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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.

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