Wednesday, September 30, 2015
The bounce appeared on schedule as the Dow rose 235 points on heavy volume. The advance/declines were 3 to 1 positive. The summation index is still heading lower. There is a potential bullish candlestick pattern on the daily S&P 500 chart. We have reached the short term downtrend line for the S&P 500. I'd expect things to stall tomorrow ahead of the jobs report on Friday. I didn't sell my SPY October calls. I suppose that I'll wait for Friday and see what that brings. If the potential bullish RSI divergences are real, then this trade has a chance to actually turn a profit. It is still showing a loss. GE was up 2/3 and the volume was good. Hopefully GE is leading the way here. Might be too late for the November calls though. Gold fell another $7 today as the US dollar was higher. The XAU and GDX were both higher today. That's the first time in a while that we have seen the gold shares out perform the metal itself. But that doesn't mean that it will continue. Volume was average there. Mentally I'm feeling OK. So can the market move higher more than 2 days in a row? That hasn't happened in over a month. Like I said before, tomorrow should be a wait and see session. With the summation index still moving down, caution is probably the best advice. The potential for a bottom to be in place is there but it is potential and not fact. If we can get through the short term downtrend line for the S&P, the next resistance is at 1945. But things could head back down tomorrow and negate any positive action that we've seen. That is the environment that we are in. The trend is still down until proven otherwise. I'm still holding the SPY October calls but I am trying not to let that affect my view of the market. Not an easy thing for me to do. We'll begin the 4th quarter and the month of October tomorrow. The foreign markets were positive yesterday and we'll see if we get any upside follow through tonight.
Tuesday, September 29, 2015
Let me just say that the market is in dire straits here and has to hold on or it will fall apart. The Dow came back in the last half hour and finished with a gain of 47 points on good volume. The advance/declines were negative though and the small stocks continue lower. The summation index is dropping as well. We are short term oversold and the technical indicators pretty much guarantee a big up day tomorrow. But there are no guarantees in this business. I do think that we will see a triple digit move higher tomorrow. After that, who knows? The breakdown in the RUT is a very negative sign. I should probably dump my SPY October calls tomorrow if we bounce and take the loss. GE was up 1/4 on good volume. Perhaps GE will once again be a precursor for the overall market. Gold was off $5 on the futures and the US dollar was a bit lower as well. The XAU and GDX had slight fractional gains on very light volume. Still no interest in the gold shares. Mentally I'm feeling OK. The stock market has a decidedly bearish tone to it and just about anything can happen in the coming days. The big cap averages are trying to hold the most recent lows but with the breakdown in the small stocks, it appears that lower prices overall are just a matter of time. To me, tomorrow will be one of the most important sessions we've had in some time. It is the end of the month, so some selling is to be expected. But if we don't have the strong up session that I am anticipating, then watch out below. There is a potential positive divergence in the RSI with regards to the daily charts of the major stock indices. However is has yet to be seen if it is valid. That is about the only hope for the bulls here. My SPY October call trade will most likely be a loser. So hold onto your seats as tomorrow will be an interesting day. We'll watch the foreign markets tonight and go from there.
Monday, September 28, 2015
The market got clobbered today for no apparent reason. The Dow lost 312 points on heavy volume. The advance/declines were 8 to 1 negative. The summation index is heading lower. The small stocks are leading the rout. Once again there is something going on underneath the scenes that I have no knowledge of. How low we go is again something that I do not know. My work says that there will be a decent rise tomorrow or Wednesday. But from what level? Oversold and staying there for the major stock indices. My SPY October calls are now solidly in the red. This is now a cut the loss trade. The gain that I had here on Friday evaporated rather quickly. Even with plenty of time for these options, I think getting out sooner rather than later is a good idea. GE was off almost 2/3 on good volume. It looks like I'll get a chance to purchase some November calls here. But now do I want them? Gold fell about $12 on the futures and the US dollar was a bit lower as well. No flight to safety for gold. Nothing seems to be able to rally the precious metals. Perhaps todays market action was another margin call around the world. That's a guess as usual. The XAU fell 2 2/3, while GDX dropped 2/3. Volume was good. No trades here for now. Mentally I'm feeling OK. Confused as to what's going on here. The RUT has now made lower lows and it appears that things could completely fall apart here. The summation index has turned around and did not make it though the zero line when it was heading up. The poor seasonal time frame doesn't help things either. I do see some type of bounce higher in the next 2 days. If that were not to happen, things would really turn ugly. There is something happening out there that reminds me of the trouble back in 2008. Perhaps we'll find out in the days to come just what kind of bad news surprise is out there. Until then we have to stick with the technical indicators and they say that we are oversold. The problem is when there is some unknown factor out there driving things, the technical don't matter. We'll have to see how the foreign markets hold up overnight and brace for whatever happens tomorrow.
Friday, September 25, 2015
A mixed session to be sure as the Dow gained 113 points on good volume. The advance/declines were slightly negative. The overall market was weaker, with the small stocks leading the way down. That is not a good sign. At one point the Dow was up 250 points but could not hold the gains. Volatility returned and not in a good way for the bulls. My SPY October calls had a 50% gain at one point but now are simply slightly higher. It didn't look like a good rally with the NASDAQ under performing in the morning. Perhaps I just wasn't nimble enough. If we can get through Monday, I think we'll see some upside after that for a couple of days. GE was flat on the session and the volume was good. I still like the November calls here. Gold shed $8 on the futures as the US dollar had a slight loss as well. The XAU and GDX had slight fractional losses on light volume. No trades here for now. Mentally I'm feeling OK. Yellens speech didn't yield much in the way of market moving content. I'm sticking with the technicals as usual. The summation index has rolled over again. That is not a positive for calls. The small stocks got clocked today and that isn't bullish either. We are short term oversold for the major stock indices, which is one thing in the bulls camp. But in down markets we can stay oversold. Plus the negative seasonal factor for stocks is still in place. I should probably be out of this SPY October call trade by Wednesday. However it is Monday that will probably present a problem if we really start to head lower. Plenty of nervousness out there for whatever reason. I think that the most that I can hope for now is a short covering rally. And good luck with that. What looked like a bullish candlestick yesterday on the S&P 500 daily chart hasn't been negated yet. But we'll need to see some sustained upside in a hurry for that to work out. So there's plenty to think about when checking the charts out over the weekend. For now it's Friday afternoon and time for a break.
Thursday, September 24, 2015
Another down session as the Dow fell 78 points on good volume. The advance/declines were negative. We did make somewhat of a comeback because early on the market was off over 200 points. Short term oversold for the major stock indices but in a down market we can stay that way. I did purchase some SPY October calls in the early morning but could have gotten a better entry if I had waited. They are showing a slight profit at the moment. Yellens speech is tonight and that should be a market mover. The daily candlestick chart for the S&P 500 has a bullish look right now. There is a possible morning star or a hammer after todays price action. But that could all change with a negative session tomorrow. GE was off 1/4 and the volume was heavy. Not such a bullish candlestick chart here. Gold found some buyers as the futures rose over $20. The US dollar was lower today but finished well off of its lows. The gold shares perked up. The XAU gained 3 1/4, while GDX added almost a point. Volume was very good. Not sure what the reason was for the buying. It will take more than one day though to turn things around here. Mentally I'm feeling OK. We'll get the final GDP revision for the 2nd quarter tomorrow. I don't think it will be a market mover unless it's a big surprise. The reaction to what Yellens says or doesn't say tonight should be the main event. I'm in the next trade with the SPY after the recent ABX debacle. I should be exiting this trade within a week unless developments prove otherwise. If the market is up tomorrow, then this trade has the potential to be a winner. Down and the opposite is true. As long as the premiums don't erode in a hurry, time will be on my side for a while. Perhaps gold knows something we don't or maybe today was just a one day wonder. Time will tell on that. We'll get the post Yellen press conference wrap up and see how the overseas markets react to that.
Wednesday, September 23, 2015
Waiting on Janet Yellens speech tomorrow as the Dow fell 50 points on light volume. The advance/declines were negative. The summation index is now moving sideways. Short term oversold for the major stock indices. I did place an order for the SPY October calls but it wasn't filled. I may try this idea again if we see some weakness early tomorrow. A lot of bearishness out there. If I do make this trade it will have to be short term. We're still in the negative seasonal time for stocks. GE was up 3 cents on good volume. No rush to get the calls here but if the market does start to rise here it will be too late for the November calls.. Gold was up $5 on the futures today as the US dollar was slightly lower. The XAU and GDX had fractional losses on light volume. The gold shares haven't followed gold for a while now. They've also shown relative weakness whenever they get the chance. I don't know what would turn things around here. Mentally I'm feeling OK. I'm considering the SPY October calls here. This isn't the strongest signal that I've seen but it may be worth a shot. So we'll see. We've got some economic data due tomorrow but Yellens speech should be the main market mover. I'll consider this trade again tonight and figure out what to do in the morning. We'll see how the foreign markets do overnight.
Tuesday, September 22, 2015
To the downside as the Dow fell 179 points on good volume. The advance/declines were 4 to 1 negative. No real news to speak of and we did come off of the lows for the session. I could make a case for buying weakness tomorrow as we are going to be short term oversold. However the option premiums are still high and I am probably not nimble enough at the moment to make this trade work. But who knows? GE was actually up a couple cents on good volume. GE opened lower and came all the way back. The action in GE leads me to believe that the stock market isn't in trouble here. I also still like the November calls here if we ever get to oversold. Gold was off $8 on the futures as the rally in the US dollar continues. The XAU fell 2 1/4 and GDX shed 2/3. Volume was good to the downside and is another negative here. No trade in mind at the moment. Mentally I'm feeling OK. The question for now seems to be if we are going to retest the lows set in August. It is a valid question. The summation index is still heading higher for now. If that were to turn around we would probably see a lot more weakness in the stock indices. But it hasn't happened yet. Another area to keep an eye on is the 500 level in the summation index. If we turn back down there, things could get ugly again. However the reverse is also true. If we make it through there you can look for much higher prices in the weeks to come. So we are in an indecision pattern right now really. Gold remains uninteresting and in the background. The continued weakness in the gold shares is not a positive sign. We'll keep an eye on the overnight developments and see what tomorrow brings.
Monday, September 21, 2015
We begin the week with the Dow gaining 125 points on light volume. The advance/declines were positive. The summation index is heading higher. On the plus side we did not get any downside follow through to Friday. On the minus side the small stocks were relatively weaker. The short term indicators are neither overbought or oversold. I will try and wait for some type of signal before attempting the next SPY trade. The option premiums are still rather high as we have just shifted into the October cycle and the volatility is still above average. GE was up 1/4 on lighter volume. GE has acted well here and I will be looking at the November calls if we get oversold. Gold was off $5 on the futures as the US dollar had a strong session. The XAU lost 1 1/4, while GDX fell 1/2. Volume was average. Coming off of short term overbought for the gold shares. No trades in mind there. Mentally I'm feeling OK. With the losing ABX trade in the books, it's time to move on. We are still in a weak seasonal time frame for stocks. However the seasonal strength certainly did not work for the gold shares. A case can be made that we are talking about two completely different markets. That said, I think the prudent course of action here is to be patient and wait for the next signal for the SPY. It may take a few days. However with the summation index moving up, the bias should be to the upside and purchasing calls. So we'll see and we'll trade it either way depending on the technicals. The Japanese market will be closed again tonight but we'll keep an eye on the rest.
Friday, September 18, 2015
Plenty of selling today as the Dow lost 290 points on extremely heavy expiration volume. The advance/declines were a little over 2 to 1 negative. That tells a story that the decline was not as bad as it seemed. The breadth wasn't as horrible as it should have been for a market close to 300 points down. The summation index continues higher. The latter half of September is notoriously weak and we should see that come into play this time around. But my thinking is that this will set us up for getting some calls. I could be wrong. GE fell over 1/2 on very heavy volume. We'll let the short term overbought condition work itself off and than take a look at the November calls there. Gold was up $8 on the futures despite a rise in the US dollar. The XAU and GDX had slight fractional gains on lighter volume. The usually seasonal strong period of August/September for gold and the gold shares has been a sideways affair this year. I finished off closing out the ABX October call trade by dumping my remaining options for a 95% loss. That ranks up there as the worst trade of the year. Way too much money on one idea and I compounded the mistake by purchasing more options at a lower strike price because I was so sure that idea would work. What happened was ABX got very oversold and stayed there. That doesn't take away from the fact that my tactics were flawed. The market, whichever one you're in, goes where it wants. Hopefully with that trade out of the way now, I can focus on the next profitable idea. Mentally I'm feeling OK. The daily candlestick charts of the major averages now have a bearish pattern as opposed to just a single dark star. It implies lower prices moving forward. Will we test the recent lows now? I did not think so before but we will have to wait and see. There is a good chance that today was simply an expiration related decline. Mondays price action will be important. It looks like that buying the SPY puts after the announcement yesterday would have worked. However the market was moving very fast and the short term nature of that trade kept me on the sidelines. Gold found buyers this week but we have not seen a sustained rally there for months. So it would be hard to say that this is the beginning of something long lasting there. I'll be checking the charts out over the weekend to try and come up with some ideas for the October option cycle. For now it's Friday afternoon and time for a rest.
Thursday, September 17, 2015
A mixed bag on the Fed as the Dow lost 65 points on heavy volume. The advance/declines were positive. Rates were left unchanged and the market briefly dipped but then rallied up over 150 points only to give it all back and then some. It wasn't exactly a sell the news event that I had thought it would be, but we got there just the same. However it wasn't a nasty decline. We are still short term overbought on the major stock indices. On the plus side the small stocks were higher. So with the Fed out of the way, where do we go from here? The decline certainly appears to be over and there doesn't seem to be a retest of the lows in the cards. Todays candlestick charts for the stock indexes have a bearish star candle on them, so we will have to see how tomorrow shapes up. GE was off 1/3 and the volume was heavy. Same candlestick chart pattern here. Gold surged after the Fed. The futures rose $12 as the US dollar got clobbered. The XAU rose 1 1/8, while GDX added 1/3. Volume was good here again. Not a huge move in the gold shares considering the news. I did finally sell some of my ABX October call position for a 95% loss. Terrible trade management there. It was also my first negative result in months. A step backwards to be sure. I'll sell the remaining position in the coming days when ABX gets overbought. Mentally I'm feeling OK. We've got option expiration tomorrow and then we'll roll into the October cycle. We are in a negative seasonal period for stocks. But with the summation index moving higher now with conviction, I think it's safe to say the trend is up. That doesn't mean that I won't try the SPY puts if we get to resistance. It does mean that put trades must be short in duration. But let's get through tomorrow first. With no action from the Fed we will still be held hostage before each meeting until they actually do something. Such is the game we play but it must be taken into consideration. We'll see if gold can continue to rally overnight. Plus we'll get the worldwide reaction to todays event. Then close out the trading week tomorrow.
Wednesday, September 16, 2015
Continuing higher before the Fed as the Dow rose 140 points on above average volume. The advance/declines were 3 to 1 positive. The summation index is now moving strongly higher. It does appear that the lows are in and this was simply a correction in a long bull market. At least that is what it looks like today. I did place an order for the SPY September puts but it wasn't filled and I canceled it. Short term overbought for the major stock indices. My thinking is that tomorrow will be a sell the news event but that's just a guess. The option premiums are still sky high but you can watch them get sucked out tomorrow after the Fed. It will be interesting to see. GE is a precursor after all as it gained almost 2/3 on very heavy volume. It has broken above the 50 and 200 day moving averages today. This is bullish. Any decline here can be bought and I still may attempt the November calls here. Gold even found some buyers today as the futures gained $15. The US dollar was weaker today. The XAU rose 3 points, while GDX was up 3/4. Volume was heavy for the gold shares. Is that telling us that there will be no change in Fed policy? Or was it just short covering ahead of the Fed? Always plenty of questions in the game. My ABX October calls are still dead. Mentally I'm feeling OK. I probably will not attempt any SPY trade tomorrow. Unless something really stands out after the Fed announcement, I'll be safe on the sidelines. It really isn't my strength to attempt the short term trades. But you never know. It looks like the major stock indexes will be heading back to the resistance zone. When we get there, that would be the area to perhaps try the SPY October puts. Let me say that we are still quite a long way from that resistance area. Gold finally had a bounce but we all know that one day does not make a trend. So tomorrow we will finally get the Fed out of the way. As usual it isn't the announcement that matters, it's how the market reacts to it. My gut says that it will be a sell the news scenario. But I could be wrong. The technicals are overbought but they could stay that way. It seems like too much of a coin toss and we do not want to trade on that. We'll see if the overseas markets follow the US higher and await the Fed tomorrow.
Tuesday, September 15, 2015
In rally mode today as the Dow gained 228 points on light volume. The advance/declines were 2 to 1 positive. The summation index continues higher. Not sure where this came from today but sometimes in down markets rallies appear from nowhere. The small stocks continue to lead here and that is a positive. However we are now short term overbought with the Fed on the horizon. I'm still leaning towards trying the SPY September puts before the Fed. But the risk will be high. Not to mention that the short term trades are usually not my best effort. GE was up 1/2 on good volume. If GE is a precursor, then the market will be heading higher. If that is the case, we can assume that the decline is over. But that is all conjecture at this point. Gold fell about $4 on the futures as the US dollar was higher. The XAU and GDX were flat on the day with very light volume. Still no interest or movement for the precious metals. Mentally I'm feeling OK. Retail sales were practically in line with expectations today. Perhaps today was simply short covering with maybe more of the same tomorrow. If we get to 200 on the SPY, I'll probably try the puts on a very short term basis. But the premiums remain elevated and they will rapidly decline once the Fed announcement is out of the way. So there is also a chance that I'll do nothing. Which by the way would probably be the most sane course of action. So we'll see. The overseas markets were mixed overnight with Europe higher and Asia lower. I'll keep an eye on the action tonight and then decide what to do tomorrow.
Monday, September 14, 2015
Waiting on the Fed today as the Dow fell 62 points on light volume. The advance/declines were 2 to 1 negative. The summation index continues higher for now but there is no conviction. 4 days to go in the September option cycle and the premiums are still very high. As soon as the Fed decision is made public, both the puts and the calls will have the premium sucked out of them. You will have to be on the right side of that trade and even then there are no guarantees. However it will be a money making opportunity for some. I'm not sure if I am going to trade it. GE was off 18 cents on light volume. Patience here for now. Gold was up just a bit on the futures. The US dollar was slightly positive. The XAU and GDX had slight fractional losses on light volume. Mentally I'm feeling OK. We'll get retail sales tomorrow and that should provide some trading fodder. I think that if we make it back up to around 200 on the SPY before the announcement, then I might try the puts for a short term trade. But there certainly is a lot of bearishness to go around at the moment. Some of the short term technicals here are more overbought than oversold. With such a short amount of time remaining in this option cycle, perhaps the risk is not worth the reward. Going out to October could be an option. Gold is still a non event and uninteresting to most. My ABX October calls are dead. That is shaping up to be one of my worst trades of the year. And we still have over 3 months left in 2015. We'll see how the foreign markets trade overnight and take it from there.
Friday, September 11, 2015
A one day reversal to the upside as we opened lower and closed higher. Late buying pushed the Dow up 102 points. The advance/declines were slightly positive and the volume was light. The summation index is moving higher but without a lot of conviction. Not sure what that implies. Expiration week coming up but all the players are waiting on the Fed. The market reaction there will be the telling story. But the announcement is on Thursday, so trading off of that will be extremely risky. If I feel like there is a signal to trade , I'll give it a shot. But we have data to get through before that as well. GE was up 1/4 on OK volume. GE has held up pretty good here and we are now short term overbought. Perhaps the November calls on a pullback is the proper choice. Gold was off a couple bucks on the futures and a bit more in the aftermarket. This, despite a drop in the US dollar. Both the XAU and GDX had slight fractional gains coming off of their lows for the session. Volume remains light as does the interest in gold. Mentally I'm feeling OK. The VIX has come back down and I am really asking myself if perhaps the decline is over. We never did retest the low, so perhaps a V bottom is in place. The medium term technical indicators for the major averages have turned back up. The small stock indices never had the bearish 50 day moving average crossover with the 200 day. The amount of put buying is through the roof. So there is a lot of evidence that we are probably going to go higher. But the market does go where it wants. I think if we continue higher into the Fed meeting I will probably go the other way in an extremely short term trade. But a lot can happen between now and then. Gold remains a lost cause along with the gold shares. I do believe though, if you have a longer term time horizon the gold shares can be bought here. They are even cheaper than the last time I said that. And the large cap companies in that industry are not going to zero. So I will check the charts over the weekend and try and get a feel for what is going on here. My ideas have been wrong as of late but that will not last forever either. For now it's Friday afternoon and time for a break.
Thursday, September 10, 2015
A day of just hanging around as the Dow gained 76 points on good volume. The advance/declines were slightly positive. We have built a triangle after the huge decline on the daily S&P 500 chart. Waiting on the breakout from that. My story is the same, not a good idea of which way to go here. Only six days remaining in the September option cycle. We've got the Fed next week and I suppose if you can figure out what the market will do on that, you'll make some money. I'll have to wait for a technical signal. That is the prudent approach for now. Could change at any time. GE was up 1/8 and the volume was good. patience for the November calls here. Gold was up $7 on the futures as the US dollar fell today. It didn't help the gold shares as both the XAU and the GDX were barely moved. Volume was light, continuing the non interest for the precious metals. Mentally I'm feeling OK. Kind of in a funk here with my trading. No good ideas for now. I'm not sure if it because of the overall market environment or the fact that I'm holding onto a big losing trade in ABX. Probably a combination of the two. I'd like to try a trade with the SPY before expiration but I don't want it to be just a guess. I'll let tomorrow go by and consider the scenarios over the weekend. The ABX trade is dead, even with a little over five weeks to go on it. Another mistake but I'm waiting for some kind of bounce to cut the loss a bit. May not happen. The world markets did not have any upside follow through last night. We'll keep an eye on things overnight and finish up the trading week tomorrow.
Wednesday, September 09, 2015
Markets around the world rallied but the US did not follow suit. The Dow fell 239 points on good volume. The advance/declines were almost 3 to 1 negative. It is a difficult trading environment. It pays to be nimble and take whatever profits that you can. You won't get the exact highs or lows. I don't have a good read on what's happening, so I'm on the sidelines. Today was a one day reversal to the downside, opening higher and closing lower. The path of least resistance is now down. GE was off 3/8 and volume was average. Getting closer to the 50 day moving average crossover to the 200 day. If that happens it may be a clue as to the next extended market direction. Or not. Gold fell today as the US dollar was higher. The precious metal futures dropped $15. The XAU lost 1 1/4, while GDX fell 3/8. Volume remains light here. Mentally I'm feeling OK. Rallies appear out of nowhere in down markets. That seems to be what we witnessed yesterday. Now we have rolled over again. We also saw a compressed 1, 2, 3 move higher from the lows on Friday. These are characteristics of a bearish phase. Of course I have been too slow to see this ahead of time. My take on the market here is a confused one and not a lot of conviction either way. Hopefully I'll get a handle on things quickly. My ABX October call trade is dead. Once again we'll watch the overnight action but I have no real trade ideas at the moment.
Tuesday, September 08, 2015
A good start to the week for the bulls as the Dow soared 390 points on good volume. The advance/declines were over 3 to 1 positive. No news to speak of really for the cause of the rise. The summation index should be moving higher after today. Perhaps the worst of the decline has passed but one day doesn't make a trend. I'm still waiting for a clear signal before my next SPY trade. Patience is still the main idea at this point. GE was up almost a buck on heavy volume. I'm still interested in the November calls here but will not chase this stock right now. The 50 day moving average still has not crossed the 200 day for GE. Gold was up a couple bucks as the US dollar was lower on the session. The XAU and GDX had slight fractional gains on light volume. Still no interest in the gold shares or the precious metals. Mentally I'm feeling OK. We will have to see if we get some upside follow through for the stock indices tomorrow. It is a light week for economic data. There is a chance that the worst is over for the decline but we cannot say that for certain just yet. If we continue higher into the beginning of next week that could set us up for the SPY September puts during expiration week. We still have a long way to go to get there. That is the only potential set up that I see at this point. So we'll wait. We'll see if the foreign markets follow the US lead overnight and go from there.
Friday, September 04, 2015
We ended the week on a down note as the Dow fell 272 points on light volume. The advance/declines were 3 to 1 negative. The employment report came in a little light and the selling came in at the open. The market tried to rally in the final hour but failed. We now have a long holiday weekend to ponder the situation. No clear short term signal one way or the other for now. I still believe that things will hold on here and we will head back up if we retest the recent lows. But I also haven't been right about much lately. GE was off 1/2 on average volume. The short term technical indicators here are more overbought than oversold. No rush for the November calls. Gold did not rally despite a weaker jobs number and a decline in the US dollar. The futures were off a couple bucks or so. The XAU and GDX had fractional moves on light volume. The precious metals complex is trending nowhere. Mentally I'm feeling OK. It was another losing week for the Dow, along with the other major stock indices. Getting oversold on the medium term picture here. I suppose we will have to see what happens if the S&P 500 gets back to the lows at around the 1880 level. That would be the area to try the SPY September calls. If the lows hold, that would be a winning trade. We haven't gotten there yet but perhaps we will in the shortened week upcoming. There is no guarantee that the lows will hold though. Perhaps the sidelines isn't such a bad place to be until I can really get a handle on what's happening. There isn't a clear signal for a trade yet. The option premiums are inflated as well with all the recent volatility. Gold is going nowhere and right now I don't see a catalyst for movement there in either direction. My ABX October calls are on life support. Another failed trade on my part, with losses bigger than they should have been. It doesn't look like the double bottom on the daily chart will pan out. It will be nice to have an extra day off this weekend as the markets have been more challenging than usual lately. Nine days remain in the September option cycle. I'll consider the strategies over the weekend. For now it's Friday afternoon and time for a rest.
Thursday, September 03, 2015
We began the day in rally mode but drifted down from the highs for the rest of the session. The Dow gained 23 points on average volume. The advance/declines were almost 2 to 1 positive. The NASDAQ was lower though. So we are getting some mixed signals ahead of tomorrows employment report. Tomorrow should be interesting and it is on the cusp of a long weekend for the US stock exchanges. I don't have a good feel as of what to expect. The short term technical indicators are not signaling one way or the other. GE was off a few cents and the volume was average. n No rush to trade here. Gold fell almost $10 on the futures as the US dollar was higher today. The XAU and GDX had slight fractional losses again on light volume. Perhaps the jobs report will get gold moving. My ABX October calls remain mired in the red. Mentally I'm feeling OK. Tough markets to trade here with the volatility and huge single day moves without much follow through. You really have to be nimble and a very short term trader. These traits are not my strong suit. That said, I would still like to try a trade with the SPY options in the September option cycle. However I will be waiting for some kind of decent signal. Haven't seen one yet and there is the possibility that none will arrive on cue. So we will have to simply wait it out for now. I don't see myself taking any positions before this long holiday weekend but you never know. Gold remains a wasteland at this point for trading capital. My only hope for the ABX trade is that a double bottom is being formed right now on the daily charts. Once again, hope is not a trading strategy. Perhaps I'll take the loss in the middle of this month if we don't start to move higher here. All eyes on the market reaction to the employment numbers tomorrow as we close out the week.
Wednesday, September 02, 2015
And back to the upside today as the roller coaster of volatility remains. The Dow climbed 293 points on good volume. The advance/declines were about 3 to 1 positive. We will ask again if the decline is over but the answer remains the same. Nobody really knows. Whipsaw action and that makes for difficult trading. I'll remain patient here and wait for a decent signal. That is the game plan. Neither overbought or oversold right now. The Fed minutes were a non event. GE rallied strong today and gained 2/3 on good volume. No rush for the November calls for now. Notice though that GE did not have the bearish moving average crossover that the indices did. Not yet at least. Gold was off $5 on the futures as the US dollar was higher today. The XAU and GDX had slight fractional losses on light volume. Perhaps the employment report will get gold going. Mentally I'm feeling OK. So here we are getting whipped back and forth with multi-hundred point moves in the Dow. The ideal scenario would be a retest of the lows but it is also possible that we rally from here back to the moving averages. One of the indicators that I look at is in extremely bullish territory with regards to option sentiment. Too many puts have been bought. The market always tried to disappoint the most players. Or so it seems that way. I'll wait for either an overbought or oversold signal in the September cycle and trade from there. There is no shame in waiting on the sidelines for things to calm down. Gold going nowhere as is ABX. A slow death from here on out for the ABX October call trade. China is closed for a couple days so we'll see what the rest of the world does in its absence.
Tuesday, September 01, 2015
September begins with a thud as the Dow fell 470 points on very heavy volume. The advance/declines were 6 to 1 negative. This will probably turn the summation index back down. This could be the start of a retest of the most recent low set last week. If we get back down there perhaps we will see a positive divergence in the RSI and the McClellan oscillator. If so, then the SPY September calls will be in order. But that is all conjecture here as we don't know where the market will lead us from here. It is possible that we will just continue lower. But if the positive divergences show up, you know what to do. GE was off almost a full point on very heavy volume. We haven't seen the bearish moving average crossover here yet. I'm still considering the November calls for GE. Gold gained $7 on the futures but it was higher during the session. The US dollar dropped today. The gold shares continue to under perform as the XAU shed 1 2/3, while GDX lost 3/8. Volume was average. Mentally I'm feeling OK. Volatility looks like it's here to stay for a while. I do not know the reason. Obviously there is something beneath the surface going on but not so obvious that I know what it is. Perhaps playing it cautious is the most prudent course of action here. The Fed minutes tomorrow should be a market mover with this environment. If we reach short term oversold, I'll try the SPY September calls. Not there yet. I suppose I may as well face the facts. I'm stuck in a losing ABX October call trade and it may be influencing what I do elsewhere. The mental capital involved in trading is always more important than the money. Not that I have a handle on what's happening in the stock market at this time. But holding onto a losing trade is a drain in itself. There is a potential double bottom being formed in ABX on the daily charts. That is about the only sliver of hope left in this trade. We'll see if todays carnage carries overseas and take it from there.