Tuesday, March 31, 2015
Back to the downside to finish off the month as the Dow fell 200 points on better volume. The advance/declines were negative but not as much as a down 200 market would suggest. I thought that this would be a quiet week but that has not been the case. Todays activity could mean that yesterdays price action was simply an oversold bounce. I did put in an order for some SPY April calls halfway through the session as it looked like a range bound day. The order was filled as we broke to the downside in the final hour. This trade is already a loser. I do have a stop loss order in place. Timing is everything and I think my timing here is off. GE was off 1/3 and looks bearish as well. I should have exited this trade as soon as it went against me. Not a lot of money involved here at least. Gold was off a couple bucks as the US dollar continued higher. The XAU was off a point and GDX shed 1/4. Volume was still pretty light here. Again, there is no interest in gold. Mentally I'm feeling OK. Getting the SPY calls here looks like a mistake. Although today could have been an end of the quarter dump. We'll know more in the coming sessions. As long as the stop loss order holds up, it won't be all that bad if it doesn't work out. And of course there is the employment report on the holiday to deal with. So we'll see. The negative action in GE does not bode well for the bulls if it is a precursor as it can be. We do get the beginning of April tomorrow and perhaps there will be some positive money flows. Some of the daily short term technical indicators for the major stock indices are trying to roll over. So it will be a plus for this trade if we can move back up tomorrow. If not, lower prices will be on the way. We'll keep an eye on the overnight action and see what tomorrow brings.
Monday, March 30, 2015
The market took off from the open and never looked back. The Dow gained 263 points on light volume. The advance/declines were about 3 to 1 positive. This should move the summation index back to the upside. I did not have a chance to get the SPY April calls. I suppose Friday was the correct day for purchase. I do not know if I will chase things here. The volume was light but this is a holiday week. The lack of follow through from the big down day of last week tells me that perhaps the decline is over. Most of the foreign markets rallied hard and the US followed. GE was up 1/4 on light volume. My GE April calls remain losers. This trade is not going to work out, barring some kind of miracle. Gold shed $15 on the futures as the US dollar was higher. The XAU was down 1 1/4, while GDX lost 1/3. Volume was light. If and when the technical indicators get oversold, I may try the gold share calls again. For now it's the sidelines here. Mentally I'm doing OK. Not sure where the major stock indices are going from here but I'm looking for bullish outcomes. So perhaps my mind is already made up. I'd expect the rest of the week to be slow but that's a guess as usual. The employment report is the next moving piece of news in my mind. However it comes out on Friday, which is a holiday for most. We do have the end of the month and quarter tomorrow. I suppose if we do see some weakness the rest of the week I could try the SPY calls. But I wouldn't count on it. We have the earnings for GE on the last trading day for the April options. I don't think that I really want to wait that long to dump the calls that I have. But who knows? Gold is still unloved and not interesting to anybody. We'll see if the overseas markets have some upside follow through to todays positive price action and go from there.
Friday, March 27, 2015
A slight move higher today as the Dow rose 34 points on light volume. The advance/declines were positive. The summation index is heading lower but not in big gaps. I'm inclined to buy some SPY April calls on weakness Monday but I'll think about that this weekend. A short week next week and lack of volume lately implies no interest. We've also got the end of the month on Tuesday. The technical indicators for the major stock indices are oversold. However I'm not convinced that they can't stay that way. GE was up a nickel and the volume was light. Just trying to cut the loss here unless we see some surprise upside move. Gold was off $5 on the futures. The US dollar finished the session little changed. The XAU and GDX both had slight fractional losses. Perhaps I can try the gold shares again before the April expiration but I'd like to finish the month of March first. There could be some selling early next week but that's just a guess. Mentally I'm feeling a bit tired, did not sleep well. It was a pretty negative week for the stock indices. The weekly candlestick charts look bearish. The summation index is heading lower. The only potential positive is the short term oversold condition. The employment number coming out on a holiday adds to the uncertainty of next weeks shortened trading time. There's a lot of questions out there. If today was negative, I would have more conviction of getting long on weakness Monday. We did break uptrend lines that go back to last year this week on the daily charts. But there hasn't been any follow through downside action. Yet. That is the problem and the concern in buying calls here. If the S&P 500 shoots through the 2050 level, you can expect more selling. Plenty to ponder over the weekend. Gold has had a two week bounce. We'll see if it can keep it up. The gold shares were negative this week though and that is a bearish divergence. I'm not sure what the next trading move is here. I will have to go over the charts this weekend and come up with some decisions. Staying on the sidelines is a decision as well. For now it's Friday afternoon and time for a rest.
Thursday, March 26, 2015
Continuing to the downside although we did close above the lows of the day. The Dow fell 40 points on average volume. The advance/declines were negative. The summation index is heading lower. The S&P 500 is now below the 50 day moving average. Another negative session and we'll be short term oversold. We will have to see how the market finishes the week tomorrow to determine if a SPY April call trade is the right choice. I do not have a good feel for what is going on at the moment. GE was off 1/8 on light volume. Short term oversold here so I didn't sell the GE April calls today, expecting some kind of bounce in the next couple of days. This trade will probably be a loser though. It is now a matter of cutting the loss. Gold was up $7 on the futures in a flight to safety. The US dollar rallied on that same premise. Gold was up much higher in the session and closed well off of the highs. The gold shares lagged as the XAU fell 1 1/8 and GDX shed 1/3. Volume picked up a bit. ABX lost a few cents and was off of its highs as well. I sold the ABX April calls that I had for a 65% gain. Todays price action was negative and there is a chance that I will buy these back at a lower price in the days ahead. Maybe. Mentally I'm feeling OK. Perhaps the stock indexes can hang in here or perhaps not. That is the situation that we find ourselves in at this juncture. If the Dow and S&P 500 can hold these levels, there will be a chance that the SPY April calls will work. I think I will be waiting until next week to try anything though. If we drop hard again tomorrow, then this idea is off the table. The weekly chart for GE looks negative here. It's possible that I'll just dump that trade tomorrow as well. They can't all be winners. Gold had an interesting day as the volume picked up but it couldn't hold onto all the gains. The fact that the gold shares under performed isn't a positive. The dollar looks like it's putting in a short term bottom as well. Maybe I sold The ABX calls too soon but it really doesn't matter now. The market moves on. We'll close out the week tomorrow.
Wednesday, March 25, 2015
Heading lower and picking up steam as the Dow fell 292 points on average volume. The advance/declines were about 3 to 1 negative. I must admit that I don't have a handle on what's going on here. We are already at the level on the S&P 500 that I thought would hold. But it doesn't look like that is going to happen. The short term technical indicators have rolled over for the major stock indices. They are not oversold yet. We also closed on the low for the day and that is bearish. The small stocks got crushed as well. The summation index should now be heading lower. So we'll see what happens but my bullish stance looking for new highs is in question. GE took a hit as well. It lost 1/3 on average volume. I considered selling my GE April calls for a loss today. Maybe I'll have to do that tomorrow. Unless we see a complete turnaround tomorrow, this trade is dead. Gold was up $5 on the futures as the US dollar fell again. The XAU lost a point and GDX fell 1/4 as the gold shares followed stocks lower. ABX was flat on the session and the volume was average. This trade is still showing a profit. Mentally I'm feeling OK. What I think that I'm seeing here is a lack of buying. There is no catalyst to own stocks after the push from the Fed announcement. The action in TRAN looks bearish as it approaches its 200 day moving average. If that doesn't hold then the look of things would change significantly. Both the Dow and the S&P 500 are at the uptrend lines that began last October. A break tomorrow would not be a good sign. So things need to be watched closely here. The GE April call trade probably needs to be sold tomorrow. I cannot afford to spend the mental capital on a slow moving, losing trade. It should have been sold today. Gold has had a nice bounce. But with the gold shares showing poor relative strength the past couple of days, it isn't exactly a bullish scenario. ABX held up today but tomorrow, who knows? We'll see if the overseas markets tank tonight as well. Tomorrow will be an important session.
Tuesday, March 24, 2015
A drift lower today as the Dow fell 105 points on light volume. The advance/declines were negative. There is no catalyst for higher prices at the moment. I don't think that this is the start of any sustained downside but I've been wrong before. Perhaps if we get back to the 50 day moving average, the SPY April calls will be worth the risk. However for now I'd advise a patient approach. We've just started the April option cycle and there isn't any good signal one way or the other yet. GE fell almost 1/4 on very light volume. My GE April calls are losers and if GE keeps going down, this trade will not work. GE also closed on the low for the day and that's not a good sign for the bulls. Gold had a slight gain on the futures as did the US dollar. The XAU and GDX had slight fractional losses. ABX was off a few cents on light volume as well. There's a chance that the recent rally in the gold shares is stalling here. Whether it's a consolidation before heading higher or the end remains to be seen. Mentally I'm feeling OK. The daily candlestick chart for the S&P 500 has a bearish pattern at the moment. It implies lower prices in the near term. The 50 day moving average and the uptrend line from last autumn at 2065-2060 should provide support. If we get there, that will be the place to try the SPY April calls. That's my hypothesis at the moment. If the market does fall now, the GE trade will be a loser. Gold probably needs a pause here and a snap back to the recent broken downtrend line would be the next technical expectation. The question is whether to hold onto the ABX calls or not. Something to ponder tonight. We'll keep an eye on the overseas markets tonight to see if they follow the US lower.
Monday, March 23, 2015
We begin the week with a one day reversal to the downside as the Dow opened higher and closed lower. It wasn't much though as the Dow fell 11 points on light volume. The advance/declines were positive. The market dropped in the last half hour to turn negative on the day. The summation index should still be moving up. I am looking at SPY April calls. Timing of the purchase will be key as always. Not a lot of data out this week. The short term technical indicators for the major stock indices are also overbought. So patience is probably a good idea at this point. GE was up 9 cents but finished well off of its highs. The daily candlestick chart isn't looking all that bullish. My GE April calls are slightly in the red. I think GE needs to get going this week or this trade will be looking like a loser. Gold was up a few bucks on the futures as the US dollar took another hit. The XAU gained 1 1/2, while GDX rose 1/3. Volume was light here. ABX was up 1/3 with little volume as well. The April calls I have here are in the black. The short term technicals here still have room to go higher. Perhaps this trade will work out. Mentally I'm feeling OK. It was really a ho-hum session today until the final half hour. No real news and the expiration hangover effect that sometimes occurs. I would not be surprised if we don't see much movement this week. That's a guess as usual. Looking forward, next week we get the employment on a day the market is closed. That should be interesting. End of the month next week as well. For now I'll have to sit tight and wait for the next signal to trade the SPY. GE is not getting any traction to the upside and that won't help my April options there. Gold is getting a bounce and we've gotten through the near term downtrend line on a daily basis. There should be a bit more room to the upside here. We'll keep an eye on the foreign markets overnight and see what tomorrow brings.
Friday, March 20, 2015
We closed out the week on a positive note as the Dow gained 168 points. The advance/declines were 4 to 1 positive and the volume was expiration heavy. Todays action should turn the summation index back to the upside. RUT is breaking out. If we can get TRAN to get above its recent highs, I think a decent rally will take place. But it hasn't happened yet. It was a good week for equities though and we'll see if we can build on it next week. Many of the major averages are on the cusp of new all time highs. GE was up a few cents on OK volume. My GE April calls are showing a slight loss. I'm not so sure that this trade was a good idea. Gold climbed $15 on the futures as the US dollar got whacked again. It was an interesting week for the dollar. Very volatile with wide swings. That sometimes happens at the end of a move. So perhaps the dollar rally will take a rest here. That could be supportive for gold. The XAU was up 2 points and GDX gained 2/3. Volume was light though. ABX was up 1/4 on average volume. One of the technical indicators here is overextended and says ABX is due for a rest. My ABX April calls have a small profit. I suppose I'll be holding them longer than expected. Mentally I'm feeling OK. Not a lot of economic data out next week and we have the Fed out of the way for now. I'm not sure what to expect next week but a grind higher would not be a bad thing. If the summation index can get moving to the upside, I'll become a lot more positive on the market. The short term technicals are getting close to overbought and the recent move higher has been very choppy. We'll keep an eye on things. GE needs to get going on the upside or my trade there will be a loser. Gold broke through a near term downtrend line today that has been in place since the start of the year. That is a positive. But it hasn't proved that this is the beginning of a multi-week rally yet. I did notice some volume coming into the gold shares. So perhaps there is a little interest for now. Follow through upside next week would be a good sign. Plenty of charts to look at over the weekend. For now it's Friday afternoon on the first day of spring. Time for a break.
Thursday, March 19, 2015
No upside follow through as the Dow fell 117 points on light volume. The advance/declines were 2 to 1 negative. The market has been alternating between up and down for the past week and a half. If that holds true, tomorrow will be an up day. However the lack of a positive day today is a negative. On the plus side the small stocks closed higher and the overall market dropped less than the Dow. But I think that I am starting to lose a handle on what is going on at the moment. GE was off 1/3 and the volume was good. I did place an order for some GE April calls overnight but did not expect it to get filled. It did and I now own them. However the daily chart for GE doesn't look all that bullish. And unless we close higher tomorrow, the weekly chart won't look all that good either. This has the feel of a mistake. But we'll see. Gold was up $17 on the futures but that was what we gained yesterday in the aftermarket. The dollar roared back to the upside and that is not bullish for the precious metal. The XAU and GDX had slight fractional losses on lighter volume. ABX was off 8 cents on light volume. My ABX April calls are still in the black. I'll decide whether to dump them after the price action tomorrow. Mentally I'm feeling OK. I was looking for new all times highs in the major stock indices but perhaps we will continue to see sideways action. You can make a case that we have been trending sideways since last December. The summation index did turn back yesterday but todays price action will probably turn it back down again. The market is making up its mind. Gold didn't have any follow through to the upside either and remains in the background. But we did see volume yesterday and that is a plus. I wouldn't be surprised for gold to do nothing in the near term either. There remains no interest here. My ABX call trade could be a mistake as well. We'll watch the foreign markets overnight and close out the week with option expiration tomorrow.
Wednesday, March 18, 2015
It was a one day reversal to the upside as the Dow opened lower and closed higher. The most watched index gained 227 points on heavy volume. The advance/declines were 5 to 1 positive. We were down well over 100 points during the session and then the Fed came to the rescue. We expected volatility and market movement after the Feds game of words and we got it. If I had any confidence I would have purchased some SPY calls during the morning. But that is just another opportunity lost. I'd expect to see some upside follow through tomorrow. Option expiration on Friday. GE went along for the ride and was up 1/3 on OK volume. I finally sold my GE March calls. I was lucky to get a 50% profit as this was another mismanaged trade. I may move to the GE April calls next because the weekly charts still show room to move higher. Gold rallied off of the Fed as well. The futures had a slight gain in the regular session but went up $15 in the aftermarket. The US dollar got crushed and continues to drop in the aftermarket as well. It lost almost 2 points. Parabolic moves never end well, if this is indeed the end. The XAU gained 3 1/8 and GDX rose 7/8. Volume was good. ABX gained 2/3 on good volume. My ABX April calls are in the black. Now the question becomes whether to hold on to this trade or simply get out as originally planned. The game is never easy. Mentally I'm feeling OK. Well the desired outcome appeared from the Fed and the markets responded as expected. But where do we go from here? My guess is that we are once again headed for new all time highs. April calls are in order I believe. The question is when do we purchase them? There will most likely be a slow holiday shortened week in the April cycle. But we will first have to see how far things run up into the Friday expiration. The technical indicators for the gold shares have just turned up. So there may be room for higher prices over a longer time period here. But the fundamentals for gold are still negative. However the way the volume came in for these issues today tells me that this may just be the beginning of a counter trend move higher. We'll see. I'm going to have to think about this tonight. We'll see if the overseas markets follow the Dow higher and if the bid for gold remains.
Tuesday, March 17, 2015
Whipsaw today as the Dow fell 128 points on light volume. The advance/declines were slightly negative. The overall market was stronger than the Dow, with the NASDAQ up 7 points. The summation index continues lower. Tomorrow will tell the story of where the market is headed. You can make a case for either direction but I am sticking with a bullish outcome. We will probably drift around until the Fed statement. The last 2 hours of trading tomorrow should be very interesting. GE was off 1/8 and the volume was average. My GE March calls, with 3 days to go are slightly in the negative. Tomorrow will tell the story here as well. Gold was off $5 on the futures as the US dollar was off just a touch. The dollar will get going tomorrow as well in my opinion. The direction is the question. The XAU was off 1 1/8, while GDX had a fractional loss. ABX fell 1/4 on average volume. My ABX April calls are in the red. Perhaps this trade was not a good idea. Mentally I'm feeling OK. There is nothing left to do but wait for the Fed. Although we were negative on the Dow today, the internals suggest that it wasn't so bad. The TRAN wasn't so negative either. The short term technical indicators for the major indexes are about mid-range. So anything could happen. Gold and the gold shares remain oversold. We'll see something happen tomorrow. The overseas markets will probably be on hold as well but we'll keep an eye on them overnight.
Monday, March 16, 2015
A good start to the week for the bulls as the Dow gained 228 points on light volume. The advance/declines were almost 2 to 1 positive. The light volume can be a concern and the breadth wasn't what you would expect with a market up over 200 points. But the price action is positive and not what you would see if we were still in a downtrend. The short term downtrend line has been broken to the upside in the major stock indices. The summation index is still heading lower. I'd expect some hesitation tomorrow and up to the Fed release on Wednesday. GE was up 3/8 on average volume. My GE March calls now have a slight profit with 4 days to go in the March option cycle. I plan on holding them until the Fed release. My guess is that whatever the Fed has to say will be viewed as a reason to rally and hopefully GE goes along for the ride. That's a guess as usual. Gold was flat on the session and the US dollar dropped today. The XAU and GDX finished the session barely moved. They did both finish off of the lows again. I did purchase some ABX April calls today. They are slightly in the black. This is a trade that will probably move off of the Fed announcement. My idea here is a rally on the Fed and an exit on follow through Thursday morning. At least that is the plan today. Mentally I'm feeling OK. The price action of the past few days suggests that the decline is over. Now that doesn't mean we can't retest the lows or simply move sideways here. But it is option expiration week and perhaps the positive bias will be in effect. As always, the market will go where it wants to. I will say that I certainly did not expect a 200+ point rally to start the week. GE had a nice move up as well. There was a positive blurb about GE in Barrons over the weekend. That may have helped. Gold is still unloved and the usually negative month of March is only half over. This ABX trade may not be the best idea but I'm giving it a shot and there isn't a lot of money involved. So we'll see. Tonight we'll get a look if the foreign markets can follow the US higher.
Friday, March 13, 2015
Back to the downside today as the Dow lost 145 points on average volume. The advance/declines were a bit more than 2 to 1 negative. The summation index continues lower. The S&P 500 is trying to hold around the 50 day moving average. I guess we'll find out next week what is going to happen. All eyes and ears will be on the Fed Wednesday. That should be quite a session, considering that it is option expiration week as well. I will say that the last hours price action was encouraging for the bulls. The market came back instead of tanking. But the short term trend remains down. GE fell 1/3 on good volume. The 200 day moving average here has been violated. My GE March calls are now losers. Why would I continue to hold on to this trade? Well for one thing, there isn't a lot of money involved. I also think that there is a chance next week that the market rallies after the Fed. The technical conditions in the short term remain overbought. Gold finished the session flat on the futures despite another positive day for the US dollar. The XAU and GDX ended the day flat but came back from their lows. The daily charts here look like that they are trying to hold on to the recent lows and I am now thinking about trying the April calls ahead of the Fed. Potentially GDX or ABX. This is something that I will consider over the weekend. There will not be a lot of money in this trade if I attempt it either. Mentally I'm doing OK. Only a week to go in the March option cycle. Who knows, I might even try a trade in the SPY next week. But I doubt it. The short term technicals for the major stock indices remain oversold despite the bounce that we saw yesterday. Short term downtrend lines remain in place as well. The summation index continues lower as well. So their isn't a lot of positives on a technical basis at the moment. That said, the market will go where it wants. Next week will be a key. We are either going to hang in here and turn around to the upside or things will get pretty ugly to the downside. I think that GE will follow whatever happens. As for gold and the gold shares, they may hold up here or not. If they don't, the decline will really gain steam because the level we are at now is the last remaining support. I'm going to take a good hard look at things here over the weekend. Nobody wants gold and the gold shares here and that is usually a good time to take a chance. But we are still in the month of March and that usually isn't positive for gold. Plenty to consider in the next couple of days. For now it's Friday afternoon and time for a rest.
Thursday, March 12, 2015
A bounce and more today as the Dow climbed 260 points on average volume. The advance/declines were about 3 to 1 positive. A bounce was due and we got it. That doesn't mean that the decline has ended. Where we go from here will determine that. I can't say I have a good feel for what will happen. 6 days left in the March option cycle and we have the Fed to contend with next week. The market could go either way. I would be more positive if the small stocks would take the lead here. They haven't yet. GE was up about 20 cents but the volume was light. My GE March calls are back to break even. Oversold here and the 200 day moving average has shown support so far. But this trade is one bad day from blowing up. Running out of time as well. There is a short term downtrend line in place as well. If we can get through that, there's a chance this trade will turn a profit. Gold was up a buck despite a drop in the US dollar. Both the XAU and GDX had slight losses. A mixed bag for the metals and there is no rush to make a trade here. The lows of the past 6 months in the gold shares have held for now. Mentally I'm feeling OK. I will venture to guess that if we see strong upside follow through tomorrow, then this recent decline is over. The Dow is right at its recent downtrend line. If we get through that with good volume, it makes sense that higher prices will follow. So tomorrow will be important. Volatility has increased as we noticed before. So the risk is more than usual. The GE trade still has a chance to work but time is running out. Even if it makes money, the trading tactics were terrible. Lack of discipline is never a good thing. Gold remains unloved. The overseas markets rallied strong last night. We'll see how markets around the world finish up the week tomorrow.
Wednesday, March 11, 2015
A drift lower today as the Dow fell 27 points today on average volume. The advance/declines were positive though. The summation index continues lower. Still short term oversold for the major stock indices. We should get some kind of short covering bounce but the question is when? Retail sales out tomorrow and that could get things moving up or down. The trend is down though. GE bounced around but finished the day barely changed. Volume was average. The analyst conference didn't move the stock. My GE March calls are in the red. Perhaps they can get back to break even if we see a bounce. But this trade should have ended a week ago. Gold was off 10 bucks on the futures as the US dollar continues its climb higher. The dollar is moving straight up. The gold shares found some interest today. The XAU rose 2 1/8, while GDX gained 1/2. The gold shares are trying to hold at the lows of late last year. Volume was good there today. Mentally I'm feeling OK. The RUT and the TRAN were up today, so perhaps we can get things moving higher tomorrow. The breadth was positive today as well and that doesn't match up with a down market. So we'll see. It is a more volatile environment, that is for certain. GE is trying to hold the 200 day moving average. Whether or not it can will go a long way in the outcome of my trade there. I still think that gold isn't the place to be at the moment despite todays bounce. However the April or May calls could be the next trade but strictly on a short term basis. We'll watch the action in the foreign markets and go from there.
Tuesday, March 10, 2015
The market is in trouble now. The Dow got clobbered and closed on the lows for the day. The most watched index fell 332 points on good volume. The advance/declines were 3 to 1 negative. The summation index is heading lower. We did not hold the 2050 level on the S&P 500 and the uptrend line from last October has been broken. It looks like the market will be negative for the March option cycle. I missed it, as my take on things unfolding was wrong. There isn't any doubt about what is happening now. The short term technical indicators are oversold and staying there. I suppose the next level of support is the 2000 level at the 200 day moving average for the S&P 500. GE lost almost 1/2 on better volume. We're right at the 200 day moving average for GE. My GE March calls are now losers as I have held on to them way too long. They should have been sold days ago. My wrong view of the overall picture led me to continue to hold this position when it should have simply been liquidated. I doubt the analyst conference tomorrow will help GE at this moment. Looks like another losing trade with the lack of discipline returning. Gold couldn't catch a bid as the futures lost $6. The US dollar soared and is going parabolic. We all know how that usually ends. The XAU fell 1 1/2, while GDX shed 1/4. No rush to purchase the gold share calls as we are on the brink of breaking the near term lows of the past 6 months. No flight to safety here just yet. Mentally I'm feeling frustrated as I once again could not do what had to be done with the GE option trade. A winner turned into a loser. I only see things getting worse for both GE and the overall market. We'll have to take our cues from the summation index and it is going down. Despite the market being short term oversold, todays price action was weak. Most of the major industry groups have rolled over. The bank stress test results will be out tomorrow. It seems the market already knows that there will be a negative surprise. Is it too early to be looking at the SPY April calls? I don't know but probably. I don't think any near term bounces that we see will hold. Let me state the obvious. Volatility has returned. That will increase the option premiums but it will also make it harder to trade. Whipsaws will happen. I suppose when I take the loss in the GE calls I'll simply head for the sidelines. We'll see if the overseas market follow the Dow lower and brace ourselves for whatever happens tomorrow.
Monday, March 09, 2015
An oversold bounce today as the Dow gained 139 points on average volume. The advance/declines were slightly positive. The summation index continues lower. The overall market was weaker than the Dow and that is not a positive. There was no weakness today to attempt the SPY March calls. Short term oversold on the major indices. The indicators are near the bottom of their ranges. There is an uptrend line for the daily S&P 500 chart that comes in at the 2050 level. That level needs to hold to continue with a bullish longer term outlook. I do not have any March option cycle trades in mind with only 9 days to go unless a decent signal appears. Managing the GE trade will be the focus. GE gained 22 cents on OK volume. The short term indicators are trying to turn back up here. Hasn't happened yet. My GE March calls are still in the black but not by a lot. There is an analyst conference for the stock on Wednesday. That could get things moving one way or the other. Gold was up a couple bucks on the futures as the US dollar finished a bit lower. The XAU dropped 2 1/3, while GDX fell 2/3. Volume was good. It isn't a good sign when the gold share stocks are leading the metal down. These stocks are oversold and staying there. This will potentially set things up for a call trade in April or May. But for now patience is needed and advised. Mentally I'm feeling OK. We've got the Dow leading things here and that usually comes at the conclusion of an upside move. With the summation index moving lower, the risk is higher than usual for some more downside. The small stocks lagging is another warning sign. 2050 will be the near term key for the S&P 500 in my mind. The market will go where it wants to though. I think if GE makes it back to the $26 level this week, I'll dump the March calls. The risk here increase with each passing day as well because we now have a short term down trend line in place. At this point I'll wait for the analyst conference on Wednesday. Nobody wants gold here and the negative seasonal factor is working this time. It will help to hold the $1150 level on a weekly closing basis. We'll keep an eye on the foreign markets tonight and go from there.
Friday, March 06, 2015
Well, wrong again. The Dow got clobbered on a strong employment report. The most watched index dropped 279 points on good volume. The advance/declines were 6 to 1 negative. The summation index is heading lower. I expected things to work out to the upside. The technicals suggested otherwise. Always go with the technical indicators. The short term indicators for the major stock indices had already rolled over. I refused to believe them. Once again the lack of discipline comes back to bite me. Well at least I didn't purchase any SPY March calls before the report. Getting pretty short term oversold after today. I could make a case for buying those calls on weakness Monday. But it may just be a bounce. GE shed 1/3 on light volume. We closed a touch below 25.50 here and I'm still holding on to the March calls. The short term technicals have rolled over here as well. However there has been buying late in the day for GE recently and that is a plus. Or perhaps I am just trying to find something to justify holding onto these options. Surprisingly, they are still showing a profit. Gold got crushed as a looming rate hike plus a very strong dollar today sunk the precious metal. The gold futures fell over $30 and well below the $1200 level. The dollar was up over a point. The XAU lost almost 5 and GDX dropped 1 1/2. Volume was heavy. No hurry to get any gold share calls. March is the weakest month for gold and at least that is going according to plan. Mentally I'm doing OK. I don't have a good handle on the stock market at the moment. At least I recognize that fact. I really didn't expect the drop that we got today. That said, things are technically getting to a point where a nice bounce can be expected. Perhaps the SPY March calls on weakness Monday will be the right idea. It's something to look at over the weekend. That said, sitting on the sidelines for now might not be a bad idea either. My GE March call trade now doesn't look so good on the weekly chart. If I can dump it early next week, that might be the best course of action at this point. Unless the market does a complete turnaround and starts to rally. I don't think that is going to happen. But obviously my ideas are not working at the moment. Patience remains the watchword for the gold market. Evidently getting March puts would have been the better idea than to wait to get long later on. But I missed that as well. I suppose when things aren't going right for you, there isn't any reason to expect that you'll make the right choices. But no matter. The markets don't care and things move along. I'll have to look everything over again this weekend and hopefully come up with something going forward. For now it's Friday afternoon and time for a break.
Thursday, March 05, 2015
Basically a holding pattern today as the Dow gained 38 points on light volume. The advance/declines were positive but not by much. The summation index has turned down. Tomorrows employment report will set the tone for the day. As always, the market reaction to the numbers will be more important than the numbers themselves. The short term technical indicators for the major averages have turned down. I'm still inclined to believe higher prices are still in the cards here before the March option expiration. Tomorrow will probably prove that thesis right or wrong. GE was up 1/8 or so on light volume. This could be a positive precursor for tomorrow. The weekly chart still shows promise to the upside. But tomorrow looms large for this trade as well. Gold was off a few dollars again as the US dollar had another good session. The dollar has broken out to a new yearly high. The XAU and GDX didn't move much today. That's a positive for the gold shares but I don't know how much. There isn't much interest in the precious metal with a rising dollar and quiet international front at the moment. A strong jobs number tomorrow would probably send gold lower. Mentally I'm feeling OK. So tomorrow will tell the story and I still think we are going higher. There is nothing to do but wait at this point. We'll keep an eye on what happens tonight and close out the week tomorrow. Should be interesting.
Wednesday, March 04, 2015
Continuing lower as the Dow fell 106 points on average volume. The advance/declines were negative. Todays action should turn the summation index lower. Is this a cause for concern? It could be. Perhaps my read on what is going on here is wrong. The short term technicals for the major stock indices have turned down. We sold off strong at the start of the day and unlike previous days we did not make it all the way back. Perhaps the market action after the employment report will clear things up. The small stocks are showing better relative strength and that usually means that whatever this is, it isn't anything major. GE lost 20 cents on about the same volume as yesterday. Perhaps I have once again overstayed my welcome with the March calls here. The technical have rolled over here as well. I'll give it until Friday and then decide what to do. Gold fell another few dollars as the US dollar had a strong session. The XAU lost 1 1/8 and GDX fell another 1/3. Volume was light as the interest in gold has waned. Patience is still required here for the long side. Mentally I'm feeling OK. Volatility has picked up in the past couple of sessions but I don't think it is anything to be concerned about yet. How the rest of the week plays out will be important to the near term outlook. I think tomorrow will be a waiting game but I thought that yesterday as well. I suppose I just don't have a good handle on things at the moment. The technical indicators are pointing to lower prices but I don't think that it will be a rout. I really think we are going to start to grind back to the upside. GE is going to have to hold the 25.50 level for me to stay positive there. But perhaps the run is over for GE now. It is certainly a possibility. We'll see if the foreign markets follow the US lower and prepare for tomorrow.
Tuesday, March 03, 2015
Some downside today as the Dow fell 85 points on light volume. The advance/declines were negative. Now we are getting churned as the market decides what it is going to do. I don't think that this is the beginning of anything big on the downside. Or even a so called correction. There aren't any major negative divergences that I see. But as always, I could be wrong and often am. That said, Fridays employment report reaction will most likely be the most telling event. There was much made of the NASDAQ reaching 5000 again yesterday, so I'm sure that led to some of the selling today. The technical data for the stock averages is mixed. GE dropped 1/4 on light volume. The weekly chart still shows room for upside but this trade maybe needs to be exited sooner rather than later. The daily RSI got very overbought and now is dropping. How GE reacts from here is key. My GE March call trade is still in the black but took a hit today. Gold was a bit lower on the futures today and the US dollar didn't do much. The XAU was off 1 1/2, while GDX lost 1/3. Volume was light here. Patience is required if you want to trade the long side in gold. Mentally I'm feeling OK. Does the market have another leg up here? That is the question. I believe so but it hasn't happened yet. I think we'll be in a waiting mode until Friday morning. That's a guess as usual. Technically some of the short term indicators have started to roll over but not dramatically so. I think that we can grind higher here. We do have the Feds beige book on tap tomorrow. That could provide some movement. But really, until the employment report, I don't expect a lot of action. So we'll see. I'll be watching to see if the foreign markets follow the Dow lower overnight.
Monday, March 02, 2015
We begin the month of March on a positive note as the Dow gained 156 points on average volume. The advance/declines were positive. The trend remains up and we should find our way higher going forward. No opportunity for purchasing the SPY March calls today. It appears that this trade isn't going to happen at this rate. However the advance/declines today were less than what you would expect for a market up over 150. So the rally is losing internal strength at the moment. That doesn't mean that we won't go higher though. We worked off the near term overbought condition for stocks and now have moved up. GE was up 1/8 and the volume was lighter. Very overbought on a daily basis here but I have a target price in mind but we are not there yet. The GE March calls I own are doing fine. Gold fell $5 on the futures and the US dollar was little changed. The XAU dropped 1 2/3, while GDX fell 1/2. Volume picked up a little on the downside. March is historically the worst month for the price of gold. So at some point this month there should be a good entry point for the April or May gold share calls in my opinion. That is a trade on the horizon. It will take some time for the gold shares to get oversold. There is no rush here. Mentally I'm feeling OK. The small stocks continue to lead the way higher and that is bullish. This rally seems to be getting long in the tooth but there is no top yet. There is no overhead resistance as well. So we have to keep looking for trades on the long side for now. Fridays employment report should be the next market catalyst. Todays gains goes to show that there is still money out there looking for a place to go. The GE March call trade continues to work but I really need to think about an exit. Gold is a waiting game for now. We'll keep an eye on overnight developments and be ready to go tomorrow morning.