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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.

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