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Monday, April 27, 2015

A one day reversal to the downside as the Dow opened higher and closed lower.  The Dow fell 42 points on average volume.  The advance/declines were negative.  The overall market was weaker than the Dow.  The TRAN and the small stocks were weak today and that is not a positive.  The major stock indices have been short term overbought and weakness is overdue.  I don't think this is the beginning of some type of extended decline.  We've got GDP and the Fed on Wednesday and that should be an interesting day.  I would not be surprised if we see more downside this week.  GE was up slightly on average volume.  I'm still considering the June calls here but will wait for GE to get oversold before purchase.  Gold had a good day as the futures rose $28.  The US dollar was weaker as well.  Not sure where the above average strength in gold came from.  The XAU rose 1 3/4 and GDX added 3/8.  Volume was good for the gold shares but we finished well off of the highs for the session.  ABX broke above $13 on heavy volume so I put in an order for the May calls in case it pulled back.  It did and the order was filled.  Unfortunately for me, ABX kept moving lower.  It finished the day up 1/4 on heavy volume.  Perhaps it was a false break out.  The May calls I bought are already losers.  Earnings are out for ABX tomorrow morning.  That will probably make or break this trade.  Mentally I'm feeling OK.  One day doesn't make a trend but it wasn't a good start to the week for stocks.  We'll have to see how the summation index looks after todays price action.  If that rolls over, we could be in for more than a couple days of weakness.  I don't expect any surprises from the Fed.  Gold and silver moved up pretty good today.  Not even close to overbought for these two.  However it could just be a one day wonder.  Time will tell on that.  I may have made a mistake with this ABX May call trade.  It certainly looked like a valid break out to the upside.  Tomorrows earnings will tell the story there.  We'll keep an eye on the foreign markets overnight and see what happens tomorrow.

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