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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. 

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