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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.

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