Monday, August 31, 2015
We start the week and end the month on the downside as the Dow fell 115 points on heavy volume. The advance/declines were negative. Most likely digesting the recent gains. Plenty of market moving data to come this week. I think that the key will be to have the patience to wait for a decent signal. Plenty of time in the September option cycle. The premiums are still high with the recent volatility. I will wait for a signal on a short term technical basis. GE was off 1/3 and the volume remains pretty good. The November calls are what I'm looking at here. Gold was little changed today and the US dollar was lower. We may see some movement in gold with the Feds beige book release on Wednesday. The gold shares were lower, with the XAU and GDX showing slight fractional losses. My ABX October calls remain mired in the red. Mentally I'm feeling OK. I looked at things over the weekend and decided that medium term you could probably make a case for either direction. I do think with the summation index turning around that the surprises will be to the upside and not another collapse scenario. But I could be wrong. If the summation index moves higher and stalls in the 500 level zone, then the rapid downside could return. I don't think that will be the case but the market moves where it wants. For now I'm advising patience and waiting for a technical set up either way. Gold remains unloved, uninteresting and off the positive radar. Seven weeks for my ABX October calls and that just won't be enough at this point. I'm hoping for another rally but hope is not a viable trading strategy. I'll be looking to take the loss if we get a bump to the upside soon. We'll watch the foreign markets tonight and see if the Shanghai can continue to hang on here.
Friday, August 28, 2015
A quiet end to a very volatile week as the Dow fell 11 points on good volume. The advance/declines were 2 to 1 positive. The overall market was stronger than the Dow and that's a positive. The summation index has turned back to the upside. The decline is over in my opinion. That doesn't mean we won't head lower again but the bottom that has formed probably won't be broken. We had blow out readings on some of the daily technical indicators this week and now we need to digest that. GE rose 1/8 or so and the volume was good. Just crazy movement for this stock during the week as it followed the overall market. I'm still looking at the November calls here. Gold was up over $10 on the futures despite another gain in the US dollar. The XAU tacked on another 2 points and GDX rose 1/2. Volume was good. Not sure why gold decided to move up in the past couple of days. My ABX October calls are still very much in the red. Mentally I'm feeling OK. It has been a volatile summer for the stock market. Certainly not what I expected. The normal summer doldrums did not show up. It's hard to say exactly what to expect from here but the bottom appears to have been put in. Declines can be bought. With three weeks to go in the September option cycle the game plan will be as follows. If we get to short term overbought, then try the SPY puts on a short term basis. If we get short term oversold, you can try the SPY calls on a short term basis. I do not expect the recent wild volatility to return. One of the problems going forward will be the decay of the option premiums. Premiums are higher than normal due to the volatility. As things slow down the volatility premium will be sucked out of both the calls and the puts. It is another factor to consider when trading for the rest of this option cycle. As of right now if we see higher S&P 500 prices in the beginning of the week it could set up the puts for the end of the week. But I will have to check the charts over the weekend. I think we have already passed the normal Fibonacci retracement levels from the low. There will still be opportunity going forward in the September option cycle. Gold remains an afterthought even with the crazy stock market atmosphere. The rise in the US dollar this week is a headwind as well. Commodity indexes got a bounce this week despite the rise in the dollar. Perhaps the precious metals positive seasonality will come back. But that is more hope than reality at this point. The short term technical indicators are trying to turn back up here though. We'll see. Plenty of data to digest next week including the Feds beige book and the employment report. This week must be put in the rear view mirror and we have to trade from here. Opportunity was missed by me last week but it cannot affect how I look at things going forward. Never an easy time in this game. I'll do the work over the weekend and get ready for Monday morning. For now it's Friday afternoon and time for a break.
Thursday, August 27, 2015
Continuing higher as the Dow gained 369 points on very heavy volume. The advance/declines were 8 to 1 positive. This might stop the summation index from continuing lower. The decline is over. Weakness can be bought in my opinion. Yes, things can change fast in this game and they just did. The summation reading is around -1000 and should turn around from here. Although the decline was severe, it actually could have been worse but the momentum readings did not go as far as the 2008 financial crisis. If we get short term overbought in the next few days you could try the SPY September puts but it would strictly be short term. I think the better trades will be from the long side from here. I could be wrong. The volatility is still out there. GE rose a buck on very heavy volume. Yesterday was the day for the November calls here. At least that's what it looks like right now. I'll keep an eye on it. Gold didn't do much today despite a rise in the US dollar. The gold shares decided to follow the overall market today. The XAU was up 2 7/8, while GDX gained 3/4. Volume was heavy. Perhaps with the gold shares out performing today, we'll see another rally here. But one day does not make a trend. Mentally I'm feeling OK. Disappointed of course for not playing this bounce. One thing for sure is that we will not be seeing such huge moves in the stock indices indefinitely. Option premiums will eventually reflect this and must be taken into consideration. Plenty of time left in the September option cycle. But the easy oversold bounce money has been made. Things will be more difficult from here. If we roll over, we can try the calls. If we head higher perhaps the puts. But I'll have to be paying closer attention than usual, due to the market environment. The bull market from the lows of 2009 is still intact. That up trend line was not broken. Gold has had its oversold, dead cat bounce. It still remains unloved. If it can hold up here and turn back up perhaps we can see more than a two week rally. But that is probably just wishful thinking on my part. My ABX October calls are still big losers. We'll keep an eye out on the overnight action and close out this crazy week tomorrow.
Wednesday, August 26, 2015
An oversold bounce to the upside as the Dow rallied 619 points on very heavy volume. The advance/declines were 4 to 1 positive. The summation index continues lower. Is the decline over? It could be. Is this a chance to get short again? That is a possibility as well. I did not get the SPY September calls today and perhaps this was the best opportunity. We are still oversold and there could be more upside to come. We now have support on the S&P 500 at the 1870 level. It looks like we may have bottomed out on the McClellan oscillator in the -300s and not below the -400 level that I was looking for. But it is a day to day challenge right now. There will still be plenty of opportunities in the September option cycle I believe. GE was up 3/4 on very heavy volume. I'm looking at the November calls here. No hurry though. Gold fell again today on the stronger US dollar and the stock market rally. The gold futures lost another $13. The gold shares continued their recent slump and closed below the previous lows for the year. The XAU dropped 2 1/4, while GDX shed 2/3. Volume was good. My ABX October calls are now almost dead. The gold shares are weaker than the metal itself and that is bearish. Mentally I'm feeling OK. The question now is whether or not we will get a V bottom for the market or not. I don't have the answer. We also don't know if the recent lows will hold. So as usual there are a lot of questions without any definite answers. I'm thinking that the worst is over as the technical readings for some indicators went off the grid. But I cannot be 100% certain. I'm still going to be on the lookout for some SPY September calls at some point. But if we get short term overbought, I will try the puts. I'm also looking at the longer term calls for GE. The gold shares are leading the way down in the precious metals complex and that is a negative. I did think that these issues were being dumped along with the overall market. But when we rally over 600 points and the gold shares drop, you can forget about that theory. The gold shares remain unloved and in retrospect, I should have just taken the loss when we had the mini rally two weeks ago. However looking in the rear view mirror now is a waste of time. Certainly interesting times for the stock market. We'll watch what happens in the overseas markets tonight and see if the world can rally with the US.
Tuesday, August 25, 2015
It was a one day reversal to the downside as we fell apart in the final hour. The Dow lost 204 points on very heavy volume. The advance/declines were slightly negative. The day began up over 400 points but we couldn't hold on. The summation index continues lower. I don't know what exactly is happening here and I certainly don't know what will happen tomorrow. I did peg support for the S&P 500 at 1850 but it looks like we'll get through there tomorrow. The bull market up trend line comes in at 1750-1700. Can we drop that far this week? I do want to try the SPY September calls but you really have to pay attention and be quick to take a profit if there is any. Perhaps I should remain on the sidelines as well. GE lost 60 cents on heavy volume. I'm looking at the November GE calls but it may be early and probably is. Gold took a hit today as the futures lost $13 on a stronger US dollar. The XAU lost almost 2 and GDX fell almost 1/2. Volume was heavy. It appears the recent bounce in gold was of the dead cat variety. If a global market sell off can't find buyers for the precious metals, than what can? My ABX October calls are still losers. The seasonal strength for gold has evaporated for now. Mentally I'm feeling OK. Interesting times. The McClellan oscillator got to -345 yesterday but I'd like to see a reading in the -400s to try the SPY September calls. That would be the ideal scenario. But the market is in unknown waters and the environment is treacherous. The fact that we could not hold on to the gains today does not bode well for tomorrow. The falling knife syndrome is apparent. There is some kind of problem in the world stock markets. Oversold, staying there and moving lower. I'll have to re-check the longer term charts tonight. In a market such as this things become compressed. What I mean by that is that everything with price moves faster. As with todays rally that has already sold off. Movements that normally take days only take hours. You have to be nimble and you have to be quick. It isn't for everybody and there is no shame just stepping aside until we get back to a more normal marketplace. That said, I'm still going to try and find an entry point for the SPY September calls. The Shanghai market is crashing and taking everybody else with it seems to be the popular story line. But we really don't know the underlying reasons for the decline. So we'll watch what happens around the world tonight and see what tomorrow brings.
Monday, August 24, 2015
Not your typical Monday in the summer. The Dow continues in crash mode, losing another 588 points on extremely heavy volume. The advance/declines were 19 to 1 negative. The Dow opened down a bit over 1000 points this morning. The summation index has run through the zero line and is heading lower in a hurry. Stock markets around the world are falling apart. Volatility is off the charts. I had support at around 1900 for the S&P 500 but 1850 now looks like a better level. You can try and catch the falling knife but the sidelines aren't a bad thing. That said, we will bounce this week but the question is from what level. Option premiums are very high. I'll have to see where the McClellan oscillator finished today. If and when we get below the -400 level is where we should see a bounce. Not exactly sure what is going on here but I'd venture to guess that we are getting a worldwide margin call where anything will be sold to meet the requirements. GE lost 3/4 on very heavy volume. It was much lower but it is hard to say where you actually could have purchased it today. The electronic quotes vs. reality comes into play. We are also in a fast market which puts a skew on things as well. Gold did not see a flight to safety as it too had to be sold. The futures here fell $5 despite a drop of over a point in the US dollar. The gold shares got pounded with the overall stock market. The XAU shed 4 points, while GDX dropped 1 1/4. Volume was huge. My ABX October calls are back solidly in the red. Let me say that nobody knows how long this rout can continue. This is one of those rare technical events. The bull market long term trend line comes in at 1750. Perhaps we'll make it all the way back to there. Very oversold now but we are in crash mode. I may try the SPY September calls on weakness tomorrow depending on the McClellan oscillator. But any trade now carries more risk than usual due to the nature of the environment. But you can't trade scared. However I can also make the case for sitting on the sidelines until we get back to a more normal market atmosphere. It has been one crazy summer. Gold is not seeing the flight to safety that I would expect with the events surrounding us. Neither is the US dollar. I believe that is telling us that this is some type of liquidity driven event where anything of value has to be sold. That's a guess as usual. We'll see if the decline continues to feed upon itself around the globe tonight.
Friday, August 21, 2015
Crash, as we are now down over 1000 points in three days. The Dow got clocked again today on expiration Friday. The most watched index fell 530 points on extremely heavy volume. The advance/declines were 6 to 1 negative. We have dropped through the zero line on the summation index and fallen apart on cue. Very short term oversold but when the conditions as they are now, it doesn't matter. I'm not sure how far down we go here but anything is possible. Monday will be interesting. Everybody is heading to the exits. I expected this long trading range in the S&P 500 to resolve itself to the upside but I was wrong. What I thought was a bottom being formed around the zero line in the summation index turned out to be a ledge to fall off of. We had flirted with breaking through lower in the past weeks but now it has happened. Volatility is off the charts and I'm not sure where we'll bounce from but it will happen at some point next week. I'm sticking with the theory that rallies can be shorted from here on out. GE lost 60 cents on heavy volume. Gaps to the downside here on the daily chart. Support is at $23. Perhaps I'll try the November calls if we get there. Oversold on a short and medium term basis but there isn't any hurry to purchase anything in this environment. Gold was up a little over $5 today which wasn't much considering the market carnage and the drop in the US dollar. Perhaps gold was being sold to make margin calls but that's a guess as usual. The gold shares fell, which isn't bullish going forward. The XAU lost 1 1/2 and GDX dropped 3/8. Volume was good. The daily candlestick charts here now have a bearish look to them and the short term technical indicators are overbought. My ABX October calls are still in the red. Mentally I'm feeling OK. Of course not being able to take advantage of this precipitous drop in the S&P 500 is frustrating. But considering it has happened in the last 3 days of option expiration week, I can't beat myself up too much. Taking positions with such little time left before expiration is a game that I don't usually play. The fact that we have hovered around the zero line for weeks without a breakdown is another reason that I won't beat myself up so much for missing this move. But I think we all know that the only thing that matters now is where we go from here. Rolling into the September option cycle with all this volatility means that the premiums will be sky high. I'm pretty sure that the next support in the S&P 500 is around 1900. I don't know how fast we'll get to there but that would be a good level to start looking for some calls. Of course I will have to check the charts out over the weekend. We closed on the low of the day again and that is bearish. There's also history of the Monday after a Friday like this as being pretty ugly. So there is much to ponder over the next 2 days. Gold has found some interest but it certainly isn't as robust as I would like to see in an environment like this. The gold shares could be acting better here as well but they aren't so far. I'd still like to at least see gold reach the resistance at $1180 and then $1225. But the markets don't care about what I'd like to see. Let's not forget that we're in a technical situation that doesn't happen too often. The magnitude of the drop here is unknown. It is a time to be careful and not risk a whole lot on any idea. Plenty of work to do this weekend but for now it's Friday afternoon and time for a rest.
Thursday, August 20, 2015
And here we are. The Dow got clobbered today as it fell 358 points on heavy volume. The advance/declines were 5 to 1 negative. The summation index is heading lower. The trend is down and we are breaking through the support at 2040 on the S&P 500. The market is falling apart at the zero line in the summation index. This is a rare occurrence and not to be ignored. We danced around the zero line for a few weeks and now we are moving through. Rallies can be shorted until further notice. I don't know how far and how long this will last. It may even be too late but we'll have to see how things pan out. GE was off 1/2 on good volume and has broken the 200 day moving average decisively. There is another clue as to where we're heading. Gold was up over $20 on the futures as the US dollar fell for a second straight day. The fear factor is propping up gold for now in a flight to safety. The XAU rose 1 3/4 and GDX was up 5/8. Volume was good. The gold shares are still lagging gold and that isn't the most bullish of scenarios going forward. ABX was up 1/3 on good volume but came off of the highs for the session. My ABX October calls are getting back to break even but not there yet. Mentally I'm feeling OK. Nothing but volatility this summer and that has been a surprise to me. The market is in trouble here. Caution is still advised. The first area of support is the 2000 to 1990 level on the S&P 500. We should get there. If that doesn't hold then 1900 is on the table. We closed on the low of the session today and that is bearish. I'll be looking at the SPY September puts on any rebound. But we may just go straight down from here. Gold has found some interest. However it's taking a market collapse to get it moving. The first resistance is at $1180. After that there's a down trend line at around $1225. GDX has resistance at 18 and then again at 19. The gold shares aren't in the lead here and that should lend itself to some consolidation at some point. But who knows? If we get an all out rout in the stock market anything can happen. We've still got over 5 weeks in the favorable seasonal time frame for gold and that seems to be happening this year. But as always the markets go where they want. Overnight should be very interesting as markets around the globe react to todays US market decline. Expiration Friday tomorrow.
Wednesday, August 19, 2015
It has been one crazy summer. The Dow was all over the place today and finished with a loss of 162 points on average volume. The advance/declines were almost 3 to 1 negative. This should put the summation index back to the downside but it has been essentially moving sideways. We sold off over 200 in the morning, came all the way back to be slightly positive and then rolled over again. It hasn't been a quiet summer. The Fed minutes came out and they can be interpreted any way you like. The short term technical indicators are starting to roll over for the major averages. GE was off 1/3 and volume picked up. Still holding the 200 day moving average but keep an eye on it. Gold found buyers as the US dollar declined. The precious metal futures rose over $10. The XAU added 1 3/8, while GDX gained 3/8. Volume was average. Gold is advancing on cue with the seasonal bias so far. ABX was up 1/4 but my October calls are still in the red. Mentally I'm feeling OK. My theory of a rising expiration week seems to be shot down after today. We must stick with the technicals. We are back at support in some of the major averages. Things do need to hold up here because if they don't, things could get ugly. We are still in close proximity to the zero line in the summation index. Things will turn bearish fast if we drop through there. There was weakness around the globe last night although the Shanghai market did make a comeback. The continuing drop in the price of oil has players concerned as well. I do not know the story behind these events but with the indicators rolling over I have to move to a cautious stance. Perhaps gold and the US dollar will see a flight to safety here if things really get dicey. Hasn't happened yet. Gold is finding some buyers now, for whatever reason. But the metal is slightly ahead of the gold shares and we'll need to see that reverse to be really bullish. At any rate the summer doldrums are short lived when they do show up this year. It hasn't been the normal routine. We'll watch what happens overnight and see if we get some downside follow through in the US tomorrow.
Tuesday, August 18, 2015
Basically a drift today as the Dow fell 33 points on light volume. The advance/declines were about 2 to 1 negative. Not much on the news front as we await the Fed minutes tomorrow. The Shanghai market did drop 6% overnight, so that might bear watching again. Otherwise it's finally summer on Wall Street. Listless trading and light volume. GE was off 1/8 or so on light volume. Sideways here for about a month. Gold was off slightly on the futures as the US dollar was higher. The XAU lost a point and GDX fell 1/4. Volume was average. Slowing down here as well. Mentally I'm feeling OK. Three days to go in the August option cycle. No need to take any chances there. In fact the market could be on hold until we get into September. That's a guess as usual. Still more overbought than oversold here for the major stock averages. We'll break out one way or the other from this extended range. You just want to get on board when that happens. But you can't make it happen. The market will make up its mind in its own time. We'll follow the overnight action and await the Fed minutes tomorrow.
Monday, August 17, 2015
A one day reversal to the upside as the Dow climbed 67 points on light volume. The advance/declines were positive. The summation index is moving higher. The Dow was off over 100 to start the day. We came all the way back and then some. The overall market was stronger than the Dow and that is a positive. There is also the expiration week positive bias to consider. The only caveat is the light volume but it is summer and the next couple of weeks should be slow despite todays volatility. GE was up 1/8 and the volume was light. No trades here for now. Gold was up a bit on the futures as was the US dollar. The XAU rose 1 7/8, while GDX was up 1/2. Volume was good here. I'd expect some more consolidation for the gold shares before we can perhaps get another leg up. ABX was up about 20 cents on OK volume. My October calls there are still mired in the red. Mentally I'm feeling OK. Today was a sleepy Monday in August. But was it? The game is always interesting. Now what would make things sell off early in the morning and then make up all that ground and more? No news to speak of. Now would all the hedge funds, banks, pension funds, investment companies, etc. get their selling for the week out of the way early on Monday of expiration week in the summer. That would be a perfect set-up to purchase your index calls and watch them rise in value pre-expiration. Now nobody is really paying that much attention are they? My only regret is that I'm not in there to play along. We'll see how the rest of the week plays out. Getting short term overbought and might be there with upside tomorrow. Gold had some interest last week but until we see higher values there it looks like a dead cat bounce. Perhaps the Fed minutes on Wednesday will get things going. Inflation data out that day as well. We'll watch the overnight action in the foreign markets and go from there.
Friday, August 14, 2015
A drift higher today as the Dow gained 69 points on light volume. The advance/declines were 2 to 1 positive. The summation index is still moving sideways but the breadth was better today. Today finally felt like a summer day in the stock market. Expiration week coming up and so I do think the positive bias will be in effect. I do not think that I'll be trying the SPY August calls though. Probably too late for that. GE was up almost 1/3 and the volume was light. If GE is a precursor for the overall market, more upside is on the way. Gold was off a couple bucks on the futures today as the US dollar was higher. The XAU and GDX had slight fractional losses on light volume. The rise in the gold shares has been put on hold for now. There's nothing wrong with some consolidation here. My ABX October calls are still well in the red. I'll need to see some more upside there to hopefully cut the loss. Mentally I'm feeling OK. I'm still looking for a positive resolution to the months long trading channel in the S&P 500. Of course the timing remains unknown if this does occur. In the near term the SPY calls remain the choice for now. The only caveat is that todays rally was on light volume and light volume rallies cannot be trusted. But I do think that there is more room to move higher in the beginning of next week. That's a guess as usual however the short term technical indicators for the S&P 500 have moved up. The best time to purchase the calls has passed. I chose the safer route of the sidelines for now. Gold and the gold shares finally had a positive week. It is being called a dead cat bounce, which could be the case. Time will tell on that but it is a start in the right direction for the bulls. I'll harp on the positive seasonal factor for gold here again. Perhaps this year it will happen in the coming weeks. Not much else to say with the final two weeks of August upon us. Perhaps the summer doldrums will finally arrive at the end of the month. There will be plenty of players on their family vacations before September. It is something that must be factored into the trading. But it hasn't affected trading yet as this year has been a volatile one for the summer so far. I'll be checking the charts as usual over the weekend. For now it's Friday afternoon and time for a break.
Thursday, August 13, 2015
Not exactly the upside follow through we were looking for as the Dow rose 5 points on light volume. The advance/declines were negative. The overall market was weaker than the Dow. The short term technical indicators are mid-range for the S&P 500. I am looking at the August SPY calls for a trade of expiration week. But it will be extremely risky with only 6 days to go in this months option cycle. Perhaps the sidelines would be the more prudent route to go. I'll consider things overnight. GE was off a few cents on very light volume. Still holding the 200 day moving average. Gold was lower today as the futures lost around ten bucks. The US dollar was flat on the session. The gold shares took a hit. The XAU fell 2 3/4, while GDX lost 7/8. Volume was heavy here. Some negative action is expected for the gold shares now since we are short term overbought. We'll see if it can be contained. Mentally I'm feeling OK. After yesterdays stellar comeback, we didn't see much upside follow through today. That isn't exactly bullish. Retail sales came in where expected and wasn't the market mover that I thought it would be. More economic data out tomorrow including inflation but I don't think it will amount to much. I could be wrong. So on we go. August isn't the most positive month for stocks but I am still looking at a short term call trade. We'll see how things go tomorrow. Gold had a bounce and it will be interesting to see where we go from here. ABX was off 1/3 on good volume today. Waiting on how the week closes there. The medium term technicals there are still oversold so there is room to the upside if we can get things moving that way. Remains to be seen. We'll watch the overnight action and finish the week tomorrow.
Wednesday, August 12, 2015
All I can say is what a day. The Dow was pounded early on and down over 250 points. However it came all the way back and finished the session basically unchanged. The advance/declines were about even and the volume was very heavy. The NASDAQ and the S&P 500 had slight gains after being routed. Did we put in a meaningful bottom today? We did make it all the way down to the lower portion of the extended trading range in the S&P 500. So perhaps now maybe we'll see a run back up to the top of the range and new highs. But tomorrow is another day and the volatility this summer has not relented. GE was up 15 cents on good volume. The 200 day moving average continues to hold. Gold rallied on a very weak US dollar. The precious metal futures added $15 on good volume. The dollar dropped a full point. The gold shares continued their ascent as the XAU rose 3 1/3, while GDX gained a point. Volume was heavy here as well. It appears that in fact the seasonal rally in gold is showing up this year. ABX was up almost 1/2 on heavy volume. Maybe the ABX October calls that I have won't lose as much as previously thought. Mentally I'm feeling OK. Retail sales due tomorrow. I have no idea how the market will react. It would be a positive if we could build off of the comeback that occurred today. Todays price action looks like a hammer on the daily candlestick charts for the major stock averages. But as usual the market will go where it wants. The summation index is trying to move higher but is really just going sideways. Gold is having quite a week so far. But it could just be a dead cat bounce. Time will tell on that. But there's still a month and a half on the positive seasonal factor here so there may be more room to go on the upside. That's a guess as usual. Technically the gold shares are now short term overbought. A little consolidation would not be a bad thing. We'll look for some upside in the foreign markets overnight after todays comeback in the Dow. Then we'll see what happens with the retail sales tomorrow morning.
Tuesday, August 11, 2015
Back to the downside today as the Dow fell 212 points on good volume. The advance/declines weren't even 2 to 1 negative though. China devalued the yaun overnight and that caused selling around the globe. We're still stuck in a trading range with respect to the S&P 500. I'm looking for a positive resolution to the sideways activity that has been in effect since the beginning of the year. But anything can happen. Still flirting with the zero line in the summation index. GE dropped 1/2 on average volume. The 200 day moving average continues to provide support here. Perhaps if it is broken we will have an idea of where the overall stock market is headed. Just a guess there. Gold was up a bit on the futures on good volume. The US dollar finished the session little changed but it did bounce around a bit. The XAU and GDX had slight fractional gains but they did come off of their lows. Volume was average. ABX had heavy volume but was only up a few cents. Mentally I'm feeling OK. It has been a volatile summer so far for the stock market. Not the typical trading by far. You can make a case for either direction here but the market will go where it wants. My guess is that the retail sales on Thursday will provide the next gyration. No SPY trades for now. 8 days to go in the August option cycle. The gold shares have performed better than gold lately and that is a plus. Hasn't happened in quite some time. Perhaps some overall market turbulence will provide some interest in the precious metal. Although that hasn't been the case so far this summer. We are in the positive seasonal time frame for gold now. We'll keep an eye on the next surprise to occur in the foreign markets overnight and go from there.
Monday, August 10, 2015
A rally appeared today out of nowhere as the Dow soared 241 points on average volume. The advance/declines were 3 to 1 positive. This should move the summation index back to the upside. No reasons for todays ascent but we were very oversold on the short term and a bounce was due. There was no weakness today so I did not have the opportunity to purchase the SPY August calls. We will have to see if we get any upside follow through to todays action. Maybe we are finally on our way to new highs in the S&P 500. GE was up almost 1/2 on light volume. The 200 day moving average has provided support for now. Gold saw some buyers as the futures rose around $10. The US dollar was weaker today. The gold shares found some interest as well with the XAU gained 3 1/3, while GDX added 7/8. Volume was good here. There was a positive article on commodities in Barrons over the weekend and perhaps that sparked some buying interest. Otherwise it can be viewed as an oversold bounce with some short covering. ABX was up 1/2 but it will take more than that to help cut the loss on my October call trade there. Mentally I'm feeling OK. Buying across the board today and we haven't seen that for a while. I'm not exactly sure what to make of it. We're still stuck in a trading range for the S&P 500. August isn't the most positive month for the stock averages, so if we continue to simply churn after today it wouldn't be a surprise. So we'll see what happens. Today was a good day for gold and we haven't said that in months. Perhaps the favorable seasonal effect is going to kick in this year. One day doesn't make a trend but at least it's start in the right direction for the bulls. We'll keep an eye on the overnight action and go from there.
Friday, August 07, 2015
Lower again as the Dow fell 46 points on average volume. The advance/declines were negative. The employment report came in as expected and we had weakness from the start. We did come back in the final hour and that is bullish in my book. Short term oversold for the major stock indices. I think that weakness Monday can be bought. I will be looking at the SPY calls to start the week. Today was not as volatile as I expected but the volume remains good. The S&P 500 is trying to hold its 200 day moving average. GE was off 1/4 on summer average volume. Trying to hold on at the 200 day here as well. The technicals here are oversold on a short term basis. Gold was up $5 today as the US dollar was a bit weaker. Both the XAU and GDX were little changed after being higher early. The gold shares could not hold their gains and that is not a positive. Volume was average. ABX was up a bit but could not hold its gains as well. Volume was heavy. My ABX October calls remain losers and it doesn't look like they will ever get back for a reasonable loss. I'll give this trade a couple more weeks but it will probably go down as a disaster. Mentally I'm feeling OK. The employment report is now out of the way and not much economic data due next week with the exception of retail sales. The summation index is moving sideways and we are near the zero line. I would like to try the SPY August calls at the beginning of next week if we see weakness on Monday. That is my thought at the moment but I will consider this trade over the weekend. August can sometimes be a dicey month for stocks. We have yet to see the summer doldrums this year but they could appear at any time. That would definitely not help with any option trades. Still two weeks to go in the August option cycle. Gold and the gold shares remain mired in a slump and I don't see any way out of it on the horizon. We are in the favorable seasonal time period for this group but it hasn't helped so far. So we wait. It would probably be a good idea to perhaps take a break from the game because it is summer. But you can't afford to miss anything as well. It is never easy in the game. I'll check the charts over the weekend and come up with a decision about what to do next week. For now it's Friday afternoon and time for a break.
Thursday, August 06, 2015
The Dow falls again as we are now short term oversold. The most watched index dropped 120 points on heavy volume. The advance/declines were negative but not as much as a down 120 market would suggest. That has been the theme lately. Declines with not really bad breadth. Another factor lately has been the heavy volume, especially for summer. I'm not sure what it all means though. The small stocks took a pounding today as well. We will have to see how things turn out with the employment report. I don't know what to expect there. GE was off a few cents and the volume was pretty light. Gold was up a bit on the futures today as the US dollar had a slight loss. The XAU rose 1 1/3, while GDX gained 1/4. Volume was good for the gold shares but they came off of their highs. ABX was up 1/3 on heavy volume. The earnings weren't all that good and they cut the dividend but the stock rose anyway. That's bullish in my book. Wasn't enough to help my ABX October calls though. We'll need to see a lot of up days to help cut the loss there. Maybe if the employment report is weak we'll see a pop for gold. Mentally I'm feeling OK. The Dow did hit a new closing low for the past few months today. The 50 day moving average is about to pass through the 200 day moving average as well. That would constitute a sell signal there. I'm still leaning bullish though as the breadth hasn't collapsed for the overall market. The summation index is now moving sideways. I suppose anything can happen here. Hopefully tomorrow will give us an indication of where we're going. The major averages have really been moving simply sideways so far this year. Gold is going nowhere fast and the gold shares have been slaughtered. I still say the gold shares are a screaming buy down here on a longer term basis. But we're here to trade. We will have to see if the positive seasonality kicks in for gold this year. All eyes on the jobs numbers tomorrow.
Wednesday, August 05, 2015
We started out strong but faded for the rest of the day. The Dow fell 10 points on heavy volume. The advance/declines were about even. The overall market was much stronger than the Dow with both the S&P 500 and NASDAQ showing good gains. The summation index is moving higher but still not at a rapid pace. I do believe that this will work itself out to higher prices going forward. Just waiting on Friday now. GE was up 20 cents on light volume. Gold was off a bit on the futures. The US dollar finished the session little changed. The XAU fell another point and GDX lost 1/4. Volume was average for lately. The gold share drop continues unabated. ABX dropped another 1/4 on good volume as we await the earnings report tonight. Although it now appears that the earnings will be out tomorrow morning. Mentally I'm feeling OK. Not much to add about todays price action. It seems as though perhaps we are getting the last selling out of the way before Friday. I will say that the volume has been a lot more than normal for the past couple of weeks. So we are about to get going one way or the other in my opinion. Being wrapped up in this losing ABX October call trade has my attention. The mental capital expanded here takes away from other opportunities that may be out there. That is the problem with losing trades. They really need to be gotten rid of as soon as possible. There is a lot of time left for the ABX trade. Plus we are in the supposedly seasonally strong period for gold. But the time devoted to that trade at this point seems to be wasted. Tomorrow should see some movement one way or the other for ABX. The overall market will most likely be in a holding pattern for Fridays employment report. We'll keep an eye on the overseas action tonight and see what tomorrow brings.
Tuesday, August 04, 2015
More of a drift lower today as the Dow fell 47 points on average volume. The advance/declines were slightly negative. The summation index is moving up but barely. The drop in AAPL hung over the market today. Really just waiting for Friday here in my mind. Nothing has changed technically since yesterday. GE was flat on the session and the volume was light. No trades for GE here. Gold was up $5 in the spot market despite a move higher in the US dollar. The XAU and GDX were flat after being slightly higher early on average volume. Still no interest in gold and commodities in general. ABX was up a dime as we await the earnings after the bell tomorrow. Mentally I'm feeling OK. I'm still a believer that things are going to work there way higher for the major stock indices. Only a rapid breakdown to take out support would change my view. We're in a holding pattern for now. This is as close as we've gotten to the summer doldrums for this year. Things should get interesting by Friday. Gold is still holding the $1080 level but a break through there will lead to another leg down. Hasn't happened yet. The gold shares remain oversold on all time frames. We'll watch the overnight action and see what Wednesday has in store.
Monday, August 03, 2015
We begin the month of August with a whimper as the Dow fell 91 points on average volume. The advance/declines were negative. No technical damage was done and we finished well off of the lows for the session. I'm still looking for higher prices going forward, although August has a reputation of not being the kindest time period for stocks. No reason given for todays decline with the exception of weaker commodities once again. We'll see if we get any follow through downside tomorrow. GE was off 1/4 and volume picked up. Bouncing off of the 200 day moving average here. Gold fell about $5 on the futures as the US dollar had a positive day. The gold shares continue to get pummeled. The XAU fell 2 points, while GDX dropped 1/2. Volume remains strong here. ABX was off another 1/3 and volume was still good. My ABX October calls are major losers. Mentally I'm feeling OK. The summation index is still heading higher so I don't think that today is the beginning of something stronger to the downside. Of course that could change going forward. The employment report on Friday should be the catalyst for movement one way or the other. But we still have the rest of the week to get through. The short term technical indicators are mid-range for the major stock indices. The gold shares have broken down from the latest consolidation zone. Oversold on all time frames and staying there. This is quite a decline for these issues. I'm still a believer that if you have a longer term time horizon, you won't go wrong picking up these stocks here. But on the short term it appears we will be going lower yet still. ABX earnings due after the bell on Wednesday. That will probably seal the fate of my ABX October calls trade. We'll keep an eye on the overseas markets tonight and take it from there.