Wednesday, December 31, 2014
An interesting end to the year as the Dow fell 160 points on light volume. The advance/declines were about 2 to 1 negative. The summation index is still trending higher. I'm not sure what to make of todays action but I am still bullish on the beginning of 2015. My open order for the OEX January calls wasn't filled even though the premium price was touched. Once again the trading in the OEX electronic market does not seem legitimate. I adjusted my order up to get filled but it was not at the price I desired. I will once again look into the SPY contract to trade the overall stock market. There appears to be much more liquidity and fairness over there. That particular contract trades very rapidly and that is something that I am not used to. Getting short term oversold now for the major stock indices. GE fell almost 1/3 and the volume picked up from yesterday but is still light. My March calls here are in the red. Gold fell back from what it gained yesterday as the US dollar was higher. The gold shares didn't move much however. The XAU was off 1/4 and GDX was only slightly lower. ABX, GG and NEM had fractional losses on light volume. Too late in my opinion to get the January gold share calls here. USO finished the day up a tad after being lower early. My open order for the USO February calls was filled. It is showing a small profit. Mentally I'm feeling OK. I expect Friday to be a positive one for the stock indexes and I would be surprised if it wasn't. I'm confident in the OEX trade made today but the market as always will go where it wants. I actually have three trades on at the moment and that is not my usual scenario. It will be important to get off to a good start in 2015. I feel that I am positioned to do that. But who knows? It's an interesting game. Tomorrow is a holiday around the world and some markets will be closed on Friday as well. We should have everybody back at their trading desks on Monday. I'll be glad to see 2014 come to an end because it was another losing year for me in the options market. Hopefully the risk control stop loss orders will bode well for a better cap on the losing trades in 2015. My themes for the beginning of the new year are higher stock prices overall and a bounce in the oil market. Happy New Year everyone!
Tuesday, December 30, 2014
Relieving some of the overbought condition today as the Dow fell 55 points on light volume. The advance/declines were negative. The summation index continues higher. We're still not back to normal market conditions as the light volume attests. I did place an open order for the OEX January calls. We'll need to see some more decline for it to get filled. GE was off 1/8 and the volume remains light. My GE March calls are now back in the red. Plenty of time for this trade to work. Gold found some buyers today as the futures rose $18. The US dollar was lower. The XAU was higher by 2 3/8. ABX, GG and NEM all had fractional gains. The volume was better than it has been. GDX was up 2/3. It's too late for the January call trade here I think. USO was flat on the day. I left in my open order for the February calls here. Mentally I'm feeling OK. We'll finish up the year tomorrow and I don't expect a lot of movement. Thursday is a holiday. I expect Friday to be positive. Things should be getting back to normal on Monday. It is a time to be patient and the orders that I have placed hopefully reflect that. What I mean is that in order for the tickets to be filled we will have to see price action that lowers the premiums. I may simply cancel the orders before the close tomorrow as well. I would really like to get the new year going in the right direction. The past couple of years haven't been my best. It's all about discipline and timing. Trading should be thin overnight as well as tomorrow. We'll see how it goes.
Monday, December 29, 2014
The market remains in holiday mode as the Dow fell 15 points on light volume. The advance/declines were positive. The summation index continues higher. It does not look like there will be an opportunity to purchase the January OEX calls at this rate. I still expect a good beginning to the new year for the major stock indices. GE was off a few cents and the volume remains light. The GE March calls that I own are still slightly in the black. Gold was off $13 on the futures as the US dollar was higher yet again. The trend in the dollar remains intact. The XAU was off 1 3/4. ABX, GG and NEM all had fractional losses on light volume. GDX was lower by 3/8. I'm still considering a GDX trade for the beginning of the year. USO dropped another 1/2 and I did place an open order here for the February calls. I'm not sure that this is the proper idea but I am willing to give it a shot at the right price. Mentally I'm feeling OK. Just waiting for 2015 at this point. All of the major trading has been completed for the year. If we do see some weakness in the next couple of sessions perhaps we'll get a chance for the OEX January calls. But it sure doesn't look like it today. Gold reversed the gains from the end of last week. Gold has basically been going nowhere for the past few months. As long as the dollar remains in rally mode, I doubt we'll see gold go much higher. But as always the markets go where they want. Things can change in a hurry but I don't expect anything like that for the next couple of days at least. We'll keep an eye on developments overnight and go from there.
Friday, December 26, 2014
And the beat goes on. The Dow gained 23 points on very light volume. The advance/declines were 2 to 1 positive. The summation index continues higher. Light volume, holiday mode thin trading. You really can't make too much out of it. GE fell a nickel again and the volume remains extremely light. Gold found some buyers today as the futures rose over $20. The US dollar was a bit higher as well. The XAU added 1 7/8. ABX, GG and NEM all had fractional gains on light volume. Perhaps the expected beginning of the year buying in the gold shares is already taking place. USO fell 1/4 and the volume was light. I am considering the USO February calls for a bounce in the beginning of next year. Mentally I'm feeling OK. The major players are out of the game at the moment. Some of them will return next week. I don't think that things will really get going until January 5th. I'm looking at getting some OEX January calls if there is some type of pullback. Perhaps the GDX January calls but it may be too late there. I'll be checking the charts out over the weekend. It's Friday afternoon and time for a rest.
Wednesday, December 24, 2014
The market closed early today as we are in holiday mode. The Dow rose 6 points although we were much higher for most of the session. The advance/declines were about even. Volume was extremely low. The summation index continues to the upside. Thinly traded and not much to make of things here. GE was off a nickel and the volume was very light. Gold lost a few bucks on the futures and the US dollar was a bit lower as well. The XAU gained 1 3/4 though. Perhaps the gold shares are already seeing some buyers at depressed levels. But the volume was extremely light. ABX, GG and NEM had fractional gains. GDX was up almost 1/2. I'm still considering the calls here for the beginning of the new year. USO fell 1/2 and is still moving sideways for now. Mentally I'm feeling OK. You can't make much of the market action at this time of the year. The major players are home for the holidays. I have some trading ideas but acting on them won't occur until next week. It's time to be patient and relax for a change. Merry Christmas and Happy Holidays to all.
Tuesday, December 23, 2014
New highs every day as we closed above 18000 for the first time today. The Dow gained 64 points on light volume. The advance/declines were almost 2 to 1 higher. The summation index continues higher. The overall market was weaker than the Dow so perhaps a pause is due. Short term overbought as well for the major stock indices. However I'm still a believer in higher prices and declines are to be bought. GE was up over 1/8 and the volume was light. My GE March calls are still in the black. Gold was pretty much flat on the futures but dropped $5 in the aftermarket. The US dollar was up today and closed above 90. The XAU was off 1/2. ABX, GG and NEM all had slight fractional losses on light volume. I'm still considering a beginning of the year call trade in the gold shares but I flip flop on this idea with each passing day. USO was up today as oil had a positive session. Mentally I'm feeling fine. Light volume will be the environment for the rest of the week for stocks. The markets are in holiday mode. All the major players won't return until the new year. The trend for the stock indexes remains up and I don't see any changes in the near term. I'd still like to get some OEX January calls if we do get some selling. So it is a wait and see type of atmosphere for the rest of 2014. I expect it to be slow overnight but we'll still keep an eye on things.
Monday, December 22, 2014
More of the same as the Dow gained 154 points on average volume. The advance/declines were positive. The summation index continues higher. At this rate, there won't be any chance to buy some OEX January calls. The reverse head and shoulders patterns will play out and the rally will simply extend itself. New all time highs are in the near future. There are no reasons for selling. Just getting to short term overbought on the major stock indices. GE was up a few cents and the volume was lighter than lately. My GE March calls are slightly in the black. I'm still guessing this trade will work out but the entry could have been a lot better. Gold took a hit today as the futures fell around $15 and more in the aftermarket. The US dollar was higher on the day. The XAU dropped 4 points. ABX off 1/2, while GG and NEM shed 7/8. Volume was good to the downside. You would think that these issues would be sold out by now but the dumping continues. Not so sure about trying the GDX January calls. It's probably best to hold off until the technical indicators are completely oversold. Not there yet. USO was off a point. I'm still considering the February calls here but USO has been oversold and staying there. Mentally I'm feeling OK. It's a holiday week with some shortened sessions coming up. I think the prudent path will be to let this week go by. My trading has been pitiful for most of the year anyway. Looking for a fresh start to the new year is the way to go for me at this juncture. My trading account lost almost 30% this year. If not for being short during the drop in October, it would have been worse. But you've got to keep moving on in this game. Hopefully the stop loss orders will put a dent in the losing trades but the execution so far hasn't been up to snuff. It's always a battle with the markets and that includes the players behind the scenes as well. Plus now the fight includes computers. However the rewards for those good enough to play the game far outweigh the obstacles. It can be done. The only question is are you good enough to do it? We've seen a steady decline in the commodities markets. Over supply and a decent rise in the dollar are probably part of the reasons. This won't last forever although it's hard to make that case right now. There will be opportunities. The US stock markets continue to climb. I expect that trend to continue. Taking advantage of it will be the key. We'll get most of this weeks economic data out tomorrow and that should get things moving. After that I expect things to get pretty slow until next week. We'll watch the foreign markets overnight and take it from there.
Friday, December 19, 2014
More of the same to wrap up the week as the Dow gained 26 points on very heavy volume. The advance/declines were almost 2 to 1 positive. The summation index is turning back up. The overall market was stronger than the Dow. Any weakness can and should be bought. We are heading to new all time highs. I will be looking to get some OEX January calls before the start of the new year. If we are lucky there will be some pullback. If not, then some type of consolidation of the recent gains will be the opportunity. This was a pretty crazy week. However the major players will be off for the holidays now. Next week should be a snoozer compared to what we have just seen. GE was up 3/8 and the volume remains heavy. My GE March calls are now slightly in the black. This trade once again looks like it will work but we all know what can happen in this game. Gold was flat on the day as the US dollar continues to march higher. The XAU was off 1/8. ABX, GG and NEM all had fractional losses. Volume remains good. I have no plans to trade the gold shares now. I am going to try and wait for the technical indicators to get oversold. If that happens before the new year, I'll try the January GDX calls. USO had a good move higher today by 1 1/4. Perhaps I have missed this one. I'm still looking at the February calls though. Mentally I'm feeling OK. Physically doing much better as well after the battle with the cold/flu. The stock indices have turned back up and we are going higher. I'll try and be patient next week since it would probably be wise to let next week go by. But you never know. The summation index has turned around and I'll take my cues from there. Gold isn't doing much but perhaps if we get a bid for oil, it will help gold. That's a guess as usual. I still think there could be some buying of the gold shares early next year by money managers seeking the bottom fishers. I could be wrong. But like I said, I'll have to wait until the technicals are oversold before trying the calls there. So I have a couple of trading ideas to wrap up the year but they will carry over into 2015. This trading year was pretty pathetic for me on the returns. My winning percentage was pretty low. I'll try and improve the results next year. I'll be checking the charts over the weekend as usual. for now it's Friday afternoon and time for a break.
Thursday, December 18, 2014
I don't know what to say after todays price action. The Dow soared 421 points on heavy volume. The advance/declines were 4 to 1 positive. That is about 700 or so Dow points in just two days. You cannot plan for such events. Volatility has returned but this is ridiculous. The past two days of gains would normally have taken at least two weeks and that would be in good bull market. It does not appear that we will get a chance to purchase some OEX January calls but who knows? The trend has turned back up and new all time highs are on the way for the major stock indices. The game plan for me now will be to wait and see if we pull back before the new year begins. GE was up almost 3/4 on heavy volume. The GE March calls that I own are getting back to break even. I still like this trade and in due time I think that it will work out fine. Gold was up just a touch on the futures after being higher earlier. The US dollar had a slight gain. The XAU was higher by 3 points, once again following stocks. ABX was up 1/3, while GG and NEM gained 7/8. Volume was good. GDX gained 3/4 and it looks like the January call trade here is not going to happen for me. We've already moved up too much. Unless we see some near term weakness in the gold shares, I'll have to find something else. USO moved back down today and appears poised to head lower. We'll see. Mentally I'm feeling OK. Quite a move today in the major stock indices and the reverse head and shoulders patterns have come back into play. Just take a look at the daily candlestick charts of COMPQ, INDU, NYA, OEX, QQQ, RUT, SPX or TRAN. These charts imply much higher prices coming on the break out from these patterns. I believe that it will happen at the beginning of the new year. Any decline can be bought. The summation index is still heading lower but should turn back up next week. The gold shares have shown a little life here but gold itself isn't doing much. I'm not sure if I am going to continue to pursue a trade here. Perhaps the USO February calls will be my next attempt. Or not. We'll see if the overseas markets follow todays US stock market move tonight. I'm also thinking that perhaps the major players in the game are getting all of their trading done before taking off next week for the holidays. We'll keep an eye on things and close out the week tomorrow.
Wednesday, December 17, 2014
We witnessed a huge bounce today as the Dow soared 288 points on very heavy volume. The advance/declines were 8 to 1 positive. We were overbought and overdue for some upside but this was quite a bump. The market also liked what the Fed had to say and that helped extend the rally. The decline is over in my humble opinion. I did place an order last night for some OEX January calls but it was not filled. I am leaving in an open order for this trade because now is the time. Some of my technical indicators are at the levels they were when we rallied in October. If we are lucky perhaps the market will drift back and the calls will be filled. If not we will have to adjust because I'm still a believer that the beginning of next year will be positive. GE was up over 1/8 on extremely heavy volume. It appears that we have put in a bottom here as well, looking at the daily candlestick chart. My GE March calls are still in the red. Gold was flat on the session but dropped a bit in the aftermarket. The US dollar had a very strong session. It was a surprise that gold did not fall further. The XAU was up 3 1/3, following the overall market. ABX, GG and NEM all had fractional gains under a dollar on good volume. I was stopped out from my ABX January call trade yesterday for a 45% loss. I don't think that I will try ABX again here but may attempt the index GDX on the long side. But I'm not sure that gold will rally here. Gold itself remains more overbought than oversold at the moment. Mentally I'm feeling OK. Oil has held up the past couple of days and that has provided some relief for the stock markets. The extreme oversold short term condition of the stock indices was due to be relieved as well. The question will be if this is a real bounce or not but I believe that it is. Declines can once again be purchased. I don't know if the market will give us a chance though. I'm looking at the OEX January calls. USO has stabilized for the past two days on very heavy volume. Something is trying to keep this issue from falling any further. We'll see if it works. Oil is pretty blown out to the downside. The gold shares outperformed gold today and that is bullish. But one day doesn't make a trend. The fundamentals for gold are still negative. However I cannot rule out a short term rally as the year turns for the gold shares. I'm thinking that there could be some bottom fishing by money managers to start 2015. I could be wrong. We'll watch to see if the foreign markets follow the US lead overnight. Volatility has returned.
Tuesday, December 16, 2014
Once again the market failed to hold on to a decent intra-day gain. The Dow was up well over 200 points during the session but finished the day with a loss of 112 points on very heavy volume. The advance/declines were negative. The summation index continues to head lower. We finished near the lows of the day and that isn't bullish. We are seeing a worldwide liquidation of assets. I do not know the reason why. My guess is heavy margin calls around the world due to leveraged assets related to oil and other commodities. But that's just a guess. My theory of how things would play out here was wrong. The reverse head and shoulders patterns in the major stock indices are not taking place. GE was off a dime and the volume was heavy again. I still have the GE March calls but they are losing value and might be stopped out soon. That will be the case if the overall market decline continues. Gold was off over $10 on the futures but this was baked in yesterday in the aftermarket. The US dollar got crushed today. Gold not being able to rally on a very weak day for the US dollar is not at all bullish. Once again I don't know why. The XAU fell almost a point. ABX, GG and NEM all had fractional losses on heavy volume. My ABX January calls got to the stop price but I do not know if it was filled. The market makers danced around my stop limit order. I'll check back again later tonight but this is the second time this year where the mechanics of a trade haven't worked properly. Everybody loves electronic trading though. Until it doesn't work right. Mentally I'm feeling OK and getting some strength back as well. Not all the way back to normal yet. We get the Fed announcement tomorrow. I have no idea what the reaction to that might be. It's probably best to be careful here and not make any huge decisions. The market forces are pretty powerful at times and this seems to be one of those times. I still believe that next year will be a good one for the stock market. But the question now seems to be from what level will the year begin? USO had an up session and the volume was massive. Trying to hold things up here perhaps? I guess I'm going to stay on the sidelines here, as I have never traded this issue before and the markets are in crazy mode. Gold should have had a rally today on the weaker dollar and didn't. I'm not sure what's next here either. The gold shares are short term oversold. I'll see if I was sold out of the ABX January call position and decide whether I'd like to try that again. We'll see if the foreign markets can hold up overnight and take it from there.
Monday, December 15, 2014
The Dow fell another 100 points today on heavy volume. The advance/declines were 3 to 1 negative. The summation index continues lower. Let me be the first to admit that I do not have a clue as to what is going on here. I've been under the weather for a week but that is no excuse. We are getting a worldwide liquidation of commodities for whatever reason. Stocks are being sold to meet margin calls is my guess. The major stock indices are oversold and staying that way. If we don't hold up here my reverse head and shoulders hypothesis will be null and void. GE dropped 1/3 and the volume was extremely heavy. I might get stopped out of the GE March calls that I own as they are now in the red. Again, not sure what is happening but everything is going down. Gold fell $15 on the futures and that much again in the aftermarket. The US dollar was slightly higher. The XAU lost 4 1/2. The gold shares had been weak and they are getting weaker. ABX, GG and NEM all fell a point or more on good volume. My ABX January calls are now losers and risk being stopped out as well. This was a trade that once showed a very good profit. Whatever is happening it looks like even more selling is on the way. Mentally I'm feeling OK but still not 100%. I guess it wasn't the best time to catch a cold/flu. With what is going on at the moment, anything goes. Today was a one day reversal to the downside as we opened higher and closed lower. I did not expect the decline to go this far or last this long and I was wrong. However if things turn around here quickly, then there is still a chance that my idea about the overall market was correct. USO is still blown out to the downside and I do have the February calls on my radar. Trying to figure out the bottom is a guessing game. I still may try this trade but probably the best course of action would be to step aside. We'll keep an eye on the overnight price action and see what the foreign markets do. Tomorrow should be interesting as well.
Friday, December 12, 2014
It was another downer for the Dow today as it got clobbered and fell 315 points on once again heavy volume. The advance/declines were 4 to 1 negative. The summation index continues lower. We closed on the lows of the day and that isn't bullish. The S&P 500 is just about at 2000, where I believe support will kick in. But perhaps I'm just off the mark here. Maybe there is some disaster in the markets waiting to happen. Technically, I just don't see it. The small stocks are holding up relatively better. The reverse head and shoulders patterns that I anticipate are still in place. Granted, if we see another week as negative as this one next week, I'll have to change my tune. But for now this decline to me is a breather on the way to higher prices and a good start to the new year. We'll see. GE was off 1/2 and the volume was heavy. This drop occurred despite GE raising its dividend. In a normal market with this kind of positive development, a nice price spike would occur. But selling was the theme of the day. The March GE calls that I own are now in the red. If I do get stopped out of this trade I will probably try it again at a different strike price. Hasn't happened yet. Gold was off a few bucks on the futures and the US dollar was lower as well. Disappointing to not see gold get a bid with the recent market turmoil. It certainly isn't a positive. The XAU slid another 1 1/4. ABX off 1/3, with GG and NEM losing 1/2. Volume was a little better today. My ABX January calls are barely in the black. This is a trade that should have been closed out weeks ago. Five weeks to go in the January option cycle and two of those week will be holiday mode. Mentally I'm feeling OK but still a bit under the weather physically. Where do we go from here will be the question thought about over the weekend. Support for the Dow is close at hand around 17200. Previous tops and the 50 day moving average are around this level. Will the support hold is now the question. The summation index is still heading lower. The McClellan oscillator is getting pretty oversold. But that doesn't mean that it can't get more oversold. I'm still looking for the stock indexes to stabilize next week though. I could be wrong. Gold is short term overbought right now, with the gold shares moving into oversold territory. Not really a clear picture of what to expect there. The USO trade that I am thinking about maybe just isn't a good idea. This issue is in a free fall on heavy volume. I suppose I have been fortunate enough to not have tried anything yet. I suppose if it makes it all the way to $20, I'll consider it. The snap back here will probably be pretty dramatic when it comes. There will be a lot to consider over the weekend and hopefully my overall health will return back to normal. I'll be the first to admit that my thinking has been rather slow this past week. That won't cut it in this game or any other. As always the market doesn't care and goes where it wants. Plenty of research to be done over the weekend. For now it's Friday afternoon and time for a rest.
Thursday, December 11, 2014
Volatility is back as the Dow gained 63 points on heavy volume. The advance/declines were positive. The summation index is still trending lower. The Dow did have a 200 point gain at some time early in the session. Can't say I know exactly what is taking place here. But I'm sticking with the thesis that this sets things up for a rally into the new year. I'm also a believer of the reverse head and shoulders patterns being formed on some of the major stock indices daily charts. GE was up 1/8 and the volume was good. The GE March calls that I own are back to break even. Plenty of time for this trade to work itself out. Gold was off $3 on the futures as the US dollar bounced back. The XAU dropped another point. ABX and GG had fractional losses, while NEM had a fractional gain. Volume was light. Sideways is the most that we can hope for the gold shares here. The short term technical indicators are neither overbought or oversold. Mentally I'm feeling tired. Cannot shake this cold/flu. Declines can still be purchased in my opinion. I'm still looking for a good start to the new year for stocks. Six days to go in the December option cycle. I have no index option trades in mind for the S&P at the moment. USO continues to drop. I'm looking but not buying just yet. Oversold and staying there for this issue and that is dangerous. The CRB continues to drop as well. Gold continues to hang in there for now. But I don't see any huge rallies coming. We'll watch the overnight action and finish out the week tomorrow.
Wednesday, December 10, 2014
Well, we got a decline today as the Dow fell 268 points on very heavy volume. The advance/declines were 5 to 1 negative. Markets around the world a beginning to drop. The summation index is heading lower. I still don't think this is the beginning of any sustained decline. It would help if we can hold things up right around here. Let me be the first to say that the look on the daily candlestick charts of some of the major averages to me is a reverse head and shoulder pattern. That implies higher prices going out in time. I do not think that we are going to retest the lows from October or anything even close to that. But who knows? The markets go where they want. GE fell another 1/3 and the volume was heavy here as well. The GE March calls that I purchased yesterday are slightly under water. I still like this trade and think that in time it will prove to be a good move. Gold fell a couple bucks on the futures despite a drop in the US dollar. That isn't s good sign for the gold bulls. The XAU fell 2 1/3 after trying to show some life early. ABX shed 1/8, while GG and NEM fell over 1/2. Volume was lighter here. The gold shares basically ended up following the overall market. Mentally and physically I'm tired, still not close to feeling 100%. It affects the trading to be sure. I should be OK by next week. The markets don't care. USO continues to plunge and the volume today was extremely heavy. Maybe it's about time to step up to the plate here but I will have to wait until next week at least. Oversold and staying there on a daily and weekly basis for this issue. The snap back should be pretty violent if you can pick the bottom. The major stock indexes are moving to short term oversold territory. Not so much so on a weekly basis. The summation index heading lower should be where we take our cues from. Perhaps the S&P 500 can see some support at the 50 day moving average at around 2000. That is my best guess at the moment. Both gold and silver are now overbought. Sideways is the most we can expect near term. There was no flight to safety here despite a lower dollar and a decent decline in the stock market. The gold shares continue to disappoint. We'll have to watch the overseas markets tonight and see if they continue lower. Once again, I don't think that this is anything to worry about. Or perhaps since that's what I think you should. But you could make those assumptions on any day about any thing. We'll see what tomorrow brings.
Tuesday, December 09, 2014
Another crazy session as the Dow was off over 200 points early but came back to finish the day lower by 51. Volume was heavy again and the advance/declines were positive. The small stocks fared much better than the Dow and that is a positive. Declines continue to be bought. That is the theme for now and I expect it to continue. The summation index is moving lower but I don't think it will turn into some type of market rout. We are setting up for the rally that will appear in the new year. That is my guess at the moment. GE was off 1/8 and the volume was good. My open order for the GE March calls was filled early when GE tanked with the overall market. I have the stop loss order in place. This trade has plenty of time to work and I am very positive that this will turn into a decent profit. I could be wrong. Gold soared on fear when the stock indices dropped on the open. The precious metal futures rose $35 as the US dollar was lower again. Gold has now risen above its 50 day moving average. Ditto for silver, which had a good session as well. The gold shares didn't move as much as I would have liked though. The XAU gained 3 1/8. ABX up 1/2, while GG and NEM added around 7/8. Volume was decent. My ABX January calls are back in the black. Mentally I'm feeling OK but I'm still feeling ill from the cold/flu. Not being 100% makes for tough trading but thankfully there isn't a lot of thought to be done with what I have going on right now. Todays market comeback only solidifies the idea that dips are to be purchased. There will be plenty of time to develop new trades when I'm feeling better. I'm still thinking about the USO February calls. Today was a great day for gold and silver but the precious metal shares lagged. That is not a positive. I'll be keeping an eye on it. We'll watch the overnight action and see what tomorrow brings.
Monday, December 08, 2014
An interesting start to the week as the Dow fell 105 points on good volume. The advance/declines were over 2 to 1 negative. We were off 150 at on point during the session. Todays action should turn the summation index down. I would not worry about any kind of big decline here. My opinion is that we are simply setting things up for the next rally to begin at the start of the new year. GE dropped 1/3 on good volume. My open order for the March calls here is close to being filled. Another down day tomorrow and it will get hit most likely. Gold turned around to the upside during the trading day and were $5 on the futures, more in the aftermarket. The US dollar was lower today. The XAU was flat on the day after being lower early. The same price action occurred with ABX, GG and NEM. Volume was good for the gold shares. My ABX January calls got all the way back to what I paid for them before finishing slightly in the black. Mentally I'm feeling tired and physically I have a cold/flu. Trading is tough enough to begin with and being sick isn't going to help. Trading decisions now will be kept to a minimum. I'm still considering the USO February calls but that issue continues to simply drop. The overall stock indices are taking a breather here. Weakness will be bought in my opinion. If you have any call trades for the beginning of next year, now is the time to be looking to buy. I could be wrong and often am. However I think next year will be positive for stocks, with a decent lift off in January. Gold has been holding up near the $1200 range despite a lot of not so good news for it lately. Perhaps it can get some kind of upside traction soon. But the technicals are more overbought here short term than oversold. We'll see what tomorrow brings.
Friday, December 05, 2014
More new highs as the Dow gained 58 points on average volume. The advance/declines were slightly positive. The summation index is trending sideways. The employment report was robust and the fear of higher interest rates is no longer a market concern. We are going higher and this rally will probably last longer than most expect. Some indexes, such as the NYA and RUT have yet to break into new highs. When they do, things will really get going to the upside. Perhaps at the start of the new year. GE was off a few cents on light volume. I'm still leaving the open order in for the March calls here. It will take some more weakness to get filled. Gold fell on the employment numbers and that is not what I needed for the ABX call trade. The precious metal futures were off $17. The US dollar continued to rally with another strong session. The fundamentals for gold are negative. I suppose I should have cashed in the profit I had a couple of weeks ago as it appears that there will be no sustained rallies for gold. The XAU lost 1 1/3. ABX, GG and NEM all had fractional losses on light volume. The ABX January call trade is still slightly in the black. Oversold now on a short term basis for ABX. USO was lower today as well. The strong US dollar does not help this issue. I am still considering the February calls here but I certainly don't know where the bottom is for oil. Mentally I'm feeling OK. We've got about two real weeks of trading left into the December option expiration before things really slow down for the holidays. I do not expect any real declines and any weakness will be bought. I may begin to look at the January OEX or SPY calls because I expect a nice pop at the beginning of next year. I could be wrong. But like I said, once all of the stock indices are into new high ground we should take off. There is no overhead resistance. Markets tend to stay overbought for a long time in good rallies. Witness the recent action in the US dollar. Now all things don't last forever but you've got to take advantage of the situations when they occur. Gold has not been able to build on that huge reversal move last week to the upside. That is not a positive going forward. Neither is that fact that the gold share indexes were rebuffed at their 50 day moving averages. Now time also becomes a factor for this ABX January call trade that I have because there are only six weeks left. Plenty to think about over the weekend. I'll be checking the charts as usual and trying to come up with a game plan for the rest of this year. For now it's Friday afternoon and time for a break.
Thursday, December 04, 2014
Bouncing around today and negative for the most part as the Dow fell 12 points on average volume. The advance/declines were about 2 to 1 negative. The summation index is trending sideways. Waiting on the jobs numbers. We could go either way here but I'm looking for a bullish outcome. Declines are still being purchased and I expect that to continue. GE fell 1/3 on average volume. I still have an open order in for the March calls here. Gold was basically flat on the futures despite a drop in the US dollar. That isn't bullish. The XAU dropped about 1 2/3. ABX and NEM fell 1/3, while GG shed 2/3. Volume was light. Not sure what to make of todays price action but as long as the gold shares continue to move sideways I'll remain with a bullish position. My ABX January calls remain in the black but have lost some profit. Mentally I'm feeling OK. Not sure what we'll see from the employment report tomorrow but I don't expect some big decline. Money continues to flow into US stocks and that trend has been pretty consistent. Given the positive seasonal factor in place now, higher prices are the expected outcome. The trend is up and you should night fight it. Gold is stuck at the 50 day moving average as are the gold shares. Perhaps tomorrows data will get things moving. Or not. The short term technical indicators are overbought for gold and mid-range for the gold shares. USO remains oversold but that doesn't mean that it can't go lower. Just because something looks cheap doesn't mean that it can't get cheaper. I'm keeping an eye on it and still may make a trade here. We'll watch the overnight developments and await the employment report tomorrow morning.
Wednesday, December 03, 2014
Another day, another new all time high. The Dow closed up 33 points on average volume. The advance/declines were almost 2 to 1 positive. I thought that perhaps we would simply move sideways here but up we go. The summation index is trending sideways though. The Fed minutes were a non event. Waiting on Fridays employment report. GE was up 1/3 on OK volume. My open order was not hit but I am leaving it out there. The GE March calls are the trade here for me. Gold was up almost ten bucks on the futures. The US dollar was higher today as well. The XAU rose almost 2 1/2. ABX, GG and NEM all had fractional gains to the upside on lighter volume. My ABX January calls are still in the black. Stalling at the 50 days moving average for both gold and the gold share indices. A move above would be positive. Mentally I'm feeling OK. Tomorrow should be a waiting game on the employment numbers. The short term technicals are mixed here so we could go either way. I'd only be guessing at which way we will go. It's the sidelines for now with regards to the OEX options. Still plenty of time left in the December option cycle. I think that gold and silver are still trying to digest the violent intra-day move on Monday. Perhaps the jobs data will get things going here again. I'm still looking at USO and considering a long trade there. We'll watch what transpires in the overnight action and go from there.
Tuesday, December 02, 2014
Back to the upside as volatility has returned. The Dow gained 102 points on good volume. The advance/declines were 2 to 1 positive. The summation index is moving sideways. Declines are being purchased. Perhaps the major stock indices will simply move sideways here before heading one way or the other. The odds favor eventually higher prices in my opinion. The short term technical indicators are trying to roll back to the upside. No OEX trades right now. GE was flat on the session and the volume was light. My open order remains for the March calls here. Gold fell back almost $20 today on the futures as the US dollar had a sharp rebound. The XAU lost 2 1/2. ABX and NEM fell 1/2, while GG shed 7/8. Volume was average. My ABX January calls are still showing a profit but not as much. Volatility has returned in the gold market as well. USO was lower today and I am still debating on whether to attempt a trade here or not. If the options for February get cheap enough, I'll probably give it a try. Mentally I'm feeling OK. Perhaps we are in a pause for the major stock indices here but we will have to see how it plays out. Working off the extended overbought condition is how I'd term the recent price action. But with the Fed minutes tomorrow and the employment report on Friday, we do have catalysts for price action. Once again , I do not expect any major decline. Gold has been acting strange lately but with the long bullish candlestick on the daily chart, I've got to think that there will be a positive short term outcome here. I could be wrong. The technicals on the gold share indexes are mid-range. USO is another idea but I am not used to trading it. Technically it is overblown to the downside. I'll give it some more time most likely before deciding on what to do. We'll follow the action overseas tonight and see what happens tomorrow.
Monday, December 01, 2014
We begin the month of December on a down note as the Dow fell 51 points on heavy volume. The advance/declines were 3 to 1 negative. This should turn the summation index down. We have been short term overbought on the stock indices for quite some time so a pause isn't completely out of the question. The short term technical indicators have now rolled over for the major stock indices. The overall market was much weaker than the Dow, especially the small stocks. I don't expect any huge decline here though. But what do I know? Not a whole lot sometimes. GE was off almost 1/2 and the volume was heavy. Not sure what is going on here either. However I did place an order for the GE March calls since I have been waiting for a pullback to try this trade. I'm leaving the order open. Gold had a wild session as the Swiss voted down the peg to gold for the franc. Gold initially sold off hard overnight but then completely turned around and rallied just a hard back to the upside. The futures ended the day higher by over $40 and back above the $1200 level. The US dollar was weaker on the session. The XAU was up 4 3/4. ABX up 1/2, GG rose 1 2/3 and NEM added 1 1/4. Volume was heavy back to the upside. Unfortunately for me ABX was the laggard here but my ABX January calls are still in the black. I really don't know what to make of todays price action but it appears to be bullish. However I would not be surprised to see some sideways action as the market figures out where it wants to go. The USO trade that I wrote about last week is still in the picture but USO had a strong day today to halt the free fall in oil. I still like the USO February calls if we drop back again. On a weekly basis, USO is so many standard deviations away from its 50 week moving average that it has to begin to snap back towards it between now and February. After todays price action I feel this will happen sooner rather than later. Mentally I'm feeling OK. My guess is that any decline that we see here will set us up for a nice rally at the beginning of next year. January through March calls should work out in my opinion. I'll be looking at the OEX and SPY to trade long at some point this month. The ideal scenario will be for the summation index to trend lower with the short term technical indicators reaching oversold status. That will be the opportune time to buy the calls. Wishful thinking perhaps on my part. The markets go where they want. Gold had a crazy session with incredible volatility. I don't know what it means for the future but at least for the bullish cause we are back above $1200. We'll have to see how the rest of the week plays out. The employment report on Friday should be the main driver. We also have the Feds beige book out on Wednesday. So it should be an interesting week. We'll keep an eye on the overnight action and get ready for Tuesday.