Friday, January 30, 2015
Once again back to the downside to close out the week and the month. The Dow fell 252 points on heavy volume. The advance/declines were 2 to 1 negative. We closed below the 2000 level on the S&P 500. We are at the bottom of the trading range for this index again. I did place an order for the SPY February calls during the session but canceled it about an hour later. I'm still feeling sick and cannot trade under this condition. My mind is dull. I will hopefully get better over the weekend. Getting to short term oversold on the stock indices but falling apart again in the final hour is bearish. GE was down about 20 cents and the volume was heavy. Gold found a bid on the market decline with the futures up over $20. The US dollar rose slightly. The XAU came back 2 1/4, while GDX added 3/4. We've basically been sideways for the gold shares the past two weeks. Mentally I'm slow and not feeling well physically. I'm still a believer in the long side for the stock indexes here but that could be way off too. We've either put in a pretty big top on the stock indices or a consolidation zone before heading higher. I tend to agree with the latter choice. The summation index has been moving sideways. I need rest so I am cutting this short again. I don't know how much work that I'll be able to do over the weekend. There's still three weeks to go in the February option cycle. The opportunity for profit is there.
Thursday, January 29, 2015
Back to the upside today as the Dow gained 225 points on heavy volume. The advance/declines were 2 to 1 positive. I have the flu again and did not get out of bed to take advantage of picking up some SPY calls this morning. I did place an overnight order for the SPY calls but it was not filled. That fact that we held at around the 2000 level again in the S&P 500 leads me to believe that calls are in order. However if we were to drop below that level and stay there, I would change my mind. Perhaps there will a chance to buy some calls tomorrow. GE was up 1/4 and the volume was good. Gold fell $30 on the futures as the US dollar was only slightly higher. The gold shares held up batter as the XAU lost only 1 1/3, while GDX fell 1/3. It's possible that the gold long trade is over for now. Mentally I'm feeling OK, physically not so good. I'm going to cut things short today since I am ill. Bottom line, I'm looking for SPY February calls on weakness. I'm going to get some rest and we'll see how things go on the GDP report tomorrow morning.
Wednesday, January 28, 2015
The market had a one day negative reversal today, opening higher and closing lower. The Dow dropped 195 points on heavy volume. The advance/declines were almost 3 to 1 negative. It appears that we are at the moment of truth here for the major stock indices. We are back at 2000 for the S&P 500. Whether or not it holds up here will be the key. The fact that we fell apart in the final hour is bearish. The small stocks have been holding up better here so maybe we can stem the decline. But the short term technical indicators have rolled over. Tomorrow could be pretty important. I'd still like to try the SPY February calls. GE was off 1/2 and the volume was heavy. This does not bode well for the overall market. If GE takes out $23.50 it will probably spell trouble overall. My GE March calls continue to shed premium. Looks like another loser. Gold was off five bucks on the futures as the US dollar bounced back. The gold shares saw selling today. The XAU fell 3 1/2, while GDX lost 7/8. Volume picked up a bit here. A lot of things saw selling today as USO sunk to a new low. Mentally I'm feeling OK. Perhaps the drop in oil today caused the late selling. The Fed statement had nothing different. We still have the GDP report on Friday. I'm not quite sure what to make of the markets price action. The recent breadth has been pretty good but prices have fallen. You could make a case that we've been in a trading range since the start of December and we are now at the bottom of the range. I'll have to check all the indicators later tonight and decide what to do or not do from there. If we have built a top here we are going to head much lower. The jury is still out. Gold didn't find any buyers on the sell off and that may or may not mean something. It along with the gold shares remains overbought. I will have to be patient here to try the long side again. There is a lot to consider overnight. We'll look to see what happens overseas and take it from there.
Tuesday, January 27, 2015
The Dow took a hit today on poor earnings, mostly due to Microsoft. The most watched index fell 291 points on lighter volume. The advance/declines were negative but certainly not by the margin you would expect with the Dow down that much. The summation index is still moving higher. I still am looking at the SPY February calls. I may purchase them tomorrow. Now of course I could be wrong on this idea. Perhaps waiting for the S&P 500 to test 2000 again would be a better plan. So we'll see. The short term technical indicators are move overbought than oversold so perhaps patience still is the best plan for now. GE was off about 1/4 and the volume was average. Indicators are rolling over here as well. Perhaps there is more going on than I can tell but that is usually the case. Gold gained $12 on the futures as the US dollar dropped almost a full point today. The gold shares continue to attract money as the XAU rose 2 1/3, while GDX gained 3/4. Overbought and staying there for the gold shares. I'm not sure how long this can last but it's already been longer than I would have thought. Perhaps the US dollar is going to take a break from its rally. Maybe the tomorrows Fed statement will shed some light on todays price action in the dollar. At least gold acted the way it normally would with the dollar weakness. Mentally I'm feeling OK. Tough trading at the moment as there is really no trend. If the S&P 500 breaks through 2000 and stays there, it would be trouble in my opinion. I'm still looking at the SPY calls if we get down there and the technical are oversold. Plenty of time in the February option cycle. My GE March calls are still in the red. Gold hasn't reached the $1340 measuring objective yet. The gold shares continue to outperform and that is bullish. We'll see if the foreign markets follow the Dow lower and take it from there.
Monday, January 26, 2015
Some upside today as the market is on its version of storm watch. A blizzard is forecast for the tri-state area. The Dow gained 6 points on average volume. The advance/declines were over 2 to 1 positive. The overall market remains stronger than the Dow. I still think that the path of least resistance is up. Sideways perhaps but I could be wrong. If we do see some weakness, I'm probably going to try the SPY February calls. We are short term overbought now on the major stock indices. GE rose 1/8 and the volume was average. Gold was off $13 on the futures and the US dollar was lower today as well. The XAU gained 1 1/4 and GDX added 3/8. Volume was lighter for the gold shares but it is impressive that they continued higher with the sell off in gold. These issues are very overextended here right now. I really do not want to chase them at this point. Mentally I'm feeling OK. Just waiting for some weakness here is about all that I can do. We've got the Fed statement on Wednesday and GDP on Friday as potential market movers. I'll try and remain patient. USO was lower again today. Oil is so blown out to the downside here that I find it hard to believe that it could go any lower. However the markets move where they want. Perhaps gold is about to take a breather here. It certainly is due. There is plenty of time in the February option cycle to find something to profit from. Waiting for a decent set up will be the key. I have an idea for the SPY but we will have to see if the market cooperates. We'll keep an eye on the overseas market action and get ready for tomorrow.
Friday, January 23, 2015
A down day to end the week as the Dow fell 141 points on average volume. The advance/declines were negative but not as much as a down 141 market would suggest. The NASDAQ was higher on the session in a mixed market. The summation index is now moving up. I'm still leaning bullish here as we just got to short term overbought before today. If we continue to pullback from here, I may try the SPY February calls. The fact that the small stocks acted well here is bullish. GE was up almost another 1/4 on the earnings and the volume was heavy. GE was higher during the session. It's a positive that GE showed a gain on a down day overall for stocks. My GE March calls are still in the red though. Gold dropped $8 on the futures as the US dollar continues to move straight up. I really think that gold needs a breather as its rise along with the dollar cannot continue indefinitely. The XAU fell 2 3/4, with GDX off 2/3. Volume was light and that is a positive for the bulls. USO dropped to a fresh new low. Mentally I'm feeling OK. I'm waiting for a good trade set up at the moment. Although I think we are going to be moving higher, nothing is set in stone. Plenty of time in the February option cycle as we just completed the extra week there. The short term technical indicators for the stock indices have moved up. Some economic data out next week, with GDP probably the most anticipated. There isn't any rush to do anything. GE had a good week and we will have to see if it builds on that. Gold and the gold shares were higher but we are both short and medium term overbought there. Earnings here are due next month. So it is probably a time to be patient in my mind. I'll be checking the charts out over the weekend as usual. For now it's Friday afternoon and time for a break.
Thursday, January 22, 2015
And there we have it. The Dow climbed 259 points on heavy volume. The advance/declines were over 3 to 1 positive. The summation index will be turning up after todays action. The European central bank had its say and the market responded. This is the rally that I expected to take place in the beginning of the year. We will see new all time highs soon in my humble opinion. Not getting the SPY February calls on Tuesday was once again a missed opportunity. Trust me, it is frustrating but at least my ideas are moving in the right direction. GE was up another 1/4 and the volume was good. I get the feeling that the earnings will be well received tomorrow at this rate. My GE March calls are still in the red though. Gold was up $7 on the futures despite the US dollar having a huge upside advance. The rally in the dollar has been non stop since last summer. That fact that gold continues to rise in the face of a strong dollar is confounding. Gold and the gold shares are very overbought now as well. The XAU and GDX had very small fractional losses on the session. A sell the news event for the gold shares on the ECB announcement. I'll consider the gold shares if we get a pullback. Mentally I'm feeling OK despite missing the SPY call trade. What can you do? When confidence gets shot during a losing streak, you tend to hesitate on the next trade attempt. That is why the trading itself is what really matters and not the money. I'll just keep looking for other trades as we move along in the February option cycle. Calls will be the way to go on the stock indexes if we see any weakness. I'm not one to chase strength usually but that should have been done in gold and the gold shares. Patience is what will be required now. We'll wait to see what GE has to report tomorrow and finish up the trading week.
Wednesday, January 21, 2015
A mostly positive day as the Dow gained 39 points on good volume. The advance/declines were almost 2 to 1 positive. The summation index is still heading down but after today it will be on the verge of turning around. I certainly think that we are going higher from here but we will have to get the European central bank statement out of the way tomorrow. I have no idea how the market will react to whatever they have to say. However we are turning up on the short term technical indicators for the major stock indices. I'm still favoring the SPY calls here but would hope to see some pullback if I am going to do something. It is probably too late anyway. GE was up almost another 1/4 on average volume. So far so good this week for GE. But the earnings will determine the direction going forward. It's a waiting game at this point. Gold ended the day little changed on the futures but did bounce up and down during the session. The US dollar was a bit lower today. The XAU was off 7/8 and GDX shed 1/3. Gold and the gold shares are over extended here. Perhaps considering some calls if we get oversold down the road. USO was up 1/3. I think that I am going to disregard the oil trading from here on out. Mentally I'm feeling OK. So now we wait for the markets reaction to tomorrows announcement. This has been played up as to be a major factor as to where the European economy is headed. But I don't think anything can predict that. All we care about is the market reaction and where we go from here. There's a possibility that whatever happens has already been priced in as well. So we'll see. Gold has moved higher along with the US dollar and that is not the usual relationship. There is also no threat of inflation right now, yet gold continues to climb. What I see is money and volume going into gold and the gold shares. You cannot deny that. We'll have to see how much longer that lasts. If we are lucky we'll get a snap back to the reverse head and shoulders breakout. If that occurs that would be the logical spot to purchase calls. We'll watch and wait for whatever comes out of Europe tomorrow. It should be interesting to say the least.
Tuesday, January 20, 2015
Bouncing around post expiration as the Dow rose 3 points on heavy volume. The advance/declines were negative. We opened higher, then spent much of the day in negative territory before heading back up again. I did want to but some SPY February calls but held off. There will be some kind of announcement coming from the European central bank on Thursday. Markets will move off of that. Which way is the question. We are oversold on the major stock index technicals. I will probably stay on the sidelines. GE was up 1/4 and the volume was good. This could bode well for the overall market if it continues. My GE March calls are still well in the red. Earnings on Friday. Gold continues to find buyers as the futures rose $15. The US dollar was higher as well. These two are marching up in tandem and that is not the usual course. Uncertainty and the flight to safety seem to be working overtime here. USO dropped 7/8 as there is no stability in oil just yet. The XAU was up 2 1/2 and GDX gained 3/4. Volume remains pretty good here although the overbought condition persists. I do not advise chasing this move as it has been missed by me. Perhaps I can think about the calls if we see some pullback to the breakout point. The reverse head and shoulders measurement for gold remains at $1340. Mentally I'm feeling OK. I suppose we are in a wait and see mode for now with regards to the stock indices. I do think that it is possible that we are in a consolidation from the rise that began in October. If that is the case then we will see the new highs that I've been looking for when the year started. But it hasn't happened yet. Any break of the recent lows for stocks will negate that theory. Although I wanted to buy some index calls today, I did not. My confidence is at a low. Missing out on the gold shares and trying USO instead was a mistake that lingers. I really need to get back to a better trading state of mind. The GE March call trade might have a chance if we get a rise in GE off of the earnings. But that has yet to be proven either. I'll simply sit tight for now.
Friday, January 16, 2015
A positive end to the week as the Dow gained 196 points on expiration Friday. The advance/declines were about 5 to 1 positive and the volume was heavy. The summation index is still heading lower but another day like today and we'll be back to sideways there. I can't make out what is going on here and I'm not going to try. We were short term oversold on the stock indices after yesterdays action and a bounce was due. What happens from here will determine if the decline continues or perhaps some type of rally will start. You can make a case that we are in a sideways consolidation following the rally in October but that is yet to be seen. Todays price action does stop the decline for a day at least. GE was basically flat on the session and volume was heavy. I assumed the earnings were coming due today since they usually arrive on the third Friday in January but they are out next week. So I suppose I'll be holding the GE March call trade until then at least. Gold was up another 12 bucks on the futures for its best week in a while. This despite another rise in the US dollar. The XAU added 2 1/3 and GDX rose 2/3. Volume was heavy once again here for the gold shares. Overbought and staying there so there is no denying the strength that we are seeing here. I'm guessing that pullbacks will be bought here for the near term future. USO was up around 7/8 and perhaps oil is finding a resting place finally. Mentally I'm feeling OK. A holiday weekend for the US on tap. The February option cycle also has an extra week on it. So I suppose there is certainly no hurry to do anything right now. My ideas and trading have been way off to start the year and we are only halfway through the first month. Perhaps now we'll see the rally to new highs that I was looking for after most of the January index calls were clobbered. There may be enough fear out there to get something going in a positive direction. But who knows? I haven't done anything correctly lately. Gold and the gold shares have broken out but it really looks like it is too late to do anything there. Maybe it's time to look at the USO long trade again. Or perhaps the sidelines might be the place for me after the rough start. Plenty to think about in the next three days. I'll be checking the charts as usual. Perhaps I'll have to wait and see how the GE trade pans out before trying some thing else. It's Friday afternoon and time for a break.
Thursday, January 15, 2015
The Dow fell 104 points and closed near the low of the day. Volume was good once again and the advance/declines were 2 to 1 negative. The summation index is heading lower. The up trend lines from October on the various stock indices have been broken. I certainly do not know what is going on in the markets at this time. A surprise currency announcement from Switzerland changed the landscape today. Once again there are things going on that I do not have the information on. However the market reflects all that is known and unknown supposedly. But it doesn't like uncertainty and that is where we are at now. GE was off 1/8 on lighter volume ahead of the earnings. Perhaps as GE goes tomorrow so does the market. The GE March call trade hangs in the balance. Gold soared on the news from the Swiss. The futures were up $30. The US dollar was up a bit on the session as well. The XAU rose almost 4 points and GDX gained 1 1/4. Volume was huge for the gold shares. Gains on the day for some of the gold shares were close to 10%. Technically these issues are overbought. The two day decline this week can be viewed as a snap back to the breakout point for the gold share indices. I'll have to look at the calls here again if we get any weakness. Price and volume are very positive. Mentally I'm feeling OK. It's been a tough week for stocks and I don't see anything to turn things around in the near term. We are working our way to a short term oversold condition. There is a holiday weekend in the US coming up. I don't see a lot of buying before that but you never know. The usual positive bias for expiration week did not materialize. Oil headed back down today and until we at least see some stabilization there, the market will be on edge. Once again I've been completely off on my theory and trading at the start of this year. Gold appears to have broken out from a reverse head and shoulders pattern on the daily candlestick chart. The measuring objective would be to about the $1340 level. I'm looking at the February ABX and GDX calls. But I'll need to see the technical indicators come off of their overbought levels. We'll watch and see if there are any other foreign market surprises overnight and close out the week tomorrow.
Wednesday, January 14, 2015
Another loser as the Dow fell 186 points on heavy volume. The advance/declines were negative but it wasn't even 2 to 1. That is one of the things that leads me to believe that this isn't the end of the world here. The summation index is heading lower but not with any steam. The overall market was stronger than the Dow. We did break the up trend line from October today in some of the major averages but came back to close right on the line. Volatility has been pretty rampant lately. But I do not see any type of crash event or falling apart for stocks here. The OEX January call trade that I did was a 100% loss. My theory and timing were way off. The stop loss order I placed did not work and I should have just exited when that happened. I suppose that I still do not have the discipline necessary to be consistently successful. However my take on the stock market for the beginning of 2015 was way off. There will never be any profits with those kind of mistakes. GE was off a few cents after being lower on the session. The volume was good. Short term oversold for GE now. Earnings on Friday. My GE March calls are in the red and almost to the 50% loss threshold. I'm going to wait on the earnings here. Gold was flat on the futures as we did not see any flight to safety here. The US dollar was a bit lower today. The XAU fell 2 points and GDX had a small fractional loss. The weakness in the gold shares the past two days may be a sign of things to come. Or not. We'll have to see how it plays out. Working off the short term overbought condition is one way to look at it. USO was up 3/4 on good volume and that is the best day we've seen there in a while. Maybe I sold those February calls too early. Mentally I'm doing OK. A rough start to the year for stocks but I don't think that we are on the verge of a rout. The major stock indexes are getting to short term overbought. I could be mistaken but I think that we will start to move higher from here. If oil can stabilize, that fear will be removed. Retail sales did come in weaker than expected but that is just one months data. I'm still a believer that this will be a good year for the stock market. Nothing to do but wait on GE for Fridays numbers. It could be the catalyst that starts to turn the market higher. Or it could have the opposite effect. We'll see. My trading so far this year has been a disaster. Stop loss orders that weren't filled, poor market judgment, terrible timing and lack of discipline. Perhaps a break is necessary. Maybe after this GE trade is completed. I think that I had too many trades going on at the same time to start the new year as well. I'm going to have to just keep things simple. Only two days left in the trading week and the January option cycle. We'll keep an eye on the overnight action and see what tomorrow brings.
Tuesday, January 13, 2015
We opened higher and closed lower today and that is usually not a good sign. The Dow fell 27 points on heavy volume. The advance/declines were slightly negative. The summation index has turned down but still shows a sideways pattern for now. My OEX January calls are worthless. Nothing will save them at this point. We are right at the important up trend line from October. It doesn't look like it is going to hold. Retail sales will be the driver tomorrow. GE was off 1/4 and the volume was good. We're almost at the 50% loss threshold for this trade. I'd still like to hold on until the earnings on Friday. Gold was flat on the day, while the US dollar continues to move higher. The XAU fell 3 3/4 and GDX dropped almost a point. The relative weakness for the gold shares is not a positive. USO was up almost a 1/4. I don't have any trades in mind for gold or oil at this time. Mentally I'm feeling tired as a change in my schedule today has left me listless. The day started out as if the stock indices might see upside gains for the day. But as the trading went on, sellers emerged. If we can't get things going to the upside soon the market could be in trouble. Hasn't happened yet. My trading has been terrible already but as usual the market doesn't care. I'm a bit tired. So we'll see what happens tomorrow.
Monday, January 12, 2015
Almost another triple digit move as the Dow fell 96 points on average volume. The advance/declines were around 2 to 1 negative. This should move the summation index lower. However it appears that the summation index is actually moving sideways at this time. I can't say that I understand the market dynamics at this point. We are trying to find our way here. The up trend line from October is still intact. As long as that holds, I'll continue with a bullish posture and call for new all time highs at some point this month. My OEX January calls are going to be big losers and will probably expire worthless. GE was off a nickel and the volume was average. Waiting on Fridays earnings here. That will most likely determine the outcome of the GE March call trade. Gold continues to rally as it gained over $15 on the futures. The US dollar was slightly higher today. The XAU was up 2 7/8. The gold shares had good volume to the upside and that is a positive sign. The fact that gold can rally with oil declining and the dollar rising is something to take note of. However gold and the gold shares are now overbought. USO fell 7/8 and I sold the USO February calls for a 90% loss. The stop loss order did not work here as well and that is something that I will have to correct on my own. The discipline required to trade must be followed or losses will just continue to pile up. Mentally I'm feeling OK. Not exactly sure what to think of the market here as the technicals are mid-range. We could go either way. The positive expiration week bias is not evident yet. The lack of upside follow through to last weeks gains on Wednesday and Thursday is not positive. The bearish belt hold candlestick pattern on the daily Dow chart is a concern. Plenty of economic data this week, with retail sales numbers and inflation stats. So expect some volatility. Oil continues its drop and trying the USO calls was a bad move on my part. Mistakes cost money in this game. My ideas haven't worked out so far in 2015. Perhaps I will just stick to one trade at a time for a while. I am also seriously considering trading the SPY options because the liquidity appears to be far greater than for the OEX. But I won't actually know if that's the case until I put some orders in. The gold shares have been the place to be so far for the beginning of the year. We'll see how that continues to play out going forward. We'll keep an eye on the overseas action tonight and go from there.
Friday, January 09, 2015
Back to the downside to close out the week as the Dow fell 170 points on average volume. The advance/declines were about 2 to 1 negative. The employment report took a back seat to the terror problems in France. Headline events are difficult to trade since they are very unpredictable. With today decline the market can go either way from here and doesn't give us a good sense of direction. It appears I should have taken the loss for the OEX January calls yesterday but hindsight always gives the best results. It means nothing now. We are working off the recent oversold technical condition of the stock indices. The indicators are now mid-range. We do have expiration week coming up. We'll see if it has the usual positive bias. GE fell 1/3 on average volume. This chart has a distinctive bearish look to it after todays price action. That could be a precursor for the overall market. GE did not really participate in the two day rally this week. That could be a problem. I think we'll know more after the earnings in a week. My GE March calls are still losers. Gold was up over $7 on the futures and a bit more in the aftermarket. The US dollar was lower today. The XAU gained 2 7/8, while GDX was up almost a point. USO dropped 1/4. The USO February call trade is most certainly going to be a loser at this rate. Do not try and pick bottoms. Mentally I'm feeling OK. The employment numbers came in at about what was expected. The market is being held hostage by fear at the moment due to the troubles overseas. Perhaps that will subside over the weekend. One week to go in the January option cycle. It looks like my trading year is going to start off like last year ended. With extended losses that were not cut short. Even with stop loss orders. Perhaps I am trading too many things at the same time. Regardless, it's where we go from here that matters. I can't say that I have a good idea about the next move in the stock indexes. The daily candlestick charts on some of the indices show a bearish belt hold pattern. That could be reversed if we get a strong up session on Monday. However the lack of follow through after being up over 300 points isn't positive. The gold shares have acted much better to start the new year. The acts of terror help support the price of gold in a flight to safety. The fact that the gold shares have led gold itself here is a positive. However we are overbought at this point and getting calls here is not advised. But who knows? Perhaps gold will break out but I think that it has to get through $1240 to really find some interest. I'll be deciding what to do with my open positions over the weekend. I think most likely the losses should be taken so I can move on to something else. It isn't a confidence booster, that's for sure. Plenty of charts to check and I'll keep an eye on the headlines as well. it's Friday afternoon and time for a break.
Thursday, January 08, 2015
The snap back rally could be more than that as the Dow soared 323 points on heavy volume. The advance/declines were 3 to 1 positive again. This should turn the summation index back to the upside. No need for the market to wait for tomorrows employment report. The volatility here is tremendous, with 100 point plus moves becoming the norm. Perhaps my scenario of a strong start to the new year will pan out. But as usual the market will go where it wants. However if we continue like this, new all time highs cannot be far away. My OEX January calls have a bid on them again. I guess I'll just hold on at this point and see what happens. GE finally participated somewhat with a gain of 1/4. Volume was good but I would have liked to see GE move in sync with the overall market. It is a laggard here. My GE March calls are back where I purchased them. Gold fell a couple bucks as the US dollar continues to grind higher. The XAU was off 1 1/4, while GDX lost 1/3. Volume was light though. USO was up 1/8 or so. My USO February calls are still losers. Mentally I'm feeling OK. This is one of the craziest starts to the new year that I can remember. First the world was coming to an end and now we've risen over 500 points in two days. Who knows what tomorrow will bring? We'll get the employment numbers and that will be the excuse to move things one way or the other. Technically we're moving off of a short and medium term oversold condition. How long it lasts is another story. If we see all time new highs in short order, that would be a big positive in my mind. So we'll see. The USO trade looks like a loser but now there is a chance that the OEX January call trade won't be a total loss. Earnings for GE next Friday will probably determine the outcome of that trade. I can't say I have any idea what will happen tomorrow. But if we finish the week on a positive note, that will bode well for things going forward. After the very weak start to the week, a comeback would be very bullish. We'll see how the foreign markets react overnight and keep an eye out for the jobs numbers tomorrow.
Wednesday, January 07, 2015
The bounce appeared on cue as the Dow rose 212 points on good volume. The advance/declines were 3 to 1 positive. The summation index is still heading lower. The question is the decline over or will we be heading lower? My view is that the decline has ended. That doesn't mean that we can't back and fill for a while. But we are at technical levels that rallies have started from in the recent past. A turn up in the summation index will support this view. But who knows? The market may surprise us here. I did not think we would start the year off this negative. My OEX January calls at least now have a bid, so perhaps they won't expire worthless. GE was flat on the session with good volume. My GE March calls are slightly in the red. Gold was off around $8 in the futures market. The US dollar continued its rise higher. It has been quite a run here with no signs of letting up. The XAU fell 1 1/4, while GDX lost 1/3. Volume was lighter on the decline and that's a positive. USO was up 1/3 as oil tries to stabilize again. Hasn't happened yet. I would guess that when it does we will see quite a bounce with short covering. My USO February calls are losers. Mentally I'm feeling OK. We got a bounce in the stock indices where we needed to see one. The up trend line from October remains intact. If we do roll over here and take out that line, then I will have to change my bullish stance. Anything could happen as always in this game. My OEX calls are running out of time but I will at least wait for Fridays employment report. This trade will be a loser, it is just a matter of how much. GE isn't acting as I would like but the earnings are due next week and that should get things moving one way or the other. USO didn't drop today but there is always tomorrow. We'll see what happens overnight and go from there.
Tuesday, January 06, 2015
More downside for the stock market as the Dow fell 130 points on heavy volume. The advance/declines were 2 to 1 negative. We opened higher, tried to come back and dropped off again at the end. The summation index is heading lower. Still short term oversold and right at an important up trend line in the S&P 500. I do think that we will hold here. Perhaps it will be the Fed minutes or maybe oil will stop going down but we are overdue for some upside. If we do not hold up here, then I would begin to worry that things will be a lot worse for the market. My technical indicators are at levels that previously led to rallies for the stock indices. It won't help my OEX January calls though as they are already worthless. If you can't get filled when your stop loss order is touched, then what is the point? GE was off another 1/2 and volume was very heavy. Climatic in my opinion. My GE March calls were a partial fill on the stop loss order and I sold the rest at the market to exit that trade. Lousy execution there and it made the loss 60%. I am certainly not happy with the way my recent trades have been treated by the exchanges. That said, I moved down a strike price and placed another order for the GE March calls. It was filled. I'm still a believer in this trade. Gold continued to find flight to safety buyers as the futures rose $15. The US dollar was higher again as well. The XAU was up 4 points and GDX gained a point. The gold shares are breaking out and that is the place to be. ABX up 1/3, GG added 1 1/2 and NEM gained 3/4. Volume was good. USO lost 3/4 and the market moved right through my stop loss price again without being filled. I've canceled that order and will have to monitor this trade myself. I probably should just get out and take the loss. The beginning of this year so far is filled with mistakes and wrong trading moves. Trading USO instead of the gold shares is the biggest so far. Mentally I'm at a loss as to why my stop loss orders cannot be properly filled. Perhaps that is the by far the most serious thing happening at the moment. When trading, cutting your losses is imperative. Yet when you have orders placed to do that and they never get filled, what can you do? Perhaps a move to a different online broker is in order. But the market certainly doesn't care. We are in a strange current situation, with a crash in oil and no bottom in sight yet there. The stock market does not do well with uncertainty. Technically we are due for a bounce. I do believe it should come tomorrow. My work says some type of rally is about to take place. At least we are at technical levels where past rallies have begun. So we will see what happens. I am trying the GE March calls again. If today isn't the bottom for GE, then this trade will fail as well. So we'll know pretty soon. USO continues to gap down and the volume is now getting very heavy again. Perhaps we are at the final washout here or perhaps not. This could go down as my stupidest trade of the year. We'll see where the overseas markets end up tonight and go from there.
Monday, January 05, 2015
We started out the week with a thud and a loud one at that. The Dow fell 331 points on good volume. The advance/declines were over 3 to 1 negative. The summation index is now moving lower. Let me be the first to admit that I do not know what is going on here. The market knows all. We are short term oversold but to keep declining with that condition is dangerous. However the technical condition with regards to the summation index is not anywhere near the crash zone as it was in October. That doesn't mean we can't fall apart but the odds are against it. We will find the reasons for the markets weakness as we move along. Of course my OEX January calls are near worthless after the stop loss order failed to fill. That does not sit well with me. But what can you do? I'll be moving to the SPY options and see how they work out. GE dropped 1/2 and the volume was good. Here too, my stop loss order price was hit and not filled. I have no answer for that. I may simply just sell out tomorrow. If there isn't option liquidity in these issues, then I don't know what to say. Gold was up $17 on the futures and the US dollar was bit higher as well. Flight to safety would be my guess. The XAU rose 1 1/3 and GDX was up 1/2. The beginning of the year gold share trade looks like a winner. USO was off 1 1/8 and my February calls here are just about at the stop loss price. Of course that doesn't mean that it will be filled. Mentally I'm feeling OK despite the rough start to the trading year. Something is going on in the markets that I am at a loss for an explanation. We are short term oversold and now even more so. We are also just about at an up trend line from the October lows on the major stock indices. If that doesn't hold we could be in for a rough period. Hasn't happened yet. We did not get any type of downside blow off today in the stock indexes, so there is probably more weakness to come. Gold found some buyers today and the gold shares as well. I think that it is too late for a gold share trade here but if we see gold get through the $1240 level it may be worth a look. Oil continues its free fall and it appears the USO trade that I did was simply a mistake. A case of trying to find the bottom before the bottom was in. You pay for your mistakes in this game. Oil will eventually bounce and probably pretty good. However from what level has yet to be determined. We'll see if the worldwide markets follow the US lower overnight and brace for tomorrow.
Friday, January 02, 2015
An interesting start to the new year as the Dow gained about 10 points on light volume. The advance/declines were slightly positive. The summation index is now moving sideways. Not the start that I expected as we opened up pretty good, with around a 75 point gain but gave it all back and then some. Most of the session was spent in negative territory. I'm still confident that we will break out to the upside form here. Getting more short term oversold as we go on in time. My stop loss order wasn't triggered even though we traded at the price again. I do not know what is going on there. The option spread was very wide as well. I ended up canceling the stop loss order and will figure out what to do over the weekend. This isn't the first time this has happened to me with the OEX. I am pretty sure that I will be moving over to trade the SPY. There seems to be more liquidity over there and the spreads are tight. The only thing about the SPY that I'm not used to is the speed of the contract. GE fell around 1/4 and the volume was about average. The short term technical have rolled over here. My GE March calls are in the red and getting close to the stop loss point. Gold was up a couple bucks on the futures but the US dollar soared to start the new year. The XAU was up 1 3/4 though which did not fit in with the dollars price movement. It looks like the beginning of the year gold share call trade would have worked. ABX, GG and NEM all had fractional gains on light volume. GDX rose over 1/2. USO fell 1/2 and the volume was pretty good. My USO February calls are at where I purchased them despite todays loss. Not exactly sure what to make of that. Mentally I'm feeling OK. All the traders should return on Monday and we'll see where we go from there. I'm not sure if the rise in the dollar and lack of gold selling means that there is something brewing somewhere to surprise the markets. It could just be a one day event. I'd like to stay with the OEX call trade for now because some of my technical indicators are getting bullish. But the market can and will do anything. I also don't like the fact that GE isn't doing well here. GE acts as a proxy for the market sometimes and if that is the case, then things are weaker than I think. We'll have to see how things pan out next week. Plenty of economic data due including the employment report on Friday. There will be plenty to ponder over the weekend as I have three positions and things are not going as planned. I'll check the charts and try to come up with a game plan. For now it's Friday afternoon and time for a break.