An up and down day as the Dow finished ahead by 37 points on average volume. The advance/declines were positive. The market is being held hostage by the ongoing fiasco in Europe. Hopefully something gets resolved over the weekend. But that won't be the end of it as there are no quick fixes. Expiration Friday tomorrow. More overbought than oversold here. Summation index still moving higher. I'm a believer in a breakout to the upside from the congestion zone for the stock indices. GE was up 1/8 on average volume before the earnings report tomorrow. Tomorrow the market will key off of this report early in my opinion. I'm still looking out to January if and when we get oversold here. Gold fell again today as the US dollar showed a bit of strength. The precious metal lost over $30 and the XAU fell 1/4. ABX down 1/2, GG lost 1/8 and NEM off by 2/3. Volume was good. My ABX calls are in the red. I'll be lucky to get out alive at this point. I think that I was a day early on the purchase. I'm committed to holding on until the earnings are out next week. We did close pretty far from the low of the day which may portend higher prices tomorrow. Mentally I'm a bit tired, did not sleep well. GE earnings tomorrow should set the tone for the stock market and we'll go from there. Expiration Friday will add to the mix. Gold and the gold shares are having a tough week and we'll see how it closes out. No economic reports due out tomorrow but they are taking a back seat to Europe anyway. Let's finish up the trading week and see what happens over the weekend.

Back and forth so far this week as the Dow lost 72 points today on light volume. The advance/declines were about 3 to 1 negative. The overall market was much weaker than the Dow. Earnings disappointments and a weak read on the economy by the Fed were the culprits. Not to mention the overbought condition of the stock indices combined with the resistance at the top of the months long congestion zone. Some hesitation is expected here. GE was off 1/8 on lighter volume. The fact that GE held up rather well today tells me that there is no huge decline coming up for the market. At least that's my theory for today. Could all change with the earnings for GE out on Friday but I don't think so. Gold fell $5 on the futures and a bit more in the aftermarket. The dollar was weaker early but then came back. The XAU got slammed, down 10 1/2 points. ABX fell 2 1/3, GG dropped 2 1/2 and NEM down 3 1/8. Volume increased to the downside and that isn't bullish going forward. My order for the ABX November calls was filled and they are already in the red. Todays price action on the gold shares was very negative considering the price of gold didn't drop that much. No matter. The game plan was to get the November calls ahead of the earnings next week at the price that I felt was right. That much has been accomplished. We'll see where we go from here. Mentally I'm feeling OK. So the next trade has begun and I will have to try and do a better job of managing it than the last one. 2 days left in the October option cycle. Not sure what to think after todays negative action but I still think we are just pausing here before breaking out of the congestion zone. On to Thursday.

Back to the upside as the Dow gained 180 points on average volume. The advance/declines were 5 to 1 positive. We are attacking the top of the congestion area and I do think we will break above it. Expiration week usually has a positive bias and that may be enough to push us through. Calls and being long are the way to go until further notice. GE was up 1/2 on average volume. Waiting on the earnings report on Friday. Gold took a hit today, down around $25 on the futures. We were down lower than that early and made even more of a comeback in the aftermarket. The US dollar was just a bit lower today. The XAU dropped early on but closed higher by 1/3 on the day. ABX off 1/8, GG was flat and NEM fell 3/4. Volume picked up here. The gold shares sold off hard to start the day and followed the market higher for the rest of the day. My order for the ABX November calls wasn't filled. Today was probably the day to get them. It was kind of a reversal back to the upside for the gold shares today. I'm leaving the order in but may have to adjust it if we continue higher in ABX from here. Or I simply missed it. Time will tell. Mentally I'm doing OK. The stock indices feel like they want to go higher here. The summation index is still pointing to the upside. You cannot fight that. We're still overbought both short and medium term but Mondays action relieved some of that. We'll see what happens overnight in Europe and take it from there.

We started expiration off to the downside as the Dow lost 247 points on light volume. The advance/declines were about 5 to 1 negative. European worries surfaced once again. I do not think that this is the start of something big to the downside. We were both short and medium term overbought, so some type of pullback is expected here. I still believe that the trend has changed and we will eventually be heading higher. GE fell 1/3 on light volume. Earnings out on Friday. I'd still like the January calls there and will purchase them if the price gets into my range. Gold fell $6 as the US dollar was higher today. Probably due to the European fears being rekindled. The XAU dropped 5 points. ABX off a buck, GG down 1 1/3 and NEM lost 2/3. Volume light here as well. I placed an order for some ABX November calls and I'm leaving it in overnight. I'd like to be holding calls when the earnings are announced next week. We're overbought here so some decline is in order. We'll see. Mentally I'm feeling OK, slept good enough. A pretty good decline to start the week. The stock indices have risen up to the top of their congestion zones. Some hesitation is expected here but I do believe higher prices are in the offing. Declines can be bought in my opinion. I am frequently wrong though. The summation index is still heading higher even with todays decline. Plenty of economic data and earnings coming up this week. We'll see how it goes.

It's a grind higher before expiration week as the Dow gained 166 points on light volume. The advance/declines were 5 to 1 positive. The sellers have left the building. Short and medium term overbought now but the tone of the market has changed. We're going higher until further notice. The low for the year has been put in. How can I be so sure of this? The summation index is heading higher. Seasonality turns bullish from here until spring. The presidential cycle points to higher prices. Any declines can be bought. The market has started to ignore bad news. This rally hasn't had great volume but I don't think that it matters. I could be wrong but this time I doubt it. GE was up 1/3 on light volume. We are still at the top of the congestion range and probably will break out next week. Earnings due out on Friday. I'll try my best to stay on the sidelines here before that. Gold continues higher with a gain of $15 on the futures. The US dollar was weaker today and it looks like the 2 month rally there is over. The XAU rose 6 1/3. The gold shares have been doing better than gold itself lately and that bodes well for the bullish cause going forward. ABX 1 1/4, GG gained 1 1/2 and NEM continues to lead the way higher, up 3 1/8. Volume was light however but nobody is selling. Declines in the gold shares are being bought. I would still like to try some gold share calls before the earnings coming out the final week of October. I would expect the gold shares to continue higher next week along with the market, pre-option expiration. Mentally I'm doing OK, slept well enough. The stock indices continue to roll along and there is really nothing to stop them now. Earnings season is upon us and the estimates are so low that even weak numbers will be cheered by the markets. That is the kind of game that this is. Know that and plan accordingly. The only way to play now is from the long side. I have a couple of ideas but getting in now after we've already rallied will not be easy. I'm going to try and not make some kind of short term trade next week but you never know. It really isn't my strong point but some would wonder if I have any strong points at all. No matter. The markets roll on. For now it's Friday afternoon and time for a break.

A little bit of selling today as the Dow fell 40 points on light volume. The advance/declines were negative. The overall market was stronger than the Dow. Summation index is still heading higher. The trend has changed to the upside. Once we get past 1220 on the S&P 500, I expect the rise to accelerate. That's my best guess at the moment. GE dropped almost 1/4 on light volume. Overbought here but we could remain that way. I still want to own some January calls but I think I'll wait until after the earnings report next Friday. Gold fell $14 on the futures and the XAU lost 3 3/4. The US dollar was flat today. ABX down 1 1/8, GG fell a buck and NEM off 1/3. Volume was light. No trades in the gold shares for now. Mentally I'm doing OK but could have slept better. The recent OEX put trade loss was my biggest of the year. So it is no surprise that the confidence level is down and I'll tread lightly going forward. I will try not to make any short term trades in the last 6 days of the October option cycle but there are no guarantees. We'll get through Fridays trading and go from there.

The rally continued today as the Dow gained 102 points on average volume. The advance/declines were about 4 to 1 positive. We did however cut the days gain in half by the close. We could be in for a pause here but the trend remains up. Summation index moving higher. We reached 1220 on the S&P 500 and backed off. 1220 is the final area of resistance in the congestion zone that has been in place since August. I almost placed an overnight order for some OEX puts. The McClellan oscillator gave a signal for a significant move but I held off. The previous loss may have saved me there. There's also a tendency sometimes to try and get back what you've just lost. Luckily I recognized this and did not place the trade. It doesn't make up for this weeks OEX trade loss though. GE was up 1/4 on average volume. I took off the open order for the January calls here. I'll keep an eye on things but this trade may have been missed. Gold was up $20 on the futures today as the dollar got whacked again. The XAU was up 1 3/4. ABX and GG both gained 1/3, while NEM fell 1/3. Volume continues light here. I also took off the open order for the ABX November calls as well. I still may try and do something before the earnings report at the end of the month but we are now more overbought than oversold here. I'd prefer to see the gold shares build more of a base here but that may not occur. Mentally I'm feeling OK. Even if the stock indices pull back in the near term, the trend has changed to the upside. We are short term overbought now. I'll be looking for some calls on weakness. I won't be in a hurry to do anything after this weeks losing trade. 7 days to go on the October option cycle and I have not had success with short term trades. I will try and be patient. Retail sales on Friday is about the only economic indicator coming up for the remainder of the week besides jobless claims tomorrow. We'll see if the rally can continue.

We ended the day with a slight loss on the Dow as we lost 16 points. Volume was light and the advance/declines were positive. The overall market was stronger than the Dow. We are now short term overbought. That doesn't mean that we can't stay that way. I dumped the OEX puts for a 75% loss. I should have sold them yesterday as this was a trade that did not work at all. It happens. Today was probably a better day to purchase some puts. I have no other OEX trades in mind at the moment. GE was flat on light volume. I still have the open order in for the January GE calls. Gold lost $10 on the futures and the XAU dropped 1/3. The US dollar was flat today. ABX and GG had fractional losses and NEM fell 7/8. Volume remains very light here. The gold shares were lower early and came back. I think my next trade might be here but we'll see. Mentally I'm feeling OK. Not exactly pleased about taking the recent OEX loss but you've got to keep moving on in the game. 8 days left for the October option cycle. Short term overbought on the stock indices but the summation index is moving higher. I have no clear ideas at the moment. I do have the open orders in for GE and ABX but they are on a longer time frame. The market is news driven lately and we have a Senate vote on the jobs bill coming up along with a European bailout vote. We'll see how things go tomorrow.

The Dow took off to the upside today on good news from Europe as we gained 330 points on light volume. The advance/declines were 10 to 1 positive. It was a partial holiday for Columbus Day which probably explains the light volume. The summation index will now be trending higher. The decline is now over in my opinion. My OEX puts are dead. I'll be taking the loss tomorrow which I really should have done today. Declines can be bought from now on. GE rose 2/3 on lighter volume. We've made it through the 50 day moving average and are at the top of the congestion zone. We should break through to the upside shortly. Gold was up $35 on the futures and a bit more in the aftermarket. The US dollar got slammed today on the good news out of Europe. The XAU gained 6 1/3. ABX up 1 1/3, GG rose 1 1/4 and NEM led the way higher by 2 1/8. Volume was extremely light here. I'd still like to get some gold share calls for November on a pullback. Mentally I'm feeling OK. I still have to open orders in for the January GE calls and the November ABX calls. I'll be leaving them in for now. Not happy about the OEX put trade but you take your chances sometimes in the game. We will most likely simply be going higher from here. Fed beige book out tomorrow and that's about it for news. We'll see what kind of follow through we get tomorrow.

An up and down day as the Dow opened higher, sold off, came all the way back and higher only to sell off at the close. We ended the day with a loss of 20 points on average volume. The advance/declines were over 2 to 1 negative. The overall market was much weaker than the Dow. The employment report came out and was much better than expected. The market tried to rally but couldn't. That may or may not be telling going forward. My OEX puts are in the red as the timing wasn't as good on the entry as it good be but what can you do? That is the trouble sometimes with the stock index options. The timing has to be exact and nothing is exact in this game. The volatility and time premium in the options are already starting a rapid decay. I also had to lower the strike price which certainly doesn't help things. It's not a complete lost cause but I'm not counting on this to be a good trade. GE was flat on the day after trying to get through its 50 day moving average. Volume was average here. I'll be keeping an eye on things here as a proxy for the overall market. It seems to be working that way lately. Gold lost around $17 on the futures and the XAU fell 4 1/4. The US dollar ended little changed despite the good employment report. ABX, GG and NEM all dropped a buck on light volume. I think the gold share calls are the way to go if we retest the recent lows. I'm leaving in the open order for the November ABX calls. Mentally I'm feeling tired as I did not sleep well or long enough. The beginning of next week will be the key. We are at the levels on some of the technicals that have turned back any recent rally attempts. If that remains true, then the OEX puts I own will have a chance. If not, then I believe that the decline is over. That's my best guess at the moment. We didn't rally on good news and that may be telling. Monday is a partial holiday with Columbus day so that may skew things. Plenty to ponder over the weekend. For now it's Friday afternoon and time for a break.

The rally continues and seems to be for real at this point. The Dow gained 183 points today on average volume. The advance/declines were 6 to 1 positive. Todays action will turn the summation index back to the upside. I went down to a lower strike price and purchased some OEX puts near the close. That was the game plan and I stuck to it but I wouldn't be surprised if it doesn't work based on the recent market action. However it will all depend on the markets reaction to tomorrows jobs report. We've worked off the oversold condition and some of the technicals are back at the levels that have begun the down moves. So we'll see what happens. GE rose 1/4 on average volume. Almost to the 50 day moving average line that has been resistance. I'm leaving in the order for the January calls. Gold gained over $10 on the futures as the US dollar was weaker again today. The XAU rose 4 3/4. ABX up 1 1/2, GG climbed 1 3/4 and NEM higher by a buck. Volume was average. It really looks like I missed out on a good opportunity here as both ABX and GG have risen well over 10% in the span of 3 days. I'm leaving in the open order for the November ABX calls but doubt it will get filled at the price that I want. My hope now is for some backing and filling in the gold shares to get long. May not happen. Mentally I'm feeling OK. Still 2 weeks to go in the October option cycle. All eyes will be on tomorrows employment report. So far it seems to me that we have had a huge snap back from the lows on Tuesday in the stock indices. If we continue to rally tomorrow, I'd say that the recent decline has run its course. If not, who knows? I'll be hoping that gold returns to its recent lows but hope is no way to trade. We'll see what the market reaction is to the employment news and take it from there.

Building on yesterdays one day reversal as the Dow gained 131 points on average volume. The advance/declines were almost 3 to 1 positive. Now we must ask if the recent lows are the end of the downtrend and is the 2 day rally for real? I don't have the answers. I would still like to own some OEX puts before Friday. However with bullish engulfing patterns on the stock indice daily candlestick charts, that may not be the proper trade here. The weekly charts now look bullish as well. That could all change with Fridays employment numbers though. So it will be a tough call as to what to do tomorrow. GE was up 3/8 on good volume. I did place an order for some January calls today. I'm leaving it open until it's filled or I decide to do something else with it. Gold rose $25 on the futures and the XAU gained 8 points. The US dollar was lower today. ABX up 1 2/3, GG higher by 2 points and NEM tacked on 1 3/4. Volume was average. I also placed an order for some ABX November calls but I may be too late here as well. Perhaps if we get some backing and filling here, the order will get filled. I do not want to chase things here as I still think there is a chance for more decline in the overall market. Mentally I'm doing OK, slept well. I'll really need to decide tonight what to do, if anything, before Fridays employment numbers. Yes, I could always just sit it out and wait for the markets reaction. But if we get a huge decline from the start, it will be too late for the OEX puts. There's always the possibility that the numbers aren't that bad and we continue to rally. The technicals are moving up from being very oversold. I'll mull things over tonight and decide what to do for tomorrow.

We had a one day reversal to the upside as the Dow opened lower and closed higher. We ended the day with a gain of 153 points on good volume. We were down almost 250 points in the morning. The advance/declines were positive. Is this the short covering rally that we're looking for in order to purchase some OEX puts? Could be. In bear markets we see strong rallies that spring up out of nowhere. Todays action qualifies under that criteria. Is today the end of the recent decline? Time will tell on that one but I'm inclined to think that we aren't done with the downside yet. I could be wrong and often am. GE was up 1/8 in reversal mode as well. Volume was heavy. I thought about putting in the order for the January calls but we are not yet at the price I'm looking for. We also have earnings coming out on October 21st which could complicate things. However I am going to get some calls at some point. Gold took it on the chin today, down over $40 on the futures. The XAU fell 6 1/4 but was lower during the session. ABX dropped about 1 1/2, GG down 1 3/4 and NEM lost 2 bucks. All had heavy volume and also cut their losses dramatically in the final hour of trading. I also considered putting in the orders for the November gold share calls as well. The daily candlestick charts are now looking positive for the gold shares. We are oversold and todays action looks like a bottom has been put in. That could all change tomorrow though in this volatile marketplace. That is just one of the problems here. You don't want to be too early. Mentally I'm doing OK. Fridays employment report still looms big at the end of this week. However a lot of the stock indice charts are now showing bullish candlestick reversals. I still might get some OEX puts before that report is released. Plenty of time left in the October cycle. Might be time for the gold shares as well but not if we get another down leg following Fridays employment report. Nothing is certain in this game as we well know. We'll see if we get any follow through to the upside tomorrow.

Starting October where we left off in September as the Dow lost 258 points on good volume. The advance/declines were almost 10 to 1 negative. Index puts are the place to be and I don't own any. The premiums are still very high on the options. We've broken the consolidation in the S&P 500 to the downside. Now it is simply a question of how low we go. We haven't even gotten to Fridays employment number yet. So we'll see what happens. I have a couple of ideas longer term involving GE and the gold shares. I suppose I'll be looking for entry points. GE helped lead the way down today, off 1/2 and closing on its low for the day. Volume was good. I still want to get some January calls here. Gold had a good day with the futures up $35. The US dollar was higher as well in the flight to safety. The XAU fell 2 points though. ABX dropped 3/8, GG was flat and NEM gained 1/3. Volume was light here. I'd like to get some gold share calls eventually. I'm looking to go out to November. Plenty of time there. The Gold/XAU ratio is off the charts to the buy side but that indicator hasn't been working lately. Mentally I'm doing OK. Trying not to get caught up in not owning any OEX puts as we fall here. Perhaps there will be a short covering rally this week before the employment report. Wishful thinking there. I have a couple of ideas with the longer term GE call options for January and the gold share calls for November. The summation index has turned down again but it's been in a range lately with no extended moves. We'll see what happens tomorrow.

More downside today as we ended near the lows for the week. The Dow lost 240 points on average volume. The advance/declines were 4 to 1 negative. I really feel as though we at at the edge of a cliff. We're at the bottom of the trading range and I think we will break it to the downside. Unfortunately I don't own any OEX puts yet as the premiums are very expensive with the recent volatility and 3 weeks left in the October cycle. I'll still try and get some before the employment report next Friday if we get some upside next week. But that may not happen. We're oversold here but that doesn't matter if we see a collapse. There aren't any reasons to buy stock here just yet. GE lost 2/3 on better volume. Probably getting ready to break down here as well. I'm going to get some January calls here next month. That has been the idea and I'm sticking with it. Gold was up $5 on the futures. The XAU was higher during the day but ended up only 1/2. ABX rose 3/8, GG gained a buck and NEM higher by 3/8. Volume was a little better today. The US dollar had a good day as money sought safety. However the flight to gold for safety is not happening at the moment. I am still going to get some gold share calls next month for the November cycle. We're oversold on the gold shares. However if we get the market collapse that I fear here, the gold shares will follow. Mentally I'm feeling tired, did not sleep enough. The stock indices cannot gain any traction to the upside. When we started the week with about a 600 point gain on Monday and Tuesday but couldn't hold it, that was telling. It isn't a good sign. Perhaps we can get one more short covering rally in the beginning of next week to buy some OEX puts. If not, I'll have to look at the other longer term call trades in GE and the gold shares. There is still plenty of time in the October option cycle. The VIX is pretty high here and if it continues upwards, look out. The market will go where it wants. I think next week could be very interesting. But for now it's Friday afternoon and time for a rest.

An up and down day as we opened higher, went lower and then closed higher by 143 points on average volume. The advance/declines were over 2 to 1 positive. Not quite sure of what to make of todays session. The overall market was weaker than the Dow. I'd still like to own some OEX puts before the employment report in a week. The summation index is moving back and forth with no real trend at the moment. I still have the open order in for the OEX puts but I'll probably cancel it over the weekend unless it gets filled tomorrow. GE was up 3/8 on light volume. GE was a proxy again today as it never went negative even with the market selling off. GE is once again getting close to its 50 day moving average on the daily charts. It is something to keep an eye on. Gold was little changed on the futures today but did sell off last night before coming back. The XAU was up 1/3. ABX and GG gained 1/3, while NEM was up a buck. Volume was light. The US dollar didn't do much today. Perhaps the gold shares are trying to put in a bottom here. However if my market prognosis is correct, we will see lower prices in the coming weeks. I could be wrong. Mentally I'm feeling OK. We had every reason to sell off today but somehow made a comeback. This portends near term strength. The ideal scenario for me would be to purchase the OEX puts next Tuesday or Wednesday on market strength. That is probably wishful thinking. We have been going sideways for about 2 months in the stock indices. The breakout, when it happens, is something to be a part of. I still think it will be to the downside but the longer we wander around here increases my doubts of that. I still want some November gold share calls as well. Tomorrow ends the week, the month and the quarter.

Back to the downside today as the Dow lost 180 points on average volume. The advance/declines were 5 to 1 negative. My guess is that the chance to purchase the OEX puts at a reasonable price has passed and we will be heading down from here. Monday and Tuesday were nothing more than a short covering snap back rally in retrospect. I think that we will be taking out the lows of support shortly. I could be wrong. I'd still like to be short ahead of the employment report next Friday. I'm leaving in my open order for the OEX October puts but it probably won't be filled. Perhaps I'll adjust the price. GE was off 1/3 on light volume. I'm expecting the recent lows to be taken out here as well. The game plan is to still get some January calls within the next month or so. Gold fell back $35 today and a bit more in the aftermarket. The US dollar was higher. The XAU dropped 8 7/8. ABX off 1 3/4, GG down 1 3/4 and NEM fell 1 7/8. Getting pretty oversold on the gold shares but the timing here will be the key. I'd still like the November calls at some point. Trying the October cycle here would entail more risk if we get the market selling off more as I expect. Mentally I'm feeling a bit frustrated. That is to be expected when what I was looking for shows up and I don't take advantage of it. I'll just have to take it from here. No hurry to get long at this point, however the gold shares are getting blown out to the downside. I really think we are about to have a precipitous fall in the stock indices. Stay tuned.

The Dow took off to the upside today but pared its gains in the final hour. We closed the day higher by 146 points but we were up over 300. The advance/declines were almost 5 to 1 positive and volume was average. This should turn the summation index back to the upside. I placed an order for some OEX puts but it wasn't filled. I'm leaving it in overnight but I may be too late again already. No real news for the rally in the stock indices, just the hope that Europe ends up OK. Not overbought or oversold here on a short term basis. I'm a believer that puts should be owned at some point before the employment report next week. I could be wrong. GE was up about 1/4 on light volume. It too was higher earlier in the day. I'll keep an eye on GE as a proxy for the overall market. It has been a precursor of sorts lately. Gold bounced back today, the futures gained over $50. The US dollar had a weak day. The XAU was only up 1/4 after being much higher early in the day. ABX was up 1/4, GG was flat and NEM lost 7/8. Volume was light here. I think it is too early for a sustained up move in the gold shares here. That said, I would still like to own some November calls eventually. If the overall market falls as I expect, the gold shares should drop and that would be an entry point for the calls. Wishful thinking perhaps. Mentally I'm feeling OK, slept well. So we had a huge move to the upside in the stock indices and couldn't hold on. My order is in for some OEX puts but it may not get filled. The daily candlestick charts don't look positive for the stock indices with todays move. But that could all change tomorrow. End of the month on Friday. We'll see what happens overnight in Europe and go from there.

A huge rally to start the week as the Dow gained 272 points on average volume. The advance/declines were about 3 to 1 positive. I'm inclined to believe that this is simply an oversold bounce but you never know. No concrete news to rally on today yet up we went. I'm not going to try and figure it out. The market speaks and we should listen. I still want to own some OEX puts before the employment report at the end of next week. Hard to be patient here but that is what's required. GE was up 1/3 on average volume. The January calls are still what I have in mind here. No hurry to purchase them as I will probably wait until next month. Gold was very volatile today as the futures lost $45 but made a comeback in the aftermarket. Overnight the futures were down twice that much. The dollar was off a bit today. The XAU gained 3 3/4 after being lower early on. ABX up a buck, GG rose 1/2 and NEM led the way higher by 1 1/2. Volume was average. I did place an order for some ABX calls but was not filled. I'm leaving the order in overnight. I'm pretty sure this is where to make the purchase. I would expect things to be choppy for a couple of weeks but I could be wrong. I'm trying the October cycle but may go out to November as time goes on. Mentally I'm feeling tired, did not sleep well. A nice rally out of nowhere today and we should see some follow through in the overseas markets. I'm still a believer in the OEX puts for the October option cycle. My feeling is that gold will hold up here around the $1600 level but I could be wrong. The technicals for the gold shares are oversold here. The ideal situation would be for some base building before we move higher. We'll see.

The Dow held up pretty well today and finished the day with a gain of 37 points on good volume. The advance/declines were positive. Perhaps we'll see a bounce in the beginning of next week. I get the feeling anything to the upside will be a short lived reprieve. I think we'll still see lower prices in the weeks ahead. Looking out a couple of weeks, I'd probably like to own some OEX puts before Octobers employment report. GE was up about an 1/8 on average volume. We're at the bottom of the trading range here and I do believe that we will break down. I'm still looking to buy the January calls here at some point. Gold had another debacle of a day, down just over 100 on the futures, with a slight bounce back in the aftermarket. The US dollar was down a touch but that didn't matter. Gold is now in a free fall as usually happens when something goes parabolic. The XAU fell 8 1/4. ABX down 2 1/3, GG lost 2 1/8 and NEM shed another 2 1/3. Volume was heavy. The gold shares did bounce a bit during the day. I would still like to get some gold share calls for October or more likely November. However we are just gapping down every day right now. Gold itself is around 1650 and support in my opinion come in at 1600. I may purchase some calls if and when we get to that point. Mentally I'm feeling a bit tired, did not sleep well. It was a negative week for all of the markets it seems as the realization is now that a worldwide slowdown in economic activity is at hand. We're oversold on a lot of the indices but could stay that way for a while. It's a tough trading envirornment. I still think that if we get a bounce, it can be shorted. I could be wrong. Plenty of data out next week and we've got the end of the month as well. I'll check the charts over the weekend

We are in liquidation mode as the Dow fell 391 points on very heavy volume. The advance/declines were 8 to 1 negative. A slight comeback before the close as we were down over 500 points. We've got lower to go though as the August lows are not going to hold up here in my humble opinion. Something is going on here but I certainly don't know what it is. All markets are dropping around the globe in what looks like a repeat of the fall of 2008. Buy index puts on any bounce if we get one is the strategy now. Plenty of time left in the October option cycle. Not sure just how low we will go this time around. It creates opportunity as well don't forget. I'm going to try and be patient but who knows? GE was off 1/3 on heavy volume. I'm still looking at the January calls here. No rush to purchase them but that is the game plan for GE. Gold got pummeled as well, down $66 on the futures as the flight to the US dollar was substantial. No flight to safety for the precious metal today. The XAU dropped 16 2/3. ABX lost 4 1/2, GG fell 3 1/2 and NEM down 2 1/2. Huge gaps to the downside in the gold shares. If the stock indices continue to the downside, the gold shares probably will follow. That said, I would still like to own some calls here at some point. The October or November calls in either ABX or GG. Mentally I'm feeling OK. The summation index is heading lower. The trend is down. We are about to break through the congestion zone of the past few weeks to the downside. I'm not sure how low we will go. If we drop hard again tomorrow I may purchase some gold share calls but I could be early. These are interesting times. Opportunity will present itself. It's a matter of being ready and being prepared. I'll check the charts tonight and go from there.

I suppose we know which direction that we are headed now as the Dow lost 283 points on average volume. The advance/declines were 6 to 1 negative. This will turn the summation index back to the downside. The Fed spoke and the market reacted. I don't know if there will be a chance to get any OEX puts on this move. They were expensive before todays move and they are more so now. If we do get one of those one day bounces, that would be the time. My guess is that we are going to take out the lows of August. GE lost 2/3 on better volume. I'm still a believer in the January calls here. I'll be getting them in the next few weeks if the decline proceeds as I expect. We could not make it through the 50 day moving average on the daily charts. Gold fell today as well and the US dollar was higher. The precious metal was down over $20 in the aftermarket. The XAU dropped 6 1/4. ABX off 2/3, GG down 1 1/2 and NEM fell 2 1/4. Volume was average. I'm going to try the October or November calls here at some point. I'm not sure if it will be with ABX or GG. Mentally I'm doing OK. Hard to fault myself for not already owning some puts here as the premiums are so high. But if we just drop like a rock here I certainly won't be happy. I do have some longer term ideas that could work though. Keep an eye on TRAN to see if it breaks the previous lows as it is a leading indicator as of late. Volatility picked up today and we will have to see if that continues as well. I think we are heading much lower in the next few weeks. Puts are in order for the stock indices in my opinion. I could be wrong and often am.

Kind of a mixed bag ahead of the Fed as the Dow gained just 7 points after being up well over 100. The advance/declines were negative and volume was light. The overall market was weaker than the Dow. Now I'm not exactly sure what the next move is. Todays action leads me to believe that we are now headed lower. I might get some OEX puts tomorrow when we get the usual gyrations during the Fed announcement. Or not. More overbought than oversold here. One of the problems is the high priced option premiums. However if this is the beginning of the next leg down, puts will be profitable regardless. I'll consider this overnight. GE lost 1/8 on light volume. Volume has shrunk here in the first 2 days of the week. Waiting on the Fed perhaps. Gold had a good day, the futures were up $30. The XAU rose 4 1/2 points. ABX up 1/2, GG gained 2 1/4 and NEM was the star of the day up 3 2/3. Volume was good. NEM is breaking out to new highs. Will ABX and GG follow? I did put an order in for some ABX calls today but canceled it before the close. This is something to consider tonight as well. If the overall market drops will the gold shares go down as well? The gold shares are more overbought as well but there could be room to move higher. The dollar didn't do much today. Mentally I'm feeling OK. Waiting on the Fed and so is the market at this point. I have a couple of ideas here but not sure what direction that I'll take. I'll check the charts overnight and decide which direction to take from there.

We started the week off with a whimper as the Dow fell 108 points on light volume. The advance/declines were 3 to 1 negative. European worries persist but I think the real trouble is the slow economy. That's my take for now. We were down well over 200 points early. The small stocks are still showing good relative strength so I continue to believe in higher prices near term. We've got the Fed announcement the day after tomorrow as the main news of the week. Prices should move off of that. GE lost an 1/8 on light volume. Getting close to the 50 day moving average on the daily chart for GE. If we can get through there it could bode well for the overall market. Gold dropped $35 on the futures today and the XAU fell 2 points. The US dollar was higher today. The gold shares were mixed with ABX off 1/8, GG down 7/8 and NEM up 1/2. Volume was average. I'm on the sidelines here for now. We are getting oversold though. The plan is to own some calls prior to the earnings releases in October. Mentally I'm doing OK, slept well enough. The market seems to want to go higher here. The summation index is still rising. One thing that troubles me though is that the price of copper has broken down. This is usually a good indicator of the strength of the economy. It also has a tendency to be a proxy for the stock indices in my opinion. That is why even though stock prices seem to want to rise here, I'm not inclined to purchase the calls. We'll see what happens as time goes on. Option premiums are high with the extra week in the October cycle. Stay tuned.

An expiration upward drift as the Dow gained 75 points on average volume. The advance/declines were just about even. Short term overbought now and I would expect some type of pullback in the beginning of next week. The summation index is moving higher and the trend is up. The major stock indices are still in the consolidation zones from the recent August decline. However the small cap indices have broken out to the upside. They are usually the leaders going up or down. Therefore I would expect the other stock indices to follow. We'll see. GE was up 1/4 on OK volume. We are at the top of the congestion zone here as well and it is something to keep an eye on. If GE breaks out I would expect the stock indices to follow. Gold made a comeback today, up $33 on the futures. The XAU rose 2 1/3. ABX up 3/4, GG higher by 7/8 and NEM gained 1 3/8. Volume was light. The US dollar bounced back today as well. Not exactly sure of what to make of things here with gold. The daily gold share candlestick charts do look constructive to the upside though. The gold share calls could be my next trade. I would like to own the calls ahead of the next earnings reports. Mentally I'm feeling OK. It wasn't a good trading week for me but I suppose it could have been worse. The market wants to go higher here it seems. You cannot fight that. However we are in an event driven marketplace and Europe is the driving force at the moment. So we'll see if any news comes out over the weekend and go from there. The option premiums will be pricey for October going from here. It's Friday afternoon and close to the end of summer. Time for a break.

An expiration week rally as the Dow gained 186 points on lighter volume. The advance/declines were 3 to 1 positive. Summation index moving higher. We've broken the downtrend lines on some major stock indices and the trend is now up. Getting short term overbought here. No trades in mind for the OEX at the moment. We'll be rolling into the October option cycle on Monday and they have an extra week. Premiums will be higher than usual. GE was up another 1/3 on lighter volume. Still looking to go out to the January options there. Perhaps next month. Gold took a hit today as the flight to safety trade looks like it got unwound a bit. The precious metal fell $45. It came back a bit in the aftermarket. This happened despite the US dollar taking a good hit today. The XAU was up 1/3. The gold shares sold off early but made a comeback. ABX up 1/8, GG down 1/3 and NEM up 1/8. Volume was light. I'd like to own some calls before the next earnings reports here but that is over a month away. Getting oversold here but not there yet. Mentally I'm doing OK. I've put yesterdays dumb trade behind me and I'm looking ahead. That's really all you can do. No solid ideas at the moment. It looks like we'll be heading higher near term. We'll get through the expiration tomorrow and go from there.

It was the third positive day in a row as the Dow gained 140 points on average volume. The advance/declines were 3 to 1 positive. We were up twice as much but sold off in the last half hour. When we got to the downtrend line on the S&P 500, I bought the OEX puts. We then raced higher through the line and the puts got slammed. I took the loss at around 65 % in the span of a few hours. This was a trade I should have avoided as I do not do well with the short term options. The market was telegraphing higher prices and I did not listen. I once again tried to impose my idea on the market and the market is always right. That said, as soon as I sold the puts the market dropped back to the downtrend line that it had broken through. The OEX puts that I bought regained their value. So perhaps this trade would have worked. We'll find out tomorrow. GE was up 1/3 on average volume. I should have taken the cue from here, as GE was stronger for the past couple of sessions. Again, I did not listen. Gold lost a few bucks on the futures. The dollar didn't do much today. The XAU lost 3 1/2. ABX fell 7/8, GG dropped 1/3 and NEM down just a touch. Volume here was nothing special. No trades in the gold shares for now. Mentally I'm feeling frustrated. I really should have just stayed on the sidelines today. Even if we drop tomorrow, I'm out of the OEX put position. So it's a no win situation and I've already booked the loss. The problem is being able to do the right thing when necessary under market conditions. I think that I just wanted to make a trade without the technicals all in line and I paid for it. I also could have bailed out with a smaller loss but I didn't. So there was nothing good from this trade. 2 days left for the September option cycle and I'll be on the sidelines. I'll have to put today behind me and go from here.

To the upside today as the Dow gained 44 points on average volume. The advance/declines were 3 to 1 positive. The overall market was stronger than the Dow. The market has the feel of wanting to go higher here. I did not try the OEX puts today but still may before Friday. If we get up to the down trend lines on the OEX or S&P 500, I might give it a shot. However as I've said before the short term trades are not my best. Economic data out tomorrow and that should move things around. GE was up over 1/3 today on average volume. That was another excuse not to buy the OEX puts today. Gold was up $16 and more in the aftermarket as the dollar was much weaker today. The XAU was up a buck. ABX rose 1/4, GG fell 3/4 and NEM gained 1/4. A mixed bag there. I think that I'm going to wait for a pullback to the up trend lines in the gold shares before I put on the next trade. I'll be looking at the October calls. Mentally I'm doing OK, could have slept better. Sometimes the hardest thing to do in the game is to do nothing. That is what I am facing at the moment. As much as I'd like to try something here with 3 days to go, the more prudent approach may be to just sit it out. I'll check the charts again tonight and decide what to do or not do.

An interesting session as the Dow was down for most of the day but made a last hour comeback to finish up 69 points. The advance/declines were negative and the volume was good. It feels like the Dow is trying to put in a bottom here. However I am considering some OEX puts before the week is out. We still have a down trend line that is in effect until broken to the upside. The European indices have already broken down through the congestion zones that the US indices currently find themselves in. With only 4 days to go on the September options the risk is high. I may have to consider going out to October but the premiums are very high. GE was off a touch on heavy volume. I'm still looking out to January there for the calls. No hurry. Gold took a hit to start the week, off $46 on the futures. We came back a bit in the aftermarket. The US dollar was higher today but closed off of its highs. The XAU was down 6 points but was much lower. ABX off 1 1/4, GG fell 2 1/4 and NEM shed 1 1/4. All of these issues were lower during the day as well. I thought about getting some ABX calls for this week but did not do it. Again, the risk in trading this week will be very high. The potential for profit somewhere is out there. However the chance for loss is just as great. Mentally I'm doing OK. The stock indices had an upside reversal today, opening lower and closing higher. We are more oversold than overbought as well. I think I will wait and see if we make it to the down trend line and then buy the OEX puts at that point. That's the idea at the moment.

A steep sell off to end the week as the Dow lost 303 points on average volume. The advance/declines were about 6 to 1 negative. I was leaning more towards the upside but that was obviously wrong. Troubles in Europe again and there is no end in sight there. The summation index will now head lower after todays action. The S&P 500 had a huge drop in August and we have stabilized and moved sideways since then. This is perhaps a bear flag implying much lower prices in the offing. The German stock market has already broken through to the downside. This is something to consider and keep in mind. GE lost 1/2 on good volume. We are back to test support at $15. If GE breaks down through $15, it could mean that the stock indices will follow. I'm still looking at the January calls there. Gold was up a couple of bucks as the US dollar soared. I'm not sure what is going to happen here because higher dollar prices are generally bearish for gold. However the flight to safety trade is still in vogue and gold is part of that. The XAU lost 3 7/8 today. ABX down 2/3, GG fell 1/2 and NEM off 3/8. Volume was average. I might try some gold share calls next week but it is extremely risky. Still overbought and staying there. Mentally I'm feeling tired. Yesterdays usual aftermarket routine was interrupted by a power failure. 5 days left in the September option cycle. Again, any trades for next week will be of the short term variety. The October cycle has an extra week. I'll check the charts over the weekend and consider what strategy to undertake for next week. I'd expect some follow through downside on Monday but after that, who knows? For now it's Friday afternoon and time for a rest.

Back to the downside today as the Dow lost 119 points on average volume. The advance/declines were about 4 to 1 negative. So where do we go from here? I certainly don't know. The case can be made for either direction since we are not overbought or oversold. I will try and not do anything stupid here but you never know. Bernanke blabbed today and tonight we get Obama. I'm favoring the upside here but not enough to take a position. GE lost 1/4 on light volume. I probably won't be trying the September 16 calls here. Too much risk. Gold made a comeback as all sell offs are being bought at the moment. It was up $40 on the futures and more in the aftermarket. The XAU rose 2 1/2. ABX gained 3/4, GG up 3/4 and NEM higher by 1 7/8. This despite the US dollar having another very good day to the upside. The gold shares are very overbought and staying there. I might try something here before expiration but again, the risk is high. The prudent thing to do would be to stay out for September at this point. Mentally I'm feeling OK. Not exactly sure what I'd like to do here but my bias is for higher prices for the stock indices in the short term. That's a guess as always. When in doubt, stay out as the saying goes. Not sure I'm going to do that. One more trading day in the shortened week.

The Dow soared to the upside today as it gained 275 points. The advance/declines were 7 to 1 positive. Volume was lighter than yesterday. The summation index should be back to moving higher after todays action. Europe, meaning Germany, had some good news for a change. The question now is whether this rally is for real. I certainly don't know. We aren't overbought or oversold here. The lesser issues such as the NASDAQ are performing well here and that usually leads to higher prices. However I will consider the OEX puts again once we reach near term resistance. We'll see if we get any follow through tomorrow before Obamas jobs speech. GE was up 1/2 on average volume. I am considering a short term call trade here for the September option cycle. But I may be too late as yesterday probably was the day to initiate it. There's only 7 days left on the options. I'm still looking to go out to January there as well. Gold took a hit today, down $55 on the futures. The US dollar was down as well as the flight to safety trade took a day off. Perhaps this is the beginning of the unwinding of that trade. That's a guess as usual. The XAU was up almost 1 1/2 as the gold shares did not follow gold today. ABX was up 7/8, GG gained 1/2 and NEM fell 3/4. Volume was average. Not sure what to make of the gold shares today. I do know that ABX and GG are right at their resistance of $55. If they break through that level there is nothing to stop them from going much higher. Overbought here on these issues but that may not matter. Might try a trade here before expiration. Mentally I'm feeling tired, did not sleep well. Volatility has returned to the stock indices as we were down 300 points early yesterday and today we gained 275. The trades have to be short term in nature I believe to be successful. That really isn't one of my strong points. I'll be keeping an eye on things as usual and we'll see what happens.

An interesting start to the week as the Dow lost 100 points on average volume. The advance/declines were about 3 to 1 negative. We started the day down hard and at one point were off 300 points. However there was never any follow through downside and we rallied almost 100 points in the last half hour. A short squeeze? Perhaps. I think it has more to do with Europe and perhaps some good news coming out of Germany tomorrow. But I don't know, of that we can be certain. I sold the OEX puts today for a 140% profit and it should have been more. The market did not react the way I wanted it to but I held on to the puts anyway. I should have dumped them early in the morning. I may buy them back before expiration but we'll have to see exactly what the market does from here. GE lost 1/2 on heavy volume. If GE is a proxy for the stock indices again then perhaps we're heading lower. It has been gapping down and is at support at $15. I'll keep an eye on it. Gold lost around $20 on the futures after hitting a new record high. The US dollar was stronger today and appears to be starting an uptrend. That could be important for the stock indices and gold going forward. The XAU was up 1/4. ABX gained 3/4, GG lost 1/8 and NEM was flat. Volume was good. The daily charts may have put in short term tops with todays action. The daily candlestick charts look like dojis at the end of an up move. We'll see what happens tomorrow. I still want to try the gold shares again when they get oversold. Mentally I'm doing OK. Still not impressed with the way I handled the exit of the OEX trade. As always, trading is an ongoing process. 8 days left in the September option cycle. I don't have any pressing ideas at the moment. The stock indices have the feel of wanting to go back up here but that is nothing to trade off of. I'll check the charts again tonight. I did have a thought of perhaps getting some gold share puts here. I'll review tonight as well. Had I properly exited the OEX trade, perhaps my confidence would be a bit better. We'll see what happens in Europe overnight and take it from there.

It was a downer on Wall Street today as the Dow lost 253 points on light volume. The advance/declines were 6 to 1 negative. It was a steep drop at the open and then we hovered around for the rest of the day. The employment report was a disaster, as no new jobs were created last month. I'm a bit surprised that we didn't drop even more. My OEX puts are solidly in the black. The question now is when to sell them. I'll consider the scenarios over the long weekend after checking the technicals. GE was down almost 1/2 on average volume. I might take my OEX cues from here. GE made a slight comeback in the afternoon. We'll see. Gold was the star of the day gaining $47 on the futures and another $10 in the aftermarket. The dollar was higher as well and the flight to safety trade is back. The XAU rose 3 1/2. ABX up 1 1/4, GG gained 1 1/3 and NEM tacked on 2 bucks. Volume was good. Looks like I sold the ABX calls too soon. Even though it was a profit, it should have been much more. Continuing to be overbought on all levels for gold but I think we are going to see new highs next week. I may just jump in and buy some more gold share calls as well. I'll consider it over the weekend. Money continues to flow in there and we are in the gold favorable month of September. Mentally I'm doing OK but a bit tired. Not all that happy about dumping the ABX calls early but you've got to move on. At least I'm on the right side of the OEX trade and the entry timing worked. Getting out right is the next challenge. A long 3 day weekend to consider things. I don't get the feeling that this downdraft is the beginning of something big to the downside but we'll see how it plays out. We're not short term oversold on the stock indices but could get there in a hurry. As I said, gold is very overbought but continues to attract capital. No easy way to trade that scenario. It's the unofficial end of summer with Labor Day weekend on tap. Time for a break.

It was another up and down session with the Dow closing the day with a loss of 120 points. The advance/declines were almost 3 to 1 negative. Volume was average. We were up around 80 points early in the day. The employment report will be the catalyst for tomorrow and then we have a long holiday weekend. I did purchase some OEX puts in the morning and they are in the black. I'm not sure how long I'll hold on to them. The stock indices are overbought but only on a short term basis. We'll see how it goes tomorrow. GE lost a dime on average volume. No trades there yet and there is no hurry. Gold lost a couple bucks on the futures and a couple more in the aftermarket. The US dollar was higher today. The gold shares were mixed as the XAU gained 1 1/3. ABX up 7/8, GG gained 1 3/8 but NEM lost 1/8. Volume was light. Looks like I should have held those ABX calls another day but as always hindsight is never wrong. I may try them again before the September expiration now as the relative strength is hard to ignore. What's also hard to ignore is the fact that the gold shares are both short and medium term overbought. I'll be keeping an eye on things of course. Mentally I'm feeling tired, did not sleep enough. So it's on to the next trade involving the OEX puts. The OEX is a much faster moving contract and that makes it more of a challenge to trade. If we are down tomorrow I'll probably hold the trade over the weekend. We'll see what the employment report brings, gauge the markets reaction and see what happens.

It was another up and down day as the Dow was up 150 early, then grinded all the way back into negative territory before a comeback in the final hour. We ended the day higher by 53 points. Volume was average. The advance/declines were 2 to 1 positive. The month of August we just completed was a wild one. Let's hope we don't see a repeat in September. We are short term overbought now and I would like to try the OEX puts for September. Perhaps tomorrow before the employment report as that was the original plan. We'll see. GE was up 1/8 on average volume. Not completely overbought here. I'm still looking out to January here. No hurry. Gold was flat on the day and dropped a touch in the aftermarket. The US dollar was higher today. The XAU was off 1/2. ABX down 1/8, GG fell 3/8 and NEM dropped 1/2. We were lower earlier in the day. I dumped the ABX calls. Overbought and staying there but I could not risk holding on any longer. It was a 65% profit and it should have been much more. There's still a chance that ABX moves higher here in the near term before a pullback. I would like to try the ABX calls again for October. Mentally I'm doing OK. Looking for some OEX puts tomorrow. Beginning of the month and possible positive money flows. Employment report on Friday. There will be plenty of data in the next two days and then a long weekend. The trading is never easy. I'm not sure that I have the same feel for things as I did a couple of weeks ago. However I'm going to move forward. If we get the expected drop in the stock indices here I'll have another chance for the ABX calls. If not there is nothing that I can do about it. I'll take the recent ABX trade as a positive and go from there.

It was an up and down session and the Dow ended higher by 20 points. The advance/declines were positive and the volume was lighter than lately. We were down over 100 points early but made it all the way back. I'm still considering the OEX puts before the employment report as we are getting short term overbought. There is the double bottom that is in place to consider also. Still 2 days before the report. GE was up a touch on light volume. No trades there yet for me. Gold had a stellar day, up $40 on the futures and another $10 in the aftermarket. The XAU rose 3 1/4. ABX up 2/3, GG higher by 3/4 and NEM gained a buck. Volume was better. Overbought here both short and medium term. My ABX calls are still in the black but I really need to consider exiting this trade. The gold shares won't remain overbought forever. Maybe I can squeeze another day or two out of this but it may be time to move on here. The US dollar rose today with gold for no apparent reason. Mentally I'm feeling OK. It's a tough call to continue holding on to the ABX trade when I'm looking at the OEX puts for a market decline. However I could also be wrong as the summation index continues to move higher. The employment report on Friday could hold the key. We'll see what happens tomorrow and go from there.

We started out the week with a bang as the Dow rose 254 points. The advance/declines were 10 to 1 positive. Volume was light however. I do not trust light volume rallies but you can't argue with price. The summation index is now moving to the upside as well. If we continue higher into Wednesday I'll probably try the OEX puts before the employment report. We'll see. Approaching short term overbought on the stock indices. GE was up 1/2 on light volume. We had a gap to the upside here but I'm not completely sold that this is the beginning of something big or sustainable. I could be wrong and often am. I'll wait to purchase the January calls here. That is my next trade in GE. Gold fell today as the flight to safety trade waned. We lost $5 on the futures and a bit more in the aftermarket. That is misleading though since we rallied strong in the aftermarket on Friday. Taking that into account it was more like a $35 loss on the day. The US dollar didn't do much today. The XAU lost 2/3. ABX down 3/4, GG fell 3/8 and NEM was flat on the day. Volume light here as well. My ABX calls are somehow still showing a profit but this trade is really getting long in the tooth. I don't know if I can hold on until the employment report on Friday. Also if my OEX put scenario is correct, the gold shares will probably drop with the overall market. Mentally I'm doing OK, slept well enough. The stock indices have made a new recovery high from the recent sell off and closed near their highs for the day. We should see some follow through tomorrow. We do have the last day of the month and beginning of the month positive money flows coming up this week. So we'll see what happens. I get the feeling that gold is going to take a rest here and that won't bode well for the ABX calls. Less than 3 weeks to go there and one less day due to the Labor Day holiday. I'll be taking some extra time to consider this trade tonight.

Volatility was the main product from the Bernanke speech as the Dow closed higher by 134 points. We were down over 200 points early. The advance/declines were 5 to 1 positive and volume was good. The stock indices are deciding which way to go here. I get the feeling that higher prices are coming before we head back down again but I could be wrong and often am. Technically we're not overbought or oversold. A few more up days and we'll be short term overbought. The ideal scenario would be for the beginning of next week to be positive, setting up an OEX put trade for before the employment report on Friday. We'll see. That's the idea at the moment. GE was up a bit on average volume. Plenty of time for the January calls there. Gold was on the move again. The futures gained $35 and it was up another $30 in the aftermarket. The dollar was weaker today and that was without Bernanke saying anything about interest rates. The XAU gained 5 points. I would have liked to have seen more of a gain there. ABX was up a buck while GG and NEM both rose 1 1/3. Volume was lighter than lately again. My ABX calls are still in the black. 3 weeks left in the September option cycle. ABX is on its way to being overbought again. I'll need to consider dumping these calls next week. We could have some beginning of the month money flows at the end of next week and that could be supportive. However gold really had a crazy week and is still very overbought. There is a lot of volatility premium in the gold share options and any slowdown in price movement will rapidly diminish prices. Plenty to consider going forward here. Mentally I'm feeling OK. It was the first positive week in the stock indices in a month. So it looks like maybe a short term bottom has been put in place. We'll see. Gold was all over the place, including an over 100 point down day. I'll be checking the charts again over the weekend to decide which path to take next week. But for now it's Friday afternoon and time for a break.

Some downside in the stock indices today as the Dow lost 170 points on good volume. The advance/declines were 3 to 1 negative. The summation index had turned higher yesterday but has taken on a sideways movement lately. Volatility picked up today in front of the Bernanke Jackson Hole speech. I don't know what the markets are looking for him to say but whatever happens in the market reaction is what to look for. Not really overbought or oversold here on a short term basis, so I guess we could go either way. It certainly hasn't been a slow summer. GE was down 1/4 on average volume. Still waiting for the right time to get the calls there. The gold futures ended up by $5 on the day after being lower early. Gained a bit more in the aftermarket. Not a bad showing considering yesterdays debacle. The XAU gained 3 1/2. ABX rose a buck, GG gained 1 1/8 and NEM tacked on 1/2. Volume was lighter than lately. The US dollar gained a bit today. My ABX calls are still in the black. I'm holding on for now but could exit anytime at this point. Yes there is plenty of time left for them but the tone of the gold market has changed with this weeks 100 point down day. We'll see what gold does after Bernanke. Mentally I'm feeling a bit tired. All eyes and ears are on the Jackson Hole speech tomorrow. There certainly is a lot of hype for this event and I don't think that it can possibly live up to it. We'll see. It's been a positive week for the stock indices so far and we'll see if they can hold onto the gains.

The Dow continued higher with some follow through to yesterdays gains. It gained 144 points on good volume. The advance/declines were 2 to 1 positive. It is looking more and more as if a double bottom is in place. However we could also just be forming a bear flag from the recent extensive decline. I'm still leaning towards trying the OEX puts, perhaps next week. We'll see what happens for the rest of the week. GE was up almost 1/4 on average volume. Looks like a possible double bottom in place here as well. No hurry for the January calls. Gold was the story of the day as it got relentlessly sold in the wake of the parabolic move upward. As usual, parabolic moves never end well. The gold futures lost just over 100 points. Yes, in one trading day. The gold shares took a hit but it wasn't as bad as the downward move in gold. The XAU fell 4 1/8 but was much lower during the day. ABX dropped 1 3/4, GG lost 1 7/8 and NEM fell a buck. Volume was heavy. The US dollar was up a touch today. Amazingly the ABX calls I own are still in the black. They've lost most of the profit since Monday but there is still a chance for this trade to work. There is still a lot of time left in them. How we close the week will be important. I'll need to see some strength going into the close on Friday. Mentally I'm feeling OK but feel a little groggy today for some reason. Perhaps it was the effect of the huge loss in gold. The stock indices are acting better here, waiting for Bernanke on Friday. I have no idea what he will say but we will have to keep an eye on the markets reaction. That will be the near term key.

The Dow roared to the upside as it gained 322 points on good volume. The advance/declines were 6 to 1 positive. The daily charts look like a double bottom in the stock indices. We would have to break through 1200 on the S&P 500 with good volume for this to be valid. Hasn't happened yet. I'm still leaning towards the OEX puts if we rally for a few days. I don't think the summation index has turned back to the upside just yet. GE was up 1/3 on average volume. No hurry to trade there. Gold was the story of the day besides the earthquake on the east coast. It got hammered, down $30 on the futures and another $30 in the aftermarket. Could this be the end of the parabolic move to the upside that we've seen recently? Could be. The XAU fell 5 1/2. ABX down 1 1/3, GG lost 2 7/8 and NEM dropped 1 1/2. Volume was good. The dollar dropped a bit as well today as the flight to safety trade took a breather. My ABX calls are still in the black but they have lost a lot of their value today. I'm still a believer in holding on to this trade but if this weeks action continues negative for gold I'll have to reassess the situation. One day does not a trend make but it's only Tuesday. Mentally I'm feeling OK, could have slept better. It will be interesting to see if we get any follow through to the upside tomorrow or if this was just a one day wonder for the stock indices. Not much economic data out this week and we have Bernanke flapping his gums on Friday. I'm in a wait and see mode. As for the ABX trade, it's still showing a profit and there is plenty of time left before expiration. But if this is the start of a correction in gold, the trade will not turn out as planned. We'll see how it goes.

It wasn't a quiet summer Monday as the Dow gained 37 points on good volume. The advance/declines were negative. We were up over 150 points early but could not hold the gains. The summation index continues lower. We are short term oversold here but todays price action doesn't look like a precursor to higher prices. We'll see. I would like to see some type of rally to try the OEX puts again but we know I didn't get the rally before. No hurry as we just began the September option cycle today. GE was flat on the day after opening higher. Volume was good. I'm looking out to the January option cycle here. Again, no hurry as I expect lower prices eventually. Gold continues its parabolic run, up $40 on the futures to a new record high. The US dollar was flat today. I have no idea how long gold will continue to rise. Very overbought and staying there. I can tell you that when it ends, it will end badly. The drop will be as prolific as the rise. The XAU gained 6 2/3 today. ABX up 1 1/4, GG rose 2 1/2 and NEM led the way higher by 2 3/4. Volume was good here. Unfortunately for me, ABX was the laggard. The September calls I own are solidly in the black though. I'm still trying to figure out exactly how long I'm going to hold this trade. Mentally I'm doing OK, slept well. After a review of the charts over the weekend my ideal scenario for the S&P would be a rally near term as an opportunity to get short. The market rarely cooperates with your ideas though. I don't want to get too greedy with the ABX trade but I still feel we could go a little higher there. Plenty of time left. We'll see what transpires in the foreign markets overnight and take it from there.

It was a downer Friday and we closed at the lows for the week as the Dow lost 173 points. The advance/declines were 3 to 1 negative and the volume was good. The summation index has turned around and is heading lower. The Dow is trying to hold at its 200 week moving average. Some stock indices have already broken through to the downside. We're oversold here on a weekly and daily basis. However in severe declines being oversold doesn't lead to market rallies. We got a bounce and now are right back at the recent lows. If the transport are any indication of what's to come, we'll be heading lower next week. I have no OEX trades in mind right now but I'll ponder things over the weekend. GE was down 1/4 on good volume. Oversold here as well. I'm still looking out to the January options here but in no hurry. Gold continues to find money as it gained $30 on the futures. Traded another $30 higher in the aftermarket but gave all of those gains back. We're at record highs again. Parabolic and that never ends well. The US dollar lost some ground today. The XAU was up about 4 points but closed off the highs. ABX up 7/8, GG gained 1 3/4 and NEM rose 1 2/3. Volume was good to the upside. My ABX calls are still in the black. Overbought here now but staying there. 4 weeks to go in these options. It is getting harder for me to stay in this trade but I'm a believer in higher prices before they expire so I'll hold on for now. The Gold/XAU ratio is still off the charts in the buy zone. So we'll see. Mentally I'm doing OK. I'll have to check the charts again over the weekend to see I can figure out where we go from here. If the stock indices start to free fall again, it will probably take the gold shares with them. I have time left in the ABX call trade but I do not want to see the gains turn into a loss. It isn't easy winning or losing in this game. I'll think about it over the weekend and go from there. It's Friday afternoon in the summer. Time for a break.

Back to the downside with a vengeance, as European worries spread to the US markets once again. The Dow fell 420 points on heavy volume. The declines swamped the advances by 20 to 1. Obviously the OEX puts were the way to go yesterday. We'll see how we get through option expiration Friday and go from there. It feels like we're ready to fall apart again but we'll have to wait for tomorrow. Any attempt at trying to decide which direction the market goes from here would be even more of a guessing game than usual. GE gapped lower and lost 3/4 on heavy volume. I am still looking at the January calls there but I'm in no rush to purchase. Gold was the safe haven play once again, up about $30 on the futures to a new all time high. The US dollar moved higher in the flight to safety as well. However the XAU followed the stock indices lower by 6 points. ABX down 1/2, GG lost 1 1/4 and NEM fell 5/8. Volume picked up to the downside and that isn't bullish. My ABX September calls are still in the black as the volatility premium got put back into the options with todays action. I'd certainly like to see some upside tomorrow here to close out the week but the way things are going these days who knows? 4 weeks to go here though. Mentally I'm still feeling tired, not sleeping good this week. The market is back in manic mode. No telling how long this will last. There are no quick or easy solutions to what the markets are focusing on. The best plan of attack will be to wait for overbought and oversold conditions and go from there. Staying on the sidelines won't lose you any money but it won't make you any either. Let's see how we get through Fridays expiration and take it from there.

It was an up and down kind of day as the Dow gained only 4 points. The advance/declines were positive. You could make a case for going either way here. With only 2 days to go in the August option cycle, I think the prudent course of action here would be inaction. There is no clear near term signal and the reward would not outweigh the risk. The summation index is still heading to the upside at the moment. I'm also seeing warnings in the media about more selling to come so you can expect the opposite. GE was flat on average volume. GE has basically the same chart pattern as the overall market. No trades there for now. Gold gained $8 on the futures and the XAU tacked on 2 1/4. We did fall back from the highs in the XAU. The US dollar was lower today. ABX, GG and NEM all had fractional gains on very light volume. Overbought here now. Nobody is selling right now but they're not really buying either. My ABX calls are still in the black but we really need to see some upwards movement in the underlying stock soon. Time decay will start to set in and any downward action will drop the premiums. I'll ponder things tonight. We are almost at new all time highs in gold itself. Mentally I'm feeling tired today, did not sleep enough or well. Just a couple of days left to trade this week and it seems relatively quiet when you consider what the markets went through last week. Another thing to consider with the ABX call trade is that the volatility premium will start to diminish as well with a quieter market. We are in the middle of August and if things get back to normal now, the market will slow down. So perhaps I won't hold the ABX trade as long as previously planned.

We were a bit weaker today as the Dow lost 77 points on average volume. The advance/declines were 3 to 1 negative. We moved off the oversold levels and now the question is where we go from here. The S&P 500 daily candlestick chart is showing a bearish belt hold pattern, implying lower prices near term. I am still considering the August OEX puts if the premiums are in my price range. The risk on this trade would be very high though. We'll see what happens tomorrow. GE was off 1/4 on light volume. No near term trades for me in GE. Still considering a longer term option trade here in the next few weeks. Gold had a good day, the futures were up $27. The XAU fell 2 1/8 though, following the overall market down. ABX, GG and NEM all had fractional losses on light volume. My ABX September calls are still in the black. We're getting overbought on ABX and I will have to think about exactly how long I'd like to stay in this trade. The weekly charts still have room to move to the upside in my opinion. The US dollar was up a touch today. Mentally I'm feeling OK. 3 days to go in the August options. The stock indices have worked off their oversold condition but are not overbought at the moment. We probably could go either way here but I'm leaning towards the downside. The summation index did move to the upside yesterday. So it's a mixed bag. We'll see what tomorrow brings.

We started option expiration week to the upside as the Dow gained 213 points on lighter volume. The advance/declines were 10 to 1 positive. The summation index should turn to the upside with todays market action. I would like to try the OEX puts this week if we call rally up to the 50% retracement level on the S&P 500. That would be around 1225. If the volume continues light to the upside that is where I may attempt the next OEX trade. With only 4 days to go in the August options, obviously this would be a very short term trade. We'll see. GE was up 50 cents on lighter volume as well. No trades here. Keeping an eye on the January calls but will not look to purchase them until we see lower prices once again. Gold rose again, up $15 on the futures and a bit more in the aftermarket. The US dollar was weaker today. The XAU gained 5 7/8. ABX up 1 1/8, GG higher by 1 1/4 and NEM up 1 1/2. Volume was light today and that could be a problem going forward. I do not trust light volume rallies. My ABX calls continue to be in the black but we are reaching overbought status. However the weekly charts still look like they have room to run. If todays drop in the dollar is the beginning of something bigger, then I'll continue to hold the calls. That would support the price of gold here. It also looks like the gold shares are starting to outperform the metal itself and that's a positive going forward. Mentally I'm a bit tired, did not sleep all that well. I will be getting back to my normal market schedule next week which should bode well for trading. I would like to try the OEX put trade but my schedule for this week may not permit it. We'll have to see how it goes. It's risky, yes. But the opportunity may be well worth the risk.

The Dow closed the week with a gain of 125 points on good volume. The advance/declines were about 2 to 1 positive. We were up for most of the day but after such huge point swings this week it seemed like a drift. The overall market was weaker than the Dow. The McClellan oscillator is making its way back to positive territory in a hurry. The summation index is trying to turn around here. The weekly S&P 500 candlestick chart looks like it may have put in a bullish hammer. It managed to close the week above the 2oo week moving average. However the jury is still out on what happens from here. I will have to check things out over the weekend and go from there. GE gained almost 1/4 on good volume. I'm going to let some kind of bottom form for GE and then I will purchase some January calls. That is the game plan for GE right now. Could change as we go forward. Gold fell again today, down 9 bucks on the futures. The XAU fell a couple of points. ABX lost 1/3, GG and NEM fell 7/8. Volume was lighter than lately. My ABX calls are still in the black but have lost some of the profit. 5 weeks to go but the weekly GLD candlestick chart looks like a blow off top. Again, I will have to check things out over the weekend and decide what to do next week. Mentally I'm feeling OK, slept well. It was quite a week and I really do not expect that type of volatility to continue. But who knows? I think at the least we will retest the lows of this week sometime in the next few weeks. But I'm often wrong. I don't think the long term problems in Europe and the US will all of a sudden be solved. But the focus of the markets could move on to something else. Another thing to consider is the presidential cycle and that implies much higher stock levels by the end of the year. So there is plenty to consider going forward. I will check the charts and the numbers over the weekend and go from there. Sometimes the hardest thing to do with a winning trade is to stick with it and not take the quick profit. That is what I'm facing with the ABX trade. I don't want it turning into a loser though either. Time will tell. For now it's Friday afternoon in August and time for a rest.

Back to the upside as the Dow gained 423 points on heavy volume. The advance/declines were over 10 to 1 positive. We were up well over 500 points and dropped over 100 in the last half hour. We have traded several hundred point up and down days this week. At this pace we should be down 400 points tomorrow but who knows? This kind of volatility won't last forever. The stock indices are trying to put in a bottom here. It remains to be seen if they will be successful. The McClellan oscillator is working off its very oversold condition. You can really make a case for either way here at the moment. 6 days to go in the August option cycle. I have no OEX trades in mind here and you have to be careful. The premiums have so much volatility in them that as we get towards the end of next week option values will plummet. I'll make a trade if there is a decent set up but otherwise I'll sit things out. GE was up 60 cents on good volume. Oversold and a bounce is expected. I'm looking at the January calls there. If we head back down again, that is a trade that I'm willing to try. Gold got clobbered today as margin requirements to hold the precious metal were raised. The same thing happened when silver went parabolic and it marked the end of the rally. Can history be repeating itself? Gold was off over $30 on the futures. However the XAU was up 3 1/8. ABX and GG had fractional gains while NEM was up 2 1/2. Volume was good again. The gold shares put in a good performance despite the drop in gold. A 400 point rise in the stock market can take some of the credit. The US dollar bounced around today but ended up about unchanged. My ABX calls are still in profit mode. I'll hang on to them for now. Not overbought here yet. Mentally I'm feeling a bit tired, did not sleep well. It has been quite a week and we still have to get through Friday. The volatility has been off the charts. I don't see any short term trades here for me but that could change. Let's see what happens tomorrow and go from there.

The decline got back in gear today as the Dow lost 520 points, wiping out yesterdays gains. The advance/declines were 3 to 1 negative with heavy volume once again. European worries once again, this time with France in the spotlight. We might actually get a short term buy signal soon if we make a lower low and the McClellan oscillator stays above its low set on Monday. But it hasn't happened yet. The market could do anything here but I think we are either trying to form a bottom here or we're heading much lower. The VIX is out of control and the last time that happened in 2008 the decline was severe. However the McClellan oscillator has already blown out to the downside so the decline may be about over for now. It's a coin flip and that isn't the way to go in this game. Tomorrow could be key. I don't have any OEX trades in mind here at the moment. We'll see. GE fell almost a buck on heavy volume. I'd keep an eye on GE for clues here as well. I'm still interested in the January calls but there is no hurry. GE is around $15 and there is no support below $14. Gold continues to defy gravity, up $40 on the futures to a new record high. The parabolic move continues. The XAU gained 4 1/3 but was higher during the day. ABX rose 1 7/8, GG up 2 3/8 while NEM only tacked on 3/8. Volume continues heavy here as well. My ABX September calls are now solidly in the black. The question turns into how long shall I hold them? Over 5 weeks left for these and we're not oversold on the gold shares yet. I like the fact that in a down 500 market the gold shares found buyers. Mentally I'm feeling OK, slept well. All eyes will continue to be on the stock markets action and reaction to the daily news events. The technicals do count for something but in this type of environment, anything goes. 2 days left in the week and it already seems like it's gone on forever. Multi-hundred point days up and down will do that to you. This summer has been anything but quiet. There will be opportunities in a market like this but you have to be careful. If I had to guess, I'd say we won't see the ultimate low in this move until sometime in October. We'll see what tomorrow brings.

The oversold bounce finally arrived after the Fed as the Dow soared 430 points on heavy volume. The advance/declines were over 10 to 1 positive. We gyrated a bit after the Fed but then came a powerful final hour rally. The Fed promised to keep rates low until the middle of 2013. Really? That must be some crystal ball they've got. But that doesn't really matter. What matters is what the markets say. We reached a new extreme negative on the McClellan oscillator and had to start moving higher. I placed an early order for some OEX calls but it wasn't filled. There is so much premium in the index options at this point that they are overpriced in both directions. I still think some money can be made though. I also don't think that the bottom of this rally will mark the low. We'll see. GE was up 1/2 on extreme volume. I'm still thinking of the January calls here but would like to see some base building. Plenty of time for this trade. Gold had a wild day. It reached a new all time high as it was up over $30 at one point. However it has fallen about $50 from there at the moment. The GLD daily chart shows a heavy volume reversal to the downside. Gold could be taking a rest here but we'll see. The US dollar fell on the Fed statement. The XAU followed the overall market higher by 8 1/2. ABX up 1 1/2, GG rose 1 2/3 and NEM gained 1 1/4. Volume was heavy here. My ABX calls are still showing a profit but that won't be the case if we see a sustained sell off in gold. There's still plenty of time for this trade to work but if the stock indices get choppy it could complicate things for the gold shares. Not to mention we will eventually head back down to test this recent low in the stock indices. Mentally I'm feeling OK. The expected bounce appeared. Looking back at previous extreme oversold readings shows that most likely there will be more downside to come. If we reach short term overbought before next Fridays expiration, I'll try the OEX puts. I'm not sure this rally has long legs. But it's only Tuesday. Gold certainly looks like it reversed to the downside today so I will have to reconsider this ABX trade as well. I'll ponder things tonight and try to come up with some sort of game plan going forward.

It's just a free fall panic at this stage. When the US debt was downgraded after the close on Friday, you'd expect Monday to be pretty ugly. It didn't disappoint. The Dow lost 634 points on heavy volume. The advance/declines were blown out once again, over 10 to 1 negative. The market is so oversold right now, I don't know what to expect. We are so overdone on the downside that the snap back will be furious. Or maybe not. Some of the stock indices have broken through their 200 week moving averages, others have not. I'm going to check the McClellan oscillator later tonight and if we are below -400 I may try the OEX calls tomorrow. We'll see. This could also be a rerun of the fall of 2008 where we just head lower. Feels like it at the moment. GE fell over a buck on blow out volume. The same question of how long this goes on is in effect. I'm looking at the January calls here but I'm in no rush. Gold rose $60 today. That's not a typo. The flight to gold has now sent gold parabolic. We all know that it never ends well when anything heads straight up. However it could go on for a while as was the case with silver. Silver stopped at a nice round number of $50. Could gold go to $2000? The XAU fell 3 1/3. The gold shares moved fractionally one way or the other on extremely heavy volume. ABX, GG and NEM were all up over $2 at one point. The ABX September calls actually moved higher, although the stock didn't do much. The US dollar was a bit higher. I'm going to hold on to the ABX calls for a while. The stock indices will not go down forever and the gold share calls have 6 weeks left on them. Mentally I'm feeling OK, could have slept more. It's been quite a wipe out in the stock market. It's really anybodies guess where we go from here. Panic does create opportunity. The charts are moving straight down. I'll check the indicators tonight and go from there. There is nothing wrong with sitting it out on the sidelines as well. However if the McClellan oscillator is below -400, I will be seriously looking at the OEX calls.

That was quite a week as the major stock indices basically fell apart at the seams. In the middle of the summer no less. We closed the week with a gain of 60 points on the Dow. However the advance/declines were about 3 to 1 negative. Volume was heavy once again. The overall market was weaker than the Dow. The summation index continues to head lower in a hurry. We are still very oversold. The employment report was better than expected but it didn't even matter. The market is now moving simply on price. Nobody knows what next week will bring. I can say from past experience though that there will be at least one huge up day. A 3 or 4 hundred point oversold, short covering rally. Pinpointing the time is the problem. GE was flat today on very heavy volume again. Perhaps we are now sold out here. We'll find out next week. I'll mention the VIX today for a change, as it reached a level not seen since the spring of 2010. It may mean the worst is over for now, depending on what happens next week of course. That's just a guess as usual. Gold lost $7 on the futures but gained it back in the aftermarket. The dollar was lower today. The XAU lost a point but was much lower early. The gold shares were mixed on heavy volume. ABX fell 3/4 and my September calls are now in the red. I am now considering just dumping them next week if we see some rally in the markets. I'll think about it over the weekend. Mentally I'm feeling OK. There are a couple of trading scenarios for next week depending on how the week begins. I think shorting whatever rally appears may be the best course of action. I do not think we will see a rerun of this week. I could be wrong. We'll have to see what develops over the weekend. I will be checking my longer term charts to see what these type of conditions in the past have led to. Usually it's a snap back rally followed by a retest of the lows. We'll see. It's Friday afternoon and definitely time for a break.

It was a market meltdown as the Dow plummeted 512 points on very heavy volume. The advance/declines were blown out to the downside. Summation index in free fall. Oversold, staying there and anything can happen at this point. Yesterdays attempt at a bottom failed drastically. I'd like to say that I know when this will all end but I certainly don't. The employment report is out tomorrow and I wouldn't expect any good news there. Perhaps we can get a blow-off move down and start to recover. There will be a short covering rally at some point but the timing is in question. Stock markets around the world collapsed overnight. Probably will see more of the same tonight. Maybe we could see some support at the Dows 200 day weekly moving average but it's still 500 points from here. Stay tuned. GE lost a buck on extreme volume as well. I'm looking at getting some GE calls for the longer term. Meaning next January or March. However in these market conditions I think that it would be better to let some type of bottom form in GE. That may take a few weeks or longer. I'll keep an eye on it and decide the best course of action over the weekend. Gold hit a new all time high before pulling back during the day. It fell by $6 and a bit more in the aftermarket. The US dollar was very strong today in the flight to safety. The XAU got clobbered, down 12 2/3. ABX off 2 7/8, GG lost 2 7/8 and NEM fell 2 2/3. Volume was very heavy here as well. I did purchase some ABX September calls. However if the market continues its free fall, the gold shares will follow suit. I could have canceled the order but I wanted to do this trade as a back-up to missing out on the OEX puts. ABX isn't extremely oversold here but it is enough for me to give it a try. I think once things settle down, gold will continue to attract capital as a flight to safety since the fear level is now elevated. My thinking is that perhaps gold and the dollar will rise in tandem as they did the last time we had a major market collapse. We'll see. Mentally I'm feeling OK but a bit tired. Could have slept more. Today was interesting but tomorrow could even be more so. Maybe we will see the panic low. There will be opportunities but it isn't easy trying to catch a falling knife. I still don't sense a gripping fear in the marketplace but that could change rapidly. We are very deeply oversold so when the bounce happens, it will be huge. Hasn't happened yet. We'll see what tomorrow brings but be ready for anything.

We finally got some type of bounce from an extremely oversold condition. The Dow gained 29 points on good volume. The advance/declines were about even. The daily candlestick chart on the S&P 500 looks like it has formed a hammer here. That could lead to some more near term gains. We still have the employment report on Friday to deal with. I think that the decline may be done for now but that doesn't mean that it's over. GE gained 1/4 on good volume. No trades here for now. Gold soared another $20 as the US dollar fell. The XAU gained 1 1/2. ABX and GG each rose about 1/2 while NEM gained a buck. Volume was good again. The money continues to flow into gold related assets. I placed an order for some September ABX calls. If we get some pullback then this order could get filled. Yesterday there was a lot of volume in the September ABX calls. Today the same options open interest expanded. The last time that I saw this, ABX had a nice rally. We'll see. Mentally I'm feeling OK. The summation index continues to decline at a rapid clip. We are in the danger zone for a crash unless we turn around quickly. However the McClellan oscillator is at a point where previous oversold rallies have started. It's a tough call either way. I'm still leaning towards getting some OEX puts on this bounce. Time will tell.

The Dow got clobbered today as it fell 265 points on heavy volume. The advance/declines were over 4 to 1 negative. Summation index gapping down. Very oversold and staying there. That's dangerous. Possible crash coming or we are in the middle of it. Debt deal is done and the markets don't care. I never did get a chance to get some OEX puts. I think it's too late now unless we see a 3 to 4 day rally. No hint of that coming. Everyone now fears the employment report on Friday. Might be a chance to go the other way but I wouldn't be betting on it. GE was down 3/4 on good volume. Support has been broken. GE led the way down and it is something to keep am eye on for when we eventually head back up. Gold had a great day, up $22 on the futures and almost that much again in the aftermarket. The XAU gained 1 1/4 in a really down market. ABX, GG and NEM all had fractional gains on OK volume. The dollar was a bit higher today. The Gold/XAU ratio is solidly on a buy and getting stronger. I think that I'm going to try the gold share calls again. That will have to be my back up plan after missing the OEX puts. We should probably see some downside follow through in the stock indices tomorrow and perhaps that will take the gold shares along for the ride. I'm looking at ABX again. We'll see. Mentally I'm a bit frustrated on the OEX puts. I don't think that I'll get another chance for them. I've got to forget about that and move on. However we could be on the brink of some type of market meltdown. Opportunities will present themselves if that happens. 8 days to the downside for the Dow. Should have seen some type of sustained bounce but haven't. Gold is soaring but the gold shares lag. This summer has been anything but quiet. I'm going to mull things over tonight and decide what to do in the morning.

A US debt deal is imminent but the Dow still can't rally. We lost 10 points today on good volume. The advance/declines were about even. The market opened much higher by over 100 points but could not hold on. We were also lower by 100 points during the day as well. Oversold and staying there. I still believe that we will see some type of bounce soon and that bounce can be shorted. I would like to own some OEX puts before Fridays employment report. We'll see. GE was flat today after some wild swings on good volume. It just about mirrored the overall market. No trades there. Gold lost about $10 on the futures while the US dollar gained some ground. The XAU was up 1 1/8 after being higher early. ABX up 1/2, GG higher by 1/8 and NEM lost 1/4. Volume was light. I may try the September ABX calls if we see a pullback in gold here. I would think that gold would lose some of its luster on a debt deal agreement. If the deal doesn't pass, we could see a pop to the upside on fear. I do however believe a deal will happen. Mentally I'm feeling OK. I'm thinking that today we may have set a near term low that will be broken later on in the August option cycle. We are very oversold and a relief rally should appear. I'll be keeping an eye on the OEX puts. That has been the story here for at least a week and it remains so. We'll see what tomorrow brings.