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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.

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