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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.

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