Thursday, July 31, 2014
Well, so much for a quiet Thursday ahead of the employment report. The Dow got clobbered today and fell 317 points on heavy volume. The advance/declines were 9 to 1 negative. The summation index is still heading lower and with a vengeance now. We were oversold and remain that way. There were plenty of clues that we were going to head lower but once again I failed to capitalize on them. However make no mistake going forward. Rallies can be shorted. We closed on the low of the day for the S&P 500 and that should spell even more trouble tomorrow. My guess is that we'll make it to the 50 week moving average and that is 100 S&P points from here. Look for September puts. GE lost 1/2 on good volume. Oversold, staying there and we just broke through the 50 week moving average here. GE was a precursor to what's happening. Longer term trend lines have now been broken here. So that's a clue as to what is going to unfold in the days and weeks to come. Gold fell $14 and dropped below the $1290 level. The US dollar was little changed on the session. The XAU fell 2 points. ABX and GG lost 1/3, while NEM shed 2/3. Volume was summer average. The earnings came out for ABX and GG but in a market environment like this, earnings take a back seat. My ABX October calls are now in the red. My thinking is that perhaps I should just dump these and take the loss but I figured I'd at least wait until the employment report tomorrow. Mentally I'm feeling OK considering. My ideas at the moment are not working. There were clues out there that I did not follow. I did not figure what the inability of the McClellan oscillator to get through the zero line implied, although I knew it meant something. The obvious breakdown in GE was there but I did not take enough notice. The poor breadth was noted but it did not sink in to my mind to act on it. The Bollinger bands did contract but you can never exactly know which way that they will break. But the markets don't wait for you or hear your excuses. It is where we go from now that counts moving forward. The bell has sounded. We are going lower. How much is the question. I'll be looking for September OEX puts on a bounce. If the McClellan oscillator can't make it above the zero line again, the decline will get uglier. We are moving into the favorable seasonal time for gold. However when the market goes sideways, it usually takes everything with it. If gold and the gold shares can hold in here and turn around, then the ABX October call trade has a chance. That could happen if we get a flight to safety theme on fear to arise. But that remains to be seen. We'll get the employment report tomorrow and things will probably get volatile off of that number. We'll watch for downside follow through overnight in the foreign markets and go from there.
Wednesday, July 30, 2014
It was interesting as promised as the Dow fell 31 points on good volume. The advance/declines were negative. We opened up over 70 points on a better than expected GDP number. The market then lost its steam and preceded to fall down over 70 points. The Fed announcement came and we rallied back up to get positive once again. But then we rolled over again to finish the day in the red. Once again the overall market was stronger than the Dow. The small stocks are acting better here and that's bullish. Tomorrow should be a holding pattern waiting on Fridays employment report. GE was up almost 20 cents. Volume was nothing special. No trading ideas here for now. Gold bounced around a little at the open but finished with a loss of three bucks. The $1290 level is still holding for now. The US dollar was higher again and hit the 81.50 level. Important points in both the gold and dollar market right now. The XAU was off about a point. ABX and GG had fractional losses, while NEM was flat on its earnings report. Volume was summer light. ABX reports after the bell and GGs numbers will come out in the morning. I did purchase some ABX October calls on morning weakness today. So we'll see what happens. Mentally I'm feeling tired, did not sleep well. The summation index continues lower. We have yet to see a significant decline yet in the major stock averages. However the fact that we haven't been able to get above the zero line in the McClellan oscillator for the past couple of weeks is a concern. Getting oversold on the Dow short term technicals but not there yet. Gold held up OK today despite what could have been viewed as bad news. The gold shares are mid-range the technicals and could go either way here. We'll see how ABX and GG react to their earnings and take it from there. As always we'll keep an eye on the overnight action as well. I'd expect a quiet Thursday on tap.
Tuesday, July 29, 2014
Once again a mixed picture as the Dow fell 70 points on better volume. The advance/declines were negative but not as much as a down 70 market would indicate. The NASDAQ only dropped 2 points. Tomorrow should be interesting as we get GDP and the Fed. The summation index is still moving lower and until that turns around we won't see any sustained rallies. The Dow closed on its low for the day and that isn't bullish. The TRAN has been in decline the past five days as well. Perhaps this is the start of a long awaited correction for the stock market. GE was off another 1/8 and has been in decline for a couple of weeks. Oversold here and below the 200 day moving average. Those are not bullish signs. Gold was off five bucks on the futures as the US dollar continues higher. If the dollar can break through the 81.50 level, there would be no more upside resistance. That would not be supportive for the price of gold. It also would not be good news for stocks in general. The XAU was off 1/3. ABX, GG and NEM all had fractional losses on light volume. I canceled the open order for the October ABX calls. NEM reports after the bell and that should influence what happens tomorrow morning for the major gold shares. Toss in the GDP report and the Fed rate announcement and you've got the recipe for an interesting trading session. Then we get the earnings for ABX and GG on Thursday. So depending on what happens in the morning tomorrow, that will determine if I get the gold share calls before the earnings announcement. Mentally I'm feeling OK. The Bollinger bands on the major stock indices are contracting. This action implies a big move is coming up soon. It doesn't predict the direction of the move though. We should know soon enough. Volatility has picked up. It is probably prudent to be cautious at the moment. I still think things could go either way. Despite the recent rise in the US dollar, gold has still held above its 50 day moving average and the $1290 level on a closing basis. If we violate this area, it could spell trouble for the bulls. The technicals here are short term oversold. The gold share technicals are still mid-range. If we get a strong GDP number and some hawkish tone out of the Fed, it will not be a good day for gold. But we will have to wait and see what the numbers are. I'm still a believer in the October gold share calls. Timing of the purchase is the question that needs a correct answer. We'll keep an eye on the overnight action. Tomorrow will be interesting and that much I'm sure of.
Monday, July 28, 2014
A mixed bag again to start the week as the Dow gained 22 points on light volume. The advance/declines were negative. The NASDAQ was lower and the S&P 500 barely managed a slight gain. The summation index continues lower. Plenty of economic data out this week including 2nd quarter GDP and the employment report. Plus we have a Fed announcement on Wednesday. I guess just about anything can happen. What will happen, I don't know. I do know that as long as the summation index is heading lower, it will be hard for the market to have an extended rally. GE was off almost 1/4 and the volume was pretty good for the summer. With GE in a decline it is a surprise to see the overall market holding up here. Gold was flat on the day as was the US dollar. The XAU was up over 1/2. ABX was flat, GG up 1/4 and NEM rose 1/2. Volume was light. NEM will report its earnings after the bell tomorrow. I did place an order for some October ABX calls today. It wasn't filled and I have left it open overnight. I think that I am going to try and get some ABX or GG calls before the earnings come out on Thursday. That is the plan at the moment. Mentally I'm feeling a bit tired. Tough call on the stock market right here in my opinion. I'm going to sit on the sidelines with regards to the OEX for now. The technicals for the major stock indices are about mid-range. The October gold share calls will be the next trade. I should be purchasing some calls tomorrow or Wednesday if all goes to plan. This is one of those trades that I will know pretty quickly whether or not its going to work. The short term technicals for ABX are more oversold than overbought. I'm sticking with the idea of the month of October option series. So we'll see what happens.
Friday, July 25, 2014
To the downside to end the week as the Dow fell 123 points on light volume. The advance/declines were 2 to 1 negative. Are we about to really head lower here? The summation index continues to the downside and has not been able to turn around. The McClellan oscillator could not make it back above the zero line. The stock indices are overbought on a short and medium term basis. However, no uptrend lines have been violated. But we are in the seasonally weak time period. I am not sure exactly what to make of things but I'm going to lean back towards the negative side going forward. GE was off 1/8 and is now below its 200 day moving average. If GE is the leader, then we know which way stocks are headed. Gold bounced $12 on the futures and more in the aftermarket despite a rise in the US dollar. The XAU gained 3 points. ABX and NEM rose 1/3, while GG added a point. Volume was OK for the summer. It looks like yesterday could have been the day to get the gold share calls. I don't know if todays strength was just positioning for the weekend or the start of something bigger. Considering we are coming off an oversold short term technical condition here, this could be the time to purchase the calls. Earnings due next week as well, which makes things interesting. Patience may not be the proper course of action now. Mentally I'm feeling OK. Things did pick up a bit today for the stock market as far as volatility goes. But we are in a tricky time period as the slowness of the summer can rear its head at any time. I have to take into consideration the decline in the summation index, which is usually pretty reliable. Perhaps the OEX puts are the right idea at the moment. Gold was able to hold its 50 day moving average and the gold shares had a nice bounce. After the big decline last week we haven't seen any follow through to the downside. Maybe its time for the gold share calls. I really have a lot to think about over the weekend. There are plenty of charts to go over and decisions to be made. The trading is never easy. For now it's Friday afternoon and time for a rest.
Thursday, July 24, 2014
Another mixed session as the Dow fell 2 points on better volume. The advance/declines were slightly negative. We bounced around a bit today in a narrow trading range. Waiting on the next catalyst one way or the other. The summer doldrums are in effect. The summation index is still heading lower. We are back to short term overbought on some of the major stock indices. I think that a wait and see approach is the proper call at this time. GE was flat and the volume was very light. Still hanging in there at the 200 day moving average. Gold fell today, the futures lost over ten bucks. The US dollar was slightly higher. The XAU dropped 1 3/4. ABX, GG and NEM all had fractional losses on better volume. These issues are now short term oversold. Perhaps it is time to consider the October calls here. However I am going to at least wait until next week to decide. Mentally I'm feeling OK. Sideways since the beginning of the month for the large cap indices. It seems as if everyone is still waiting for the next decline. It will occur when everybody is bullish. Earnings are the main driver for now. Gold has moved back to its 200 day moving average. The US dollar is in a rally and that is not bullish for gold. We also have a lot of geopolitical turmoil around the globe and gold isn't moving higher. These are not bullish signs for gold at the moment. Throw in the gold share earnings due next week and we are perhaps at a critical trading juncture. The October gold share calls remain on my radar. We'll close out the week tomorrow.
Wednesday, July 23, 2014
A mixed bag today as the Dow fell 26 points on light volume. The advance/declines were positive. Both the S&P 500 and the NASDAQ were higher today. The TRAN continues to make new all time highs. It just simply looks like higher stock prices are coming. The summation index hasn't turned around yet but it is on the verge of doing so. The week so far has the feel of the summer doldrums to it. It was bound to happen. More earnings on tap as we move forward. GE lost 1/8 and now rests on its 200 day moving average. GE is not participating here and that could spell trouble eventually. Gold and the US dollar were little changed on the session. The XAU was off 1/2. ABX, GG and NEM were all fractionally lower. Volume has dried up here. It appears that we are in a holding pattern for gold and the gold shares at the moment. Mentally I'm feeling OK. Light volume and not a lot of movement is the story for now with regards to the stock market. Barring any unforeseen event, I don't think that a grind higher is impossible. But I don't think there will be any type of explosion to the upside. Gold is lightly traded so far this week. Patience is the key idea here this week. Summertime has arrived for now. We'll keep an eye on the after the bell earnings along with the overnight foreign market action.
Tuesday, July 22, 2014
Back to the upside as the Dow gained 61 points on light volume. The advance/declines were 2 to 1 positive. You can make your case either way here for the stock indices but I now believe we are heading higher. The summation index is about to turn around. The TRAN continues to make new all time highs. I'm guessing that the earnings coming out will be viewed as positive. I'll probably wait for the September option cycle to try the OEX puts. GE was pretty much flat on the day as it tries to hold on to the 200 day moving average. No trades in GE for now. Gold lost $7 on the futures as the US dollar was higher on the day. The XAU was off 1 1/8. ABX and GG fell 1/4 or so, NEM was up a nickel. Volume was pretty light. No interest in buying the gold shares here but no real selling either. Earnings due next week. I'm still trying to remain patient with the gold shares for now. Mentally I'm feeling OK. Some tech bellwethers report after the close today and that will probably set the tone for tomorrows open. The big cap stock indices are short term overbought but the small caps (RUT) have room to move higher based on the technicals. I think that a drift higher for now is in order. If that does occur on light volume, we then may have a set up for the OEX puts. However when the summation index dropped recently and prices didn't follow, it leads me to believe that we have just completed a consolidation before moving higher once again. I could be wrong. Gold is in a holding pattern for now. We had a nice run higher. Then we had a couple of days that wiped out around 40% of the gains. It looks like things could go either way from here. Once again, patience is the key here. We'll watch the earnings in the aftermarket and see what happens overseas later tonight.
Monday, July 21, 2014
A weak start to the week as the Dow fell 48 points on light volume. The advance/declines were negative. The summation index continues lower. Plenty of earnings on tap as we get that season going in full swing. The technicals here are mixed for the major averages. I guess at this point you could make a case for either direction. However, as long as the summation index is heading down, I would not be all that bullish. GE was off 1/2 today and the volume was heavy. This is another reason not to fall in love with stocks at this juncture. GE is often the bellwether for the overall market. Gold was up $4 on the futures as the US dollar was flat. The XAU was flat as well but did come off of its lows. ABX, GG and NEM all had slight fractional losses on very light volume. Mixed technicals here as well. I'm still considering the October gold share calls. Mentally I'm feeling OK. Once again the summation index has headed lower and stocks have just moved sideways. It could set things up for higher prices but I don't think it would be a huge move forward. I was looking at the August OEX puts as a possible next trade. But I will need to see overbought technical conditions first. Volatility has picked up lately but the summer doldrums can return at any time. Patience is sometimes required in the game and that is what I think is needed right now for the gold shares. Plenty of time before October and that is the month that I've chosen for the calls here. Earnings due in less than 2 weeks. Unless something drastically changes here, I will probably wait on purchasing the options. We'll see what happens overnight and go from there.
Friday, July 18, 2014
Well, so much for a quiet summer. The Dow came back today, up 123 points on lighter volume for expiration Friday. The advance/declines were over 4 to 1 positive. Volatility has returned as it has been a crazy couple of days. What's it all mean is the question to be answered. I wish I knew. The summation index continues lower but we have really only moved sideways in the major stock indices. I'm beginning to think that the August OEX puts are not going to be a good idea. Oh I've got plenty of time to change my mind again. We will really have to see how the breadth goes from here. If it remains weak as it has been lately, then the puts may work. If not, we could be going back to all time highs again. GE was off 1/8 and the volume was heavy. GE did move off of its lows as the earnings report wasn't greeted especially well. Not sure what that means going forward. Gold backed off $7 on the futures but came off of its lows as well. The US dollar ended little changed and is short term overbought. The XAU only fell 1/2. ABX and NEM were flat, while GG had a fractional loss. Volume was light. The gold shares began the day lower and then found buyers for the remainder of the session. I'm still looking at the October gold share calls which have three months of time now left on them. ABX is the recent out performer of the big 3. Mentally I'm feeling OK. The small stock out performed today and that is a plus. The coming days will tell if this was just an oversold bounce or the beginning of the next leg up. Plus it is hard to say how much of todays price action was expiration related. I'll check the charts over the weekend. Gold started the week lower but did manage a comeback. The question is where would gold be if that plane hadn't been shot down? The gold shares are doing pretty good regardless. The gold shares are overbought on the weekly charts and the earnings are due in less than two weeks. So some more thought will have to be put in on exactly what to do here. Plenty of things to think about over the weekend. The trading is always a challenge and that is something that remains a constant. It's a summer Friday afternoon and time for a break.
Thursday, July 17, 2014
It was a downer of a day as a passenger plane was shot down over the Ukraine. The Dow fell 161 points on average volume. The advance/declines were 4 to 1 negative. The summation index continues lower. The breadth weakness still remains regardless of the geopolitical events. The stock indices are now oversold but I would not be a buyer here. We are very oversold on the McClellan oscillator but the tone of things here is beginning to change. I am still looking to get August OEX puts on a snap back. Seasonality suggests that lower prices are in the future. GE gave back 3/8 today and the volume was average. Earnings tomorrow and that may set the tone for the overall market action. Gold was up $17 on the futures today and made its move after the plane crash. The US dollar did not see the same flight to safety and was little changed on the session. The XAU rose 2 1/2. ABX up 1/3, GG added 3/4 and NEM gained 1/4. Volume was OK here. The gold shares are already bouncing off of the oversold level and perhaps they are ready to take off again. I'm still going to be patient here though. Mentally I'm pretty tired as it has been a long day for me. The price action today was indeed negative but we will have to see if it is just a knee jerk reaction to the plane crash. Even so, I think a more defensive posture will be the proper attitude. Gold remains interesting in my mind. The October gold share calls may still be the next trade. Expiration Friday tomorrow so we'll have to see how it all plays out.
Wednesday, July 16, 2014
The Dow climbed 77 points today on average volume. The advance/declines were positive. The Dow is the leader here and that generally isn't considered bullish. The small stocks continue to lag. The transports however, continue to make new all time high prices. Back to short term overbought on the major index technicals. The Bollinger bands on the S&P 500 are converging, which suggests a big move is coming. I'm still considering the August OEX puts. GE was up 3/8 on very good volume today. Perhaps someone knows about the earnings ahead of time. That's not to say that the game is rigged. Some are better informed than others. Gold was up a couple bucks on the futures and is trying to stabilize. The US dollar was up on the session. The XAU was up around 1 1/2. ABX, GG and NEM were all higher by around 1/2. Volume was good for ABX, average for the others. ABX announced a management change today and it was viewed favorably. I'm still interested in the gold share calls. Mentally I'm feeling OK. The summation index continues lower but we have only seen sideways action in prices, not an actual decline. The breadth is deteriorating here and that is not a good sign. But if we take out the highs in the major stock indexes on good volume, my idea for the August puts isn't going to work. The good move for GE today could be a sign of things to come. It's a tough game. Gold has had a huge move lower so far this week. There is no rush to get the gold share calls. I'm still thinking about taking the position ahead of the earnings due on the 31st. Getting short term oversold on these issues. But patience could be the key idea for now with regards to the gold shares. Always plenty to consider. We'll see what tomorrow brings.
Tuesday, July 15, 2014
Some volatility today but the Dow finished the day up 5 points on average volume. The advance/declines were almost 2 to 1 negative. The summation index continues lower. The market didn't like what it heard from Janet Yellen the Fed head today. The overall market was much weaker than the Dow. I'm still hoping to see some sort of light volume rally this week, in order to set up an OEX August put trade. Once again the breadth here is staring to deteriorate. Caution is still advised if you're thinking of getting long. GE was off a nickel and the volume was pretty good. Earnings are due on Friday and they will probably set the tone for that day. Gold followed through to the downside as the futures fell another ten bucks. The US dollar was higher today. The XAU dropped 3 points. Uptrend lines have been broken and now it is a rush to the exits. This type of action will most likely allow me to try the October gold share calls in the coming weeks. ABX off 1/2, GG down 3/4 and NEM shed 2/3. Volume was good. My thinking is to get some calls at the 50% retracement level prior to the earnings reports due at the end of this month. Getting short term oversold here in a hurry. Mentally I'm feeling OK. I do believe that the market is running out of steam here. I could be wrong. The TRAN closed at a new all time high today. However the small stocks are lagging as of late and that is not a bullish sign. A top could be in the process of forming. As long as the summation index is moving lower, I'd still err on the side of lower prices coming. Gold is heading lower and rapidly. I'd expect some kind of consolidation soon. Good seasonality is approaching for August and September. Plus the mining shares have outperformed the metal and that is bullish. A little more patience here and then buying the October gold share calls should be in order. But you really never can be sure of anything in this game. We'll keep an eye on the overnight developments and see what happens tomorrow.
Monday, July 14, 2014
To the upside as the Dow gained 111 points on light volume. The advance/declines were about 2 to 1 positive. No reason for the advance with the exception of an oversold market. We've also got the positive expiration week bias in effect. I'm still looking at the August OEX puts though. A nice light volume levitation week would be in order. We've got the Fed head speaking on capital hill for the next couple of days and that could move things. I'd like to let this week pass before taking on any trades. GE was up 1/8 but the volume was light and it came off of the highs. No trades here for now. Gold got rocked to the downside today as the futures lost $30 on the session. The US dollar was flat. No explanation here why gold dropped today, nothing in the world has changed over the weekend. The market moves when and where it wants. Perhaps gold is anticipating some bearish comments from the Fed but that is unknown right now. The XAU fell 2 3/4. ABX, GG and NEM all dropped around 1/2. That wasn't bad considering the drop in gold. Volume was light. If the gold shares get oversold, I'm going to try the October calls. Hasn't happened yet. Mentally I'm feeling OK. I don't think that todays price action will turn around the summation index. We'll need to see some more upside for that to occur. Stocks continue to attract money but that condition won't last forever. I am seeing weaker breadth now on the rallies and that will be a precursor to lower prices in my opinion. It is subtle for now but that will change. I would advise caution for anybody considering getting long the stock indices here. Gold had a huge move lower today and has broken the near term uptrend line. The gold shares continue to do better relative to gold and that is longer term bullish. Earnings for the gold shares are due at the end of the month. I'd like to have a call position before then. We'll see. We'll watch the overnight action for positive follow through in the foreign markets and go from there.
Friday, July 11, 2014
The Dow hung in there today as it gained 28 points on light volume. The advance/declines were positive. It was a good sign that we didn't continue lower but the summation index is still heading down. With expiration week coming up, I think that things will stay together for now. But I am looking at August and September OEX puts. The ideal scenario is a light volume rally next week to set up the August OEX puts. The market rarely cooperates though. The short term technicals are oversold for the small stocks, not so much so for the large caps. GE had a really good day, up 1/3 on OK volume. That should lead to higher prices in the short term for the overall market if GE is once again the leader. Earnings are due here in a week. Gold finished the session little changed as was the US dollar. The gold shares reversed back to the upside after yesterdays downside reversal. There is no stopping the gold shares so it seems. Money buys every dip. The XAU rose 2 1/3. Overbought and staying there. ABX up 3/4, while GG and NEM rose 1/2. Volume was good. I just can't bring myself to purchase the calls here because the technicals are so overbought. Not to mention that the CRB index has actually broken down so there isn't any imminent inflation about to occur. But you cannot argue with price. Money and volume are also flowing here. Plus gold is not getting a lot of press so it probably has further to go on the upside. But the XAU has risen 20% in a little over a month. Some sort of pause would seem to be in order. Mentally I'm feeling OK. As usual with the stock market it is always the question of where are we going? The small stocks didn't have a good week and that could be a clue to the future. Or not, if things turn around back to the upside next week. It's never easy. Earnings season is about to get under way and you never really know what the reaction to the numbers will be. Plus it's the summer and things could grind to a halt as well. I'll check things out over the weekend and try and determine the next course of action. Gold continued higher but it was really the gold shares that have made the most progress lately. That is bullish going forward. But the gold shares are both short and medium term overbought and I really do not want to chase them. I've already missed out on some decent profits. I get the feeling that if I buy the October calls now that the gold shares will start to take the rest that they need. Obviously my confidence is not in a good spot. The weekly charts of ABX, GG and NEM are all on the verge of a major break out. I would like to be on board for that. A lot to think about this weekend. For now it's Friday afternoon and time for a break.
Thursday, July 10, 2014
We opened lower and stayed there for the session as the Dow fell 70 points on average volume. The advance/declines were 2 to 1 negative. The summation index is heading lower. There wasn't a chance to get any July OEX puts this morning as it was a down hard open. But you are getting the idea. My guess is that things are in the process of change. Remember the weak start to the year and the implications of that. Be looking for entry points for OEX puts now. Expiration week coming up and I'll look for August and September puts going out from here. GE was off 1/8 and the volume was average. It looks like GE was once again a sign of things to come. Pay attention to GE, it will help your trading of the stock indexes. The gold futures rose $15 on the day, most likely due to the increased tension from the Gaza strip and the report of a troubled bank in Portugal. These issues didn't help the stock market either. The US dollar was slightly higher today. The XAU however lost 2 points as the gold shares had a classic reversal. They opened the day higher and closed lower. ABX and GG lost 1/3, while NEM was off a few cents. Volume was good here and these stocks are overdue for some weakness. I'm still looking at the October calls for the gold shares as a possible trade in the future. Mentally I'm feeling OK. Tomorrow will be an important session in my mind. If stocks hang in here, then more time will be taken to build a significant top in my opinion. If we simply continue lower, then it is possible that a decent top has been put in. The short term technicals have rolled over for the stock indices. So we'll see what happens. No summer doldrums for now. The gold shares had what looks like a major one day reversal today. Perhaps this will give us a set up to purchase the October calls. But there isn't any rush to do anything after todays price action. The only thing that would change that is if we have a huge up move tomorrow for these stocks. I don't see that happening but you never know. Yesterday the foreign markets did not follow the Dow higher. We'll see what transpires tonight.
Wednesday, July 09, 2014
Back to the upside today as the Dow gained 79 points on light volume. The advance/declines were positive. The Fed minutes were greeted with buying eventually. The question now is do I try the OEX puts on a rally to 1975 on the S&P 500 or not? It is something that I'll consider overnight. The short term technicals have turned around to the upside and that is something to consider. No real economic data to trade off of and the summer factor also comes into play. The McClellan oscillator did bounce form the oversold -100 level today. GE was off a nickel but the volume was pretty good. Back below the 50 day moving average here. Gold was up 8 bucks on the futures and a bit more in the aftermarket. The US dollar was lower again today. The XAU gained 2 2/3. ABX, GG and NEM all had fractional gains to the upside with NEM leading the way this time around. Volume was good and the gold shares have climbed above the recent consolidation. There is no worse feeling for me than missing a move. That is what has happened for me with the gold shares. I am a believer in this move higher and if there is a chance in the future to get the October calls, I will. But it doesn't look like that's going to happen. Mentally I'm feeling tired. Up early and not enough sleep. I'm considering the July OEX puts tomorrow if we get to the 1975 level on the S&P 500 and stall. One of my concerns is that I haven't put on a trade in a while and that could be the reason to try this one. This trade is based more so on the Summation index , which has rolled over. We also have relative under performance from the small stocks. One of the problems for this trade is expiration week and its positive bias is almost upon us. I'll think things over tonight and take it from there. Gold is overbought and staying there. It continues to attract capital. I do not know the reason why. All I know is that it is happening. I do not know how long this can continue but it is usually longer than you think. All I can do at this stage is watch. We'll see if the overseas markets overnight follow through with the upside action to the Dow.
Tuesday, July 08, 2014
Interesting, as the Dow fell 117 points on average volume. The advance/declines were negative but not as much as a down 117 point market would suggest. The McClellan oscillator did give a signal for a significant move on Friday and we got that move today. That indicator has been working well in that respect lately. The summation index is now heading lower. Maybe it is time to look at the OEX puts if we see some upside in the next couple of days. Only 8 sessions left in the July option cycle though. Perhaps this will be the next trade. It is something to ponder. GE was off 3/8 and the volume increased from yesterday. On this daily chart we have a break of the up trend line that began in February, a snap back to that line and now a drop again. Textbook technically so far but is it a precursor for the overall stock market? Gold was little changed on the futures, rose a few bucks in the aftermarket. The US dollar was little changed on the day. The XAU was up 1 1/8 and continues to not sell off. ABX was up 3/8 and broke out to the upside from its consolidation with good volume. GG rose almost 1/2, while NEM gained just a few cents. Volume was OK here. The gold shares are out performing and there has been no move lower. NEM is the laggard here. It is very tempting to just get long the gold shares here but I just can't bring myself to do it. I will have to see some kind of downside first. Mentally I'm feeling OK. A couple days lower for the stock indices with the small stocks leading the way. The indication is bearish. I am considering trying the OEX puts for July in the next couple of days if we see some consolidation or upside. I could be wrong. A move back to the 1975 level in the S&P 500 will get my attention to attempt the trade. We'll see. Gold and the gold shares remain interesting to me because their relative strength here has been very good. We haven't seen this for quite some time. It is as if they are not giving you a chance to participate on the long side. The charts remain overbought and are staying there. I'll of course keep an eye on things here but it could simply be an opportunity missed. We'll keep an eye out for the Fed minutes tomorrow but it is really a week without much economic data due out. We'll see what tomorrow brings.
Monday, July 07, 2014
A down day to start the post holiday week as the Dow fell 44 points on light volume. The advance/declines were 2 to 1 negative. Still overbought here as one day of selling isn't a trend. No real reasons for the activity today as nothing has really changed. Technically overbought on most levels and all up trend lines remain in place. Light trading should dominate from here until the end of summer barring some unforeseen event. The small stocks are extremely overbought on some indices, hence the under performance of RUT today. Could it be a sign of things to come? Hasn't yet. GE was off 1/8 and the volume was light. Gold didn't do much on the day and neither did the US dollar. The XAU was off 1 1/2. ABX, GG and NEM all had fractional losses. Volume was good for ABX, light for the others. Yes, I still like the idea of the October gold share calls. I need to see the technicals get to oversold though and we are no where near that yet. Gold has held up pretty good after the run up though. That leads me to believe that higher prices are in the future. Mentally I'm feeling OK. Not much else to report about todays price action. Slipping from all time highs and there is no reason for concern at the moment. However let's not forget the negative January price action for the stock indexes and what that implies down the road. OEX puts are going to make sense at some point I believe as well. The gold shares under performed today and that is a negative looking ahead. Still plenty of geo-political turmoil in the world though. I think it would be prudent to wait for some type of pullback in the gold shares. But it may be wise to own the gold share calls before the earnings releases at the end of the month. As usual plenty of questions in the game with no easy answers. We'll keep an eye on the overnight developments and get ready for Tuesday.
Thursday, July 03, 2014
In a holiday shortened session the Dow rose 92 points on very light volume. The advance/declines were positive but not as much as an up 92 market would project. The employment report was cheered as we expected yesterday. When the market is in a bull mode, everything has a positive spin to it. It's not a bad thing and we'll enjoy the ride. However the volume once again is lacking and some sort of pause is overdue. GE gapped up 1/4 and the volume was light. On the move higher here and we'll have to see if it is for real or just a snap back to the broken uptrend line. Gold fell $10 on the futures as the US dollar was higher on the day. Gold did come off of the lows of the session though as buyers remain evident. The gold shares did not follow gold lower as the XAU added 1/8. ABX was up a dime, while GG and NEM had fractional losses. Volume was light. I would really like to see some extended decline for the gold shares in the next couple of weeks to get positioned in the October calls. However the strength in the gold shares at these levels cannot be denied. Just like the overall stock market, buyers are coming in on the dips. It is not a good idea to go against that trend. Mentally I'm feeling OK. It seems like it is just up, up and away for the stock indexes. The Dow reached 17000 for the first time today. There is no overhead resistance. The summation index has been trending higher but it hasn't had huge gaps higher. The general public isn't enamored with the stock market even at these levels. That tells me we have higher to go. When everybody is out there talking about how great the market is, that will be the time to get worried. We are not there yet and it may take years. That doesn't mean I don't think that we will see some extended downside action in the autumn. I do. But that should set things up for the next leg higher. Gold has stalled in the past two weeks after a two week run up. The gold shares continue to out perform and that is a positive. It may simply be that I have missed this trade to the upside. The US dollar was higher this week and that is not supportive for gold. But the dollar hasn't closed above the 50 week moving average yet, so the jury is still out there. A long weekend coming up and then only two weeks left in the July option cycle. I'll be checking the charts and trying to come up with a game plan going forward. For now it's Thursday afternoon and time for a break.
Wednesday, July 02, 2014
A wait and see session after yesterdays stellar gains. The Dow rose 20 points on light volume. The advance/declines were negative. The technical condition of the market hasn't changed. Overbought and staying there. We'll get the employment report tomorrow ahead of a long summer holiday weekend. We'll see what happens. GE was up almost 1/4 but the volume was light. Slightly back above the 50 day moving average here. Gold was up a buck on the futures as the US dollar was slightly higher. The XAU rose 1 3/8. ABX, GG and NEM all had fractional gains on light volume. I would really prefer to see the gold shares drop back before trying the October calls. However the market rarely does what you'd like it to. I may just have to chalk this up to another missed opportunity and look elsewhere for the next trade. Mentally I'm feeling tired. Not much else to report really. The trend in the stock indices remains up. There is nothing on the horizon to think that the rally can't go on. Perhaps things will run up into the July expiration and then we'll see where we go from there. There seems to be plenty of liquidity to go around. Gold has found buyers. We never got the snap back return to the near term broken down trend line. The gold shares went back to out performance today and that is bullish. Declines are being bought here now and that is the opposite of the preceding price action. It looks like patience did not pay off this time around. Tomorrows employment report will key the trading for the day. It seems like no matter what the result, the market will find a way to view it as bullish. It is that kind of game for now. We'll keep an eye on the overnight action and go from there.
Tuesday, July 01, 2014
A jump to start off the month of July as the Dow rose 129 points on average volume. The advance/declines were 2 to 1 positive. I expected a quiet market and was wrong. Money flows came in much more than I anticipated. More new all time highs for the major stock indices. There is no overhead resistance. The summation index continues higher. There seems to be no stopping the market from continuing higher. Still overbought all the way around. GE was up 1/8 and the volume was average for summer. I still have no trades in mind here near term. Gold was up a few bucks on the futures as the US dollar was flat on the session. The XAU was off 7/8. ABX, GG and NEM all had fractional losses on light volume. The gold shares didn't follow the market higher today for a change. I'm still a believer in the October gold share calls and I am still trying to be patient. Mentally I'm feeling a bit tired, did not sleep well. What more can you say about this market? It just keeps moving on. I still think that it won't end well when it does end but you cannot argue with price. A summer rally is in place. How high it gets is anybodies guess. We'll see how things go after the employment report on Thursday. Gold is overbought as well but that doesn't mean that it cannot go higher. I would have expected to see more beginning of the month and quarter money flow into there but that was not the case. Also today did not see the gold shares have good relative strength vs. the movement in gold itself. It may or may not mean anything but we'll find out in the days ahead. I would wait until after the holiday weekend to take on any trading positions. Obviously it is too late for any index calls. We'll see if the foreign markets follow the Dow higher and go from there.