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Tuesday, April 15, 2014

Another session of up, down, up.  We finished the day with the Dow gaining 89 points on good volume.  The advance/declines were positive.  We are back to a level where resistance should come in for the S&P 500.  The small stocks continue to under perform but perhaps a short term bottom is in place.  That's a guess as usual.  Volatility has picked up but that is obvious to everyone at this point.  Perhaps all we are seeing so far this week is the positive expiration bias.  How the next couple of days play out will be key.  GE was up 1/8 and the volume was light.  Still above the 50 day moving average here.  Gold took a drop today as the futures fell over $25.  The US dollar was slightly higher.  The XAU lost 2 points but was down more early on.  The gold shares followed the overall market back from its lows.  ABX off 1/3, while GG and NEM shed about 1/2.  Volume picked up to the downside and the short term technicals rolled over.  I did place an open order for some May ABX calls but it will only be filled if we see some more weakness there.  The gold shares did better that the metal itself today and that is a good sign if you're bullish.  Mentally I'm not feeling 100%.  Nobody expects a rally here for the stock indices.  However looking at the charts there is a potential that the decline will take a rest here.  A weak, light volume rally now would also set up possible head and shoulder tops for some of the indexes.  This is all speculation on my part.  The market will tell us what it is going to do with the price action in the coming days.  The summation index is still moving down.  We should take our cues from there.  I have no explanation why gold would all of a sudden drop today.  The unrest in the Ukraine is escalating which should be supportive for gold.  Trying to hold the $1300 level.  The preceding rally had been weak.  It is now a question of will the previous lows hold.  Time will tell.  We've got the Feds beige book out tomorrow.  Might be a market mover.  We'll keep an eye on the overnight action and see if the overseas markets follow the US stock indexes higher.

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