Friday, April 24, 2015
The drift higher continues as the Dow tacked on another 21 points on average volume. The advance/declines were about even. The NASDAQ is now setting new all time highs and the response is a yawn. That is bullish. The small stocks continue to out perform and things won't get all that bearish under these conditions in my view. We are due for a rest though as the short term overbought condition for the major stock indices is getting long in the tooth. I don't see any huge declines coming though. GE was off a few cents and the volume was light. Not oversold here yet. The plan remains to get some GE June calls when it gets oversold. Gold got walloped today and fell almost $20 on the futures. The US dollar was lower as well. The XAU only dropped 2/3 and GDX shed 3/8. Volume was light. The gold share indexes were helped by the positive earnings report from NEM. FCX was higher today as well. I'm now thinking that perhaps some ABX calls before its earnings report could be a trade. NEM benefited from its cost cutting plan and ABX has a similar course of action. Something to ponder over the weekend. Mentally I'm feeling OK. Declines can be bought in my opinion for the major stock indices. I don't see anything near term to derail the upside. The advance/decline line continues to make new highs. we've got the Fed meeting next week but I don't see any surprises coming from that. The first quarter GDP number will probably be the biggest market mover. But that's a guess as usual. The gold shares holding up in the face of the declining metal is a positive for them. That kind of out performance usually leads to higher gold share prices. However we are not completely oversold on the gold shares and I don't want to jump the gun. This is also not a seasonally strong period for gold. So there is plenty to consider before putting on a trade here. It never gets easy. I'll be checking the charts over the weekend and trying to come up with something that seems reasonable to attempt. For now it's Friday afternoon and time for a break.