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Tuesday, October 14, 2014

Another crazy session as the Dow was up well over 100 points but closed with a loss of 5 points on heavy volume.  The advance/declines were positive and the overall market was stronger than the Dow.  That's a positive.  The summation index continues lower though.  Option expiration week and only three days to go.  Plenty of earnings coming out and we've got some economic data due for the rest of the week.  We started out strong and continues to build on that but then faltered during the second half of the session.  I still have the October OEX puts but I really should sell them tomorrow.  They will be profitable.  GE was up 1/8 after being much higher early on.  Earnings out on Friday and I will let that get out of the way before thinking about taking a position.  Gold was up $4 on the futures despite a stronger US dollar.  Flight to safety money is my guess there.  The XAU gained 3/4.  ABX, GG and NEM all gained around 1/4 on average volume.  These issues also were higher during the session and then came back.  The gold shares seem to be following the overall market here.  No trades for now.  Mentally I'm feeling tired, not enough sleep.  The small stocks are starting to act better but it's all relative I suppose.  I'm not sure that we're out of the woods yet with respect to this decline.  I'd like to see a washout session to be sure and we haven't had that yet.  I don't know if we'll get it by expiration Friday, if at all.  We are no doubt overextended to the downside and have been in a waterfall type decline for a few days.  Oversold, staying there and through the zero line on the summation index.  I can only guess at downside targets from here.  Gold has found some buyers here but I don't know if it has staying power.  I'm in no rush for the January gold share calls yet.  I've got to stay focused on the OEX for now.  Retail sales, inflation data and the Feds beige book due tomorrow.  Volatility will no doubt be on the menu.  We'll keep an eye on the overseas markets tonight and go from there.

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