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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.

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