Friday, May 29, 2015
We completed the month of May with a whimper as the Dow fell 115 points on heavy volume. The advance/declines were 2 to 1 negative. The revised GDP came in weaker and that was pretty much expected. The summation index is still heading lower and perhaps we should take our cues from that. The short term technical indicators for the S&P 500 are still mid-range. No clear signal yet with 3 weeks to go in the June option cycle. GE was off 1/3 on average volume. It appears that the technicals here on the short term are starting to roll over. Perhaps we will get a set up for the July calls in GE. That is what I'll be looking for here. Gold didn't do much today despite the weaker GDP report. The US dollar finished the session little changed as well. Ditto for the gold share indices. Volume was light. I'm still looking for the ABX October calls but ABX isn't oversold on a medium term basis yet. I may try the June calls here again as well if the short term is negative. I should not be in a hurry here because we are still in a seasonally weak period for the precious metal. Mentally I'm feeling OK. The TRAN continues to be weak here and is oversold on both a short and medium term basis. Will this condition continue or will we see a bounce from here? I think that the answer to that question will go a long way into telling where the stock indexes are headed. Another thing to ponder is whether the divergence between the TRAN and the Dow is going to have a negative effect on stocks. It hasn't happened yet. I'll have to check the charts this weekend and try to come up with some answers. Gold is still holding on above the support of $1180 to $1150. It is oversold on a short term basis. The precious metals are either building a long term base or consolidating before the next break down. The right answer there will make you some money. It's something to think about. Plenty of work to do over the weekend. A lot of economic data out next week, with the jobs report on Friday being the biggest. But for now it's Friday afternoon and time for a break.
Thursday, May 28, 2015
Weakness for this trading session as the Dow fell 36 points on light volume. The advance/declines were negative. We'll get the GDP revision tomorrow and finish up the month of May. The summation index is moving lower. I still think that we will be moving higher from here but anything can happen. The short term technical indicators for the major stock indices remain mid-range. Not a clear signal really. GE was up 1/8 on light volume. I still would like to get some July calls here if we ever get oversold. Gold was up a couple bucks as the US dollar was lower today. The XAU was up a point and GDX had a fractional gain. Volume was light. ABX was a bit lower early on and I placed an order for the June calls. My order wasn't filled and ABX turned around to finish the day with a gain of 1/3 on average volume. Perhaps I should have chased this trade but to me it was short term in nature so I stayed out. It is simply another missed opportunity if ABX continues higher. I also like the October calls here at some point over the summer. Mentally I'm feeling OK. We'll see how the market reacts to the revised GDP number and that is about all we've got to finish the week and the month. Still three weeks to go in the June option cycle, so there will be trades out there. My guess is a weaker GDP and a stock rally with gold moving higher as well. The consensus is for a weaker number as well. Perhaps there will be some more volatility with the end of the month but we could finish things with a whimper as well. There really isn't a clear technical signal for the stock indexes at this time. The gold shares were stronger than the price of gold today and that's a positive. However the volume was light. Summer is approaching and you don't want to force trades. If the gold shares head back to the downside in the next few weeks, it possibly could be the set up for the October calls. Time will tell. We'll watch the overnight developments and see what tomorrow brings.
Wednesday, May 27, 2015
A bounce back to the upside as the Dow gained 121 points on light volume. The advance/declines were about 3 to 1 positive. Todays price action negates the Friday bounce trade that I had in mind. We would have needed to move sideways or continue lower for that trade to take place. So now we go from here. The overall market was stronger than the Dow. The small stocks acted well. The TRAN looks like it may stop its decline here. I'm thinking that we will be moving back now to attempt new all time highs. GE was flat on the session and volume was light. Patience for now. Gold didn't do much today and the US dollar finished flat as well. The XAU and GDX were little changed on light volume. I am now considering a bounce trade for the gold shares on Friday. They are short term oversold and I'm thinking that the GDP revision will be lower. I am looking at the ABX June calls and this would be a short term trade. I will consider it tonight. Mentally I'm feeling OK. The stock indices are back in a place where they could go either way again. However I now think that we'll be heading higher form here. You always have to adjust to the information and price action at hand. It isn't easy to do. The short term technicals here are now mid-range for the major stock indexes. Taking a gold share trade here is risky but it could pay off for strictly a short term play. I'm looking at the ABX June 11.5 or 12 calls. If there is weakness in ABX tomorrow, I'm probably going to try this trade. So we'll see. 2 days left in the month of May. We'll keep an eye on the foreign markets overnight and go from there.
Tuesday, May 26, 2015
We started off the short trading week to the downside as the Dow fell 190 points on average volume. The advance/declines were 4 to 1 negative. The summation index will be moving lower after todays action. The short term technical indicators for the major stock indices have now rolled over. We did bounce up off of the lows for the day in the final hour. I'm not sure if this is the beginning of something sustained or just another run lower in the trading range. If we stay lower the next couple of days, I'll be looking for a bounce on Friday. GE was off 1/8 or so on good volume. I'm still looking at the July calls here if we can get oversold or near the $26.50 zone. Gold fell today as the US dollar continues higher. The precious metal futures dropped twenty bucks. The XAU fell 2 1/2, while GDX shed over 1/2. Volume picked up to the downside. I'm looking for gold share calls with an autumn expiration. The ABX October calls are on my radar. No hurry to purchase. Mentally I'm feeling OK. The TRAN continues to drop and its 50 day moving average is now passing through the 200 day moving average to the downside. That is a classic sell signal. However none of the other major stock averages are even close to that happening. The technical roll over of the indicators says that there is more downside on the way in the short term. Obviously purchasing index puts on Friday was the way to go. My work does point to an oversold bounce possibility this Friday if we see more weakness in the next two days. So we'll see. I'll be looking at the SPY June calls if things line up. The gold share indices have broken down out of their rising trend channels. The short term technicals here are getting oversold. NEM continues to show the best relative strength. The European stock markets were weaker today also. We'll have to see if that continues overnight as well as what happens in the Asian markets.
Friday, May 22, 2015
Lower today as we were for much of the session as the Dow fell 52 points on very light volume. The advance declines were negative. We bounced around and then dropped in the final half hour to close with a loss. You can't read too much into todays action because the market was certainly in holiday mode. The Yellen speech came and went. The short term technical indicators for most of the major averages are still in the overbought zone. The summation index is moving sideways. GE was off a few cents, the volume very light. Overbought here as well. Gold was flat despite a higher US dollar. The XAU and GDX had fractional losses. Volume was very light. Mentally I'm feeling OK. So we got what was expected today in the marketplace. Listless, light volume activity. Not sure what to expect next week but I'll try and figure that out over the weekend. It really was a week to just let pass by and I'm glad I did. Next week perhaps the 1st quarter GDP revision will be the mover on Friday. That's a guess as usual. The gold share indices are breaking down from their ascending trend channel. Not quite oversold there yet on a short term basis. Not mush else to say about today. I'll be checking the charts this weekend as usual. Perhaps I'll be able to come up with a trade for the June option cycle. For now it's Friday afternoon and time for a break.
Thursday, May 21, 2015
Still trying to figure out which way to go here as the Dow barely changed today on light volume. The advance/declines were slightly positive again. The overall market was stronger than the Dow. Maybe we're going higher, maybe lower and I just don't know. So I had better wait until things clear up. I'm going to let tomorrow go by and consider scenarios over the long weekend. I suspect tomorrow will be another light volume affair unless Janet Yellen says something noteworthy. GE up another 8 cents on good volume. The relative strength of GE is very good here. If we do see a pullback, calls will be in order. The gold futures were off few bucks and the US dollar was lower as well. The XAU and GDX had slight fractional losses on light volume. Patience advised here for the gold share calls. Mentally I'm doing OK. Yesterday the McClellan oscillator gave a signal for a big move forecast for today or tomorrow. We'll see if that pans out. Direction is not part of the signal. I'm going to hold off on any SPY options until next week. The technicals for gold have rolled over. Expect lower prices there. We'll close out the trading week tomorrow.
Wednesday, May 20, 2015
It seems as though the market is still trying to make up its mind here. The Dow fell 27 points on light volume. The advance/declines were slightly positive. The Fed minutes arrived and the stock indices had a small rally only to give it all back. The TRAN had a very negative day. If that is the leader here, we are about to roll over. It has that feel. The summation index is starting to go sideways. The short term technical indicators for the major stock indexes are overbought. I'm moving my stance to cautious here. GE on the other hand was up over 1/3 on good volume. If GE is a precursor for the overall market, than we should be moving higher. But I'm not thinking that is the case this time around. Gold was up a couple bucks on the futures. The US dollar was higher but not as much as the past two days. The XAU and GDX had very slight fractional gains. Volume was light. For whatever reason, NEM is out performing here. Mentally I'm feeling OK. A couple of days to go this week before a long holiday weekend in the US. I think the logical course of action would be to let this week complete and go from there. Maybe try some June SPY puts if we continue to just drift higher on light volume. The market has tried to break out and the volume hasn't been there. The TRAN breakdown is not a positive. The small cap stocks have now made lower highs. Unless we get some huge upside rally out of nowhere, be wary. Perhaps the Yellen speech on Friday will help the market make up its mind. The gold share indices remain in an upward channel. But one more negative session will break down out of it. Stay tuned. We'll see what transpires in the overnight action and go from there.
Tuesday, May 19, 2015
An up and down day with not a lot of conviction either way. The Dow gained 13 points on average volume. The advance/declines were negative. Waiting for something to get a trend going but nothing just yet. The major stock indices are short term overbought. Not much to do here but watch and wait. Of course, you don't make any money that way but you don't lose any either. Perhaps if we continue the light volume levitation, I'll try some June SPY puts. But the better idea in my mind is waiting for a pullback to get long. GE was up a few cents and the volume remains light. Patience here. Gold took a fall today finally on the stronger US dollar. A delayed reaction I suppose. The precious metal futures dropped twenty bucks as the dollar gained a full point. The XAU shed 2 7/8, while GDX dropped 3/4. I did put in an overnight order for some ABX June puts but it wasn't filled. I was a day late and it is frustrating. I'm looking for more downside for the gold shares. Mentally I'm doing OK with the exception of missing this gold share trade. I probably should have done more work over the weekend but this idea just occurred to me yesterday. Had I been paying better attention, perhaps I would have seen it over the weekend. The overall market was weaker than the Dow today which was the opposite of yesterday. The TRAN also reversed course. The big caps are hitting new highs but the small stocks are not. That is not the scenario for an extended rally in my view. This type of price action usually happens towards the end of an up move. So we'll see. The volume has been weak and that isn't a positive either. But the summation index is still pointing up and as I've said before, there is no overhead resistance. Plenty of time in the June option cycle, so we'll see how things play out. I believe that gold is about to begin an extended decline. The gold shares are overbought both short and medium term. Puts there are advised but they are already more expensive than yesterday. We'll watch the foreign markets overnight and see what the Fed has to report tomorrow.
Monday, May 18, 2015
Meandering higher today as the Dow gained 26 points on light volume. The advance/declines were positive. The summation index is heading up. The overall market was stronger than the Dow. The major stock indices are overbought and staying there. The TRAN had a good session. There is no reason to not believe that higher prices are coming. The only drawback here is the light volume. However there is no overhead resistance. We've got the Fed minutes on Wednesday and Janet Yellen with a speech on Friday. GE was up a few cents and the volume was light. Just waiting for an oversold reading to get some June or July calls here. Gold was up a couple bucks on the futures despite a strong session for the US dollar. There are some rumblings about Greece again which perhaps is leading to a flight to safety play. The XAU was slightly lower, while GDX was flat. Overbought for the gold shares on a short and medium term basis. I'm now thinking about perhaps some June puts here. There was some media hype over the weekend about now being the time to buy some gold. Usually when something gets popular in the media, it pays to go the other way. The volume for gold and the gold shares remains low. Mentally I'm feeling OK. I guess at this point I'd like to see stocks pull back a little in order to purchase some June SPY calls. I'm wary of the low volume here but there isn't any doubt that the trend is up. An extra week in this option cycle makes things expensive for now. I suppose I'll just be patient and keep an eye on things for now. Gold is at resistance and most likely depending on the Fed this week will determine if we break through or not. That's a guess as usual. I'm looking at the ABX June puts. We'll keep an eye on the overnight developments and go from there.
Friday, May 15, 2015
An uneventful expiration as the Dow gained 20 points on light volume. the advance/declines were positive. We were lower for most of the session in a narrow trading range. Some of the big cap averages hit new all time highs today. But we haven't seen a high volume breakout to the upside just yet. I do think that it's coming but I certainly don't know when. The summation index is now heading higher. However the small caps, most notably RUT, are lagging here. I'm still a believer in higher prices going forward. I just need to time the purchase of some SPY calls at the right time. GE was off 1/8 on light volume. I'm leaning towards the July calls here. Gold was flat on the session and the US dollar lost a bit more. The XAU and GDX had slight fractional losses on very light volume. Still oversold here on a medium term basis. Mentally I'm feeling OK. On now to the June option cycle which has an extra week in it. The premiums will be priced as such and will be more expensive to start. We'll also have a holiday week thrown in a s well. We'll get the Fed minutes in the middle of next week. The SPY is getting short term overbought. I'll be looking at what to do over the weekend but I'm pretty sure that I want to own calls here reasonably soon. If the stock indices do break out to the upside, there is no overhead resistance. I'm considering the July calls for GE because this stock sometimes goes sideways for quite a while, as is the case for the past few weeks. The ideal entry point would be around $26.50. Gold and the gold shares are short term overbought here and at 200 day resistance. Although this is a seasonally weak period for the precious metal, it has held up pretty well. I'm not sure what that means going forward. There is certainly not a lot of interest in the precious metals at this time. Patience is probably the best course of action here. Plenty to ponder over the weekend. For now it's Friday afternoon and time for a break.
Thursday, May 14, 2015
The market surged higher today and some of the major stock indices closed at all time highs. The Dow gained 191 points on light volume. The advance/declines were 3 to 1 positive. This may move the summation index back to the upside. Perhaps this is the beginning of a sustained move to the upside that I have been looking for. But that has yet to be seen. However I'm still a believer in higher prices going forward. Looks like the May SPY calls this week would have worked out. GE was up another 20 cents on light volume. If the overall market goes up, GE should go along for a ride. It may be too late for the calls here. Gold was up another $7 on the futures as the US dollar was a bit lower again. The gold shares didn't go along as the XAU and GDX only had slight fractional gains. Volume was average. Mentally I'm feeling OK. It will be interesting to see if we can really get out of this protracted trading range. If we continue higher with some volume, that will be the key. Once it gets going, it usually goes higher than everybody expects. So we'll see. The gold shares are stalling at the 200 day moving average. The medium term picture here is overbought. I'm waiting for a decline here before attempting the next long trade here. The September or October calls for ABX or GDX perhaps. But patience is needed. GE looks like it wants to break through the upper Bollinger band now. That would be a positive for higher prices going forward. The TRAN continues to lag. We'll see how the expiration goes tomorrow.
Wednesday, May 13, 2015
The stock market is still trying to figure out what to do here as the Dow fell 7 points on average volume. The advance/declines were positive. We opened with a pop higher but could not hold on to the gains. The summation index continues lower. I'm still in the camp of a positive resolution to this sideways pattern. GE was up almost 20 cents on average volume. Waiting to buy June or July calls here on an oversold reading. May not happen at this pace. Gold rallied today on the weak retail sales number. The precious metal futures rose $25 as the US dollar took a had a good drop. The XAU rose 1 3/4, while GDX gained 1/2. Volume was good. The medium term technical indicators are overbought for the gold shares. I do not advise chasing todays gains. Mentally I'm feeling OK. It seems like we have been waiting forever for the stock indices to have a sustained direction. We continue on that path. The TRAN looks like it is about to break down here. I'm on the sidelines with regards to the SPY. I think perhaps the GE calls will be the next trade. The gold shares can wait for now. Let's get through this week and go from there is my mantra at the moment. We'll follow the overnight action and see what tomorrow brings.
Tuesday, May 12, 2015
The market got clobbered early but finished the day with a loss of 37 points. The advance/declines were negative and the volume was light. We were off 150 early and eventually made it all the way back to positive before rolling over again. When we were down, I did not get any SPY May calls although that probably would have been the right move. A market that can come back from such a drop, isn't one that is going much lower in my opinion. I think that I'll be staying on the sidelines now with regards to the S&P 500 May options. GE was up 1/8 on light volume. June or July calls here remain the game plan. The gold futures were up almost $10 on a weaker US dollar. The XAU rose 3/4 and GDX gained 1/4. Volume remains on the light side. Patience is advised here. Mentally I'm feeling OK. Although the summation index is still heading lower, I really think that we are about to hit new all time highs again. That's a guess as usual. It is option expiration week and it usually has a positive bias. The comeback off of the lows today was impressive. Retail sales tomorrow should provide some excitement. Bond yields have risen pretty fast in the past few weeks. As we come back off of that, the market should rally. The technicals right now are not giving any solid signals for the major stock indices. It looks like I'll be moving into the June option cycle which has an extra week in it. Gold found some buyers today but it remains range bound. Nothing to do here but wait. We'll watch the foreign markets overnight and go from there.
Monday, May 11, 2015
No upside follow through today as the Dow fell 86 points on light volume. The advance/declines were almost 2 to 1 negative. The summation index continues lower. I am thinking about getting some May SPY calls on weakness tomorrow but I usually don't fare well on the short term trades. The technical picture is mixed for this trade but we are in expiration week. Maybe I'll come to my senses and skip this idea. We'll see. GE was off 3/8 on average volume. The Bollinger bands are contracting which foretells a big move coming for GE. Which way is the question. I still like the June or July calls here but I could be reading things wrong here as well. Obviously my confidence isn't where it should be. Gold was off $5 today as the US dollar was slightly higher. The XAU and GDX had slight fractional gains on light volume. The gold shares are more oversold than overbought on a short term basis. No trades here for now. Mentally I'm feeling OK. Knocking on the door to new all time highs for some of the major stock indices but we just can't get in. Not a lot of economic data due this week but we do get retail sales on Wednesday. That should get things moving. Once again, which direction is the question. If things get short term oversold on some of my intra-day indicators tomorrow, then I might try the SPY call trade. If not I'll hopefully sit things out. I'll be checking some other things out overnight. GLD and SLV remain in a trading range with light volume. Unloved and with no interest for now. It is still a seasonally unfavorable time period for the precious metals. We'll keep an eye on the overnight developments and decide what to do tomorrow.
Friday, May 08, 2015
The employment report came out and the market responded with a huge gain of 267 points on average volume. The advance/declines were 4 to 1 positive. I'm not sure that this will turn the summation index around but it will be getting close. Back to knocking on the door to new all time highs for some of the major stock indices. There is nothing in the way preventing new all time highs. You figured today would tell the story and it did. I don't think the numbers really mattered as the market will use any excuse to do what it wants. So we should be heading higher form here. GE was up 1/3 on average volume. I'd still like to get some calls here but we've already moved up in the past two days. Gold was up $6 on the futures and the US dollar was a bit higher as well. These two didn't move as much on the jobs numbers and to me that makes sense. The employment report really wasn't drastic one way or the other. The XAU was up 2/3 and GDX rose 1/8. Volume was light. Patience advised for purchasing options on the gold shares. The interest remains missing. Mentally I'm feeling OK. It looks like the oversold reading on the McClellan oscillator this past Wednesday marked the low for stocks at this time. Expiration week is next week and the positive bias could come into play. I'll be looking for SPY calls on weakness. It we can get the summation index to turn positive, that would be the all clear sign. I do believe that is where we are headed. Perhaps June calls should be the next trade. Also I may be getting a better read on what is going on in the markets now. The employment report doesn't matter as much as the market reaction to it. Once we get to new all time highs there is no overhead resistance as well. I'll be looking for opportunities over the weekend. Gold remains unloved and I'll be looking for trades elsewhere. For now it's Friday afternoon and time for a rest.
Thursday, May 07, 2015
A bounce today as the Dow gained 82 points on good volume. The advance/declines were positive. We're coming off of an oversold reading in the McClellan oscillator. The summation index is still heading lower. I think tomorrow will go a long way as to what is going on here. The market should move off of the employment report and that should give us the medium term direction. I think it could go either way. But we'll know more tomorrow. I am not going to attempt any SPY trades here. GE was up about 1/4 on average volume. Not completely oversold here so I'll try and remain patient. Gold was off $8 on the futures as the US dollar was higher today. The employment report should get these trading vehicles moving as well. The XAU and GDX had slight fractional gains today on average volume. I think that patience is a good idea here as well. Mentally I'm feeling OK. So we are now basically waiting for the market action to tomorrows data. The major stock indices appear to be trying to hang on here. It is possible that the selling has subsided and that a rally will begin here. The TRAN had a good day today. But it's also possible that today was simply a day to relieve the selling pressure. So I think that tomorrow will tell the story. The gold shares acted better than gold today. That is bullish. The gold share indices also held at their 50 day moving averages. So we'll see. As always we'll watch the overnight action as we await the all important employment report tomorrow.
Wednesday, May 06, 2015
The Dow continued lower today as it lost 86 points on good volume. The advance/declines were 2 to 1 negative. We did open higher and close lower again. However we did come off of the lows for a mid-range of the day close. Perhaps we'll see an attempt at a bounce tomorrow. But the summation index continues lower. Plus we have the jobs report on Friday, so I think traders could be wary of a position before that. The McClellan oscillator is now in an area where it has bounced in the recent past. The S&P 500 closed right on the near term support. The next level in my mind would be 2050. GE was off 1/8 and the volume was light. Still waiting to get the calls here. Support at $26.50 and then $26. Gold fell a couple bucks on the futures despite a huge drop in the US dollar. That isn't bullish for the precious metal. The XAU lost 1 1/3, while GDX declined 1/2. Volume picked up a bit. Gold should be rallying when the dollar drops like it did today. The usual relationships here between the US dollar, gold and the gold shares are not happening. I don't know what that means but it is harder to try and trade here when the conditions are like this. Not even close to being oversold yet for the gold shares so patience is still advised. Mentally I'm trying not to be too down on myself for missing this shorting opportunity. But it just goes to show you the type of dedication and hard work that must be put in to be successful in this game. Even when doing that, you're not going to see every trade. The small caps held up better today so there's a chance that perhaps the recent decline is closer to the end. That's a guess as usual. The foreign markets are losing ground here as well so perhaps there is some coordinated liquidation occurring. Time will tell. I suppose the next main event will happen on Friday when we get the employment report. No telling how the markets will react to that. If we get an oversold signal on the S&P 500 in the coming days, perhaps a bounce trade can be attempted before the May expiration. We'll keep an eye on the overnight developments and take it from there.
Tuesday, May 05, 2015
To the downside today as the Dow fell 142 points on good volume. The advance/declines were 4 to 1 negative. The previous two day light volume rally was the opportunity to get some puts. With the summation index heading lower the path of least resistance is down. The TRAN got whacked today and the small stocks continue to lead the way lower. The big caps are still near their all time highs but I think that lower prices are in the near future. It is probably too late to purchase any SPY puts. GE was off 1/3 and the volume picked up today. Perhaps we will get low enough here to get the June or July calls. Not oversold yet though. Gold gained $6 on the futures as the US dollar was lower. The gold shares followed the overall market. The XAU lost 1/2 and GDX shed about 1/4. Volume was light. I'm still in the camp of waiting for a pullback before considering purchasing some calls here. Mentally I'm doing OK. I suppose I could have been more in tune with things and recognized that the recent light volume rally was a chance to get short. But that was not the case. I still don't have a good idea of the markets purpose here. Only 8 days to go in the May option cycle. I am still a believer in higher prices for the stock indices this year. Right now Greece is starting to enter into the market picture again. You can only guess how that gets resolved. US interest rates have backed up in the past couple of weeks and the decline so far could be blamed on that as well. But the decline has really only been in the smaller issues. We've got the employment report due out on Friday and that should provide some clarity on market direction in the near term. I suppose it wouldn't hurt to remain cautious for now. Gold remains uninteresting. We'll see if the foreign markets follow the US lower overnight.
Monday, May 04, 2015
Trying to push higher as the Dow added 46 points on light volume. The advance/declines were positive. We did come off the highs of the session. The summation index is still heading lower. I don't have a good grasp on what is going on right now. The small stocks did lead the way up and perhaps now they are leading the way down. I do not have any SPY trades in mind for right now. I wish there was a clear signal on what to do but there isn't. GE was off a few cents and closed below its high as well. Volume was light. I'm looking out to the June or July calls. Gold was up $12 on the futures and the US dollar was higher today as well. However the XAU and GDX only had slight fractional gains. Volume was very light. Gold and the gold shares have not correlated well lately. Mentally I'm feeling OK. Not a lot of time left in the May option cycle. I suppose if there is a set up in front of the employment report, I may be able to do a trade. But that remains to be seen. I am not sure if the light volume rally we've seen since Thursday is a chance to get your puts or something else. So I'll have to sit on the sidelines for now. Sometimes you simply have to be patient but we'll see how things shape up before Friday. The volume in gold has tapered off so perhaps the interest that we saw has waned. That's a guess as usual. We'll follow the overnight developments and go from there.
Friday, May 01, 2015
The market stormed back to the upside today as the Dow gained 183 points on lighter volume. The advance/declines were positive but not as much as an up 183 market would suggest. Beginning of the month money flows perhaps? Do we begin another assault on new all time highs from here or was today a bounce for you to get short? That is the question and at this time I don't have an answer. You can make a case either way. The summation index is heading lower, so I don't think that the weakness is over. The small stocks are not leading the way here as well. But it could be that the big caps will lead the way higher, which happens towards the end of extended rallies. Obviously I don't have a clear idea of what is occurring at the moment. GE was up 1/4 but the volume was lighter. I'm still constructive on GE but I need to time the next trade properly. I'll try and wait for an oversold condition. Not there yet. Gold was off about $8 on the futures as the US dollar had a bounce. The gold shares continue their out performance as both the XAU and GDX had small fractional gains. Volume was light. I'll wait for a decline here before trying any trades in the gold shares. We are still in a seasonally weak period for gold. The gold shares have bucked that trend. Mentally I'm feeling OK. The month of May has started out on a positive note for the major stock indices. The TRAN had a very good day and that could bode well going forward. We'll have to see if there is any follow through on Monday. I do not have any SPY trade ideas right now. Perhaps the weekend chart studying will turn something up. The continued strength in the gold shares despite the drop in the precious metal is confusing. However the market always knows more than we do. It's something to keep an eye on. The market had plenty to digest this week and we'll get more data coming up including the employment report in a week. I'll be looking for a technical signal to initiate a position but I don't see one now. Plenty to ponder over the weekend. For now it's Friday afternoon and time for a break.