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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.

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