positive. The small stocks continue to lag though. They are short term oversold and perhaps we can get some kind of bounce there as well. Technically speaking we are in areas that led to rallies in the past for small caps. I have to say that overall the market seems to be in a period of indecision. We'll get things going one way or the other but when that happens is the ongoing question. GE was up a few cents and is really not giving any clues towards market direction. Trying to break out to the upside of the daily chart triangle but we'll need to see some more volume to be convinced. Gold was pretty much flat on the session as was the US dollar. But the XAU gained 1 1/2 as the gold shares have shown two days of out performance. ABX and GG were up 1/4, while NEM gained a buck. Volume was nothing special. The daily candlestick chart for NEM is showing a bullish bottom has been put in with todays price action on that stock. I do believe that at least a short term bottom is in place for the gold shares. My May ABX call order was not filled but I will try again on Monday. Perhaps I'll try NEM instead. Something to ponder over the weekend. Mentally I'm feeling a bit tired. The summation index is still heading lower but another good day of market action will turn it around. Hasn't happened yet. We've got the end of March and the 1st quarter coming up on Monday. Still a waiting game for the next sustained trend in stocks. It's never easy. Gold has had a negative two weeks as the weakness expected in March finally showed up. I'm going to be a buyer of gold share calls next week. Timing as usual will be the tricky part. We've got the employment report to look forward to on Friday. A good slate of other reports out as well. Plenty to think about over the weekend to come up with a game plan for next week. For now it's Friday afternoon and time for a rest.
Thursday, March 27, 2014
Another day of indecision as the Dow fell 4 points on good volume. The advance/declines were positive. Volume was above average today. The market is still trying to figure out what to do here but the indicators are pointing down. The summation index is heading lower and the small stocks are relatively weak. Perhaps we can get a near term bounce but I do not expect any extended rallies for stocks. I could be wrong. GE was up almost 20 cents and remains at the apex of a wedge on the daily charts. Volume was a touch less today. Gold continues lower as the futures fell another 8 bucks. The US dollar was slightly higher. The XAU was up a buck today for a change. ABX and GG had fractional gains, while NEM had a fractional loss. Volume was light to average. I did place an open order for the May ABX calls but it wasn't filled. I'm leaving the order in overnight. Is this the bottom for the gold shares? I'm thinking that it is. I may have to adjust the ABX option order to get it filled but we'll see. Gold is getting close to my target of $1280. Mentally I'm feeling a bit tired. Still trying to figure out exactly what is going to happen in the stock market. I'm still a believer in lower prices on an extended basis eventually. We could continue to slosh around for a while. Sometimes the April tax season brings sideways activity. Gold continues to not see a bid but some bargain hunting took place in the gold shares today. The technicals for the gold issues are blown out to the downside. Even if we do see a bounce in the XAU, it may take a while to get something extended to the upside here. That said, I'd still like to try the ABX calls here. We'll keep an eye on the foreign markets tonight and finish off the trading week tomorrow.
Wednesday, March 26, 2014
And back to the downside today. The flip flop of activity up and down continues. The Dow fell 98 points on good volume. The advance/declines were 2 to 1 negative. The small stocks are really much weaker here and that is not a good sign for the bulls. The summation index continues lower and that implies weakness for the stock indices. Although the Dow and the S&P 500 look like they've been in a sideways pattern, this condition won't last forever. It increasingly appears that a more pronounced sell off is in the near future for the major stock indexes. The NASDAQ is leading the way. GE was off a few cents and could not hold onto the days gains. The daily chart is showing a wedge formation and we are at the apex of the wedge. Probably about to head lower here. Gold continues to get sold as the futures fell another 8 bucks. The US dollar finished flat again today. The XAU dropped 3 3/4 as the gold shares are getting dumped. ABX off 2/3, GG fell almost a buck and NEM lost 7/8. Volume was good here as we remain oversold. Do I still want to try the May ABX calls? Yes but I just might have to purchase them this week. However the decline has been pretty swift and it hasn't stopped yet. That said, some of the indicators for getting long here are flashing buy signals. I'll consider everything later tonight. Mentally I'm feeling OK. A weak close to todays trading session for stocks. All recent rallies have been sold. It has the feel of something that is going to go lower. Tomorrow could be interesting. Gold is trying to hold the $1300 level but I think better support is at $1280 or so. The gold shares are acting like they are practically in free fall. If gold breaks below $1300 overnight we could see more of a rush to the exits. The ABX May calls still interest me and as always timing will be key. At the moment, there is no love for gold. I'll keep an eye on the overnight developments and see what tomorrow brings.
Tuesday, March 25, 2014
Back and forth as the Dow was up 91 points on light volume. The advance/declines were positive. I'm still not sure what to make of the recent market action here. The summation index is still heading lower though. The small stocks remain relatively weaker as well. It isn't exactly a bullish scenario. I'm remaining in the cautious camp for now. GE gained over 1/4 on average volume. GE is now above its 50 day moving average. Perhaps GE is leading the way but that remains to be seen. Gold bounced around but closed flat on the session. The US dollar was flat as well but finished well off of the highs for the day. The XAU was up 2/3. ABX, GG and NEM were flat as well on light volume. A halt in the recent decline for gold today. We'll see how long that lasts. Mentally I'm feeling OK. The market still seems to be trying to make up its mind here on what to do. It makes for a treacherous trading environment. There is no urgent need to do anything here and there is not a solid technical signal that I can see. The major stock indices are moving sideways. We'll wait for a valid signal and go from there. Gold and the gold shares are in a decline and the technicals are oversold on a short term basis. I'm trying to remain patient here and am still looking at the ABX May calls for the next trade here. I am trying to let this week pass before purchase. We'll watch the overseas action tonight and see what tomorrow brings.
Monday, March 24, 2014
A negative start to the week as the Dow fell 26 points on average volume. The advance/declines were negative. The Dow doesn't really tell the story as the overall market was very much weaker. The small stocks got crushed and that is not a good sign for the bulls. The summation index is heading lower. No real news except perhaps a weak report out of China. The short term technicals have rolled over for the stock indices. We did finish off of the lows though. However it appears like lower prices are coming for the near term. GE was flat on the day and the volume was about average. Not much to say about this issue for now. Hovering around the 50 day moving average. Gold continues to drop, the futures fell $25. The US dollar was lower as well. The XAU lost 4 1/2. ABX off 7/8, GG down 1 1/8 and NEM shed 2/3. Volume picked up to the downside. Oversold on the technicals for the gold shares and their indices. We'll probably stay oversold as the tone for gold has changed to bearish. Up trend lines here have been broken. I'm still looking at the May ABX calls though. But gold and the gold shares look like they are in some sort of free fall at the moment. Mentally I'm feeling OK. Not really a positive tone for the stock indexes to start off the week. With the summation index heading lower it is probably a time to be cautious. The option premiums are expensive since we just rolled over to the April cycle. I don't have any OEX trades in mind right now. Gold was due for a rest and we are getting a lot more than that now. I see support for the precious metal at around $1280. It has been quite a steep drop for the gold shares in the past week and a half. It looks like the catch a falling knife scenario. There is no rush for me to purchase here as I would ideally like to wait until at least next week for the May calls. And this idea could be completely wrong as the fundamentals for gold are not bullish in my opinion right now. However short term technically we are there for a buy unless the indicators remain oversold. That is what I think will happen, so patience is required for now. We'll keep an eye on things overnight and take it from there.
Friday, March 21, 2014
Another mixed day to be sure on expiration Friday. The Dow fell around 25 points on heavy volume. The advance/declines were positive though. However the small stocks were much weaker than the overall market and that is not a good sign. The major indices also had a one day reversal to the downside by opening higher and then closing lower. But it was option expiration so we don't know how much any of this really matters. Yeah, it's confusing but there is not clear picture of direction for me at the moment. The technicals are now more mid-range than anything else. Could go either way or simply sideways. GE was up 1/8 but finished well off of the highs for the session. No trades there for now. Gold stabilized for now and was up five bucks on the futures. The US dollar finished the day little changed. Ditto for the XAU. ABX, GG and NEM also were basically unchanged on the trading day and finished off of their highs as well. I still think the gold shares need to take a breather here for maybe another week or so. Or perhaps it is the beginning of something more to the downside. I'll be keeping an eye on how far the retracement goes. The May ABX calls are still the plan for the next trade. Mentally I'm feeling OK. Looking at the daily charts for the stock indexes, I could make a case for a rollover to the downside here. The candlestick patterns after todays price action look bearish. But we'll have to let the market tell us which way it is going to go since there are no clear technical signals that I can see right now. The S&P 500 barely reached a new all time high today and then sold off. Gold had a tough week and I am going to try and remain patient there to make the next trade. I also could be completely off in trying to purchase the gold share calls in the coming weeks as well. The fundamentals for gold aren't really bullish going forward in my mind right now. That would limit the upside potential even if we get another rally. So perhaps I'll have to rethink this idea again. Just as everything lined up well for gold during this recent rally, things will have to look completely bad for it to be a trading buy again. Patience is the key for now. Plenty to ponder over the weekend and many charts to go over as well. For now it's Friday afternoon and time for a break.
Thursday, March 20, 2014
Back and forth for now as the Dow gained 108 points on average volume. The advance/declines were just about even. Trying to figure out the next trend. My guesses for now are either a drift higher or a nasty decline due to the potential megaphone patterns in some of the stock indices. Of course sideways at this time of year has been known to happen too with the looming tax day deadline in April. Let's just say that I have no good technical signals at the moment so I'll have to wait it out. I wish things were clearer but at the moment they are not. At least not to me anyway. GE finished flat on the session and volume was the same as yesterday. No trades there for now. Gold was off $10 on the futures but that reflected yesterdays aftermarket losses. The US dollar continued higher. The dollar has rallied strong off of its support and that should put a lid on gold for the time being. The XAU added 1/4. ABX, GG and NEM all opened the day lower but finished little changed. Volume was average. We've had sharp losses here this week. Any purchase of calls for these issues is now on hold. But I still like the ABX call idea in the future. Mentally I'm feeling OK. Expiration Friday tomorrow. We'll just have to let the market tell us what to do in the coming days. Rolling into the April option cycle next week so the premiums will be expensive. No real hurry to do anything really without a decent technical signal. The Fed is out of the way but it seems the tone there may have changed. Or has it? The Ukraine situation also seems to be over for now. So sit tight and be patient. Gold has had a rough week for the bulls. The fundamentals here changed once the taper process began. There still can be rallies to trade though as the beginning of this year showed. But for now expect lower prices in the near term. We'll close out the week tomorrow.
Wednesday, March 19, 2014
An interesting trading session as the Dow fell 114 points on light volume. The advance/declines were almost 3 to 1 negative. The stock indices are trying to figure out what to do here. Volatility increased after the Fed announcement. The Fed said nothing that was unexpected but the market dropped anyway. Not sure what to make of that. We'll have to see if there is any follow through downside tomorrow. I'd have to say things are mixed at the moment and trading should be done accordingly. Really no clear signal one way or the other for now. GE was off 1/3 and the volume was OK. No clear idea of what to do here either in my mind. Sidelines for now. Gold took it on the chin as the futures dropped $17 and more in the aftermarket. The US dollar had a strong session but we knew the Fed was going to reign in the stimulus ahead of time. A strong dollar will not be supportive for gold. The XAU lost 3 3/4. ABX, GG and NEM were off from 3/4 to 7/8. Volume picked up to the downside, which is not a good sign there. I still am interested in the May ABX calls but obviously there is no hurry to purchase. We'll have to let the market tell us how long and how far this decline will last. Mentally I'm feeling OK. I'm not sure exactly which way the stock indexes will go here. When in doubt, stay out is the time tested advice for now. The Fed did not say anything that the market wasn't expecting and we fell off anyway. Perhaps we are heading for some sideways price action. Still above the 50 day moving average for the major stock indices. Sometimes you just have to be patient. It looks like the 5 wave up pattern in gold was correct. The next technical expectation would be an ABC move lower. We are in the A part of that now. Might take a couple of weeks for this to play out. Or maybe gold just heads much lower from here. Trend line support is at $1320. GDX has already broken trend line support. I'll be keeping an eye on things. Perhaps March will live up to its reputation as the historically weak period for gold after all. We'll watch the overnight action and take it from there.
Tuesday, March 18, 2014
Continuing higher today as the Dow gained 89 points on light volume. The advance/declines were 3 to 1 positive. The summation index should turn back up after todays market action. I's like to say that we are going to new all time highs but I am not sure. The volume so far on the upswing has been light. That isn't a good sign. But who knows? If there aren't any sellers left, the only way to go is up. We'll get the Fed announcement tomorrow and that should be a price mover. Technically the short term indicators for the stock indices have turned around and are moving higher. That's a plus for the bullish cause. GE was up 1/4 but the volume was very light. Nowhere near new recovery highs for this issue. Gold continued lower on the lack of Ukraine events. The yellow futures were down about $14. The US dollar finished the day little changed. The XAU was off 7/8. ABX, GG and NEM all had fractional losses on light volume. Expecting some pull back here for the gold shares and we're getting it. I'm looking out to the May calls for ABX. If and when we get through the overhead resistance for this stock at $21.50, it has plenty of room to run. I'm not sure when this will happen but when it does, I want to be there. Mentally I'm feeling OK. Sure would have liked to have the chance yesterday to get the March OEX calls. But at least the technical signal there was valid and there will be other opportunities down the road with the same indicators. Simply waiting on the Fed at this point. Gold and the US dollar also have the potential to move off of the Fed statement as well. The Ukraine situation seems to not be a concern for the stock market right now. That is one of the dilemmas of the headline driven environment. The stories can evaporate rather quickly. Three days left in the March option cycle. We'll see what tomorrow and the Fed brings.
Monday, March 17, 2014
Got the bounce today as the Dow rose 181 points on light volume. The advance/declines were almost 3 to 1 positive. No chance to get the March OEX calls this morning but that was the game plan. The market screamed higher from the open, there was no weakness to purchase the calls. The question now? Is this for real? The rest of the week should tell. I think we are in a period of indecision, at least I am. We've got the Fed this week and that should provide more volatility one way or the other. It looks like I won't be trying any trades for the March option cycle. I think we are at a point where it could go either way and maybe just sideways as well. GE was up 1/3 but came well off of its highs. Volume was good. We made it back to the 50 day moving average and turned around. Gold dropped today after the vote tally in the Ukraine. It was a sell the news event for gold. The precious metal futures fell six bucks and that much again in the aftermarket. The US dollar was slightly weaker. The XAU dropped 3 1/3. The short term technicals have rolled over for the gold shares. ABX off 1/2, GG fell 3/4 and NEM lost 3/8. Volume was light though. The daily candlestick pattern for the gold share indexes is bearish after todays price action. It looks like I'll wait to get some ABX May calls in a few weeks. That is the idea for now. Mentally I'm feeling a bit frustrated once again. Wanted the OEX calls this morning for the short term bounce but did not get the chance. The market was up 100 points in the first five minutes. Not sure what is the proper route from here. I'll be on the sidelines again this week most likely. Gold is due for a rest and today is the beginning of that in my opinion. The bullishness for gold at the moment is very high. The gold shares were relatively weaker today and that is not a positive. Patience will be required here once again. We'll watch and see how the foreign markets react to todays pop in the US.
Friday, March 14, 2014
Still moving lower as the Dow fell 42 points on light volume. The advance/declines were positive. The market is still being held hostage by the situation in the Ukraine. Short term oversold and we will see a bounce on Monday or Tuesday regardless. That's my guess at the moment. The PPI actually came in with a negative reading and I was expecting a high number due to the advance in the CRB for February. So much for my economic predictions. It's a headline driven situation at the moment for the stock indices. That makes for tricky trading and there are only five days to go in the March option cycle. GE was off 1/4 and the volume was light. The weekly indicators appear to be rolling over for GE and that doesn't bode well for things going forward. Gold continues to attract capital as the futures rose $6 and more in the aftermarket. The US dollar was a bit weaker. It is interesting to note that gold is getting the flight to safety money while the US dollar isn't. The XAU added 7/8. ABX and GG had slight fractional gains, while NEM rose 3/4. Volume was good here. I really have to wait for some type of pullback on the gold shares in order to attempt the calls again. The technicals remain overbought and when the Ukraine situation resolves itself, money will flow out of the sector. But I definitely missed this move. Mentally I'm feeling OK. Thinking about trying a short term OEX March call trade on weakness Monday. The advance/declines haven't been overwhelming on this decline and we are oversold. It will be something to consider over the weekend. However short term option trades are not a strength of mine. But the opportunity may present itself. We'll see. Gold continues to rally with the price and volume in a very positive direction. But I feel that once the Ukraine event is over, the fundamentals for gold just won't sustain the rally. Anyway, my recognition as March being the historically weakest month for the price of gold hasn't been any help this year so far. No doubt that clouded my judgement when considering taking a position in the gold shares. I did try the ABX calls this week but wasn't filled on the open order. Doesn't matter now. I'll try and come up with some type of game plan for trading next week over the next couple of days. For now it's Friday afternoon and time for a break.
Thursday, March 13, 2014
The Dow took a hit today as the most watched index dropped 231 points today on good volume. The advance/declines were only 2 to 1 negative though. Negative headlines on the Ukraine and China are the excuse. I'll be the first to admit that I was wrong, as new all time highs don't appear to be coming. The summation index is heading lower and I'll take my cues from there. We are pretty short term oversold now for the stock indexes. However the daily technicals have a way to go to be completely oversold. The small stocks were pretty negative today as well. Look for lower prices going forward now. GE fell 3/8 and the volume picked up. Below the 50 day moving average again for GE. The daily candlestick chart looks pretty bearish here now. Gold held steady as the futures here were up a buck or so. The US dollar was flat on the session as well but came back from its lows. The XAU gained 2 1/2 and has broken out of the consolidation range to the upside. ABX and NEM added 1/2, while GG rose 3/4. My order for the ABX calls yesterday was not filled. The gold shares are still attracting capital and it appears that I have missed this move higher. The short term technicals here have turned higher. Obviously I should have gotten the calls on Monday or Tuesday when the indicators were oversold. I thought we would see more weakness but we did not. I'm expecting a high PPI number tomorrow and that should move gold and the gold shares even higher. Mentally I'm feeling frustrated for missing out on this gold share rally. There is nobody to blame but myself. But you have to keep moving in this game. There are potential megaphone patterns on some of the stock indices and that particular pattern is very bearish. Hasn't happened yet but the chance for a lot more downside is out there. I would not be surprised for a near term bounce in the next couple of days but the trend is now for lower prices. I don't think that the problems in the Ukraine will amount to much but I'm just guessing on that. The recent breakdown in copper should have been more of a clue for the stock market direction. I've seen that happen before. Gold is on the move higher once again. My hope here is that my prognosis for the final wave of a five wave move higher is in progress now. That would give me a chance to try the gold share call trade at lower prices once a corrective move lower begins in gold. Hasn't happened yet and I could be wrong in the wave count. The technicals for gold are overbought though. However we are about to get the bullish cross of the 50 day moving average through the 200 day moving average to the upside. It happened today for the XAU. So perhaps the gold shares will go higher than I think. We'll keep an eye on the overnight action and take it from there.
Wednesday, March 12, 2014
Another day of indecision as the Dow fell 11 points on light volume. The advance/declines were positive. The small stocks were stronger today. So it's another mixed bag of indications for the stock indices. I'm still sticking to a bullish resolution to the recent price action. The market tried to sell off again in the morning and came almost all the way back. The summation index has turned lower though. My thinking is that things will hold up into next weeks option expiration. I could be wrong and often am. GE was off 1/8 and the volume was pretty light. No trades there. Gold rallied today and the futures were up over $20. Gold broke above the $1350 resistance level. The US dollar was a bit lower. The XAU gained 3 points. ABX up 1/2, GG added 7/8 and NEM rose 2/3. Volume was nothing special though. I did place an order for some April ABX calls but I don't think it was filled. The gold share indices are at the top of their recent consolidation ranges and appear ready to break out to the upside. That is why I tried to get some ABX calls. The short term technicals for the gold shares have turned back to the upside as well. Obviously yesterday would have been a better purchase day but that is behind us now. There is also the reality that the gold shares could turn back down tomorrow and not break out of the range. Mentally I'm feeling OK. The stock indexes are still in the process of making up their minds on which way to go. Volume has tailed off as interest seems to be waning here. The trend is still up though and despite the turnaround in the summation index, I'm giving the bulls the benefit of the doubt. We'll see. The gold shares appear poised to break out here and I would like to be a part of that. Gold itself is leading now and that isn't the most bullish scenario. However I'm going to be a buyer of calls in the morning on any weakness if I didn't get filled on the ABX order. Volume picked up on gold today as it broke out of its recent sideways range. That's a positive. There could be a 5 wave pattern on spot gold though and this would be the last wave of that picture. It's never easy in the trading game. Inflation data out on Friday and I'm looking for a bigger number than expected. The CRB index had quite a positive move in the month of February. How gold and the markets react though is what is important. We'll keep an eye on overnight developments and take it from there.
Tuesday, March 11, 2014
Some weakness today as the Dow fell 67 points on light volume. The advance/declines were 2 to 1 negative. The summation index has now rolled over to the downside. Any more solid weakness here and I'd say the trend is going to change. For now I'm still giving the bullish scenario the benefit of the doubt. The volume here has been weak, so there is no downside momentum just yet. Perhaps there is an absence of buyers but that has yet to be proven as well. Small stocks and the overall market weaker than the Dow and that isn't bullish. GE was off 1/8 and the volume was light. Still above the 50 day moving average here. Gold was up $5 on the futures and came off of lower levels during the session again. The US dollar finished the day little changed. The XAU was flat on the session. ABx, GG and NEM had fractional gains on light volume. Running in place seems to be the theme for the gold shares lately. I still want to buy some April or May calls here. Short term oversold for the gold share indices. So perhaps this is the time to purchase some calls. I'm still going to give it some more time though. March is generally not a good month for the price of gold. Mentally I'm feeling a bit tired, did not sleep well. Still waiting for new all time highs on the Dow. However the technicals on the short term are starting to roll over for the stock indexes. I have no OEX trades in mind at the moment. It's probably a good idea to be extra careful here. We are closer to a top than to a bottom. Gold has been holding up pretty good here but hasn't been able to get a decent close above the $1350 level. The gold shares remain in a sideways channel. Getting long some gold share calls is still my main hypothesis at the moment. Timing is key. We'll see what tomorrow brings.
Monday, March 10, 2014
The stock market tried to sell off today but it ended up only being a slight decline. The Dow fell 34 points on light volume. The advance/declines were negative. The foreign markets sold off overnight and the US market opened weak as well. The Dow was off over 100 points during the session. But it came back along with the NASDAQ and the S&P 500. The overall feel is still that of one that wants to go higher despite the chronic overbought condition. That's my take on things at the moment. GE was off a bout a dime on light volume. No trades here for now. Gold was up a few bucks on the futures, coming back from lower levels to begin the day as well. The US dollar was slightly higher. The XAU fell 3/4. ABX, GG and NEM all had fractional losses on light volume. Getting short term oversold for some of the individual gold issues but not on the gold share indexes. We've been going sideways for about a month on the gold share indices. I still like the idea of the gold share calls for April or May. Timing on the entry is the question that needs to be correctly answered. I'm still trying to be patient here. Mentally I'm feeling OK. I was thinking about purchasing some OEX March puts over the weekend. However the price action today has put that idea on hold. Perhaps we'll see a run for the Dow to get to new all time highs in the coming days. That's a guess as usual. I'm still keeping an eye on gold and the gold shares. That will probably be the next trade for me. Sometimes having no position in the markets is actually a position. That is an example of market logic and it doesn't sound logical at all. Patience is taking precedence for me at the moment. Less than two weeks to go in the March option cycle. We'll keep an eye on the overseas action and take it from there.
Friday, March 07, 2014
We got the employment report today but it really didn't move the markets as expected. After an initial small gyration the volatility I expected did not occur. The Dow rose 30 points on average volume. The advance/declines were negative. The small stocks were negative on the session. The jobs numbers were a bit higher than anticipated. The stock indices remain overbought and staying there. We are still overdue for some pullback and it still isn't happening. The summation index is moving higher and the trend remains up. GE lost a dime and the volume was light. The short term technicals are beginning to roll over here. Gold fell over $10 on the futures. The US dollar was slightly higher. The XAU dropped 2 1/2. ABX off 1/2, GG shed 3/4 and NEM fell 1/3. Volume was average. Not a real bad day for the gold shares. I still like this group for the April or May calls. The short term technicals here have rolled over. Perhaps an opportunity will present itself next week. Mentally I'm feeling OK. Two weeks left in the March option cycle. We rallied this week on lighter volume and that is not a positive. The short and medium term technical picture for the stock indexes remains very overbought. Although the trend is up I do not advise chasing things here. We are obviously closer to some kind of top than to some kind of bottom. Perhaps things can hold up through the expiration. Gold seems to continue to find a bid despite bearish news. That is encouraging for the bulls. We are still in a negative seasonality period though. The Bollinger bands on the gold shares are starting to get closer together. That implies some kind of price move in the near future. As always the key question is which way? It feels like a consolidation here for the gold shares before we head higher but that's a guess as usual. The markets always go where they want. My thinking at the moment is to go out to the May option cycle for the calls here. We'll see. Plenty to think about over the weekend. For now it's Friday afternoon and time for a break.
Thursday, March 06, 2014
A mixed bag today as the Dow was higher by 61 points on light volume. The advance/declines were positive. The NASDAQ was lower and the overall market was weaker than the Dow. All eyes will be on tomorrows employment report. The summation index continues higher. The market still has the feel to me that it will go higher regardless of the numbers out tomorrow. We're overbought and have stayed that way for some time. Money needs a home and stocks are still the place where money is going. GE was up 1/4, the volume was OK and we are now above the 50 day moving average. If GE is the precursor for the overall market again then higher prices are coming. Gold rallied today on a weaker US dollar. The precious metal futures rose over 10 bucks. The XAU gained 1 1/4. ABX was flat on the day, while GG and NEM were up 1/3. Volume was light. Gold should get moving tomorrow as well and it remains overbought. Mentally I'm feeling a bit tired. The stock market needs a breather but when that will occur is anybodies guess. We are still in a favorable seasonality period for stocks. That is probably one of the reasons we've stayed overbought for so long. Another is the fact that we are at all time highs for some of the indexes and there is no overhead resistance. Gold has had a good run but is overdue for a rest as well. Ditto for the gold shares. The volume has been pretty light for gold the past 2 sessions, so maybe some weakness is coming. We'll see what the reaction to tomorrows employment report is and go from there.
Wednesday, March 05, 2014
Taking a breather after yesterdays run up. The Dow dropped 35 points today on light volume. The advance/declines were about even. Waiting on Fridays jobs report. The overall market was stronger than the Dow and that's a positive. There wasn't any market noise from the Ukraine today. I'm still looking for higher prices near term. But the market will not stay overbought forever. GE was up 1/4 and the volume was light. Right on the 50 day moving average now for GE. Perhaps the March calls were the proper play here. Too late now. Gold didn't do much today, up a couple bucks on the futures. The US dollar was little changed as well. The XAU did rise 1 1/2 though. Perhaps the gold shares are ready to take the lead again. ABX was flat, while GG and NEM gained 3/8. Volume was light. It's possible that the gold shares are ready to begin another leg up here. However I am going to remain on the sidelines for now with respect to the gold share calls. Mentally I'm feeling OK. I'd not expect much from the stock indices tomorrow ahead of the employment report. Last month the preceding Thursday ahead of the report had a rally and it continued on Friday. I doubt that we'll see a repeat of that. That's a guess as usual. Gold is still due for a rest in my opinion. The gold shares showed some life today but the volume was light. One could make a case that the prior couple of weeks was a consolidation before we move higher in those stocks. Time will tell. We'll follow the overnight action and continue from there tomorrow.
Tuesday, March 04, 2014
The Dow exploded to the upside today as it gained 227 points on good volume. The advance/declines were 5 to 1 positive. The summation index continues higher. Today Russia is not invading the Ukraine. Tomorrow, who knows? Headline driven markets can turn on a dime in either direction. New highs for the S&P 500. The small stocks out performed and that is bullish. Still overbought for the stock indices but there is no overhead resistance. GE turned around and was up 1/2 on better volume. Still below the 50 day moving average here. Gold dropped back by 12 bucks on the futures. The US dollar was a little higher. The XAU was off 1/2. ABX and GG had slight fractional losses, while NEM was up 1/2. Volume was light. Considering the news today, gold held up pretty good. There is still plenty of time left in the month. The short term technicals for the gold shares have rolled over but not dramatically so. Patience is still the theme here for getting some calls. We are right at the up trend line in GG that began the recent rally. We'll see if it holds in here or not. That will be the key to near term direction there. Mentally I'm feeling OK. Volatility has returned the past couple of sessions for the stock indexes. Trading gets a lot tougher in these conditions. I do not have any OEX trades in mind. The employment report on Friday looms large as well. Gold is still due for a rest in my opinion. A one day decline is not enough. Up trend lines in the gold share indexes are not at risk yet. The US dollar is trying to hold above the recent lows and that isn't bullish for gold. The employment report later this week should impact gold as well. We'll see what tomorrow brings.
Monday, March 03, 2014
In like a lion as the Dow fell 153 points on light volume. The advance/declines were 2 to 1 negative. Russia invading the Ukraine will be the excuse. However we were overbought and now the short term technicals have rolled over. I do not think that this is the beginning of a huge move lower but what do I know? We did finish well off of the lows for the day in some stock indices. I don't think that the summation index turned lower today. Perhaps we'll have some backing and filling ahead of Fridays jobs report. GE was off 1/3 and the volume was OK. Gold found buyers on the Russia news and the futures rose almost $30. The US dollar got some flight to safety capital as well and finished the day higher. The XAU was only up 1 3/8. ABX, GG and NEM had fractional gains on average volume. The under performance of the gold shares leads me to believe that the rally today in gold will not be sustainable. That's my guess for now. I will still be looking at buying some gold share calls later this month. Mentally I'm feeling OK. The short term technicals for the stock indexes have rolled over. The rally will be on hold for a while. Whether or not this turns into an all out decline is yet to be seen. We'll see if there is follow through downside tomorrow. To me it appears to simply be an event driven move lower. I could be wrong. Gold had a very nice move higher. But what happens when the Ukraine event ends? Gold remains overbought and it won't stay in that condition forever. It is overdue for a rest and March is the likely time for it to take it. Patience is required to purchase the April/May gold share calls in my humble opinion. We'll see if the foreign markets continue lower overnight and keep a close eye on the headlines as well.