The Dow finished the day practically unchanged on holiday light volume. The advance/declines were negative. The small stocks were slightly higher but the S&P 500 showed a loss. The price of oil took center stage as it continued its collapse in a big way after the recent OPEC meeting. I am thinking of getting some USO calls for February. USO is a widely traded fund used as a proxy for the price of oil. Oil is blown out to the downside and some type of recovery will occur. As always the timing is the key question. The overall stock market remains short term overbought. GE was off over 1/3 today on average volume. Could this be a sign of things to come? No new news here and the short term up trend line has now been broken. Perhaps I'll get a chance for the March calls here. Gold followed oil lower today as the futures fell $15 to add to the $10 they dropped yesterday. The US dollar had another good session. The gold shares got clobbered as the XAU fell 6 points. ABX and NEM lost over a buck, while GG dumped 1 1/4. Volume was very good for a holiday shortened session. The gold shares are rolling over here. The time to sell my ABX January calls was earlier this week. They are still showing a profit but it has been more than cut in half. Commodity prices are crumbling. Mentally I'm feeling OK. It was supposed to be a quiet holiday session but the oil drop changed things. You really can never tell what will happen in this game. I think that the oil price is overblown to the downside here but it isn't something that I usually trade. That said, opportunity appears in times of crisis. Or so they say. I'll consider the USO trade over the weekend. The trend in stocks remains up. The summation index continues higher. I don't have any OEX trades in mind at the moment. Gold and the gold shares have rolled over. Perhaps the vote in Switzerland would turn things around but that is a long shot and probably won't happen. I will seriously have to consider exiting the ABX January call trade on Monday. I suppose a small profit is better than a loss. But it's another thing to look at over the weekend. It's Friday and time to take a break.
Wednesday, November 26, 2014
A drift higher today as the Dow gained 12 points on light volume. The advance/declines were positive. The overall market was much stronger than the Dow including the small stocks. This bodes well for the bullish cause going forward. The summation index continues higher. The trend remains up and should be for quite some time. There is no overhead resistance. GE was flat again and the volume was light. Waiting for a spot to buy the March calls here. Gold didn't do much on the futures but the US dollar was lower today. Markets are traded thin this week. The XAU fell a point. ABX was flat today, while GG and NEM had small fractional losses. Volume was holiday light. There is some noise about an upcoming vote in Switzerland to peg some of franc to gold but the odds of passage are slim. Mentally I'm feeling OK. A shortened stock session on tap for Friday but I would not expect any major market movement. End of the month that day as well. The major players will be off. Things will return to normal on Monday and we'll start the month of December. There is nothing in the way to cause any of the bulls concern at the moment. Gold and the gold share indexes remain below their 50 day moving averages. I think sideways price action is the most we can hope for right now. Short term overbought on some of the technical indicators for the gold shares but it has yet to produce a decline. We'll see what next week brings. Happy Thanksgiving to all that celebrate the holiday and we'll be back here on Friday.
Tuesday, November 25, 2014
More of the same as the Dow fell 2 points on average volume. The advance/declines were slightly positive. It's mixed bag here really with no major moves one way or the other. The remainder of this week will be muted as traders will be leaving early tomorrow and Friday is a shortened session. So we will wait and be patient. GE was off 1/8 and the volume remains light. Still waiting on a possible chance to get some of the March calls here/ Gold was barely higher on the futures as the US dollar lost ground today. The XAU gained 2 2/3 though as it trades near the 50 day moving average. ABX up 1/3, GG rose 7/8 and NEM added 1/2. Volume was pretty good to the upside here which is surprising considering the holiday mode. Perhaps the gold market knows something we don't. Or not. Mentally I'm feeling OK. The trend remains up and the song remains the same for the stock indices. I'm expecting tomorrow to be a light volume affair. There will be some economic data reported but I don't think we'll really be back in the swing of things until next week. Gold and gold share indices are at their 50 day moving averages. A move through there would be constructive for the bullish cause here near term. My ABX January calls are still very much in the black. We'll see what happens overnight and go from there.
Monday, November 24, 2014
Nothing has changed as the Dow gained 7 points on light volume. The advance/declines were positive. The summation index is back to moving higher. The overall market was much stronger than the Dow. We should be drifting up for the remainder of the holiday week. Overbought, staying that way and no change in sight. GE was flat on the session and the volume was light. Nothing new to report here. Gold was off a couple bucks on the futures and the US dollar was a bit lower as well. The XAU fell a point. ABX, GG and NEM had fractional losses. Volume was light for ABX and GG. Average volume for NEM. The gains on my ABX January calls are being pared. We are rolling over on the technicals for the gold shares here and it looks like I have overstayed my welcome on ABX. Mentally I'm feeling OK. Not much to report with todays price action. All signs point to more of the same. The small stocks are relatively stronger and that's bullish. New closing all time highs for many of the major stock indices. There is no overhead resistance. Gold is stalling at the 50 day moving average. If we can get through there it would be a positive but I would not count on it just yet. The gold shares broke the near term down trend line. The next technical expectation would be a return to that line. Perhaps that is what is occurring now. Here too, the 50 day moving average is providing resistance. Plenty of time for the ABX call trade that I'm in but maybe selling out last week was the proper move. Time will tell on that. We'll keep an eye on the overnight action and take it from there.
Friday, November 21, 2014
A jolt higher in the morning and then a down to sideways drift. The Dow ended the day with a gain of 91 points on expiration heavy volume. The advance/declines were 2 to 1 positive. There is nothing in the way of higher prices. We'll get a holiday week next week and that is generally positive. Declines will continue to be bought. The trend remains up and should be for quite some time in my opinion. GE was up 1/8 and the volume was average. I still like calls here but will need to see some decline for purchase. Otherwise it's a wait and see game for GE. Gold was up $6 on the futures despite a good day for the US dollar. The XAU was up 3/4. ABX, GG and NEM had fractional gains one way or the other on lighter volume. The recent rise in the gold shares could be over here and perhaps I have overextended my stay with the ABX January calls. Overbought on some of the short term technical indicators for the gold shares. Mentally I'm feeling OK. What more can I say about the stock indices? There are no sellers, only buyers. We are in the seasonal positive zone for stocks and will be for quite some time. New all time highs are a daily occurrence. Calls are the way to go for option trading. Daily declines are immediately purchased. You cannot fight the positive price action. Gold has had a bounce but it certainly hasn't been robust. I think the most we can hope for here is a sideways range before continuing higher. The only certainty is that I don't know. The gold shares have had a decent couple of weeks but it does look like that may be out of steam. There should be some more end of the year tax loss selling in this sector as well. My ABX January calls are still showing a good profit. I will have to seriously consider whether or not to sell them over the weekend. I'll also be checking the charts to try and find some new ideas. For now it's Friday afternoon and time for a break.
Thursday, November 20, 2014
Another early sell off and another comeback as the Dow gained 33 points on light volume. The advance/declines were 2 to 1 positive. The summation index is beginning to trend sideways. Things should pretty much slow down for the next week of trading days as the Thanksgiving holiday approaches. I'd expect an overall positive bias to exist for the major stock averages. We're still short term overbought and that condition persists. No change to the uptrend for now. GE was off a few cents and the volume was pretty light. No trades here for now. The gold futures were off three bucks but made up what they lost in the aftermarket last night. Some volatility now for gold. The US dollar finished the session little changed. The XAU was up 1 7/8. ABX rose 1/3, while GG and NEM were up 1/2. Volume was light. I think that sideways is the most that we can expect near term for the gold shares. Overbought on the short term here. My ABX January calls are still in the black. I really need to think about selling them here but there is the potential for more upside after a digestion period. Or not. The game is never easy. Mentally I'm feeling OK. Patience is required now as we wait for the next set up. I don't think that the OEX puts are the right trade even though we are overbought. Declines are easily still being bought at the moment. So we wait. GE has had a nice upside run and getting the March calls is still in the plans. However some type of pullback must occur for this trade to be worth it. Gold and the gold shares have started to act better but there still may be some end of the year selling to contend with here. I am tempted to simply book the profit here that I already have. It's something to think about. Expiration Friday tomorrow in front of a holiday week coming up. We'll watch what happens in the foreign markets and close out the week tomorrow.
Wednesday, November 19, 2014
A sell off early but the market almost made it all the way back. The Dow fell 2 points on average volume. The advance/declines were negative. Still overbought and still staying that way. The market is trying to make up its mind I suppose. Declines are being purchased and that is expected. I'm on the sidelines with regards to the OEX until a decent signal appears. I don't know when that will occur. GE was off a few cents and the volume was good. No trades here until we see a pullback. Gold was off a few bucks in the regular session but lost another $10 in the aftermarket. The US dollar finished the day with a slight gain. The XAU got crushed and lost almost 4 points. It appears the bullishness for gold has been lost in a day. ABX and NEM fell over 3/4, while GG dropped 1 1/4. Volume was good to the downside. Unless we see a turnaround in the gold shares tomorrow, the advance here is probably over. My ABX January calls are still showing a profit but have lost some value. Mentally I'm feeling OK. More of the same for the stock indexes. Going nowhere fast really. Sometimes patience is required and we have arrived at one of those times. Holiday week coming up as well. Gold had a good drop today and with volume. That isn't good sign for the bulls. I am going to have to consider selling the ABX January calls sooner rather than later. We'll keep an eye on things overnight and go from there.
Tuesday, November 18, 2014
Another run to new highs as the Dow gained 40 points on average volume. The advance/declines were positive. The summation index continues to the upside. Still pretty overbought here. The final hour saw the market lose ground and that usually isn't positive going forward. However we can see the positive upward bias of option expiration week in force today. Plus the overall market and the small stocks were stronger than the Dow. GE was up 3/8 and the volume was good. GE was a precursor for the market once again. It doesn't look like I'll get a chance for the March calls here. Gold had a positive session with the futures gaining $13. The US dollar fell today for a change. I can make a case that the dollar has had a five wave up move since the beginning of July. If that is so then more dollar weakness will follow. We'll see. The XAU was up 3 1/8. ABX and GG gained 3/4, while NEM rose 2/3. Volume was good and we broke above the down trend lines that have been in effect since the beginning of September on the gold share indices. My ABX January calls are showing good gains for now. The next question is when to sell. Mentally I'm feeling OK. It looks like higher prices are coming for the major stock indices. Although we remain very overbought all signs appear to be pointing higher for now. Any declines can be bought in my opinion. The gold shares are breaking out to the upside. Price and volume are finally positive here now. I don't know how long it will last. But we should at least make it to the 50 day moving averages. We'll see what happens tomorrow.
Monday, November 17, 2014
Another day of hanging around as the Dow rose 13 points on light volume. The advance/declines were negative. The summation index continues higher. The small stocks were lower and that is not a positive. The TRAN was lower today as well. We are overdue for some type of decline but it is option expiration week. The short term indicators have rolled over for the small caps but not for the major stock indices. Your guess as to what happens next is as good as mine. No OEX trades for now. GE was up over 1/8 on OK volume. I'm still considering the March calls here but there hasn't been a pullback for the purchase. Gold was off a couple bucks on the futures, which wasn't too bad considering the good gains in the US dollar. The XAU was up 1 1/8 as the gold shares out performed. That's a good sign for the bulls. ABX, GG and NEM all had slight fractional gains on good volume. Somebody is buying the gold shares. My ABX January calls are still showing a decent profit. Not completely short term overbought yet for the gold shares. Mentally I'm feeling OK. With the weakness in the small stocks it would not be a surprise to see some selling here. But with the positive expiration week bias, I doubt any meaningful decline is around the corner. With a holiday week looming it could just be more of the same stagnation. I simply don't know. When in doubt, stay out. I think that gold has experienced some short covering in the past couple of weeks. The gold share indexes are on the verge of breaking through the down trend lines on a daily basis that began in the beginning of September. If we can get through them with volume it would be a short term positive. But it hasn't happened yet. We'll keep an eye on what happens overnight and take it from there.
Friday, November 14, 2014
Still just hanging around for the stock market as the Dow fell 18 points on light volume. The advance/declines were slightly positive. The summation index is still heading up. We really just went sideways this week and perhaps that is enough of a rest before we head higher. Expiration week and its positive bias is coming up. With a holiday week to follow. So I don't expect any major declines or any surprises. Steady as she goes for now. GE gained a nickel and the volume was extremely light. No hurry to do anything here. Gold had an unusual session as it took off to the upside for no apparent reason. The dollar was weaker today but not enough to justify the gold futures taking off by over $25 and a bit more in the aftermarket. Short covering in my opinion. The XAU gained over 4 points. ABX up 3/4, GG gained 1 1/8 and NEM added 7/8. Volume was good to the upside. The weekly gold share charts still appear to be trying to hammer out a bottom after todays price action. My ABX January calls are solidly in the black. But we know anything can happen in this game. Mentally I'm feeling a bit off, did not feel well last night. Perhaps some rest is due. I don't see anything in the near term that could derail the recent rally. We are overdue for a pause but none seems to be forthcoming. The technical indicators are overbought and simply remaining that way. We are in a positive seasonal area for stocks. I do not expect a lot of tax loss selling this year because there really aren't a lot of losses. But that's a guess as usual. What isn't a guess is that all declines will be bought for now. Gold had a huge move to the upside today and got back above the $1180 level. I can't say I saw that coming. The next goal will be $1200. Not overbought yet on the gold shares. However there are plenty of losses to take in this sector if they haven't been taken already. I'm not sure when to book the profit for the January ABX call trade but it may be sooner rather than later. Plenty to ponder over the weekend. With only five days remaining in the November option cycle, I doubt I'll be attempting any trades next week. But you never know. For now it's Friday afternoon and time for a break.
Thursday, November 13, 2014
Another gain for the Dow as the most watched index gained 40 points on average volume. The advance/declines were almost 2 to 1 negative though. The Dow as the leader is usually not a bullish sign. I still feel a breather is in order for the major stock indices. But who knows? Perhaps the recent sideways action this week is all we'll get. The summation index continues to move up. However the action in the RUT today was bearish and we like to see the small stocks in the lead. So we'll see. GE was off about 1/8 on light volume. No trades here right now but I'm still looking at the March calls. Gold was up a couple bucks on the futures as the US dollar had a slight loss. The XAU fell a point and that isn't bullish action for the gold shares. ABX, GG and NEM all had fractional losses on light volume. We are not seeing the gold shares add to last weeks gains and that is a discouraging sign. Perhaps sideways is the most we can hope for here in the near term. Mentally I'm getting back into the market routine. Six days left in the November option cycle. After that we will have a holiday week. So I think whatever the near term direction will be, will play out in the next six days. The stock indexes are still overbought and that condition really needs to be relieved before any further advance can take place. That's my best guess at the moment. Whether or not we've built a short term top here will play out in the next few days. Gold remains a disappointment but maybe we are hammering out a bottom here. That's a guess as usual. The gold shares have stopped going down but we certainly aren't witnessing any kind of rally yet. My ABX January calls are still showing a slight profit. We'll see what happens in the overseas trading tonight and close out the week tomorrow.
Wednesday, November 12, 2014
Not much happening today as the Dow fell 2 points on lighter than lately volume. The advance/declines were positive. The summation index continues higher. Nothing changed in the two days I was away. We continue to be overbought and the market continues to grind its way higher. The small stocks had the relative strength today and that is bullish. I do not see any big declines coming. It will probably just be more of the same. We are overdue for some type of breather coming up. But when that occurs is anybodies guess. GE was up 1/8 on average volume. GE is just hanging around this week. Gold was off a few bucks today as the US dollar was higher. Gold has given back some of last weeks gains so far this week. The XAU was off 1/8. The gold shares sold off Monday and have since come back. ABX and GG had fractional gains, while NEM fell 1/4. Volume has lightened up for the gold shares. My ABX January gold share calls are still showing a small profit. Mentally I'm feeling tired from the travel. The stock indices continue to travel upwards but some type of pause would not be a surprise. It is a light week for economic data. Declines will still be bought in my opinion. Gold has not been able to add to the gains of last week. That is not an encouraging sign for the bulls. But we still have a couple of days left in the week. The gold shares are hanging in there so far for the week. I need to get some rest as things get back to normal here after a couple of days away from it all. We'll keep an eye on the overnight developments and go from there.
Friday, November 07, 2014
We bounced around for most of todays session and finished with a gain of 19 points on the Dow on average volume. The advance/declines were positive. The summation index continues higher. The employment report came in just a bit lighter than expected but it wasn't a drastic development. The stock indices sold off and came back twice. Still overbought and staying there for the short term technical picture. I don't see any big declines coming and a grind higher would not be a surprise. The trend is up. GE gained a nickel on lighter volume. I'd like the March calls if GE falls back, although that does not appear to be happening anytime soon. Gold was a surprise today as it took off to the upside. The futures gained over $25 as the US dollar had a good decline on the day. Probably short covering for gold because the overall fundamental picture there hasn't changed. The gold shares added to yesterdays gains with the XAU up 4 3/4. ABX gained 3/4, GG rose 1 1/2 and NEM added a buck. Volume was good here. Some bargain hunting along with short covering is my guess for todays price action. My ABX January calls are in the black. Mentally I'm feeling a bit tired, did not feel well last night. The major stock indexes are still in a straight line up pattern form the lows of mid-October. This cannot last. We are hitting new all time highs on some of the indices almost every day. That fact that this is not receiving a lot of press bodes well for higher prices as we go along. But we do need to take a rest at some point. Perhaps that will be the opportunity to purchase some calls. I expect the beginning of next week to be slow. Tuesday is another bank holiday in the US. Gold had it's best day in months today for whatever reason. The daily candlestick chart here now has a bullish pattern. Perhaps gold can get back to $1200 off of this snap back attempt. It's also possible that the gold shares are trying to put a stop to their decline here as well. The weekly candlestick charts here had their first positive close in nine weeks. Volume was heavy going higher as well and that's bullish. But we will need to see some follow through upside next week to have a more constructive picture of the situation. The blog will be off on Monday and Tuesday as I am taking a mini-vacation in the mountains and will not have internet access. I'll have a recap of those days here on Wednesday when I return. For now it's Friday afternoon and time for a rest.
Thursday, November 06, 2014
The stock markets continue to climb higher. The Dow gained 70 points on what passes now for average volume. The advance/declines were positive. The summation index is still moving up. The employment report is due tomorrow and I get the feeling that regardless of the data the market will rally. The Dow and the TRAN continue to make new daily all time highs. That fact is getting no press at this time. The trend is up until proven otherwise. GE had a good session as it gained 1/2 on good volume. Will I get a chance to buy the March calls here? Not at least until this issue gets oversold and that could be a while. The move higher bodes well for the overall market. Gold appears to be trying to stabilize here as it lost a few bucks on the futures. The US dollar took off to the upside again and crossed the 88 level. The fact that gold didn't drop even more is interesting and confusing at the same time. The gold shares somehow found a bid and the XAU was up 2 2/3. ABX and NEM rose 1/3, while GG was higher by 3/4. Volume was good for the gold shares. Probably just some short covering for the gold shares today. The fundamentals for gold remain bearish. My ABX January calls are showing a small profit. Mentally I'm feeling OK. Everything is pointing to rising stock index prices and we'll move tomorrow off of the employment report. The short term technicals for the major stock indices remain overbought but in strong moves higher that is the case. Enjoy the ride. Gold and silver remain unloved. So why would I try the gold share calls here? If my prognosis that this is the 5th and final leg down for the gold shares, a snap back rally should ensue. That and the extreme oversold nature of these stocks provide the technical case for the trade. Combined with the extreme bearishness and general feeling that gold has nowhere to go but down helps build the contrarian argument. However as always the markets go where they want. We'll see what tomorrow brings.
Wednesday, November 05, 2014
Mixed again for the major stock indices as the Dow gained 100 points on good volume. The advance/declines were positive. The small stocks lagged today and the NASDAQ was slightly negative. Overbought and staying there for the stock indexes. The summation index is still moving higher. The election is out of the way and the next piece of trading news will be the employment report. I don't see anything in the way of higher prices right now. Declines will be bought in my opinion. GE was up 1/8 and the volume was OK. GE is not participating in the rally as much as you'd like to see here. No trades here for now. Gold got sold off again as the futures fell over $20. The US dollar was strong again today. Getting overbought short term for the US dollar. Gold remains oversold and has been for weeks. The XAU dropped 2 3/4. ABX and GG lost around 1/2, while NEM fell over 3/4. Volume remains very heavy in what I think is the final liquidation for the gold shares. I canceled the overnight order that I had for the January ABX calls. In the morning I placed another order at a closer to the money call for the January ABX options. It was filled late in the day. It is already showing a small loss. I may be early with this idea. At this point there is really no telling how low the gold shares can go. Mentally I'm feeling a bit tired. Tomorrow should be a holding pattern for the stock market. Still in a straight line up for the Dow. This will not last forever. Overbought, staying there and there is no end in sight for the rally. However the lack of small stock participation here is probably a warning sign. I think that gold and the gold shares are in the final phase of their decline. If correct, then the January ABX call trade that I placed today might have a chance. If not, the stop loss will be hit. It appears that I'm early here with the drop in the final hour for the gold shares. But we'll see. I'll keep an eye on the foreign markets tonight and go from there.
Tuesday, November 04, 2014
Another day of mixed results as the Dow rose 17 points on heavy volume. The advance/declines were negative though. The overall market was weaker than the Dow. The summation index continues higher. This is probably a digestion period due to the recent gains. We'll get the election results overnight and they will most likely indicate a stalemate for Washington. That should be a positive for the stock market. We're still overbought on the short term technical indicators for the major stock indices. GE was flat on the session and the volume was light. Gold didn't do much on the futures today despite a drop in the US dollar. The XAU fell 2 1/2 and returned to under perform the metal. ABX, GG and NEM all fell around 1/2 on good volume again. What appeared to be an attempt to hammer out a bottom for the gold shares isn't holding up. I still have the open order for the January ABX calls but I may have to adjust it lower. Or perhaps forget about it altogether. Mentally I'm feeling OK. So we have had a straight line rally form the lows in October. This cannot last forever. Perhaps it is time for some sideways activity to consolidate the gains. I do not expect any large scale decline because I think that there will be buyers to step in. The VIX had a spike and we are now back at more normal levels. After tomorrows price action it should be a waiting game for Fridays employment numbers. Gold and silver are in incredible bear markets. However on the weekly gold share charts I can make a case that we are in the fifth and final leg down. How far down it goes is the question. I'll rethink the January calls tonight. We'll watch the election returns come in tonight and see what tomorrow brings.
Monday, November 03, 2014
A mixed bag to start the month of November as the Dow lost 24 points on average volume. The advance/declines were barely negative. The overall market acted better than the Dow. The summation index continues higher. Still short term overbought for the major stock indices. We'll get the mid-term elections out of the way and wait for the employment report. There is nothing in the way of higher prices. GE was off 1/8 and the volume was good. I'm still thinking about getting the March call here. The timing is the ongoing question. Gold was off a couple bucks on the futures as the US dollar continued its climb higher. The XAU was actually up two points and this is the first sign of the gold shares starting to act better. Of course one day doesn't make a trend but it is something to keep an eye on. ABX and GG had very minor gains, while NEM was up 1/3. Volume remains heavy here. I did place an order for the January ABX calls and I am leaving it open. The technicals for the gold shares remain oversold. However it looks like both ABX and GG are trying to hammer out bottoms here on the daily candlestick charts. Mentally I'm feeling OK. I'm not sure how much longer the straight line up from the lows can go. But you've got to admit it's been pretty amazing. I really don't think anybody saw that coming. But where we go from here is what matters now. Declines, if we get any, can and will be bought in my opinion. I do not have any OEX trades in mind right now. I am starting to look at the SPY as a trading option as well. Gold has broken support and lower prices are forecast from that. How low is the question here. The gold shares look like they are trying to stabilize here. Whether or not they can remains to be seen. I'm still willing to try the January calls here if I can get filled at the price that I want. This looks like it will be my next attempt at a trade. We'll see what transpires overnight and watch the pre-election markets tomorrow.