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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.

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