Friday, May 30, 2014
A mixed picture to finish out the month as the Dow gained 18 points on better volume. The advance/declines were slightly positive. The small stocks were lower on the session. The summation index continues higher and there is no overhead resistance. The S&P 500 closed near its high for the trading day. It appears that all systems are pointing towards higher prices. The June OEX puts that I bought are almost at a 50% loss. Bad timing on my part there. The technicals for the stock market are overbought and staying there. GE was up a few pennies but the volume here remains extremely light. No trades in mind here. Gold was off over $10 on the futures but came back a bit in the aftermarket. The XAU rose 2/3 in a turnaround during the day. ABX, GG and NEM all had fractional gains. I'm not sure if this is the bottom for the gold shares and there is no rush to find out. I think it may be prudent to wait and see if we get down to the $1200 level. Mentally I'm feeling OK despite holding onto the losing June OEX put trade. There are still three weeks to go in the June option cycle. However the market seems as though it simply wants to move higher. Overbought short and medium term, so some type of pullback is due. The volume has been really light on the upswing but there do not appear to be any sellers out there. The beginning of the month should see some positive money inflows as well. Gold broke the support this week and is heading lower. The US dollar was a bit lower today but remains in an uptrend on a daily basis. Today was the first day in a while that the gold shares outperformed the precious metal for a change. But that may not mean anything. I'm still looking at getting some October gold share calls eventually. Perhaps golds perceived value as a safe haven doesn't work anymore. There is practically a civil war about to erupt in the Ukraine and gold continues lower. I can't figure that out. Plenty of charts to consider over the weekend. It seems like the June OEX put trade is now a cut the loss deal. We'll see what happens next week. For now it's Friday afternoon and time for a break.
Thursday, May 29, 2014
The Dow continues on higher as it gained 65 points on light volume. The advance/declines were 2 to 1 positive. The summation index is moving higher. We hit new highs on the S&P 500. The OEX set a new all time high. There is no overhead resistance. The technicals are overbought and staying there. Perhaps this is the blow off top that I mentioned had a chance but I certainly didn't predict it. My June OEX puts are losers but not 50% yet. I suppose if they get to that much of a loss, I'll have to dump them. Poor timing on my part. I'm still a believer to not chase this rally but I could be wrong and often am. GE was up a few cents and the volume remains light. That is the problem here in my view. The volume on this stock market rally is so light that it cannot be trusted. Gold was off a couple bucks on the futures, while the US dollar finished the day basically unchanged. The XAU was up 3/4. ABX and GG were little changed. NEM gained 1/4. Volume remains light. I'm in no hurry to purchase any gold share calls yet but I probably will do so in June or July. I'm still looking at the October cycle for that trade. Mentally I'm feeling stupid for not waiting to purchase the June OEX puts. There were signs that some more upside was possible. I think that I was anxious to put on a trade after researching it over the long holiday weekend. This trade may work itself out but it certainly doesn't look that way now. There are still three weeks to go. However if we are in a blow off top situation, the market could even take off from here. The technicals are overbought both short and medium term. That doesn't mean that they can't get even more overbought. The volume is anemic and I am counting on that to mean something. It usually does. The story for gold hasn't changed. Lower prices and no interest. I do like to pick things up when nobody wants them but I don't want to be early here. We'll watch the overnight market action and finish off the short trading week tomorrow.
Wednesday, May 28, 2014
Bounced around but spent most of the day about even until the final half hour. The Dow lost 42 points on light volume. The advance/declines were slightly positive. The overall market dropped less than the Dow and that is a positive. Today would have been a better day to purchase the June OEX puts. But what can you do? I should have done a better job on the entry. We should probably take a little time to build a top here, if this trade is going to work. My June OEX puts are still showing a small loss. GE was up a few cents and the volume remains light here. No trades in mind for GE. Gold had some follow through downside as the futures dropped six bucks. The US dollar strength continues. These two are now in sync with their inverse relationship. The XAU was off around 1 1/2. ABX, GG and NEM all had fractional losses on good volume. All are oversold and have been for weeks. No decent bounces and the gold shares are attracting no money at all. Perhaps I'll take a look at the calls if and when gold gets to $1200. Mentally I'm feeling OK. Two days left in the week and the month. Short term overbought for the major stock indices. We'll get the GDP revision tomorrow, perhaps that will get things going. It is almost as if we are in the summer mode for the market already. Despite the recent all time highs I do not think this is the right time to be bullish. Falling apart in the final half hour could bode well for those June puts. Gold has broken support and the next logical target is $1200. Until then it is simply a waiting game again. I'll be looking at the October option series for the gold shares. We'll keep an eye on the overnight developments and see what tomorrow brings.
Tuesday, May 27, 2014
Continuing higher as the Dow gained 69 points on light volume. The advance/declines were over 2 to 1 positive. New highs in the S&P 500. The broader market was stronger than the Dow. The summation index is heading higher. Against this positive backdrop I bought some June OEX puts today. I think that I am early on this trade. I also was not patient even during todays session to buy them. Plenty of time for this trade to work out but I probably should have waited to get them at least until tomorrow. They are showing a slight loss. GE was up a few cents and the volume was light. Gold broke down below support today as the precious metal futures dropped over $25 breaching the $1280 level. The US dollar was little changed on the day. The XAU fell 3 1/8. ABX off 1/2, while GG and NEM fell 7/8. Volume picked up to the downside. We now have the direction for gold, lower. How far it drops is the next question. I am still looking at the calls for ABX in October. Plenty of time to let things sort out here. There still is no interest in owning gold or the gold shares. When everybody else is selling is when you want to be buying. I'll probably get some gold share calls in June or July. Mentally I'm feeling a bit tired, did not sleep well. So perhaps we are on our way to a blow off top. Or maybe this is the sustained rally I've been looking for. Time will tell. I still don't trust light volume rallies. But my timing for this OEX put trade appears to be off. The short term technicals are overbought here. We appear to be breaking out above the rising wedge pattern on the daily charts. That was not the expectation. I'll give the trade a couple of days at least and see what the market does. End of the month coming up this week as well. We see what has happened to gold and the gold shares. The question is now how low will we go? I'll be watching the overseas action tonight and take it from there.
Friday, May 23, 2014
Onward and upward as the Dow gained 63 points on light volume. The advance/declines were just a little over 2 to 1 positive. The overall market remains stronger than the Dow. The Dow transports reached another record high. Perhaps my hypothesis of the rising wedge in the stock indices is wrong. We are almost to the level on the OEX that I had in mind to purchase some OEX puts. The short term technicals are moving to overbought. GE was flat on the session with extremely light volume. Gold lost a couple of bucks on the futures while the US dollar continued higher. The XAU dropped 1/2. ABX, GG and NEM had slight fractional moves one way or the other on light volume. This group has stagnated as it grinds its way lower. I will try the ABX calls again at some point again but when, I don't know. Mentally I'm feeling OK. The stock indices continue to move higher. There doesn't appear to be anything to be in the way of higher prices. The only caveat here is the volume, which has been week. The summation index has been moving back and forth without a trend either way. I'm still leaning towards the cautious side for stocks here. However I can't rule out some sort of last pop to the upside which would follow the transports. That's a guess as usual. Gold remains in a sideways channel. $1280 on the bottom and $1320 on the top. The Bollinger bands are so close now that whatever way it turns out, it will be huge and hopefully trade worthy. There is no sense in trying to guess which way it will break. I've already tried that unsuccessfully despite the technical signals. A long holiday weekend to ponder my next move with the markets. Plenty of charts to check as well. For now it's Friday afternoon and time for a break.
Thursday, May 22, 2014
Barely up for the Dow as it only gained 10 points today on light volume. The advance/declines were just about 2 to 1 positive. The overall market was much stronger than the Dow. That is bullish moving forward. I am still looking at the June OEX puts for the next trade. It appears to me that a bearish rising wedge is being constructed on the daily charts for the OEX. My target for getting the puts is around the 845 level. A check of the option premiums shows that the puts are very expensive relative to the corresponding calls. Usually when the prices are out of whack like they are now, it is a tip off to the direction that we are going to take. GE was flat on the session and the volume remains very light. The gold futures were up around $5 and the US dollar was a bit higher today as well. The XAU finished little changed. ABX, GG and NEM all had fractional losses on light to average volume. Still no interest in the gold shares. Mentally I'm feeling OK. The TRAN hit a new all time high today. It has yet to be confirmed by the Dow. The usual weak seasonality due now has not materialized. I am going to try and be patient here and wait for the OEX to reach the 845 level. That should be the next trade unless we get some type of huge rally. Gold continues sideways. The US dollar today broke above its short term down trend line. That isn't bullish for gold. Tomorrow should be a light volume, get off for the long holiday weekend early type of trading day. We probably shouldn't read too much into it one way or the other. We'll watch the overnight action and close out the week tomorrow.
Wednesday, May 21, 2014
The uptrend line for the Dow held for now as the Dow gained 158 points on light volume. The advance/declines were 2 to 1 positive. Got the Fed minutes out of the way and we chugged on higher. Nothing to stop another run to new highs I suppose. However the volume remains light to the upside and that is a concern. Patience for now but I will be looking at the June OEX puts in the future. Until then it is a sit and wait attitude. GE was up 3/16 on very light volume. No trades in mind for GE. Gold was off six bucks on the futures but came back a bit in the aftermarket. The US dollar gyrated during the session but finished little changed. The XAU was flat. ABX and GG had fractional gains, while NEM was flat. Volume remains very low here. Nothing has changed with regards to the sideways activity for gold and the gold shares. Mentally I'm feeling OK. Churning around for the stock indices but we really aren't getting anywhere. A holiday weekend coming up as well so I don't expect anything major happening in the next couple of days. I'm on the sidelines for now. Plenty of time to do something in the June option cycle. It isn't always easy to sit and wait but what can you do? When things do get going there should be some opportunities to take advantage of. Gold is either building a base for a solid upside move at some point or making a ledge that it will drop off of. We'll have to wait and see what happens there and get on board when it does. As always we'll follow the foreign markets overnight and go from there.
Tuesday, May 20, 2014
Heading lower today as the Dow fell 137 points on light volume. The advance/declines were over 2 to 1 negative. No reason for the decline really and it wasn't as bad as the Dow loss appears. The overall market didn't fall as much. I'd like to say I know what kind of market environment that we're in right now but I don't. There isn't a clear signal one way or the other. I'm still leaning towards some OEX puts at some point in the June option cycle. The S&P 500 is still in an uptrend until it breaks and closes below 1860. GE was off 1/3 and the volume remains light. We're still above the 50 day moving average here. Gold and the US dollar were flat on the day again. The XAU was off 3/8. ABX and GG were up pennies, while NEM rose 1/4. Volume remains light here. Still no interest in gold or the gold shares. Gold continues its sideways movement and the gold shares remain trending lower. Mentally I'm feeling OK. So where do we go from here for the stock indices? I'm still in the caution camp. The Dow is right at the short term uptrend line that started in February. Perhaps the Dow will be the leader this time around. That is just a guess as usual. As I have said before, we are closer to the highs than the lows in the stock market. The uptrend line comes in at 825 for the OEX. The story for gold remains the same. Turmoil throughout the world and gold doesn't rally. That isn't bullish. We'll see what tomorrow brings.
Monday, May 19, 2014
Upside to start the week as the Dow rose 20 points on pretty light volume. The advance/declines were 2 to 1 positive. The overall market was much stronger than the Dow and that is constructive moving forward for the bulls. We can't trust that light volume though. Also the negative seasonal period that we are in will rear its head sooner or later. That is my thought for today at least. Not a lot of economic data this week but we do get the Fed minutes on Wednesday. No trades in mind right now for the OEX as the technicals are mid-range. GE didn't do much today and the volume was very light. Gold and the US dollar were little changed on the session. The XAU was up 1/4. ABX and GG were off pennies, while NEM fell 2/3. Volume was light to average. The gold shares are oversold on a short and medium term time frame and remain that way. I will try the calls here again at some point. Mentally I'm feeling OK. My trading scenario here is to wait for the stock indices to get either overbought or oversold and then trade the opposite way. There are no valid signals at the moment. So it will have to be a waiting game for now. The June option cycle has an extra week tacked on to it, so that shouldn't be a problem. Gold continues to frustrate as it basically moves sideways. Sooner or later it will break out one way or the other. When that occurs will be the time to get on board. The continued oversold nature of this market without any sustained upside is frustrating. Not to mention expensive when trading long without any profit. We'll keep an eye on the overnight action and take it from there in the morning.
Friday, May 16, 2014
We ended the week on a positive note as the Dow gained 44 points on light volume. The advance/declines were almost 2 to 1 positive. The S&P 500 is still holding on to its 50 day moving average. The short term technicals are mid-range here so we could go either way. The summation index has been flip flopping back and forth. We are in a period of indecision in my view. However I am still wary of any rally from here and will be looking for an entry point to purchase some puts. GE was up a few cents and the volume remains light. The gold futures were flat on the day and the US dollar had little movement as well. The XAU was down 3/4 or so. ABX, GG and NEM all had fractional losses on light volume. I had to dump the June ABX calls that I bought last week for a 70% loss. The longer term weekly basis up trend line was broken here. I tried the ABX calls twice and was wrong both times. Who knows, I may try them again at some point. The gold shares continue to under perform and they remain oversold on both a short and medium term basis. Mentally I'm feeling OK. Another losing trade in the books. I've already given back most of the gains made for the year. The markets don't care though. I'll be looking for some kind of strategy over the weekend to move forward. Volume has been pretty weak for the stock indices lately and that is not a positive. The lagging small stocks are not a good sign going forward either. But we cannot argue with price and the Dow did hit a new all time high this week. Gold remains range bound and it feels as if this condition has been lasting forever. Trading the gold shares from the long side remain a frustrating experience. Oversold and staying that way. Even with all the turmoil in the world, gold can't get a rally going. I'll be checking the charts over the weekend as usual. Perhaps I can gather up a winning game plan for the next trade. You always have to keep moving in this game. There really is no time for pity or self doubt. There are plenty of opportunities in the markets. You just have to be good enough to take advantage of them. For now it's Friday afternoon and time for a break.
Thursday, May 15, 2014
It looks like the market wants to roll over here as the Dow fell 167 points on average volume. The advance/declines were over 2 to 1 negative. This should turn the summation index lower. Is this the beginning of the seasonal May decline? Perhaps. I believe that it is but as always the market will go where it wants. No need to be bullish on stocks here. We are closer to the top than to any kind of bottom. My advice would be to keep an eye on the opportunity to purchase some June OEX puts. GE was off 1/8 or so and the volume picked up. The short term technicals here are beginning to roll over. Gold fell over $10 today on the futures, which negated yesterdays $10 gain. The US dollar came off of its highs and was little changed on the day. The XAU fell 1 1/4. ABX lost 1/2, GG and NEM each shed 1/3. Volume picked up to the downside. ABX has now broken the longer term trend line for the June call trade. Unless we see some rally tomorrow to at least the $17.30 level, I will have to close out that trade for a loss. The weekly basis up trend line will have been violated for ABX and that was the defining factor for that trade. It isn't looking good at this point. Mentally I'm still a bit tired. The technicals are now rolling over for the major stock indexes. Caution on the long side is advised. Hopefully things will hold up to get an opportunity to get short. Gold now has a bearish engulfing pattern on the daily candlestick chart. It appears not even a civil war in the Ukraine can help the price of gold. If that can't help, what can? Gold remains an asset that money is staying away from. We're still in the trend channel but at this rate is looks like the $1280 level will be taken out at some point. The gold shares also look like they are about to break the support on their trend channels as well. Unless there is a dramatic turnaround gold and the gold shares will be heading lower. We'll watch the overnight action and finish up the week tomorrow.
Wednesday, May 14, 2014
To the downside today as the Dow fell 101 points on light volume. The advance/declines were negative. No real news today but some more rumblings out of the Ukraine. I did expect a drift to the upside but that was not the case. The short term technicals remain overbought for the major stock indices. The Dow was the weakest index on the session and that is a switch. There is a potential negative candlestick pattern on the S&P 500 but we will have to see what happens in the coming days. GE was off 1/8 or so on light volume. Gold found some buyers as the futures rose over 10 bucks. The US dollar was off just a touch. The gold shares didn't really follow the precious metal as the XAU nudged up 1/2. ABX, GG and NEM were mixed, with GG gaining about 3/8. Volume picked up slightly. My June ABX calls are at break even. Mentally I'm feeling a bit tired, did not sleep well. Still waiting for the negative seasonals to take effect for the stock indices. Perhaps once expiration week has passed. Not much else to report for now. Gold remains stuck in its trading range. The fact that the gold shares can't rally with a $10 move higher in gold is not bullish. There is still no love for the gold shares. We'll continue to monitor things in the markets overnight and go from there.
Tuesday, May 13, 2014
A pause in the action today as the Dow gained 20 points on light volume. The advance/declines were negative. Back to having the small stocks weaker than the Dow. I again, don't trust light volume rallies but that doesn't mean that we can't drift higher during expiration week. Retail sales were flat. We are still short term overbought on the major index technicals and have been for a while. This condition will not last forever. I would not trust this rally to continue for very long. GE was up just a touch and the volume was pretty weak. No trades in mind here. Gold was slightly off as the US dollar had a good day again. It appears that the 79 level for the dollar has once again provided support. The XAU was off 1/4. ABX, GG and NEM all had little movement on very light volume. My June ABX calls are now slightly in the red. No movement and no interest for gold and the gold shares here. Perhaps rolling into the June contract for this trade was not a good idea. Time will tell. Mentally I'm feeling OK. All signs point to higher prices near term unless there is a sharp reversal. We are in a low volume drift higher and I don't think that will end this week. I could be wrong. Inflation data on tap the next couple of days. Gold is still stuck between $1280 and $1320. The Bollinger bands are getting very close together on the precious metal daily charts, so a big move one way or the other is coming. I'm hoping it is to the upside for the sake of my June ABX calls. The short term technicals here are oversold and have been. The opposite of the major stock indexes technicals. Something will give, sooner or later. As always we'll be watching the foreign markets overnight and see what happens tomorrow.
Monday, May 12, 2014
We got the break out and it's to the upside. The Dow gained 112 points today on light volume. The advance/declines were about 4 to 1 positive. The summation index should be heading higher after today. The small stocks rallied good as well. The positive expiration week bias is in effect. There is no overhead resistance for the big cap indices. The only caveat is the low volume. I never trust light volume rallies. My guess is that this will be the last run upwards before we move into a corrective or negative phase for stocks. But my guesses haven't been that good lately. GE was up 3/8 with the same light volume. Not close to the highs here as GE is still negative for the year. Gold was up around $8 and came off of much lower prices overnight. The US dollar was little changed. The gold shares really didn't get going as the XAU only rose 1 1/4. ABX up 1/8, GG was flat and NEM gained 1/2. Volume remains very light here with no interest. I dumped the May ABX calls that I had for an 85% loss. Held on too long as usual. Only four days left for these options and only a dramatic upswing would save them but probably only to cut the loss. The odds of that happening are slim. The June ABX calls I have are at break even. The multi-week trend line for ABX is still holding. Plenty of time on the June option cycle but more sideways lack of movement here or a break of the trend line will doom this trade as well. But I'm counting on the trend line holding up. We'll see. Mentally I'm doing as well as can be expected. The losing trade closed out today was my first loss for the year but I haven't made too many trades. I am not getting too excited over the current rally. Low volume and weak seasonals are working against chasing the stock indexes at this time. I will probably be looking at the June OEX puts at some point. However it looks like this week will trend higher. Gold has every reason to move higher today with all the problems around the world. However the move higher was muted in my opinion. There is no interest in owning gold. We've got inflation data out in the next two trading sessions. Perhaps that can get things going here. We'll keep an eye on the overnight developments and go from there.
Friday, May 09, 2014
Another day of the markets just hanging around really as the Dow gained 32 points on light volume. The advance/declines were positive. Still waiting for some kind of break out one way or the other for the major stock indices. Perhaps expiration week can get things moving. Sideways is not the preferred path when taking option positions unless you are writing them. The short term technicals could go either way but I think the longer we just nowhere, the better the chance is that we drop. The second half of May is generally not positive for stocks. GE was flat on the session and the volume was extremely light. More oversold than overbought here. Gold was flat on the futures which wasn't bad considering the strong move in the US dollar today. The inverse correlation between gold and the dollar hasn't been in effect lately. Not sure what that means. The XAU fell 1/2. ABX, GG and NEM were all flat on the day with very light volume. I did not sell the May ABX calls today but probably should have. This trade is going to be a big loss regardless. I figured I'd wait to see if we get a bump up on Monday if the Ukraine vote over the weekend is to secede. I did purchase some June ABX calls as we finished the week right on the longer term trend line that I have been talking about. If the line holds, this trade will be profitable. If not, it won't. We'll probably find out next week. Mentally I'm feeling OK. It seems like we have been waiting forever for the stock indexes to do something other than move sideways. The markets always just go where they want though. You cannot project what you want on the market. Patience cannot be underrated. The summation index has been pretty much moving sideways as well. I think when this thing breaks out, it will be big. Gold continues to frustrate as well as it moves between the band mentioned yesterday. No telling when or which way the breakout there is coming either. I've rolled into the June ABX calls and I'm pretty sure next week will tell the story here. Nothing to do but continue to check the charts over the weekend and go from there. For now it's Friday afternoon and time for a rest.
Thursday, May 08, 2014
Another up and down type of day as the Dow finished with a gain of 32 points on average volume. The advance/declines were negative. The overall market was weaker than the Dow. I get the feeling that when this thing breaks one way or the other, it's going to be big. It is just a guess as to which way we go from there. My mind seems to change on direction every other day. We're mid-range the technicals for the major stock indices. Expiration week is generally a positive period however the second half of May is seasonally weak. I'm on the sidelines for the OEX for now. GE was down around 1/8 and the volume remains light here. Gold was little changed for the futures despite a good day for the US dollar. It appears that the 79 level for the US dollar has held once again. The XAU shed 1/8. ABX lost 1/8, while GG and NEM were little changed. Volume remains light here. My May ABX calls are basically dead and I should dump them tomorrow barring a rally. I did place an overnight order for some June ABX calls. I believe that the longer term up trend line for ABX will hold and we will see some upside in ABX soon. That is the basis for the trade. We are also short term oversold on ABX. However, if the up trend line breaks, then this trade is off. Mentally I'm feeling OK. The small stocks continue to be weak and that is not a good sign for the bulls. Normally when the Dow is the leading index we are at the end of the line for the upside. I'm still advising caution for stocks here. Gold continues to frustrate both the bulls and the bears. If we break the $1280 level lower with volume then lower prices will follow. We need to break $1320 to the upside to say a rally is underway. With the US dollar looking like it has put in a short term bottom, perhaps trying the gold shares here again is the wrong idea. I'll reconsider the June ABX call trade overnight. We'll finish off the trading week tomorrow.
Wednesday, May 07, 2014
A mixed bag for the stock indices today but the Dow gained 117 points on good volume. The advance/declines were 2 to 1 positive. The opposite conditions of yesterday. The summation index is now basically moving sideways. The small stocks were lower on the session but finished off of the worst levels of the day. The Fed head Janet Yellen said the economy is doing good and the big stocks rallied. The market is trying to make up its mind on which way to go. I still believe that caution is advised when it comes to stocks here. GE was up 1/3 on light volume. No trades here for now. Gold took a hit on Yellens remarks and back tracking from Russias Putin on the Ukraine situation. The precious metal futures fell 20 bucks. The US dollar was slightly higher. The XAU dropped 2 points. ABX fell about 1/8, while GG and NEM lost around 1/2. Volume was light. The May ABX calls I have are now solid losers. I don't think they will be able to come back to a profit in the remaining seven days. ABX still hasn't broken the longer term trend line, which is the only reason that I am still holding this trade. Could happen tomorrow though. Mentally I'm still dealing with issues unrelated to the market. Internet issues today as well to deal with, which explains why the blod today is so late. I'm back to thinking that we are heading to new highs again. With expiration week approaching the positive market bias should be in effect. But that's a guess as usual. Gold had a pretty negative session as did the gold shares. I do not expect any turnaround here this week. It is now just a matter of how much of a loss that I will take on the May ABX call trade. We'll see what happens overnight and go from there.
Tuesday, May 06, 2014
As promised we got a decent move today as the Dow fell 129 points on average volume. The advance/declines were 2 to 1 negative. This should move the summation index to the downside. The small stocks helped lead the way down. We finished near the lows of the session and that isn't bullish. We could not build on the turnaround from yesterday. There are now hanging man candlesticks on the major index daily charts. I think that now the most we can hope for is a sideways pattern from here on the bullish side. The bears will anticipate a solid drop from here. GE was off over 1/3 and the volume remains light. No volume equals no interest and that is where the market is at. Gold was flat on the session despite a good drop in the US dollar. The US dollar is at critical support near the 79 level. If this level breaks on good volume, the dollar will be headed much lower. This should help gold but who knows? The XAU fell 3/4. ABX and GG were flat, while NEM shed 1/4. Volume was extremely light here. Eight days to go for my May ABX call trade and they are showing a 50 % loss. We are still right at the up trend line of almost a year in the making. I'm still expecting some type of bounce off this line but will it occur in the next week and a half? That will determine the outcome of this trade. Mentally I'm feeling tired, not enough sleep and other outside influences on my mind. The markets move on though. The small stocks could not get above their short term declining tops lines and that is bearish. The sell in May crowd could start showing up about now too if we keep heading lower. Lack of volume is a concern for the bulls. Of course the market will go where it wants but after today it looks like we are going to head lower. Gold is trying to get something going to the upside but has yet to have a sustained rally. The gold shares have been moving sideways for over a month. The unrest in the Ukraine is not lending any upside momentum to gold. Perhaps a breakdown in the US dollar will be a catalyst. That remains to be seen. My May ABX call trade is running out of time. We'll keep an eye on the overnight action and see what tomorrow brings.
Monday, May 05, 2014
A one day reversal to the upside as the Dow fell 125 points at the open and came all the way back to finish with a gain of 17 points on very light volume. The advance/declines were barely negative. Positive market action to be sure. Some foreign markets were closed today, so that could account for the light volume. The McClellan oscillator is forecasting a big move here. I don't know if todays action was it. The small stocks are still way behind here. Even if we get a rally in the next couple of days, I'm still advising caution on getting too bullish. GE was off 10 cents and the volume was very light. Gold was up 6 bucks on the futures today. The US dollar was little changed on the session. The XAU was off 1/4. ABX, GG and NEM all had very slight fractional gains on the same light volume. My May ABX calls are still in the red. This week should tell the story for this trade. Still a chance that it will work out but time is not on my side here. Mentally I'm feeling a bit tired, did not sleep well. So where do we go from here? You can make a case for either direction for the stock indexes. We are still short term overbought on the technicals. The price action was bullish today. We'll see if we get some upside follow through tomorrow. Gold broke through the short term down trend line today that has been in effect since March. The only caveat was the volume wasn't strong. Also still below the 50 day moving average here. The gold shares did not participate in the upside with gold and that is a negative. Nine days to go in the May option cycle. We'll keep an eye on the overnight developments and go from there.
Friday, May 02, 2014
An interesting session as the employment report was better than expected but the market reactions were not. The Dow fell 46 points on light volume. The advance/declines were positive. We started off with a rally but could not hold it. Problems in the Ukraine surfaced again as the selling excuse. We are still short term overbought for the major stock indices. The summation index is grinding higher though. I thought that we would be heading to new all time highs on some of the stock indexes. Perhaps next week. GE was off a few cents and the volume was light. No trades here for now. Gold rose almost $20 on the futures but backed off in the aftermarket. A nice move despite higher jobs numbers. The US dollar was up early but could not hold the gains and finished the day basically unchanged. The XAU was up 2 points. ABX, GG and NEM all had fractional gains. Volume was nothing special. GG is now the out performer for the big three. My May ABX calls are still in the red. The important weekly up trend line is still holding for now. If it does we should see some gains for ABX next week. That may allow me to break even on this trade. Could just be wishful thinking. However, when ABX has reached this trend line in the past, it has rallied for over a week. We'll see what transpires this time around. Mentally I'm feeling OK. Still closer to a top than to a bottom for the major stock indexes in my opinion. Even if new highs occur it isn't a time to be overly bullish in my opinion. We could not rally on good news and could be a problem next week. So stay tuned. Gold on the other hand rallied today despite a strong employment report. We still haven't broken the down trend line that began in March though. The problem for the May ABX call trade could be simply sideways action in the coming weeks. Next week should sort things out as to whether this trade will be a winner or a loser. I'll be keeping an eye on what happens in the Ukraine this weekend. I do know that next weekend there is another separation vote coming up. Not sure I can hang on to this trade that long though. I'll be checking the charts over the weekend as usual. For now it's Friday afternoon and time for a break. UPDATE: I have just got the McClellan oscillator reading for today. The past couple of trading sessions has given a signal here that a big move is coming in the stock indexes within the next day or two. It doesn't indicate which direction the move will be, only that something is brewing. Take note.
Thursday, May 01, 2014
A waiting game on tomorrows employment numbers as the Dow fell 21 points on average volume. The advance/declines were positive. The summation index is still moving higher. My guess is that we will move higher tomorrow regardless of the data. Of course that is just a guess. We're still short term overbought on the major stock indices. The small stocks acted better today and that is a plus. So we'll see what the market reaction is tomorrow. GE was off 1/8 and the volume was light. Gold dropped $12 on the futures. The US dollar was only a bit higher. Nobody wants to own gold here. The XAU fell 1 1/4. ABX and NEM lost 1/3, while GG was flat on the release of its earnings report. The May ABX calls I have are now 50% losers. ABX is on the precipice of breaking a longer term up trend line dating back to last July. However if the line holds, there is a slight chance these options could make it back towards break even. Hasn't happened yet. Only a couple of weeks to go here as well for the May option cycle. Mentally I'm feeling kind of stupid as gold did not rally with the weak data out so far this week. If what you are trading can't get higher on good news, there's a problem. I probably should have just gotten out with a small loss yesterday. Hindsight is never wrong. Some of the major stock indexes look poised to set new all time highs. Could happen tomorrow, including the Dow. I'm thinking that they will but anything can happen in this game. Gold remains unloved along with the gold shares. Only a very weak jobs report combined with an invasion of the Ukraine will turn the precious metal around at this point. We'll keep an eye on the foreign markets tonight and await the all important employment report tomorrow.