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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.

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