Tuesday, September 30, 2014
The month and quarter ended with a whimper as the Dow fell 28 points on heavy volume. The advance/declines were negative. The overall market was weaker than the Dow. The summation index continues lower. It is edging closer to the zero line. That is why I'm still holding on to the October OEX puts. If we go through that line things will get ugly. Hasn't happened yet. The stock indices are short term oversold. Friday should be the day of reckoning, one way or the other for the market. The employment report and the reaction to it will tell the story. GE was up 20 cents, gaining back what it lost yesterday. If GE is a precursor once again, the market will hold up here. No trades for GE at the moment. Gold continues to fall as it dropped ten bucks with the futures and aftermarket combined. The US dollar continues to the upside unabated. The technicals aren't working anymore for gold and silver. The simply remain very oversold. The XAU dropped 1 3/4. ABX, GG and NEM all fell 1/3 or more on good volume. My January ABX calls were almost stopped out. I am wondering if I should move to the next strike price lower if they do get sold. The long gold share call trade hasn't worked at all for me so far this year. Perhaps just abandoning this idea would be the best course of action. Mentally I'm feeling OK. The stock indexes could go either way here but I have to keep leaning to the bearish outcome. The RUT has underperformed here by so much that I do believe lower overall prices are in the future. I could be wrong. I said before that some of the medium term technical indicators are at levels that have contained the previous declines and led to rallies. Friday should be the key. I don't know what else I can say about the gold and silver market. Lower prices are met be even lower prices. No bounce, no bargain hunting, no nothing. This market will recover but when that happens is not something that I can predict. With all the world wide turmoil that exists, the non rally in the precious metals is beyond confusing. Perhaps this isn't a market to trade after all. However it could also be said that the strong dollar trumps all else and is the only reason for the demise in gold and silver. And with US interest rates with only one way to go, gold may not be any good from the long side for some time to come. Just a thought. We'll keep an eye on the overnight action and see how the 4th quarter begins tomorrow.
Monday, September 29, 2014
Another volatile session today as the Dow fell 41 points on average volume. The advance/declines were negative. The market fell straight down at the open and we were down over 170 points early. But the stock indices spent the rest of the day making up ground and it was pretty impressive after the opening. The decline is either over or we are hanging on for dear life before something big to the downside happens. The summation index continues lower. The small stocks hung on better and that is a positive. End of the month tomorrow. GE was off almost 1/4 and the volume was average. Solidly below both the 50 and 200 day moving averages now. Gold was up a few bucks on the futures but back down in the aftermarket. The US dollar was flat on the session. The XAU was off another point. ABX, GG and NEM all had fractional losses on light volume. The gold shares are completely blown out to the downside. The technicals have been so oversold for so long that they don't even mean anything anymore. My January ABX calls are in the red and on their way to the stop loss point. Mentally I'm feeling OK. The stock market made quite a comeback from the early bout of selling. That cannot be ignored. I would expect to see more buying tomorrow. But I cannot get too bullish until the summation index turns around. There is a chance that the selling is done for now. Some of the medium term indicators are at levels where we have started to rally again. Tough game as always. The gold shares are decimated. We'll probably see some more end of the month and quarter selling tomorrow. That trade looks like it will be a loser. We'll see how the foreign markets react overnight and go from there.
Friday, September 26, 2014
Quite an interesting day as the Dow climbed back 167 points. The advance/declines were almost 3 to 1 positive. That is better than we have seen lately. The volume was light though. The summation index continues lower. Volatility has really picked up. I thought we would simply be heading down but now it looks like anything could happen. With todays price action the daily S&P 500 candlestick chart is showing a bullish belt hold pattern. We will have to see if this rise continues next week. My October OEX puts are still in the black but they lost a lot of their value today. GE was up a few cents on around average volume. Trying to hold the 50 week moving average here. Gold was off $6 on the futures as the US dollar had another strong session. Well above the 85 level for the dollar and there is no indication that the rally will end. Overbought and staying there for the dollar. The XAU lost another point. ABX, GG and NEM all had fractional losses on light volume. I have expected a bounce in the gold shares for weeks now. The positive seasonals never kicked in. The gold shares have remained oversold for weeks. Gold will not rally with the dollar continuing its strength. There is nothing on the horizon that will change that scenario. I suppose I should have not tried the gold share calls again. Mentally I'm feeling OK. It wasn't exactly the way I would have liked to see the week end in the stock indices. Todays up move was not what I expected. Perhaps the decline is over but I'm not sold on that idea just yet. Plenty of time in the October option cycle. We do have the end of the month and the quarter coming up on Tuesday. Plenty of economic data due out next week including the employment report. I would expect more of the same 100+ point moves next week unless there is a dramatic change in the landscape. I have no idea when the decline in the precious metals will end. Oversold for many weeks now and I think perhaps I may even stop trading there and simply focus on the stock indexes. The US dollar has gone straight up for three months. It eventually won't end well there for the bulls but I cannot predict when that will be. With all the turmoil around the world, normally you would expect to see a flight to safety. Usually that includes the gold market. This time around it looks like money is concentrated in the US dollar for that reason and the looming rise in US interest rates. So gold and the gold shares continue to suffer. That's my view there. Plenty of work to do over the weekend. For now it's Friday afternoon and time for a rest.
Thursday, September 25, 2014
I guess there will be no doubt about the market direction now. The Dow fell 264 points on average volume. The advance/declines were 5 to 1 negative. The summation index continues lower. The major averages closed on their lows once again. The McClellan oscillator is pretty oversold but in market declines it can stay that way. The advance yesterday turns out to be nothing more than a dead cat bounce. The summation index is starting to get close to the zero line. That is the area that must hold or the stock averages will begin to fall apart. Caution is advised. GE dropped over 1/3 on average volume. GE took out yesterdays lows and is back below both the 50 and 200 day moving averages. Gold found a slight bid and the futures were up a couple bucks. The US dollar was higher as well and now above the 85 level. The XAU was flat on the session but rose from the daily low. ABX, GG and NEM had slight fractional gains on OK volume. Perhaps if the stock indices continue to drop, gold can find some buyers. Hasn't happened yet. My January ABX calls are still in the red. Mentally I'm feeling a bit tired. Perhaps we are at the beginning of a multi-week decline. That would be my guess as of today. My October OEX puts are solidly in the black. Now the decision when to sell the puts becomes the next job. I'm going to give it some time. Because if we are into something big here, the profits will be pretty good. It won't make up for the money that was lost last month but it certainly would help. Some of the major stock indices are at up trend lines that began in May. If these lines don't hold we will be heading lower in a hurry. Getting oversold on the daily technicals but not all the way there yet. Still no real buyers in the precious metals complex. I don't know when that will turn around. But as I said if there is a rout in the stock market we could see a flight to safety occur. The decline began in the European markets last night. We'll keep an eye on what transpires there tonight and close out the trading week tomorrow.
Wednesday, September 24, 2014
A nice bounce today as the Dow gained 154 points on average volume. The advance/declines were positive. However the breadth was not what you would expect with a market up so much. That is the problem that I'm having with any recent rally. I still think it is setting up for some decent downside in the October option cycle. Now I could be wrong and we simply move higher from here and on to new highs in the major stock indices. The summation index is still moving down. My October OEX puts are still profitable but another day like today and they won't be. It will be important to see how this week closes. GE was off about a dime after being much lower. Volume picked up. No trades here for now. Gold was off a few bucks as the US dollar hit the 85 level. The XAU shed 7/8. ABX, GG and NEM all had fractional losses on average volume. The January ABX calls that I own are in the red. The story remains the same in the precious metals complex. Mentally I'm feeling OK. The move higher today was more than I expected. The major stock averages now have a bullish candlestick formation on the daily charts. We'll see if there is any follow through tomorrow. Some economic data due tomorrow. Silver is very oversold and trying to hold up so far this week. Some kind of bounce here is way overdue. Perhaps if that occurs, the precious metal shares will find a bid. Things here cannot stay oversold forever. Tonight we'll see if the foreign markets rally back up following the Dow today.
Tuesday, September 23, 2014
Continuing lower as the Dow fell 116 points on average volume. The advance/declines were 2 to 1 negative. The summation index continues lower. The small stocks did not decline as much as the Dow which may mean that we will see some bounce tomorrow. However I think that it is safe to say that things have changed for the stock indices. No longer term up trend lines have been violated yet but that could occur. We closed right on the lows for the day on some of the stock indexes and that is not a positive. I'll be keeping an eye on the breadth as it gave a clue as to what is going on at the moment. My October OEX puts remain in the black for now. GE was off a few cents and the volume was light. GE is holding up well here. Perhaps it is not going to be a precursor this time around. Gold was up around $5 on the futures. The US dollar finished little changed. The XAU was up 1 3/8. ABX, GG and NEM all had fractional gains on average volume. Still no love for the gold shares. The January ABX calls that I bought are in the red. Plenty of time for this trade and the stop loss order is in. Perhaps some overall stock market weakness will spur some interest in the gold shares. Mentally I'm feeling OK. Perhaps my timing on the October OEX puts was correct this time. We'll see. The short term technicals for the stock indices haven't reached oversold just yet. The up trend line for the Dow comes in at around 16600. We are not close to that yet. Gold stopped falling today but that by no means says the decline is done. Silver has held up for a couple of days as well but that doesn't really mean anything yet. These markets are overblown to the downside in my opinion. The gold shares indices are trying to stop at the lows made in June. Sooner or later there will be a decent bounce here. We'll see how the overseas markets react to todays decline in the US and take it from there.
Monday, September 22, 2014
The week has started on a down note as the Dow fell 107 points on average volume. The advance/declines were 5 to 1 negative. The overall market was weaker than the Dow. The small stocks are so far leading the way lower. One day doesn't make a trend though. The summation index continues lower. My October OEX puts are in the black but not a lot. Breadth is getting worse and I still think lower prices are in the near term picture for the major stock indices. GE was off almost 1/4 but the volume was light. No trades here for now. I may go out to next years March calls here eventually. Gold barely closed higher despite a weaker US dollar. The XAU lost another 2 1/2. ABX, GG and NEM all had fractional losses on average volume. Silver was lower but at least came off of its lows. The January ABX calls that I bought are in the red. Mentally I'm feeling OK. Weakness today but the week has just begun and the market can be fickle. Not a lot of economic data due out this week. The short term technicals have rolled over but are not oversold yet. The daily candlestick chart of the Dow has a bearish topping pattern on it. I believe lower prices are coming but how low is the question. As always, I could be wrong. But I would advise caution in the market right now. Gold and the gold shares are in a steep drop. How long this will go on is anyones guess. I'm taking a chance with the gold share calls here but the stop loss order is in. If the trade doesn't work out, at least there won't be another huge loss. We'll keep an eye on the foreign markets tonight and see what tomorrow brings.
Friday, September 19, 2014
It was a one day reversal to the downside for most of the major stock indices but not the Dow as it gained 14 points on expiration heavy volume. The advance/declines were negative though. The underlying breadth continues to deteriorate and that cannot be ignored. It was Alibaba day on the exchange and trading there was whipped up into an IPO frenzy. I am still a believer that lower prices are coming in the next few weeks. I once again bought some OEX puts, going out to October. I have a stop loss order placed at 50%. Hopefully I'll be able to keep it there. The stock indices are now short term overbought. GE was up a few cents and the volume continues to be better than average. My September GE calls expired worthless for a 100% loss. The percentage loss should never happen again. Gold continued lower and fell another $10 on the futures. The US dollar bounced back from yesterdays loss and negated the bearish daily candlestick pattern. Getting close to the resistance level of 85 on the dollar. The XAU lost 2 1/4. ABX, GG and NEM all had fractional losses on heavy volume. All are short and medium term oversold. My open order for the January ABX calls was filled. I have a stop loss order in at 50%. I'm not feeling as good about this trade but support for ABX comes in at $15.50 and we are almost there. Mentally I'm feeling a little tired. Some of my thinking here goes along with the lines of things being propped up as usual for expiration week in the stock market. Perhaps we will get a cleared picture of the actual prevailing trend next week. I will say that it is not bullish when the small stocks lag and they have been for a while. Also at this point the advance/decline line is not confirming the move higher in the big caps. That could change. One of the new trading rules involves placing a stop loss order when each trade is filled. The order is placed so that the maximum loss is 50% of the amount of the trade. Obviously if I place a trade and it loses half of its value, I've done something wrong. Keeping the stop loss order at 50% and not moving it down will be the challenge. But it shouldn't be. Not all ideas are correct. Gold continues lower and silver is absolutely getting crushed. The time to buy is when blood is in the streets according to an old wall street saying. However things can go even lower than you think as they can go higher. I'm still willing to take a trade on the ABX calls here though. Probably won't be holding this trade until January but it does have some time to work out. The gold shares are very oversold. It was an eventful week for the markets this week. How will things follow through next week is the question to ponder over the weekend. For now it's Friday afternoon and time for a break.
Thursday, September 18, 2014
Expiration levitation continues as the Dow rose 109 points on average volume. The advance/declines were positive. I did not think that we would break out to new highs but here we are. The small stocks continue to lag and that is not a positive. But you cannot argue with price. I got rid of my remaining September OEX puts for practically a 100% loss. That trade was a catastrophe. I am implementing new rules and will try my best to have the discipline necessary for success. The short term technicals for the market have turned around and are heading higher. But I continue to see weak breadth on this advance. GE was up over 1/8 and the volume was good. My September GE calls will expire worthless. Thankfully there wasn't much money in that trade. Not near a recovery high here yet. I do think that the stronger dollar will be impacting the big multi-national earnings in this quarter. Time will tell on that. Gold lost ten bucks on the futures but that really occurred late yesterday. The US dollar had a weak session and the daily candlestick chart now looks bearish. The XAU fell 1 1/4. ABX, GG and NEM were all lower on average volume. These stocks are blown out to the downside and the technicals as well. I did place an open order for the January ABX calls in anticipation of lower prices as gold drifts towards $1200. I'll cancel it over the weekend if it isn't filled tomorrow. Mentally I'm feeling tired. Having some minor issues outside of the markets to deal with. We'll probably see some more upside tomorrow with the offering of Alibaba providing the excitement. The summation index has yet to turn around and I still feel that bears watching. The RUT is not near recovery highs either. The broader NYA is lagging here as well. It usually isn't a good sign when the narrow Dow is leading the way. Gold remains the same. Oversold and staying there. Ditto for the gold shares. But I'm willing to try them again. Sometimes it is best to buy what nobody else wants. We'll see. Should be an interesting Friday with the Scottish voting results, Alibaba and option expiration. Stay tuned.
Wednesday, September 17, 2014
Now at least we have the Fed out of the way for a while. The Dow gained 24 points on average volume. The advance/declines were slightly positive. The market got a pop to the upside after the Fed announcement but sold off in the final hour. It's options expiration week and the positive bias is certainly present. But if you look closely, the breadth is starting to deteriorate. The summation index is still heading lower. I'm a believer in lower prices moving forward for the next few weeks. GE was up a few cents and the volume was average. No trades here for now. My September puts will expire worthless. Gold was flat on the futures but off over ten bucks in the aftermarket. The fundamentals remain bearish here. The XAU dropped almost two points. ABX, GG and NEM were all off 1/3 or more on average volume. I'm waiting for gold to drop to $1200 before I think about getting the January gold share calls. Even then, it may not be the right idea. But gold and the gold shares are blown out to the downside, so at least some kind of bounce is way overdue. Mentally I'm feeling tired, did not sleep well. Volatility picked up today and I expect some more near term. I think tomorrow will be a bit more interesting than traders expect. I left in an order to sell my remaining September OEX puts. They are almost worthless and will essentially be a total loss. From here on out I will be implementing my new trading rules. That should limit any future losses to 50% max. It is long overdue. But supposedly you learn more from your mistakes than from your successes. That is certainly the case for me at this point. Gold and silver continue to drop and there is no end in sight. There is no rush to do anything on the long side here. I will try my best to be patient at this point. We'll see what happens in the overnight markets and await the vote in Scotland tomorrow. Although Scotland is a minor player in the whole scheme of the market, the outcome of the vote will be a reason for the currency markets to move.
Tuesday, September 16, 2014
Turnaround Tuesday as the Dow gained 100 points on average volume. The advance/declines were 2 to 1 positive. Fed chatter was the reason for todays gains but the oversold nature of the market was the technical clue. The McClellan oscillator was near minus 200 yesterday. We'll get movement on the Fed statement tomorrow. The summation index is still heading lower despite todays gains. My remaining September OEX puts are practically worthless. It's anybodies guess which way we head tomorrow. GE rose over 1/4 on better volume. My September puts here are worthless. Gold was up a buck or so on the futures. The US dollar was lower today. The XAU gained 3/4. ABX and GG were up 1/8, while NEM was flat. Volume was OK here. Gold may move on the Fed tomorrow but the underlying bearish fundamentals will remain. I'm still looking at some January gold share calls eventually. Mentally I'm feeling OK. Tomorrow will tell the story for the stock indices. If we move higher, then most likely new highs will be in the near future. If we give up todays gains, then perhaps the long awaited correction will be underway. Regardless of what is said tomorrow by the Fed, interest rates really have no place to go but up. With rates at zero, what do you expect? Eventually the market will react. Gold remains unloved. All eyes and ears on the Fed tomorrow.
Monday, September 15, 2014
A very mixed market today as the Dow gained 43 points on light volume. The advance/declines were 2 to 1 negative. The NASDAQ got slammed but the big caps held up well. The weaker action in the small stocks isn't bullish. The summation index continues lower. I sold some of my September OEX put position for a 95% loss. I'm still holding the closer to the money puts. I think that despite option expiration we will be heading lower this week. I could be wrong. GE was up a few cents and the volume was very light. It looks like my September GE puts will expire worthless. Inexcusable. Gold was up three bucks on the futures. The US dollar finished the session little changed. Ditto for the XAU. ABX, GG and NEM had fractional moves one way or the other with light volume. I sold the October ABX calls that I had for a 95% loss as well. I'm considering the January gold share calls now. I may attempt that trade if and when gold gets to the $1200 level. Mentally I'm feeling OK. Oversold on the major index short term technicals. Waiting on the Fed which will have their statement out on Wednesday. The fact that the small stocks had such a lousy session is perhaps a clue of things to come. However the market could just as easily turn around tomorrow. It is not an easy game to play. I have a new set of trading rules that perhaps I'll share at the end of the week. Like I've said before, following them with strict discipline will be the key. Otherwise they are worth nothing. At least as I liquidate the losing trades, it will give me a clean slate to perhaps start doing things correctly. Gold remains in a down trend and not interesting to anyone unless they are short. The strong US dollar has taken care of that and the price of oil as well. In fact all of the commodity complex is under pressure. We'll keep an eye on the overnight developments and go from there.
Friday, September 12, 2014
We did not head higher as I expected as the Dow fell 61 points on average volume. The advance/declines were 4 to 1 negative. The overall market was weaker than the Dow. The summation index is heading lower. We did come up from the lows of the day as the market is not falling as rapidly as the advance/declines would suggest. Could be expiration related already. We've got the Fed next week but I don't expect any surprises there. My September puts remain losers. GE was off 1/8 and the volume picked up just a tad. Gold continues to drop as the futures there fell another seven bucks. The US dollar was off a dime or so. The XAU dropped 1 1/3. ABX, GG and NEM all were off 1/3 or more on average volume. I think gold is headed to $1200. If correct we have another $30 to go. But anything can happen in this game. Mentally I'm feeling OK. Some of the weekly technicals have rolled over in the major stock indices. Caution is advised for now. I do not think we will see enough decline next week to save my OEX put trades though. Expiration week usually has a positive bias. But with the summation index pointing down, bullish positions are not favored at this time. That's just my view and my views haven't been right lately. I might try the gold share calls again if we get to $1200 on gold. That is the last major support for the precious metal until $1000. However the fundamentals for gold here are not bullish. The US dollar is in a huge rally but is approaching resistance at the 85 level. Perhaps a wait and see attitude would be best here. If gold cannot rally when it is supposed to seasonally, then maybe it is one of those years that it simply continues downward. I don't know. I'll be setting up my new trading rules over the weekend. The set up is easy. Strictly following them is the hard part. The losses that I will have to take next week make change a necessity. I'll try my best to finish out the trading year on a positive note. For now it's Friday afternoon and time for a break.
Thursday, September 11, 2014
The Dow fell 19 points on light volume. The advance/declines were slightly positive. It was however a one day reversal to the upside for the S&P 500 and the NASDAQ. The market has all the feel of something that is going to go higher. The summation index is heading lower still though. But with expiration week coming up, I wouldn't be surprised if we start to move up tomorrow. Perhaps the retail sales numbers will trigger something. My September OEX puts are dead. Unless we see a drop tomorrow, I'll be booking huge losses. GE was up a few cents and the volume remains light. My September puts are toast here as well. Should dump them tomorrow, if possible. Gold continued to slide, the futures lost another six bucks. We're at the $1240 level and very oversold. The US dollar continued higher today. The XAU turned around for some reason and was up 3/4. ABX, GG and NEM all had fractional gains on OK volume. My October ABX calls are practically worthless as well. No hope for this trade. I did consider going out to the January strike price for some calls here today. But perhaps the sidelines are the best place for me to go at the moment. We'll see. Mentally I'm feeling OK. I'm going to have to revise and change my trading tactics after the recent losses in the options market. I have an idea on what will help but implementing it will be the challenge. It is one thing when the technicals don't work. It is quite another when you can't admit that your ideas were wrong and you simply need to bail out. That is where the problem lies here. The markets are unrelenting and not really interested in your ideas. There are enormous sums of money moving around. As an individual trader you can't expect to have any influence on what transpires in this game. You can do all the work and all the study but the only thing that matters is the bottom line. When you get in and when you get out. The options game is tough as you have not only price and time but volatility to factor in. The rewards can be great. But the losses can be humbling. The short term technicals for the major stock indices are trying to curl back to the upside. The small stocks moved higher today and that is a positive. I'm expecting higher prices tomorrow. Gold is dropping and there seems to be no end in sight. If we can't hold $1240, then I guess the next stop will be $1200. I might try the ABX January calls soon or I might just sit on the sidelines for a while. We'll see what tomorrow brings.
Wednesday, September 10, 2014
Back to the upside today as the Dow gained 54 points on light volume. The advance/declines were slightly positive. We will see if the decline has been contained to what has happened early this week or if it is something for real. The next couple of days will tell the story. The summation index is still heading lower. My September OEX puts are all but dead at this point. GE was up a nickel and the volume remains light. Hanging around the 50 and 200 day moving averages. Gold was down a few bucks again on the futures today as the US dollar was little changed. The XAU fell 1 1/3. ABX, GG and NEM all had fractional losses on light volume. Same story for gold and the gold shares. The trend is down and the fundamentals are negative. Technically oversold and staying there. Mentally I'm feeling tired, did not sleep well again. Seven days to go in the September option cycle. If the stock indices are going to have a decent decline, we'll have to see some downside within the next two days. Otherwise I believe that we will trend up to new highs in expiration week. All of my outstanding option positions are losers. I will have to book the losses soon. We haven't seen much volatility since after Labor day and that wasn't expected by me. The light volume remains troublesome by my standards. However we haven't seen the decline that I expected. The foreign markets didn't really react to yesterdays decline in the Dow. We'll follow the overnight action and take it from there.
Tuesday, September 09, 2014
The Dow fell 97 points today on light volume. The advance/declines were 3 to 1 negative. The overall market was weaker than the Dow and that is bearish. The summation index is now heading lower. I kind of doubt that there will be enough decline in the next eight days to save my September OEX puts but in this game you never know. We were down from the start but got a lift from the AAPL product show. However the gains did not hold and we headed lower for much of the rest of the session. Not oversold yet for the major stock indices but on the way there. The VIX took a bump up but remains below its 200 day moving average. GE was off over 1/8 and the volume was light. The recent candlestick pattern here looks bearish on the daily chart. Gold continued lower, down another five bucks on the futures. The US dollar had a slight drop today as well. The XAU actually gained 7/8. ABX, GG and NEM had fractional gains on average volume. My October ABX calls remain losers and are very far out of the money. Mentally I'm feeling tired, not a good nights sleep. We'll have to see if we follow through to the downside some more tomorrow. That would be a plus for my put positions but the market would really have to move lower to make a difference. Not a lot of market moving data due out. Gold still has to visit the $1240 level in my opinion. We haven't gotten there yet. No love for gold right now and there hasn't been for quite some time. The positive seasonal bullishness for gold did not materialize this year. We'll see if the foreign markets follow the Dow lower and take it from there.
Monday, September 08, 2014
A mixed bag to begin the week as the Dow fell 26 points on light volume. The advance/declines were negative. The NASDAQ showed a gain on the session and that's bullish. The small stocks are out performing and that is not a negative sign. The summation index is trending sideways at the moment. Not a lot of economic reports due out this week. Retail sales on Friday being the biggest. GE was off a couple pennies and the volume was light. Light volume is the general theme for the market right now. Gold continued to move lower. The precious metal futures fell around $13. The US dollar continues to move higher and that is bearish for gold. The XAU lost 2 1/2. ABX off 3/8, while GG and NEM dropped 2/3. Volume is good to the downside for the gold shares. Although my ABX call trade goes out to October, it is practically worthless. Another loser trading the gold shares this year. Mentally I'm feeling OK. Although the market sold off a bit today, there always seems to be plenty of buyers on the sidelines. We've been sideways for about two weeks but at this rate it appears that we will eventually break out to the upside. That is what the small stocks are saying. Perhaps tomorrows AAPL product announcement will be the catalyst for higher prices. Technically on the major stock indices the short term technicals have started to roll over. Gold is headed to $1240 and we'll see what happens when it gets there. The US dollar is overbought, staying there and now moving up in a straight line. That won't last forever but the trend is up until proven otherwise. We'll keep an eye on the overnight action and see what happens tomorrow.
Friday, September 05, 2014
Today we got a one day reversal back to the upside as the Dow opened lower and closed higher. The Dow gained 67 points on light volume. The advance/declines were just shy of 2 to 1 positive. The employment numbers came in light and the market sold off in the morning. However buyers once again stepped in and the market climbed higher the rest of the session. My September OEX puts are just about dead, as are the rest of my open option positions. Terrible risk management or should I say none whatsoever. But I will say this. The volume on this particular upswing has been horrible. It won't end well. GE was up 1/8 on light volume. The short term technicals here are trying to head back to the upside. Gold was flat on the futures, as was the US dollar. The XAU was up 1/4. ABX, GG and NEM were mixed with fractional moves. Volume was about average for what we have seen lately. Mentally I'm feeling a bit down. The steep losses that I'm about to take are the reason. Once again I am going to have to take a step back and implement some strict trading rules. There is no one to blame but myself. When the summation index turned around, that is when I should have exited the OEX put trades. When the dollar broke above the 81.50 level, that was the time to forget about and long gold share trades. But once again I sometimes get emotionally involved in the trades, as if I have to get them all correct. That, as we all know, is never going to happen. So it's back to the drawing board again. The summation index is still trending higher. The short term technicals for the stock indices are still overbought but they have been now for three weeks. The TRAN continues to make new highs and that is bullish. Gold broke down this week and the next support is at the $1240 level. The weakness in the gold shares this week doesn't bode well for higher prices anytime soon. I'll be checking the charts over the weekend as usual and deciding my next trading move. I obviously need to make some specific changes in my trading tactics because what I have tried so far this year simply isn't working. But for now it's Friday afternoon and time for a break.
Thursday, September 04, 2014
A minor one day reversal in the Dow as it opened higher and closed lower. The most watched index lost 8 points on light volume. The advance/declines were 2 to 1 negative. We did come up from the lows of the session. The TRAN did make it to new all time high territory and that is bullish. However the good news of lower rates overseas didn't see the market take off to the upside. Tomorrows employment report will set the tone for Fridays trading. I do not know what to expect. As always, the reaction to the numbers will be key. GE was flat on the session and the volume was average for lately. Gold was off $4 and that much again in the aftermarket as the US dollar took off on the European rate news. The dollar rose almost a full point in the currency market. The XAU dropped 3 1/3 and has now broken down out of the consolidation zone. ABX, GG and NEM all fell 3/4 on good volume. The October ABX call trade is now dead. The strength in the dollar has finally taken effect. The seasonal pattern for gold and the gold shares did not pan out this year. The gold shares are leading the way lower and that is not bullish. Mentally I'm feeling OK. So we will have to see if this is the start of an actual decline for the stock indices or simply another buying opportunity. My only hope for the September OEX put trades that I'm holding is that some type of decline has begun. However one day doesn't make a trend. I'm thinking that the significant rise in the US dollar will impact the profits of the big multi-national corporations at some point. If and when the market starts to factor that in would lead to some weakness. That my theory at the moment. Gold can find no buyers. The fundamentals right now don't favor gold but that has been the case for quite some time. The weakness in the gold shares doesn't bode well going forward. Unless there is a dramatic turnaround for gold in the near future, the trend is down and who knows by how much? We'll see how the European markets do overnight and wait for the US employment report tomorrow.
Wednesday, September 03, 2014
The Dow gained 10 points today on light volume. The advance/declines were slightly negative again. Just marking time here again as the stock market continues a low volume pattern. The NASDAQ was much lower today and that is not bullish. However that may have simply been a factor of APPL taking a dive. The summation index continues higher. Waiting for a catalyst one way or the other for the stock indices. GE was up a dime and the volume was light. Nothing has changed here as well. Gold stabilized with a $5 gain as the US dollar was lower for a change. The XAU lost 1/2 though. ABX, GG and NEM were off fractionally or unchanged on the session. Volume slacked off from yesterday. The trend here is down now. Mentally I'm feeling OK. Perhaps the employment report on Friday will get things going for the stock indexes. Despite the return of the major players, trading remains lackluster. That isn't really a good sign but things can change rather quickly in this game. We will just have to wait and see what happens. My option positions all remain losers. We'll keep an eye on the foreign markets tonight and take it from there.
Tuesday, September 02, 2014
The Dow fell 30 points today on light volume. The advance/declines were slightly negative. The market sold off during the session but made most of it back. It is a market that wants to go higher. The summation index continues to the upside. The small stocks outperformed and that is bullish. The TRAN had a strong session and that bodes well for higher prices. My over leveraged September OEX put trade is getting crushed. I suppose I'll give it until the employment report on Friday. GE was off 1/8 and the volume was light. GE came off of its lows as well. Gold broke down today as support at $1275 did not hold. The precious metal futures were down over $20. The US dollar made another new high for the year. The XAU fell 3 1/2. ABX off 1/2, GG lost 1 1/3 and NEM shed 2/3. Volume was good to the downside for the gold shares and that is not bullish. The positive seasonal pattern has not shown up this year. With all the geopolitical turmoil in the world, gold cannot even rally. That bodes ill for the bulls. My October ABX calls are losers. Another failed trade so far. Mentally I'm feeling OK. I expect that the stock market will be heading higher tomorrow as it tried to sell off today but barely did. There is plenty of money coming from somewhere. Still overbought but not as much as it was. GE has moved lower than the overall market recently but it hasn't meant anything yet. Gold should continue down to the $1240 level. We'll have to see what happens when it gets there. The gold share indices are on the verge of breaking down from their 2 1/2 month consolidation. All of my option positions are heavy losers and it looks like I'll have to book the losses soon. We'll follow the overnight action and see what tomorrow brings.