Friday, August 29, 2014
A pop in the last hour pushed the Dow to a gain of 18 points on light volume. The advance/declines were a little over 2 to 1 positive. The summation index continues higher. Next week all the players will return and we will see which way things go. Right now everything is pointing to higher prices. The overall market is much stronger than the Dow. The advance/decline line continues to make new highs. My over leveraged September put position is a big loser. Three weeks to go in the September option cycle. GE was barely changed and the volume was light. These September puts that I own are big losers too. Gold was off a few bucks as the US dollar continued to climb higher. The XAU was up 1 1/4 as the gold shares out performed the precious metal once again. That is a bullish sign but with the strength in the dollar, I can't really see any big gains for gold coming. ABX, GG and NEM all had fractional gains again on light volume. My October ABX calls are losers, joining the rest of my recent poor trades. Mentally I'm feeling OK. We closed out the month with gains and the normal pattern of weakness in the market for this time period is not showing up yet again. The near term technicals point to even higher prices coming. I'll probably hold onto my September options until the employment report next Friday. But unless we see a dramatic turnaround in equities next week, these trades will be losers. There hasn't been a catalyst for gold and silver despite the continuing geopolitical turmoil. I don't know what it is going to take to get this market going. The positive seasonal influence is not happening here as well. That trade goes out to October, so it still has time to turn positive. But at the rate things are going there, it will probably just be another loser. I'll be checking the charts over the long weekend and keeping an eye out on any news that may affect the markets. For now it's the unofficial last weekend of summer and time for a break.
Thursday, August 28, 2014
Another day of watching paint dry as the Dow fell 42 points on light volume. The advance/declines were negative. We sold off fast early and spent the rest of the session coming back. Buyers arrived on the dip. The volume is so light here that this will simply be a lost summer week. Tomorrow should be just as lackluster. GE was off 1/8 and volume was very light. Nothing new to report. Gold found a bid on the futures as they rose seven bucks. The US dollar was flat on the day. ABX, GG and NEM all had minor fractional gains on light volume. Waiting for a catalyst here as well and the summer doldrums continue. Mentally I'm feeling OK. We will have to see what kind of mood the traders are in after this weekend. The summation index continues higher. We worked off some of the markets overbought condition today. Right now I'm expecting a positive start to next week. What happens after that will be the key to my September put trades. They are all pretty big losers now. Gold found some buyers at the $1275 level but it certainly isn't convincing. However gold has held up OK despite a decent break out to the upside in the US dollar. That is encouraging to the bulls. We'll close out the trading week tomorrow.
Wednesday, August 27, 2014
The middle of the week and we are simply marking time here. The Dow gained 15 points on light volume. The advance/declines were positive. Nothing has changed from yesterday. Time premium is being sucked out of any open option positions. I would expect a quiet rest of this week. The summation index continues higher. GE was up 1/8 and the volume was light. Keep an eye on GE. Gold lost a buck or so and the US dollar was lower for a change. We are in a holding pattern now for gold as well. The XAU was off 1/8. ABX, GG and NEM were all little changed on light volume. Nothing new to report. Mentally I'm feeling OK. I'm holding on to losing positions and waiting for next week to begin. It is a lousy strategy but it is all I can do at the moment. Unless I want to close out with major losses. Over leveraged to the downside and that was the wrong thing to do. We'll watch what happens overnight but I would expect more of the summer doldrums for now.
Tuesday, August 26, 2014
Nothing but good news from the economic numbers today and that helped the Dow to a gain of about 30 points on light volume. The advance/declines were 2 to 1 positive. The summation index continues to the upside. No overhead resistance for the major stock indices and daily new all time prices are the norm. I should have not tried the September OEX put trades but hindsight is always correct. GE was off almost 20 cents and the volume slightly picked up. If GE is the leader once again we should start to see some weakness in the indexes. Hasn't happened yet. Gold found a bid today as the precious metal futures rose six bucks. The US dollar was up yet again. The XAU gained 2 1/8. ABX, GG and NEM all had fractional gains on light volume. Still waiting on the positive seasonal factors for gold to kick in. Mentally I'm feeling OK. Slow volume continues as we reach the end of summer. This week is playing out as expected with a move higher to begin the week. I don't see any bumps in the road yet for this rally. I'm just hanging on to the losing positions that I own and waiting for next week. Without a doubt overbought here for the stock indices. But the market can sometimes stay overbought for long periods of time and we have yet to see any sellers arrive on scene. Gold is hanging in there so far this week. However the fundamentals right now are not bullish. Plenty of time still left on the ABX call trade though. We'll keep an eye on the foreign action overnight and take it from there.
Monday, August 25, 2014
More of the same as the Dow gained 75 points on light volume. The advance/declines were positive. The summation index continues to the upside. Overbought, staying that way and bullishness remains. There are no sellers. It's the last week of summer so I would not expect much action. My over leveraged September puts are losing money. This idea is a disaster so far. I don't know what it will take to turn things around. At some point, I will have to swallow the loss. GE was up a nickel and the volume was light. My September GE puts are losers as well. Nothing new to report here. Gold was off a bit on the futures while the US dollar continued higher. There is no resistance for the dollar here and that is not good news for the gold bulls. The XAU lost 1 1/3. ABX, GG and NEM all had fractional losses on light volume. My October ABX calls are losing as well, keeping with the theme of poor trades at the moment. Mentally I'm feeling OK. Some economic data out this week. However the major players are still out for the summer. We should get things going next week. Unfortunately this week will suck out some more of the time premium in the option positions. It is basically a period to sit and wait. The short term technicals for the stock indices are very overbought. The medium term indicators are overbought as well. I do expect some near term pull back but it hasn't happened yet. We'll see what tomorrow brings.
Friday, August 22, 2014
A mixed bag to close out the week as the Dow shed 38 points on very light volume. The advance/declines were negative. The small stocks were up on the session and that's bullish going forward. The summation index continues to rise. All signs are still pointing to higher prices for stocks despite the overbought condition on the indices. I'm still over leveraged and holding on to the September OEX puts. Four weeks remaining for this trade and I've decided to give it another week. Unfortunately, the major players are still out until Labor day. This trade is showing a decent loss at the moment. GE was off 1/4 on light volume. One day doesn't make a trend. However there is a possibility that GE is rolling over here. That would bode well for the September OEX put trades that I have. The September GE puts that I own are pretty good losers. Gold was up about five bucks on the futures and made it back to $1280. It is on the precipice of major trouble though if this level is severely breached. The US dollar was higher today as well. The trend is clearly up for the greenback. The XAU was off 1/4. ABX, GG and NEM all dropped 1/4 on light volume. These shares are still in their consolidation channels but at the bottom of them. Next week could be the key and all signals appear to point to lower prices. My October ABX calls have lost half of their value. Mentally I'm feeling OK. One more week of summer and then I would expect volume to perk up along with volatility. But who knows? The past couple of years has seen the beginning of September with nice gains for the stock indexes. Perhaps it will be three years in a row. I've decided my course of action and it is to be positioned for a decline. It appears that this OEX put idea will either make or break my trading year. No one trade should determine that but it is what it is. The market will go where it wants. Overbought, staying there and very light volume any way you slice it. Gold is oversold as are the gold shares but not completely. I've commented at length on the favorable seasonal time period for gold. We are now in it and haven't seen any kind of sustained upside for gold. There is still time for that to happen but it certainly is late. As usual I'll be checking the charts out over the weekend. My thinking right now is that next week will be more of the same. Quiet, summer like trading with a bias to the upside. But anything can happen in this game. For now it's Friday afternoon and time for a break.
Thursday, August 21, 2014
Still moving basically straight up as the Dow gained 60 points on light volume. The advance/declines were positive. The summation index continues higher. The S&P 500 hit a new all time high today. Overbought and staying that way. I'm still over leveraged in the September OEX puts. This idea has done nothing but fail since I started taking positions. At the rate the market is going, it will be one of my biggest losers. There is nothing to suggest that the stock market is going to head lower. Still over four weeks left in this option cycle but the main players won't return until after Labor day. The things that I thought would cause lower prices are not happening. GE was up a few cents and the volume was light. The September puts that I have here are nearly worthless. Another failed trade for now. Gold finally got whacked as the futures fell about $20. We are now below the important $1280 level. We will have to see how the week closes out tomorrow. The US dollar was slightly lower today. The XAU was off 2 1/8. ABX shed 1/4, GG down 1/8 and NEM lost 7/8. Volume picked up to the downside and that is not a good sign for the bulls. The gold shares haven't broken down out of the nearly two month consolidation yet. But they do appear to be on the verge of doing so. I'm still holding on to the October ABX calls although they have lost half of what I paid for them. My thinking is that sooner or later the positive seasonal factors will kick in. Looks like later if at all. Mentally I'm feeling tired, not enough sleep and dental problems. Stocks are very overbought and I am leveraged to the downside. This is not a good place to be. My thinking has been atrocious and my trading tactics have been wrong. The market does not care. Perhaps I am just too stubborn in my attempts to trade here. With the summation index continuing to the upside, the only smart play is to be long. As always, I will pay for my errors. Gold broke down today and it appears poised to head even lower. The gold shares are out performing but in this environment it only means they aren't going down as far. There are still a couple of months for the ABX trade to work but at this rate it won't. When everything is going wrong perhaps it is best to take a step back. I'll consider this overnight. We'll close out the week tomorrow.
Wednesday, August 20, 2014
And the beat goes on. The Dow rose 59 points today on light volume. The advance/declines were about even. The Dow was stronger than the overall market and that usually isn't bullish. However the way things have been going lately, that may not matter. It seems as though there are no sellers. The summation index continues to the upside. I did move up to a closer to the money strike price on the September OEX puts but I did not yet sell the other puts that I already own. This increases the leverage and the risk. I should sell the earlier position tomorrow to be on the safe side. If their is anything safe about trading options. The major stock indices appear poised to hit new all time highs. I'm still not a believer in light volume rallies but perhaps I am wrong. GE is leading the way and gained 1/3 today on OK volume. GE led the way down and is now leading the way back up. It is something to keep an eye on. Gold was off another couple of bucks on the futures but the US dollar had another strong session. The dollar has broken trough some long term resistance and the trend is up. The XAU was up 1/4. ABX, GG and NEM were all little changed on light volume. Considering the move in the dollar, the gold shares held up pretty good. Not exactly sure what to make of that. The October ABX calls that I have are still showing a loss. Mentally I'm feeling OK. All signs point to higher stock prices at this juncture. The Fed minutes today provided a temporary dip but it didn't last long. Declines can be bought. Then why try the OEX puts here? We are short term overbought. The second year of the presidents term usually has a decent decline at some point and we haven't seen anything like that yet. The rally from the recent lows is on very weak volume. There is plenty of time in the September option cycle for this trade to work. Gold is still going nowhere. It is a surprise that we haven't seen some kind of actual decline there. Perhaps the seasonal positive tendency will prevail. We'll see if the European markets can get headed back to the upside tonight.
Tuesday, August 19, 2014
Another strong day to the upside as the Dow gained 80 points on light volume. The advance/declines were shy of 2 to 1 positive. The summation index continues higher. The small stocks are doing good too. I tried to move to a closer strike price again on the September OEX puts but my order wasn't filled. I'm prepared to take yet another loss on the existing trade if I can get the closer to the money puts. I am still a believer in this idea because the volume on this rally has been pretty anemic. However that could just be a summer phenomena. Time will tell on that. GE was flat on the day, volume extremely light. This September put trade has lost about half of its value. It may be time to pull the plug. Gold lost a couple bucks on the futures today. The US dollar broke above its recent consolidation to the upside. This isn't bullish for gold but gold is somehow hanging in there without a decline. SO far that is. The XAU was off 7/8. ABX and GG had slight fractional losses, while NEM was flat. Volume was light once again. My October ABX calls are still showing a loss. Mentally I'm feeling a bit drained, had a tooth pulled today. It appears that the major stock indices are poised to hit new all time highs. My idea for the September puts has failed pretty badly so far. I'll probably try to get to a close strike price tomorrow and if that doesn't happen I'll simply stand pat with what I've got. Short term overbought now for the stock indexes. Gold is going nowhere fast and silver just keeps going down. With a rising US dollar, things are not looking good from the long side of the precious metal complex. Perhaps all my thinking is just wrong at the moment. It's possible. I'll consider what to do overnight. We'll see if the foreign markets follow the Dow higher and get ready for Wednesday.
Monday, August 18, 2014
The market screamed to the upside today as the Dow gained 175 points on light volume. The advance/declines were over 3 to 1 positive. The summation index is heading higher. Some small stock indices are hitting new recovery highs and that is bullish leading the market here. Getting short term overbought for the major stock indices. The trend is now up though. My September OEX puts are now losers. The question is whether or not to hold them for now or just take the loss. The stock indexes act like they want to go to new all time highs. I'll probably wait to see how the rest of the week shapes up. But this trade is not acting well. GE was up 3/8 on summer average volume. GE got above its 200 day moving average today. My September puts here are losers as well. Short term overbought here on the technicals. We closed on the high of the day as did some of the major averages. Gold fell around seven bucks on the futures as the US dollar was higher. The XAU managed a 1/2 point gain. ABX, GG and NEM all finished the day close to unchanged. The volume was very light. There is no interest in gold or the gold shares at the moment. My October ABX calls are showing a slight loss. I'll hold these as long as gold does not break below the trading range that it has traveled over the past two months. Mentally I'm feeling a bit tired. My idea for the September index puts is not looking good at the moment. With the small stocks leading the way here, we could be in for a decent rally. Not a lot of economic data out this week. It's possible we could find ourselves in the summer doldrums after todays huge upside move. But that's a guess as usual. The only thing that the September OEX put trade has going for it now is the extra week in the option cycle. Still waiting for the positive seasonal factors to kick in for gold. Over halfway through August now and we have yet to see any kind of sustained rally. The gold shares are holding up for now. We'll keep an eye on the overnight action and go from there.
Friday, August 15, 2014
An interesting day to be sure as the Dow fell 50 points on a bit better volume. The advance/declines were about even. The overall market was much stronger than the Dow. The NASDAQ registered a gain on the day and that is bullish. The market had a gap to the upside to start the session but an hour or so later news from the Ukraine sent the stock indices lower. The rest of the day was spent recovering from that sell off. The summation index is moving higher and the stock market has all the signs of wanting to move higher. Volatility picked up today. My September OEX puts are about at what I paid for them. This trade has plenty of time to work but the market isn't acting bearish at the moment. It is acting quite bullish and perhaps this idea is simply wrong. GE fell 1/4 and volume picked up a little just like the overall market. The September puts that I own here are break even. The gold futures fell almost $10 today despite the trouble in the Ukraine. Silver got walloped as well and that is not good news for the precious metals complex if you are long. The US dollar was a bit weaker as well. The XAU was off by 2/3. ABX, GG and NEM all had fractional losses on light volume. The October ABX calls that I have are slightly positive. If gold can't rally on todays news, I don't know what it will take to get things going higher. The positive seasonal factors haven't taken hold yet. Mentally I'm feeling OK. A positive week for the major stock indexes but the volume was pretty light. Perhaps the next two weeks will be more of the same with regards to volume. The major players are still out for the summer. Maybe I was too quick in taking the September options positions. The market appears to want to go higher despite the loss for the Dow today. I guess a lot depends on what happens in the Ukraine over the weekend. The short term technicals have worked back up from the oversold condition but are not overbought yet. I think that gold really needs silver to stop going down to get any kind of sustained rally going. The silver chart looks ugly if you're bullish. The CRB has also been heading almost straight down for almost a month and a half. It appears obvious that despite all the money that has been thrown around, inflation is not a concern at the moment. That isn't bullish for gold. But as usual, anything can happen in this game. I'll be checking out the charts and the headlines over the weekend. For now it's Friday afternoon and time for a rest.
Thursday, August 14, 2014
The upward push of the market continues as the Dow gained 61 points on light volume. The advance/declines were 2 to 1 positive. The S&P 500 is right at the 1955 level and also poised at its 50 day moving average. The volume has been light all the way up and I think that this rally is not going to last. However, the September OEX puts I bought yesterday have already lost 35% of their value, so I sold them today and took the loss. I then repurchased some September OEX puts at a closer to the money strike price for less than what I paid for the options yesterday. If the trade does work as expected, the loss taken today will more than be made up due to the closer to the money strike price of todays option purchase. If the trade doesn't work, it will amount to about the same loss that holding onto the September puts that I sold for a loss today would have had. The stock indices closed at their highs today which is bullish. Plus the small stocks are leading the way. So perhaps my idea of getting some index puts is completely wrong. The summation index is heading higher now as well. GE was up a nickel and the volume was light. The September puts I own here are showing a small loss. Gold was flat on the session as was the US dollar. These markets are in a summer doldrums pattern for this week so far. The XAU fell 1 1/4. ABX and NEM were flat, while GG fell 1/4. Volume was pretty light. Nothing new to report here as we wait for the next catalyst. Mentally I'm feeling OK. We'll close out option expiration week tomorrow. We are in a light volume rally so far this week. Light volume rallies cannot be trusted. I do still believe that we will soon be rolling over and that we will also be taking out the recent lows in the major stock indices. I could be wrong and often am. The gold market is going nowhere at the moment. Patience is required but we are going to move pretty good one way or the other soon. The Bollinger bands on the daily chart are telegraphing that. So we'll see. As always we'll watch the overseas overnight action and take it from there.
Wednesday, August 13, 2014
Back to the upside today as the Dow climbed 91 points on light volume. The advance/declines were about 3 to 1 positive. Today should turn the summation index up. I bought the September OEX puts today. The scenario of a light volume rally after the initial drop is playing out as hoped for. However my entry today was rushed and I could have gotten a better price on the options. I still think this is the proper trade unless we continue to move higher past the 1955 level on the S&P 500. So we'll see what happens. GE was up almost 1/4 and the volume was light. The September puts that I have here are now at break even. It's a good idea to keep an eye on GE here as well for clues to the overall market direction. Gold was up a bit on the futures and the US dollar was a little higher as well. The XAU was flat on the session. ABX was off 1/8, GG rose 3/8 and NEM was flat on the day. Still waiting for gold and the gold shares to break higher. Short term overbought for now here. My October calls for ABX are still in the black but not by as much as before. Mentally I'm feeling frustrated with myself on the September OEX put entry. I should have let the trade come to me but I got anxious. There is nobody to blame here but myself. Hopefully I'll do better on the exit. Plenty of time for this trade to work. Building a top here on the stock indexes would be the preferred price action. However as always, the market will go where it wants. Over five weeks to go in the September option cycle. Gold remains in a trading range. Hopefully the favorable seasonal pattern kicks in at some point this month. August expiration is on Friday. So we'll keep an eye on the foreign markets overnight and see what transpires.
Tuesday, August 12, 2014
Digestion of the recent gains as the Dow fell 9 points on light volume. The advance/declines were negative. The summation index has started to move sideways. I'm trying to remain patient here but I don't want to be late for the September OEX puts. The timing for purchase looks like it will be tough as usual. The ideal scenario would be a nice up move tomorrow in the stock indices. But the market rarely cooperates. Trading the index options requires even more finesse than individual issues in my opinion. Hopefully the upside expiration week bias will continue. Another short squeeze would be good for the cause but that remains to be seen. GE was off over 1/8 and the volume was very light. The September puts that I own here are slightly in the black. Gold was little changed on the session but did come off of its highs. Ditto for the US dollar. The XAU rose 1 3/8. ABX, GG and NEM were all higher by 1/2 or so. Volume was good for the summer. The October ABX calls that I have are in the black. Plenty of time to go here. Mentally I'm feeling OK. We got a bounce from the oversold levels of the major stock indices and now we are waiting for the next catalyst. Perhaps the retail sales data tomorrow will provide some direction. Maybe if we can get some rally from the overseas markets it will propel the US stock indexes higher. For now we're more oversold than overbought short term. Just waiting to buy some September index puts at this point. Gold is on hold but the daily Bollinger bands are starting to get closer, which implies some movement coming in the near future. The gold shares are out performing now and that is a positive. However silver is not moving higher with gold and remains oversold. The best situation would be to get those two rising in tandem. We can hope but hope has no place in trading. We'll keep an eye on the overnight price action and see what tomorrow brings.
Monday, August 11, 2014
Higher today but not by much for the Dow as it gained 16 points on light volume. The advance/declines were almost 3 to 1 positive. The overall market was stronger than the Dow. Getting a decent move up for now as today could turn around the summation index. I'm still a believer in the September OEX puts though. I plan on getting them this week on more strength if we see any as the week progresses. The ideal scenario in my mind would to get to the 1950 level on the S&P 500. We'll have to see how the week plays out. GE was up 1/8 on summer average volume. We did get to the $26 level today and I did get some September GE puts when we got there. Plenty of time for this trade to work and it fits in with my bearish prognosis. Gold didn't do much today and neither did the US dollar. The XAU managed a gain of 1 1/8. ABX was flat, while GG and NEM had fractional gains. Volume was light. The October ABX calls that I have are slightly in the black. Holding on for now. Mentally I'm feeling OK. I'm going to try and be patient when attempting to get the September OEX puts this week. But I don't want to be late either. It is a tough game to play. Of course I could be wrong in my thinking and the stock indices simply rally from here. However I am looking for more downside as the summer ends and we roll into September. The short term technicals are still oversold for the major stock indices. On thing in the bulls favor though is the out performance recently of the small stocks. So it is a difficult call to make one way or the other. Gold has been lacking a trend for a month. We are in a good seasonal period but that doesn't always mean a rally will be coming. At least today the gold shares found some buyers but it wasn't a huge move. The foreign stock markets have started to bounce so perhaps the US stock indexes will keep pace. There should be an opportunity this week to get set up in the September puts, hopefully. We'll keep an eye on the overnight action and go from there.
Friday, August 08, 2014
We finally got a rally today as the Dow soared 185 points on light volume. The advance/declines were 3 to 1 positive. The McClellan oscillator is heading back towards the zero line. Can it make it through there is the question. In negative markets the rallies come quick out of nowhere. Today qualifies for that. The light volume also is telling. I'll look for a 50% retracement of this decline to purchase some September OEX puts. This may or may not be the proper outlook going forward but it is the idea at the moment. Perhaps there will be a positive bias for expiration week. GE was up over 1/8 and the volume was light here as well. If we make it back to 26 or close to it, I'll try the September puts here as well. Holding onto the 50 week moving average for now. Gold was off a touch on the futures as the US dollar was lower as well. The XAU rose 1/8 but finished well off of the highs. ABX and NEM were up 1/4, while GG fell 1/4. Volume was light. My October ABX calls are now slightly in the black. Gold had a positive week but we'll need to see it build on that to really get bullish. I get the feeling it could be just sideways action coming up. But what do I know? My guesses haven't been all that good lately. Mentally I'm feeling OK. The major stock indices managed a decent bounce today. The markets were very oversold and due for something to the upside. It has all the looks of short covering to me. I certainly hope it continues next week because I am still a believer in the September put idea. But anything can happen in this game. There is an extra week in the September option cycle and that will add to the cost of trying September trades. Gold and silver have gone opposite ways of late and that isn't really bullish. Gold is now short term overbought with silver just the opposite. It would be much more bullish if they rose in tandem. The gold shares remain in a trading range. Plenty of time for the October calls to work here but it may take a while to really get going. And they could get going in either direction as well. So on it goes. I'll be checking signs from the various media outlets to see the reaction to todays positive market action. The ideal scenario for the bearish cause would be an indication that all is well. There's plenty of charts to check over the weekend. However the game plan for the September puts remains the same. For now it's Friday afternoon and time for a break.
Thursday, August 07, 2014
Lower we go as the Dow fell 75 points on average volume. The advance/declines were just slightly negative though. The summation index continues lower. Will we ever get a decent bounce to get short is now the question. But everybody is waiting for the same thing it seems. Oversold and staying there for the major stock indices. That could be dangerous. Caution is still advised in my book because I think we have a lot further to go on the downside. I could be wrong. GE was up a few cents and the volume was average. GE hasn't led things higher near term. I'm now considering some September GE puts since the OEX puts have gotten very expensive. Just a thought for now. GE is holding at its 50 week moving average. The gold futures rose around five bucks as the US dollar gained back what it lost yesterday. The XAU was flat on the session. ABX, GG and NEM all had slight fractional gains on light volume. My October ABX calls are slightly in the red. Nothing to do but hold on here for this trade. Plenty of time and the favorable seasonal factors hopefully kick in for gold. Mentally I'm feeling OK. Everyone knows now that the trend is down. I don't see any sustainable rallies in the near future. Simply waiting to get some puts on something. Option expiration week is coming up. Will the usual positive bias show up? The McClellan oscillator remains in negative territory and the positive divergence there earlier in the week did not pan out. Gold has had a bounce this week but it hardly qualifies for an uptrend. Ditto for the gold shares, which still have yet to break out from their recent consolidation. Volume was anemic today in this complex. We'll close out the week and it is anybodies guess what will happen tomorrow. The European markets have been very weak as of late and that is probably weighing on the US. So we'll see.
Wednesday, August 06, 2014
A waiting game today as the Dow rose 14 points on good volume. The advance/declines were positive. We did not continue lower today and that is a positive for the bulls. I did place an order this morning for the August OEX calls but canceled it later in the session. I still think that this trade could work and may try again tomorrow. The summation index continues lower. Only seven days left in the August option cycle, so any trade will have to be short term in nature. I still like the September OEX puts on a relatively longer term basis. GE was up 3/8 and the volume was good. GE led the way down so it figures to now lead the way back up. It is another reason to potentially try the August OEX call trade. Gold rallied today as the futures rose over $20. The US dollar was slightly lower. The XAU gained 2 points. ABX, GG and NEM all had fractional gains on better volume. My October ABX calls are now slightly in the red. Perhaps this is the beginning of a leg up in gold. Time will tell on that. The volume on the gold shares was good and that is bullish. The US dollar is also at resistance so perhaps it will be turned back down here. Mentally I'm feeling OK. To trade or not to trade here is the question at the moment. The risk is elevated since the time is running out for the August cycle. There is a positive divergence on the McClellan oscillator. The short term technicals are oversold for the major stock indices. So maybe I'll try the calls tomorrow. The gold shares acted better today but one day doesn't make a trend. There has been very little of the summer doldrums so far this year. We'll keep an eye on things overnight as usual and see what tomorrow brings.
Tuesday, August 05, 2014
So much for a quiet week. The Dow fell 140 points on good volume. The advance/declines were over 2 to 1 negative. The summation index continues to decline. The market needs to hold in here or it will really get ugly. I think that we will hold up for now. If I had any guts, I would buy some August OEX calls tomorrow for a short term trade. But the better idea in my mind is to get some September puts if we see some strength. The short term technicals are oversold and staying there. Let's remember that markets go down a lot faster than they go up. If we see a rally, short it. If we don't, then it is too late. GE lost 1/4 and the volume was OK. Keep an eye on GE. It is oversold both short and medium term. It needs to hold in here. Gold was off a few bucks today as the US dollar closed above the 81.50 level. Perhaps the dollar will continue to rally on the flight to safety trade now that it has gotten above resistance. That would not be good for gold. The XAU managed a 3/4 gain. ABX was flat, while GG and NEM had fractional gains. Volume was light. No interest in the gold shares but at least they didn't decline with the overall market. Mentally I'm feeling OK. Interesting times I must say. If we don't see some positive action soon, the market will fall apart. This isn't something that can usually happen but we are getting closer to the zero line in the summation index. There is a chance that it could occur and that is yet another reason to purchase some OEX September puts. I do not know if the market will give me a chance to buy them though. As for the short term, we got the bounce on Monday and today was not positive. The McClellan oscillator remains very negative and should bounce higher than it has. I probably won't try the August OEX calls tomorrow. Make no mistake, the trend is down. Gold came back a bit in the aftermarket but is simply grinding its way lower. The gold shares have been moving sideways for almost two months. It looks like they want to break down. That would not bode well for my October ABX calls. They are still in the red. We'll see how the overseas markets react to todays negative session and go from there.
Monday, August 04, 2014
Bounce expected and it arrived on cue. The Dow rose 75 points on summer average volume. The advance/declines were less than 2 to 1 positive. If you were good enough, you could have gotten the August OEX calls at around 8AM and sold them for a nice profit before the close. I, as has been the case lately, wasn't quick enough. We'll have to see how far this bounce goes but the summation index is still heading lower. I'm going to have to focus on the OEX September puts and maybe leave it at that. The short term technicals for the major stock indices remain oversold. GE was off a few cents and the volume was average. No trades in GE for now but I still am considering the idea for the calls of early next year. Plenty of time to purchase though. Gold was off over $5 on the futures. The US dollar didn't move much today. The XAU lost around 1 1/8. ABX and GG had fractional losses, while NEM rose 3/8. Volume was good for NEM, light for the others. My October ABX calls remain in the red. There was some major volume in the October option cycle for ABX. The 18 strike price had over 10000 contracts traded on both sides. The 19 strike price had over 20000 contracts traded on the call side. I don't know what to make of it but somebody is betting big here. Mentally I'm feeling OK considering I just missed another trading opportunity. At least the idea worked, even if I didn't make any money off of it. I'm a believer that rallies can be shorted now. I'll be looking for an entry point on the September OEX puts. Of course as always I could be wrong here and the decline has run its course. But I'm not really thinking that will be the case. Gold is hanging around its 50 and 200 day moving average. The gold shares have under performed near term and that isn't bullish. The short term technicals for the gold shares are oversold though. Plenty of time for the October call trade to work. Seasonal factors are in the positive camp as well. We'll keep an eye on the foreign markets overnight and go from there. Not a lot of economic data out this week so it may get quiet.
Friday, August 01, 2014
Trying to stabilize today as the Dow fell 70 points on good volume. The advance/declines were less than 2 to 1 negative. The employment report came in a bit less than expected but the technicals are what we need to keep an eye on for now. The summation index is heading lower. Blown out to the downside on the indicators here. A decent bounce is the next expectation. Will it be worth the risk to trade it? Maybe. Two weeks to go in the August option cycle. However a bounce is all it should be as uptrend lines have been violated and the nature of the game has changed for now. GE turned around and was higher by 20 cents on good volume. GE led the way down and now is giving a clue as to what to expect next in the near term. Gold recouped $12 on the futures as the US dollar was slightly lower today. The XAU was up about 2/3. ABX, GG and NEM had fractional gains on summer average volume. The technicals here for the gold shares are mixed. My October ABX calls are still slightly in the red. I guess I'll hold on to them for now. I'm viewing the past month here as a consolidation from the rise in June. If that is correct, we should once again move higher in the weeks to come. I could be wrong. Mentally I'm feeling OK. Quite a week as we saw the first major daily decline in a while. I think that there will be more to come. Let us not forget the January weakness and what that usually means for the market. But in the near term, I'll consider getting some August OEX calls on Monday for a bounce next week. It's risky but the rise in GE today combined with very oversold short term conditions may make it a good idea. We'll see. I really don't see any catalysts for the price of gold one way or the other. Perhaps the rise in the US dollar will stall out here at the 81.50 level. The Bollinger bands are starting to contract on the weekly gold chart, so a big move will eventually be coming there. No doubt before the October ABX calls that I now have expire. Which way gold goes is the question but we are in a favorable seasonal period there. Plenty of charts and things to consider over this weekend. But for now it is Friday afternoon and time for a break.