The employment numbers came out weak but the market didn't care as the Dow rose 165 points on average volume.  The advance/declines were 3 to 1 positive.  Is the decline over?  It sure looks like it after today.  However I still think the recent lows will be tested at some point in the next couple of weeks but I could be wrong.  Yesterdays positive action in the stock indices was a precursor for todays action after all.  I guess the lesson there is the market always knows more than we do.  The summation index should turn around after todays numbers.  It looks like we have already gained back half of the decline.  Resistance is at the 50 day moving average for the S&P 500.  Around the 1810 level.  GE was up 1/4 and the volume was lighter than it has been recently.  The 200 day moving average has held for now.  Gold was only up $5 on the futures and a little more in the aftermarket.  The US dollar was lower after todays jobs report.  The XAU gained 2 3/4.  ABX added 3/8, GG up 2/3 and NEM rose 1/2.  Volume was average.  GDX was up 3/4 as well.  My positions in the February ABX and GDX calls are back at break even.  The gold shares were a bit better performers than gold itself today and that is a minor positive.  Looks like I may hold on for the ABX earnings report next week after all.  The technicals for the gold shares short term have turned back up.  Mentally I'm feeling OK.  Well it looks like all the shorts have been squeezed out of this market for now.  The negative tone in the media hit a high point early in the week and that kind of activity must be payed attention to.  We'll have to see how bullish things get over the weekend.  More important will be if we get follow through to the upside next week.  The new Fed boss will be speaking during the week and that will be the next prime mover in my opinion.  I expect a dovish stance so that should be supportive to the stock market.  We'll see.  Gold held up OK today.  The Bollinger bands on the daily charts are converging and that means a big move is coming here soon.  Which way is the question.  We'll probably find out pretty soon.  The bands are getting closer on the gold share indexes as well.  Yellens talk next week should move gold as well.  Plus the ABX earnings report due Thursday will get things going in that stock as well.  Plenty to look forward to.  I'll be checking the charts over the weekend as usual.  For now it's Friday afternoon and time for a break.

The Dow climbed 188 points today on good volume.  The advance/declines were 3 to 1 positive.  Is this the start of the next leg up or simply short covering ahead of tomorrows employment report?  That is the question.  There is a chance that the decline has ended but we will have to wait and see what develops tomorrow.  I'd like to say that I have a good feel for what is going to happen but I don't.  The summation index is still heading lower but we are getting close to being back up to the zero line in the McClellan oscillator.  Usually though, at some point the recent low will be tested.  GE was up 3/8, the volume was OK and the 200 day moving average has held the decline in GE so far.  GE led the way down and it appears a 5 wave move lower has been completed.  No trades in mind here for GE yet.  Gold was flat on the session after being higher intra day once again.  The US dollar was a bit weaker today.  The XAU and GDX were basically flat on the trading day.  ABX, GG and NEM had slight fractional moves one way or the other on very light volume.  A waiting game today for the gold shares.  My GDX and ABX February calls are showing losses.  Tomorrow will mean a lot for these trades but it may not be the end.  We've got the new Fed head speaking next week and that should move things.  Plus earnings due for ABX on Thursday.  Technically the gold shares have worked off the recent overbought condition on a daily basis.  Mentally I'm feeling OK.  I thought today might be a waiting game for the stock market but we got a rally instead.  Could the market know more than we do?  It usually does.  But we will still have to see what happens tomorrow.  Gold has tried to rally the past 2 days and has been pushed back each time.  That is not bullish action by any means.  A move lower on Friday would not be a good sign for the February gold share calls that I own.  However we will have to wait and see what transpires tomorrow.  We'll keep an eye on the overseas action tonight as we await tomorrows all important employment report.  Should be an interesting day.

Marking time today as the Dow fell 5 points today on good volume.  The advance/declines were negative.  The overall market was weaker than the Dow.  The market did come back from an early sell-off though.  Pretty oversold on some of the short term technical indicators but the tone remains negative.  All eyes will be on Fridays employment report.  We could go either way I guess.  The market reaction, not the number itself will be the key.  If the recent decline was what is called a measured move, it is probably for the most part over.  If it is something more then there will be a trip down to the 200 day moving average which equates to 1710 on the S&P 500.  GE was off a nickel and the volume was good.  Still holding the 200 day moving average here.  Gold was up 5 bucks on the futures, while the US dollar lost just a bit.  The dollar did come off of its lows though.  Gold fell off of its highs.  The XAU fell almost 1 1/8.  ABX dropped over 1/2, GG and NEM fell 1/3.  Volume was lighter than it has been.  GDX lost over 1/3 and my GDX February calls are showing a loss.  I also got a buy signal on one of my indicators for ABX today and I purchased some February calls there as well.  They are showing a loss too.  Perhaps I am late for the recent gold run and that was a concern with the GDX trade.  ABX does have earnings coming out next week but I probably don't want to wait that long.  Mentally I'm feeling OK.  I would expect tomorrow to be another day of indecision for the stock indexes.  There is no reason to establish big trading positions before the employment report.  The summation index continues lower and we should probably take our cues from there.  I still may try the February OEX puts if we make it back to the 1775 level on the S&P 500.  Although I'm not exactly sure that is the right move.  Gold came off of its highs and the gold shares underperformed the metal itself.  That is definitely not bullish action and I am holding gold share calls.  Could simply be another trading mistake on my part.  We'll see.  Chinese players returning yesterday did not move gold.  Once again I may be too focused on gold when there are better opportunities elsewhere.  But I did receive a short term buy signal for ABX today so I had to follow it.  We'll see what tomorrow brings.         

A bounce today after yesterdays drubbing.  The Dow gained 72 points on good volume.  The advance/declines were over 2 to 1 positive.  The summation index continues lower.  I still think we are going to go lower here but I'm starting to hear everyone in the media turn bearish.  So perhaps most of this part of the downside activity has already happened.  Some of the technical indicators are blown out to the downside and rightfully so.  Still plenty of time in the February option cycle and we do have the employment report on Friday.  If we somehow make it back up to the 1775 level or so on the S&P 500, that would the spot to try the puts again.  Yesterdays blow out volume may have been a short term exhaustion for the bears.  GE was up 1/4 and the volume was good.  Hovering at the 200 day moving average here.  Watch GE for clues to the overall market direction.  That idea has worked so far.  Gold fell $8 on the futures as the US dollar was a bit higher.  The XAU was up about 2/3.  ABX, GG and NEM had slight fractional moves one way or the other on lighter volume.  GDX turned around during the session and was up almost 1/3 on lighter volume as well.  My February GDX calls are showing a slight loss.  I'm looking at the April calls now for the gold shares.  Mentally I'm feeling OK.  Checking the stock index charts, the downside formation here could be a measured move.  If that is the case it would be an ABC move and would be about over.  It is possible but the future market action will tell us.  I'm still leaning on getting some index puts if we get more near term upside.  But the risk now is higher on the short side in my opinion and the volatility has spiked.  Again, being nimble here is the preferred path.  Gold might get moving again tomorrow with Chinas market opening back up.  The recent 2 week price action in the XAU and GDX is possibly a bullish flag continuation from the recent move higher in January.  We should find out soon.  Not exactly sure how long I will hold the GDX call position.  We'll keep an eye on the overnight action and take things from there.

The market started out the month getting slammed once again as the Dow fell 326 points on very heavy volume.  The advance/declines were 6 to 1 negative.  The summation index continues lower.  There cannot be any doubt now that the trend is down.  The question is how far will we go?  The recent consolidation above 1770 on the S&P 500 was a flag and now we have broken that support.  We are right at a daily up trend line that began last September.  That probably won't hold but it could provide some near term support.  Or not.  A better chance for support is probably at the 200 day moving average around 1700.  Of course owning the February OEX puts was the way to go here and I blew it.  I wasn't fast enough and that is a problem that must be faced.  GE got pounded and lost 3/4 on very heavy volume.  It appears to be the last leg of a 5 wave down move for GE.  GE is also at its 200 day moving average here.  So there is a chance that the decline for GE is coming to its conclusion.  We'll see.  Gold found buyers again as the futures rose 20 bucks.  The US dollar was weaker on the session.  The XAU however lost 3/4.  ABX was flat, GG lost 1/8 and NEM fell over 1/2.  Volume was average.  I did purchase some February GDX calls today.  This trade already looks like a mistake.  My theory is that GDX is consolidating its recent gains before moving higher above the 24 level.  We are also right at the up trend line that began in early 2014 for GDX.  So the gold shares will either bounce from here or the up trend there is over for now.  But with gold moving higher and the gold shares moving lower it isn't looking like a bullish case near term.  Mentally I'm definitely feeling frustrated for not taking advantage of a down trend that I saw was coming.  That is why I'm afraid that todays GDX trade was done because of that.  I think that maybe I just wanted to get something going and that it isn't really the best idea at the moment.  The trading game is always fought within.  Perhaps the GDX trade will work out but I will not be surprised if it doesn't.  It will be interesting to see just how far we head down here for the stock indices.  I would not advise trying to pick the bottom.  Wait for the positive divergences first.  We are a long way from that at the moment.  Volatility is really ramped up right now.  You really have to be nimble on any trades taken out there.  The trading environment has changed.  The time to get long the stock indexes will be when all you hear in the media is bearishness.  We aren't there yet.  We'll keep an eye on the foreign markets tonight and go from there.

Up and down here on a daily basis as the market is trying to make up its mind here.  The Dow fell 150 points on pretty good volume.  The advance/declines were shy of 2 to 1 negative.  We dropped in the final hour and that isn't bullish.  The summation index continues lower.  My open order for the OEX puts wasn't filled but I'm leaving it in over the weekend.  I'll need to see some upside to hit my purchase price.  The overall market was not as weak as the Dow but that hasn't meant anything lately.  I think we are still headed lower and if we break 1770 on the S&P 500 things will unravel in a hurry.  I would like to take advantage of that.  GE was off over 1/3 and the volume was average.  No trades in mind here.  Gold bounced around on the futures but finished the day little changed.  The US dollar continued higher.  The XAU was down 1/2.  ABX was little changed on the session.  GG rose 3/4 but the story was with NEM.  It got clobbered on its earnings report and lost 2 1/2 on very heavy volume.  That points out the problem with trading the individual issues sometimes.  News can move it violently either way.  Happened with ABX last year.  If you are on the right side of the move it's great.  If not, you lose everything.  The trade off of trading the gold share indices is less price movement of the option premiums.  But the odds of getting wiped out are diminished.  Perhaps I'll try the GDX.  Something to think about over the weekend.  Mentally I'm feeling OK.  It's entirely possible that the major stock indexes are putting in a flag formation here, which would be a precursor to more downside action in price.  If that is the case my open order for the OEX puts will not get filled.  Yes, I'd like to see some upside early next week but the market rarely accommodates what I want.  The short term technicals are oversold but in down markets they stay that way.  I'll try and figure it out over the weekend.  Beginning of the month coming up so perhaps there will be some money flows into stocks.  The employment report in a week will certainly be a mover.  Gold looks to be approaching a point for a decent move one way or the other.  The bollinger bands are starting to converge.  We saw what that led to in the stock indices in the past two weeks.  Maybe it is time to just go ahead and buy some February gold share calls.  I'm really late with this trade and I have nobody to blame but myself.  The recent rise in the US dollar isn't really bullish for gold though.  Plenty to ponder.  There's still three weeks to go in the February option cycle so opportunity is out there.  Whether or not I can take advantage of it is the question.  Lots of charts to go over this weekend.despite the Super Bowl.  For now it's Friday afternoon and time for a break.

Back again to the upside as the market tries to stabilize in this area.  The Dow gained 109 points on average volume.  The advance/declines were 3 to 1 positive.  The medium term technical picture was at a juncture that suggested that we'd see some upside.  How long it lasts is another question.  I think about 1810 on the S&P 500 is the best case scenario if we can even get to there.  That would be a good place to purchase some index puts in my opinion.  We are short term oversold on some of the technical indicators as well.  Europe was mostly positive overnight and the GDP report was viewed as good.  Now is this more than just a bounce and possibly the beginning of another leg up?  That's the question to be answered in the days to come.  The summation index continues lower.  For me, I've got an open order in to buy some February OEX puts.  GE was up about 1/4 and the volume was light.  The daily chart has a 5 wave down type of structure to it with the last wave down yet to be completed.  It looks like that to me but really anything can happen.  Gold got hit today as the US dollar was stronger on the GDP report.  The yellow metal futures lost almost 20 bucks.  The XAU fell 2 points.  ABX off 1/3, GG lost over 1/2 and NEM shed 3/4.  Volume was average.  Am I still considering the February gold share calls?  Yes but I'm not as much in a hurry to buy them.  I'm also considering going out to the April contract.  We'll see.  Mentally I'm feeling OK.  It would be great to see some more upside tomorrow but today could actually be all we get.  It is possible that the 1770 level in the S&P 500 will hold.  I don't think that it will but I'm wrong a lot of the time anyway.  But I'm right once in while too.  We'll have to see if there is any follow through tomorrow and what the medias take of the situation is.  There are now more bears out there and that isn't a positive for the downside.  A light day tomorrow for economic data.  Even though gold fell today there wasn't much volume.  That is a positive.  The gold shares also have continued to hold up rather well.  An extended rise in the US dollar would be a headwind though.  If the stock market continues to drop it should provide a bid for gold.  I'm still probably going to get some gold share calls in the near future.  We'll close out the week and the first month of 2014 tomorrow. 

Heading lower as the Dow fell on heavy volume.  The advance/declines were 3 to 1 negative.  We are trying to hold the 1770 level on the S&P 500.  I expect that it won't hold.  Pretty oversold here so perhaps the market will hold up short term and give a chance to purchase the OEX February puts.  But if not then that will be another opportunity that was missed.  The Fed announcement came out and the taper continues.  The summation index continues to head lower.  The volume on the declines has been pretty good so you know that this move lower is the real thing.  Liquidation is in progress.  No point in trying to pick the bottom just yet.  GE was off 1/8 or so and the volume was lighter than we have seen there lately.  Pretty oversold here and I'm guessing that we have further to go on the downside as well.  Gold continues to attract capital as the futures rose $18.  The US dollar finished the day little changed again.  The fact that gold rose despite the fact that the Fed is tapering says a lot.  I thought we would get some decline on the announcement which we did but it was short lived.  The XAU rose 2 points.  ABX up 3/4, GG higher by 7/8 and NEM added 1/4.  Volume remains good here.  It looks like I have missed the boat here for the February gold share calls.  NEM is lagging here but I probably won't try the calls there.  ABX or GG are the preferred options to try in my opinion.  Fear is taking over the markets and gold is the safe haven choice for now.  Mentally I'm feeling frustrated as I have no positions despite the correct hypothesis on the stock market and gold.  There is still a lot of time in the February option cycle.  However when the markets start to head lower, they do so in a hurry.  You really have to be both quick and true to your conviction.  I certainly haven't been quick.  Maybe we can get some bounce off of tomorrows GDP report.  Gold continues to move higher and remains overbought on the short term.  Perhaps I'll just get some gold share calls tomorrow anyway.  The trend is up.  I do not like to chase things but perhaps in this case I should.  The markets are full of uncertainty and gold should continue to benefit from that.  We'll keep an eye on the overseas action tonight and go from there.

We got some bounce today as the Dow rose 90 points on light volume.  The advance/declines were 3 to 1 positive.  Some upside was expected and we should see some more in the next couple of sessions.  The NASDAQ was relatively weaker and that is not bullish.  I'm sticking with my scenario to get some February OEX puts in the next two days.  The summation index is heading lower even after todays numbers.  There is always a chance that the decline is over and my prognosis is wrong.  We'll get the Fed announcement tomorrow and the markets should move off of that.  The stock indices are short term oversold.  GE was up 3/8 on OK volume today.  Just as GE led the way down it began to stabilize yesterday before the overall market.  I do not have any trades in mind for GE at this juncture but will be keeping an eye on it as usual.  Gold fell over $10 on the futures but came back a bit in the aftermarket.  The US dollar was again little changed.  The dollar should move on the Fed tomorrow.  The XAU bounced back 1 1/2.  There still seems to be interest in the gold shares.  I did place an open order in overnight for some February GG calls but it was not filled.  ABX up 1/4, while GG and NEM gained 1/2.  Volume was light though.  I'm still interested in getting in a gold share call trade for the February option cycle.  Mentally I'm feeling OK.  So far everything is lining up as planned in an attempt to try the February OEX puts.  Additional light volume upside in the next couple of days will seal the deal.  However the stock market rarely cooperates with the best laid plans.  I will try to remain nimble and open minded about the situation.  But if we see a strong rally after the Fed tomorrow, I may just purchase the puts.  The gold shares outperformed gold itself and that is bullish moving forward.  The Fed announcement should move the price of gold as well.  The gold shares have come off of overbought technical levels short term.  Who knows?  Maybe I'll attempt a trade there tomorrow as well.  We'll look for upside follow through in the overseas stock markets overnight.

Another downer as the Dow fell 41 points on heavy volume.  The advance/declines were about 3 to 1 negative.  We had a rally during the session but fell back hard in the last hour.  Hopefully that won't be the only bounce that we see this week.  I do think that we should see some upside on Wednesday and Thursday according to my work but you never know.  The market goes where it wants to.  The summation index is heading lower.  I will be purchasing some February OEX puts this week if we get some upside.  GE was up 1/8 and the volume was heavy.  GE led the way down so todays action looks good for some type of rally for the stock indices during the week.  GE is now oversold on a short term basis and due for some positive action.  I would not be looking to buy any calls here though on GE.  Gold was off a few bucks on the futures but fell around $10 in the aftermarket.  The US dollar was little changed on the day once again.  The XAU fell 3 1/8.  ABX was lower by 1/2, while GG and NEM dropped around 3/4.  Volume was light.  I'm still a believer in the February gold share calls.  I will most likely wait for the Fed announcement on Wednesday before attempting to purchase them.  But who knows?  If we see another drop tomorrow like what we saw today I may just go ahead and get them.  I'm looking at the GG February calls.  Mentally I'm feeling OK.  Volatility has really picked up here and that is something to contend with.  However I am sticking with the plan of purchasing index puts on a bounce higher this week.  The Fed announcement on Wednesday should be another catalyst one way or the other.  There is a decent amount of economic data out this week as well.  I'd like to at least see higher stock prices tomorrow.  May not happen.  Gold was lower today but the recent up trend line remains intact.  We'll see if any buying comes in tomorrow for gold.  Still plenty of time in the February option cycle.  To me it seems as though there will be money to be made near term if you're nimble enough.  Hopefully I'm up for the challenge.  We'll keep an eye on the foreign stock markets overnight and go from there.

The Dow got clobbered today as the most watched index fell 318 points on very heavy volume.  The advance/declines were about 7 to 1 negative.  We knew it was coming and now it is here.  If we get any rally you can simply buy index puts.  The summation index will be heading lower after todays action.  The bollinger bands converging let you know a major move was about to occur.  Support for the S&P 500 is first at 1700 and then the 50 week moving average at 1675 or so.  That's just my opinion as usual.  I don't own any OEX February puts but I will get some probably next week if the market cooperates.  GE was off 7/8 and the volume remains very heavy.  GE was the precursor to events as we thought it may well be.  It always pays to keep an eye on this particular stock and that is why we do.  Gold held up rather well again today as the futures rose 5 bucks.  The US dollar finished the session little changed.  The gold shares held up pretty good as well.  The XAU only dropped 3/4.  ABX was flat, GG was up 1/8, while NEM shed 1/4.  Volume was once again good for the gold shares.  It was a volatile trading session for the gold shares.  I'm still inclined to purchase some February calls here if I get the chance.  Mentally I'm feeling a bit frustrated for not already owning some index puts.  However if the market pans out as I expect, there will still be time to make some profits.  I do expect some kind of snap back attempt next week for the stock indices and that will be the opportunity hopefully to purchase some puts.  If I already owned some at this point it would be simply a matter of holding on until we reach the previously mentioned potential areas of support.  The gold shares have come back to life.  That is the case with any trading vehicle when it is left for dead as these stocks were at the end of last year.  I still think there can be profits had in the February option cycle on the call side.  Perhaps the Fed announcement next week will throw some cold water on the recent rally and give us a chance for purchase.  Plenty of time in the February option cycle as we still have four weeks to go.  The trading will have to be nimble though as the recent volatility does not favor long holding periods.  As usual I'll be going over all the charts this weekend and keeping an eye on how much press todays decline gets.  The ideal scenario would be some kind of relief rally next week and the thought that this downside move is over.  However as always, the markets will go where they want.  For now it's Friday afternoon and time for a break.

We got some movement today as the Dow fell 176 points on heavy volume.  The advance/declines were 2 to 1 negative.  Global economic worries was the excuse for todays downturn.  Plus some negative earnings reports.  It appears the breakout that we were looking for will be to the downside.  Index puts are in order.  The summation index hasn't turned around yet but when it does the decline will continue in earnest.  Yes I am late in purchasing the puts but there is still probably time to get in on some profits.  Plenty of time left as we have just begun the February option cycle.  GE was off over 1/8 and the volume was heavy again.  Maybe a short term bottom for GE here but the target is around $24.  Gold rallied today as the US dollar got clobbered.  The precious metal futures were higher by $25.  We are right at a daily down trend line that has been in effect since late August.  Look for a breakout to the upside.  The XAU rose 2 1/4.  ABX up 1/2,  GG gained 7/8 and NEM added 3/4.  Volume was good.  The technicals here have reversed yesterdays downside rollover.  I'll be looking to get some February gold share calls as soon as possible.  However I may wait until the Fed announcement next week as another taper should drive prices lower short term.  We'll see.  Mentally I'm feeling tired, did not sleep well.  We are at the lower end of the recent trading range for the major stock indices.  A break lower here will really get things moving down.  I do anticipate that will happen.  The Dow is trying to hold its 50 day moving average.  The small stocks have held up better here.  That is usually bullish but perhaps not this time around.  The TRAN was positive today and hit a new all time high but it has yet to be confirmed by the Dow.  I don't know what is going on there.  I do know that the tone of the stock market has changed.  Puts are advised.  Gold appears to have found some buyers since the start of the new year.  The gold shares have led the way higher and that is bullish moving forward.  I'll be getting some February gold share calls at some point.  We'll see if the foreign markets follow the US lower and finish out the week tomorrow.    

Another day of mixed results as the Dow fell 40 points on light volume.  The advance/declines were almost 2 to 1 positive though.  The NASDAQ and the S&P 500 were both positive.  The summation index continues higher.  I am still looking at the February OEX puts.  We are going sideways in the S&P and I believe the breakout will be negative.  I am even firmer in my commitment to this idea after looking at the option premiums for the OEX February cycle.  The puts are priced much higher than the respective calls.  The market knows more than we do.  I could be wrong but I'll probably be leaving in an overnight order.  GE was down again, off another 30 cents.  The volume was lighter than it has been but GE is probably telling us something here.  It could be a warning of things to come for the overall market.  That's a guess as usual but it may be correct this time around.  Gold was off a few bucks on the futures while the US dollar was a bit higher.  The XAU dropped 2 1/3.  That is a change from the recent gold vs. gold share relationship.  ABX, GG and NEM all fell around 1/2.  Volume was lighter on the decline and that is a positive.  I'm still considering the GG February calls but will probably wait to purchase.  Something to think about tonight.  Mentally I'm feeling OK.  The market seems to be going nowhere at the moment.  We are simply building up to the next sustained move either up or down.  It will be a trade worthy event to be sure.  An extra week in the February option cycle so the premiums are still high.  The market will not wait though so we have to be ready when things get going.  The short term technicals for the stock indexes remain overbought.  Gold is right at its 50 day moving average and the short term technicals have appeared to roll over.  The XAU had its technicals roll over today as well.  Perhaps patience is needed here.  We'll keep an eye on what develops overnight and come up with a strategy for tomorrow.

Another session with a mixed picture as the Dow fell 44 points on good volume.  The advance/declines were 2 to 1 positive.  The overall market was much stronger than the Dow.  Some small stock indices hit new highs.  The summation index remains to the upside.  The large cap stock indices are still moving sideways though.  I'm still a believer of a top being put in place.  I am looking at the purchase of February OEX puts in the near future.  GE was off over 1/4 and the volume was good.  We have a bearish crossover here on the weekly MACD.  Support comes in at the 50 week moving average at $24.  Gold fell $10 on the futures and the US dollar was a bit lower as well.  The XAU rose 1 1/4 though as the gold shares are outpacing the precious metal.  ABX, GG and NEM all had fractional gains to the upside despite lower gold prices.  Volume was good.  If and when we see some pullback here, that will be the time to purchase some February gold share calls.  The tide has turned for the gold shares.  The only caveat will be if we don't see a pullback.  Then it will be too late for this move.  Mentally I'm feeling OK.  A short trading week and not a lot of economic data to boot.  It could be another time to just be patient.  The bollinger bands on the stock indexes are converging, so a decent sized move one way or the other is coming in the near future.  I'm still leaning towards the downside for the breakout.  However the overall market performance lately seems to be pointing higher.  We'll see.  The gold shares have come to life with a slow grind higher.  We are overbought there on a short term basis to be sure.  However markets can stay overbought when they are in an uptrend.  I'll be keeping an eye on it.  We'll see what transpires in the overseas markets tonight and go from there.    

Once again a mixed bag for the stock market.  The Dow gained 41 points on good volume.  The advance/declines were negative though.  The overall market was much weaker than the Dow via the S&P 500 and the NASDAQ.  We are still in a sideways configuration for the most part.  The breakout will occur in the February option cycle which also carries an extra week in it.  I still think we are about to have some downside for the stock averages.  I will be looking at the February OEX puts for purchase.  GE dropped 2/3 and the volume was extremely heavy.  The street did not like the numbers out from GE today.  This could be a precursor for the overall market going forward.  I believe that it is.  Gold keeps moving higher.  The precious metal futures rose $13 despite a higher US dollar.  That has been the theme lately with both gold and the dollar moving up on the same day.  Could it be a defensive allocation of funds that nobody has picked up on yet?  Maybe.  The XAU gained another 2 1/2.  ABX and NEM were up over 1/2, while GG added 7/8.  Volume was good.  Short term overbought to be sure for the gold shares.  I don't think that it is too late for the February calls here still but we'll need to see some pullback in order to purchase.  The ideal scenario would be for the gold shares to drop with the overall market in the coming weeks.  That may simply be wishful thinking on my part.  Mentally I'm feeling OK.  It looks like I'll try the OEX February puts next week if we get some rally.  It is a holiday weekend so there will be plenty of time to decide exactly what to do.  The summation index is still moving higher and it is usually not wise to go against that.  But you must admit that the tone of the market has changed.  We are not simply going up all the time anymore.  I'll be checking the indicators over the next three days.  Gold has grudgingly moved higher since the beginning of the year.  The gold shares have also shown relative strength vs. the overall stock market since then as well.  I do not think that this is widely known yet.  Many are skeptical of gold after the very poor showing last year.  So we'll see where it goes.  I still think that short term trades from the long side are still viable for the gold shares.  I'll be looking at the February calls here over the weekend as well.  Plenty of ideas to ponder for the next trade.  For now it's Friday afternoon and time for a rest.

A mixed bag today as the Dow fell 65 points on average volume.  The advance/declines were positive.  The overall market was stronger than the Dow, with the NASDAQ finishing the day positive.  However the TRAN was weaker today.  The summation index is still moving up.  The signals are kind of mixed here really.  I'm still saying that a top is in the process of forming.  I would advise caution against anything other that short term long positions.  GE was off 1/8 and the volume was light.  We'll get some movement off of the earnings tomorrow to be sure.  Could go either way and I have no idea which.  We're still holding the 50 day moving average for now.  Gold rose $3 on the futures as the US dollar was a bit lower.  The XAU gained 7/8.  ABX, GG and NEM had small fractional gains on light volume.  No a lot of interest here for the gold shares as we grind our way higher.  Mentally I'm feeling OK.  Option expiration tomorrow plus some big name company earnings reports, INTC and GE.  We've really just been going sideways for the major stock indexes for about a month now.  I'm expecting that the resolution will be lower prices but I could be wrong.  Gold continues to hang around its 50 day moving average.  I'm still considering the February gold share calls if we see some decline in the near future.  Haven't seen much interest there lately though.  We'll get through Fridays expiration tomorrow and see where we stand.

Continuing higher as the Dow gained 108 points on good volume.  The advance/declines were 2 to 1 positive.  It looks like I may be wrong in my top building prognosis for the stock indices.  The small stocks are breaking out to the upside and that is a positive.  The summation index continues higher.  The expiration week positive bias seems to be taking hold.  We'll have to see how the rest of the week goes though.  But higher prices on expanding volume is usually a positive sign.  GE was up over 1/3 on average volume.  The earnings due on Friday will probably be the next catalyst.  Gold was off $4 on the futures but closed off of its low.  This, despite a higher US dollar.  Not sure exactly what that implies.  The XAU rose 1 1/4.  ABX and NEM had fractional gains, while GG was off a few cents.  Volume was light.  Not a lot of interest in the gold shares today with the market moving higher by over 100.  I'm still considering the February calls here but probably after this week.  Mentally I'm feeling OK.  It looks like buying some OEX January calls on the decline Monday was the way to go.  Hindsight is always profitable.  Where we go from here is the next question.  The short term technicals could support some more upside.  However I have to say that prices for stocks are over extended in my opinion.  I remain cautious for the stock indexes even if we hit new highs.  We are closer to a top than to a bottom.  Gold is hanging around the 50 day moving average.  $1280 remains the near term target but the move higher recently has been anemic.  I'm still keeping an eye on GG.  We'll see what happens overnight and go from there. 

Back to the upside today as the Dow gained 115 points on average volume.  The advance/declines were over 2 to 1 positive.  The small stocks were particularly strong today and that bodes well for the near term.  The summation index is still heading higher.  I still believe that we are in a top building phase of the market for now.  That takes time.  We may hit nominal new highs but I do not think that we will see a sustained rally from here.  We could drift higher into option expiration but I do not see any bold moves upwards for the stock indices.  I could be wrong.  GE was up 1/4 today but the volume was light.  Earnings due on Friday.  Gold dropped a bit on the futures during the session, off 5 bucks.  The US dollar was a bit higher.  The XAU was down 1 1/3 after being higher early on.  ABX fell 1/3, GG off 3/4 and NEM shed 1/2.  Volume was light to average.  The short term technical indicators for the gold shares appear to be rolling over to the downside here.  I still may attempt the February gold share calls when we reach oversold levels.  Mentally I'm feeling OK, much better than yesterday.  It is wise to remember that trading the financial markets requires all of your undivided attention.  Anything less than that will put you at a disadvantage with the other players in the game.  It was a nice bounce back today for the bulls and we'll see if they can build on it.  The TRAN has set a new high in the past few days so we will see if the industrials confirm it.  I'm still advising caution though as the sentiment remains extremely bullish.  Gold took a rest today as we are at around the 50 day moving average and the $1250 level.  The fundamentals here remain weak in my opinion.  However that does not mean that it can't be traded from the long side now and then.  Short term time frames are the best chance for profit here I believe.  February gold share calls remain on my radar for now.  We'll keep an eye on the overnight action and go from there.

A negative day in the markets as the Dow fell 179 points on average volume.  The advance/declines were almost 3 to 1 negative.  The short term upside that I was expecting has not materialized.  The summation index was heading higher but another day like today will change that.  No expiration week positive bias to speak of.  Caution will have to remain the main theme here.  GE was off 1/4 on average volume and was the forerunner of the move down.  Gold was up $4 on the futures and the US dollar was a bit lower today.  The XAU rose 2 points.  ABX, GG and NEM all sold off early and practically came all the way back.  Volume was average.  Perhaps I could have picked up some GG calls today but I was not physically or mentally in the game really today.  I had some minor surgery performed in the middle of the trading session and I'm still not up to par right now.  I'm cutting the blog short today and I'll hopefully be feeling better tomorrow.

We got the employment report today but we still have yet to see some strong movement one way or the other for the stock indices.  The employment report was much weaker than expected.  The Dow finished the session down around 8 points on light volume.  The advance/declines were over 2 to 1 positive though.  The small stocks and the overall market was higher.  The summation index continues to the upside.  I looked at the OEX January calls today but did not purchase them.  That would be the short term play here with only a week to go in the January option cycle.  Regardless, longer term I remain cautious.  GE was off 1/4 on average volume.  We're back to the 50 day moving average here and that may provide some support.  Earnings due here in a week.  Gold found a bid today on a weaker US dollar.  The precious metal futures rose $17.  The XAU gained 2 7/8.  ABX up almost 1/2, GG added 3/4 and NEM higher by almost 2/3.  Volume was OK.  GG has broke through the resistance line on the daily charts.  It appears that I've missed the January call trade here as it is too late.  I'll still be looking out to February for the gold share calls on a pullback.  Mentally I'm feeling OK.  It is puzzling to me that we haven't seen the usual beginning of the year rally in stocks.  Perhaps my prognosis of a top being put in place will prove correct.  I do expect some short term rally here though.  Perhaps the positive expiration week bias will be in effect.  The OEX January calls near the money would be the preferred option choice.  Gold had a nice session to the upside and $1280 remains my near term target there.  No mention of gold in the media, so it has the potential to keep moving higher in my opinion.  However the stock market has a strange feel to it so far this year and if we do see a significant decline, the gold shares will probably go along for the ride down.  So we'll have to keep an eye on things and see what happens.  I've already missed a decent trade in GG and I'm not happy about that.  My mind is a bit preoccupied though so I can't beat myself up too much about it.  Maybe I'll try the OEX calls on Monday but today was probably the time to do that.  I'll be checking the charts over the weekend.  For now it's Friday afternoon and time for a break.

Still no rally for the Dow as we fell 18 points on average volume.  The advance/declines were slightly positive.  Tomorrow we will see some movement as the employment report is due.  I'm expecting a rally due to the technical condition of the market at the moment.  We are overdue for some kind of short term upside.  I still do not expect any sustained move higher.  We'll see.  GE was flat on the session after being lower early.  Still no trades in mind here.  Gold was up $3 on the futures as the US dollar was slightly lower.  The XAU dropped 1 1/2.  ABX and NEM lost 1/4, while GG bucked the trend by closing up 1/4.  Volume was good for GG as it announced some positive results for the year 2013.  I did place another open order for the January GG calls but it wasn't filled.  With only 6 days to go in the January option cycle, I'm going to head over to the February cycle.  The risk is too high for the January options at this point.  I'll be waiting for a signal to get the GG calls.  We still haven't gotten through the resistance from the down trend line from last August.  Mentally I'm still feeling tired.  I expect to see some upside here on a short term basis.  The catalyst will be the employment report one way or the other.  Gold should be moving tomorrow as well.  It could get interesting. 

A mixed market today as the Dow fell 68 points on average volume.  The advance/declines were negative.  We did come back in the final hour and that is positive.  The small stocks were higher on the session and that is positive.  So is the summation index still in a rising mode.  I do expect more upside in the coming days for the stock indices.  The employment report should be the next catalyst for market movement.  We got the Fed minutes today with no real surprises.  Technically getting more oversold on a shorter term basis somewhat.  Regardless if we do see some rally here it should be sold into.  Closer to some kind of top in my humble opinion.  GE was off a dime and the volume was light.  If GE is a precursor of events we'll be heading lower sooner rather than later.  Gold dropped again today, another 5 bucks or so on the futures.  The US dollar was slightly higher.  The XAU fell 1 1/8.  ABX and GG were down 1/3, while NEM shed 1/2.  The daily technicals for these stocks have now rolled over to the downside.  I did once again place an order for the January GG calls but was not filled.  It is looking like this trade is not the way to go here.  I may go out to the February contract or simply pass on this idea.  I need to check the charts tonight again.   Mentally I'm feeling tired as my daily schedule has been changed for this week.  It is important to be in the best physical and mental shape as possible to play this game.  It seems to me that the stock indexes are about to head higher in the short term.  We've had plenty of time to digest the gains of late December.  Even if we do hit new highs in the next few days, I don't think that it will last.  Gold had a bounce and now we are drifting lower.  Attempting a trade here with only 7 days left in the January option cycle is pretty risky.  I still may give it a try.  The gold shares remain near the resistance down trend line at around 87 for the XAU.  A break above that area will mean higher prices rather quickly.  However we haven't gotten through there yet.  Points to ponder this evening.  If a trade is to be done, it will have to happen before the employment numbers on Friday I feel to have the most effect.  I could be wrong and often am.  I'll decide what to do tonight.  We'll keep an eye on the foreign markets overnight and go from there.

Some upside progress today as the Dow rose 105 points on average volume.  The advance/declines were 2 to 1 positive.  We were short term oversold and today helps alleviate that condition.  Perhaps we can get some more rally here but I am not looking for anything that is sustainable.  The overall technical conditions remain in an area that is closer to a top than a bottom.  We are in some cases getting extremely overbought which isn't bullish.  I do not want to sound like a broken record but caution here is advised.  GE was flat on the session after opening higher.  No trades here for now.  Gold was off $8 on the futures after a slightly stronger US dollar.  The XAU sold off a bit but came all the way back to almost break even.  ABX and NEM had slight fractional losses, while GG was unchanged.  Volume was light.  These issues also sold off during the day and made back most of the ground they lost.  The price action is bullish.  I again had an order for the January GG calls but we did not make it down to my price.  Running out of time for this trade with only 8 days to go in the January cycle.  Mentally I'm feeling OK.  So we got some nice positive action in stocks today and it would not be a surprise to see some more upside in the coming days.  However that would be a chance to take some of last years profits in my opinion.  We are most likely building some sort of top here in the stock indexes. Taking long positions should be for short term trading only.  Gold fell today.  My near term upside target remains at $1280 unless we break down from here.  A break down is possible since the technicals are overbought in the short term.  However the technicals can sometimes remain overbought as we all know.  I'll have to check things out again tonight for the gold shares to see if a January option trade is viable.   We'll watch the foreign action overnight and await the Fed minutes tomorrow.

Everybody should be back to work by now but they're not buying as the Dow fell 45 points on light volume.  The advance/declines were negative.  Getting short term oversold now for the stock indices.  The small stocks are leading the way down though and that isn't bullish.  I do expect some upside here soon.  We get the Fed minutes on Wednesday but the big mover should be the employment report on Friday.  No idea here what to expect so we'll stick with the technicals for the stock indexes and they are mid-range and pointing down.  Even if we get some rally here, we are over extended and the risk is to the downside.  My humble opinion.  GE was off 1/4 and the volume was light.  Heading lower here now is my guess.  The upside move has completed.  Gold was flat on the session after bouncing around.  The US dollar was lower.  The XAU was up 1/3 but the resistance is still in place.  ABX, GG and NEM all had slight fractional gains on lighter volume.  I did place another overnight order for some GG calls but it was not filled.  Only nine days to go in the January option cycle.  I am not sure if I will continue to attempt this trade.  Perhaps going out to February is the way to go.  Mentally I'm feeling tired, did not sleep enough.  I'm still waiting for the beginning of the year rally.  It hasn't happened.  Perhaps it isn't coming.  The transports were pretty weak today and they are sometimes the leaders of direction.  The summation index continues to the upside though.  I still think that it is a time to be cautious.  Gold was somewhat volatile today but ended little changed.  That sometimes means a change in direction so perhaps we'll be heading lower there in the near term.  That's a guess as usual.  I'll check the charts later this evening to see if it is still worthwhile to put on the gold share call trade for January.  We'll keep an eye on the overnight developments and go from there.

A mixed bag today as the Dow rose 28 points on light volume.  The advance/declines were almost 2 to 1 positive.  The overall market indices were weaker than the Dow.  The NASDAQ was lower once again.  When the small stocks are leading the way lower it isn't bullish.  We're still overbought on most of the technical indicators.  I believe that we are in the beginning of building a top.  I would expect that we will see some upside at the beginning of next week.  However that market will go where it wants.  GE was flat on the day.  No trades there for now.  Gold continues to the upside as the futures gained over $10.  The US dollar was higher again as well.  Gold has broken out above a down trend line of the past two months.  The next line of resistance comes in at $1280.  The XAU fell 7/8 and has stopped at resistance.  ABX off 1/8, GG down 1/3 and NEM was flat on the session.  Volume was lighter on the decline.  I placed another order for the January GG calls and wasn't filled.  I'll probably try again on Monday.  Mentally I'm feeling a bit tired, did not sleep well.  Next week will bring the return of all the players on Wall Street.  So we'll get a better idea of where things are headed.  But I'll say it again.  We are closer to a top than we are a bottom.  Getting long stocks here should be a short term proposition.  Some of the technicals are still wildly overbought and that is not the best place to be to get long.  So we'll see.  Gold has found a bid but with the strength in the dollar I'm not sure how long that can last.  That said, I'd still like to try a short term trade in the gold share calls if we see some weakness at the beginning of next week there.  However the optimum time to enter that trade has passed.  It is something to ponder over the weekend.  I'll be checking the charts again in the next two days to come up with something for the January option cycle.  For now it's Friday afternoon and time for a break.

We started off the new year with a whimper as the Dow fell 135 points on light volume.  The advance/declines were 2 to 1 negative.  I did not expect the negative action that we saw today but the market has been very overbought any way you look at it.  I do not think that this is the beginning of a major decline just yet though.  It takes a little time for a top to be built.  I believe that this is the beginning of the building.  We may still yet see new all time highs in the coming days but we are near the top for stocks, not near the bottom.  Any calls buying should be short lived in my opinion.  GE dropped 1/2 and the volume was good.  The last six months on the daily charts have the look of the A-B-C-D-E 5 wave up move for GE.  That move is now over.  I am not considering the January GE calls anymore.  Gold is now in rally mode as the futures gained over $20 despite strength in the US dollar.  The theory of money coming into gold and the gold shares at the beginning of the year is valid.  The XAU rose 3 1/3.  ABX up 1/3, while GG and NEM gained almost a point.  Volume was good for the gold shares which validates the move higher.  Any move lower for the gold shares should be bought for a short term trade.  I'm still considering the January calls here.  However I am late here as my order wasn't filled on Tuesday morning.  Mentally I'm trying not to let the unfilled order for the GG calls bother me.  You have to be nimble and make adjustments in the game.  It isn't always easy.  Usually the first day of the new year is positive.  I'm not saying today is an omen for the rest of the year but I will say I doubt we will see the size of last years gains again.  2015 will be a good year for stocks though.  I'm sticking with my prognosis of a top being put into place in the beginning of the month and we'll see where we go from there.  Gold and the gold shares are on the move higher.  We are right at a down trend line on the daily charts for the XAU that has been in effect since September.  We may pause here but a break through that line will bring even higher prices.  Hopefully it's not too late to make some money there.  The January calls are the way to go I think, even though there is only two weeks left in that option cycle.  We'll keep an eye on developments overnight and take it from there.

We finished off the year with a new closing high as the Dow gained 72 points on very light volume.  The advance/declines were 2 to 1 positive.  We'll take a day off tomorrow and then begin trading for 2014.  The stock indices remain overbought on a short and medium term basis.  A decline is due at any time.  We most likely will continue a bit higher in the next few days but caution is advised.  The summation index is heading higher and that is bullish.  GE was up 1/8 and the volume was OK.  We've reached $28 here.  Gold was up a bit on the futures as was the US dollar.  Gold was lower early in the session but came back.  The XAU rose 1 3/4.  ABX up 1/2, GG gained 3/4 and NEM added 1/8.  Volume was good for the gold shares.  I did place an overnight order for the January GG calls but it was not filled.  There is now a bullish engulfing candlestick for the daily GG chart.  If we get some weakness on Thursday here I may still attempt this trade, however it may be too late.  Mentally I'm feeling a bit tired, did not sleep well.  How long can this rally last?  Longer than I think perhaps.  But I must say some of the technicals are really over extended here and the bullishness is extreme by some accounts.  The stock indexes are overdue for some decline.  Gold is trying to hold the $1200 level and has succeeded so far.  Any gold share trade now has to be short term.  I'll check the charts here again with the day off tomorrow.  We'll keep an eye on any overseas developments and be back at it on Thursday in the new year.  2013 is a year that I'd like to forget.  My trading account shed 30% and my win % was worse than that.  I'll start 2014 with a clean slate and try to get things right again.

A mixed bag today as the Dow gained 25 points on light volume.  The advance/declines were barely negative.  The overall market was weaker than the Dow.  I thought the main players would return this week but that is not the case.  We are still in holiday mode.  Perhaps things will change with the new year on Thursday.  Still technically overbought and staying that way.  I do expect some kind of push higher for the beginning of the new year.  After that, who knows?  GE gained a few cents on light volume.  No trades in mind here for now.  Gold fell $10 on the futures and a bit more in the aftermarket despite a weaker US dollar.  I would think that the year end selling would be over here but maybe I'm wrong again.  The XAU fell almost 2 points.  ABX off 1/3, while GG and NEM dropped 2/3.  Volume was almost average here despite fewer players.  I may try the January gold share calls tomorrow on weakness if we get any.  Oversold on the technicals but not all the way yet short term.  We also could be starting another leg down for gold and the gold shares as well.  Mentally I'm feeling OK.  It is beginning to look like this week may be a light volume holiday affair as well.  It makes for tough trading.  I still think that we'll see plenty of cash flow into stocks the first couple of days for 2014.  I'm guessing that some of that money will go to the gold shares as well.  I could be wrong.  After such a lousy 2013 trading year, I'd like to start next year off in a positive fashion.  The game plan at the moment is to get some January gold share calls tomorrow and then sell them by the close on Friday.  I'll rethink this idea overnight.

Running in place today as the Dow lost a point or so on extremely light volume.  The advance/declines were slightly positive.  Still overbought on the stock indices.  The summation index is still moving higher.  Only two days left for 2013.  The small stocks were under performers today but it is hard to read anything into a holiday biased session.  We certainly won't go up forever.  I think that we are closer to a top than most people think.  But I could be wrong and often am.  GE was flat and volume was light.  Gold was up a buck on the futures and the US dollar was slightly lower again.  The XAU rose a point.  ABX, GG and NEM had slight fractional gains on light volume.  It looks like it may be too late to try the gold share call trade for January.  I'll have to see some pullback on Monday or Tuesday to attempt this trade.  Mentally I'm feeling OK.  It has been a great year for the stock indexes.  Everybody is expecting a nice pop to start the new year, myself included.  After that, who knows?  We are overbought both short and medium term.  Perhaps we will see some beginning of the year blow off top.  But the upside from here is limited in my opinion.  Some of my technical indicators are getting off the charts overbought and warning of some negative action to come.  At the very least some sideways activity.  So I really do not want to go chasing things on the upside here.  Gold is hanging in there above the $1200 level.  However this is such a light volume limited participation week, it is hard to say a bottom is being put in.  That said, it is possible that the precious metal is just about sold out for now.  That's a guess as usual.  I'm still interested in the gold share calls for the beginning of next year but I may go out to the February contract.  It is something to think about over the weekend.  Most of the major players should be returning to their desks next week as we close out the year and begin the trading for 2014.  For now it's Friday afternoon and time for a rest.

Up, up and away we go as the Dow soared another 122 points on light volume.  The advance/declines were slightly positive.  Overbought and staying there.  The summation index continues to the upside.  There are no sellers in sight.  I'm not sure how far this can go but the volume is light and that is not a good sign despite it being a holiday week.  The advance/declines today do not support a plus 100 points upside move.  There remains no overhead resistance but this has the look of an upside blow off.  GE was up 1/4 on light volume.  The short term technicals and the medium term technicals are overbought for GE.  I'm probably not going to try the calls here for January.  Gold rose $9 on the futures as the US dollar was a bit weaker.  The XAU was up 1/2.  ABX, GG and NEM were little changed on the session.  I'd still like to try the gold share calls for January if we drop a bit from here.  Mentally I'm feeling OK.  It's a holiday for many of the world markets today.  So the overall trading is skewed.  You can't argue with higher prices but some kind of rest is due for the stock indices.  If we continue to simply go up it won't end well.  Gold is holding the $1200 level for now.  Three days to go in the trading year.  I'd expect a lot more of the major players to return next week.  Sometimes it's a waiting game and patience is required.  Now seems to be one of those times.  We'll finish off the week tomorrow.

Still moving higher in a holiday shortened session as the Dow gained 63 points on extremely light volume.  The advance/declines were 2 to 1 positive.  The summation index continues to the upside.  The Santa Claus rally is in full swing and even higher prices are probably coming.  There is nothing in sight to derail the rally at this time.  Overbought, staying there and that is the characteristic of bull markets.  GE was up almost 1/4 and the volume was really light.  Might be too late to try the calls here now.  Gold gained back what it lost yesterday and the US dollar didn't do much.  The XAU rose 2 1/3.  ABX, GG and NEM all were up over 60 cents.  Volume was anemic.  Might be too late here as well for the calls since todays upside increased the option premiums.  The daily technicals also finally got moving to the upside for the gold shares.  But it is hard to read much into a holiday light volume move.  Mentally I'm feeling OK.  We'll take tomorrow off and see how things pan out when we open on Thursday.  Thursday is also a holiday for many people around the world.  I'd still like to try the gold shares from the long side at some point before the new year begins.  So we'll see what happens.  Happy Holidays everyone.

A nice start to the holiday week as the Dow gained 73 points on light volume.  The advance/declines were better than 2 to 1 positive.  The summation index is heading higher.  The holiday rally is in full swing.  I don't know how high this market can go but the trend is up and there is nothing in the way.  We are short term overbought for the stock indices but can remain that way in an uptrend.  There will be an early close for the exchanges tomorrow.  GE was little changed and the volume was light.  I'm still considering the calls here for January.  Gold was off 6 bucks on the futures and the US dollar was slightly weaker as well.  The XAU ended the day flat.  ABX, GG and NEM had little movement on light volume.  I'm still looking for the gold shares to pop at the beginning of the new year.  I'm considering the ABX or GG calls.  Looking to purchase them this Thursday or Friday.  Mentally I'm feeling OK.  As expected the volume this week will be light and the trend will be for higher equity prices.  Weakness can be bought in my opinion.  Gold is going nowhere fast.  It is really a waiting game for most of this week.  Sometimes you just have to be patient.  I'd like to start the new year on the right track.  We'll see what happens going forward.

The Dow gained 42 points today on option expiration heavy volume.  The advance/declines were 3 to 1 positive.  The summation index is now heading higher.  There is no overhead resistance.  Look for higher prices heading into the new year.  The Santa Claus rally lives on.  Look to buy calls before the start of 2014.  GE was up around 1/8 and the volume here continues to be heavy.  January calls are in order if we get some pullback.  Gold was up 10 bucks on the futures as it tries to stabilize.  The US dollar was a bit weaker on the session despite a higher GDP revision.  The XAU was flat.  ABX, GG and NEM had slight fractional moves one way or the other on average volume.  I'll be looking to try the gold share calls before the end of the year.  I think we'll see some money go into this group at the start of the new year.  Mentally I'm doing OK.  Another great opportunity was missed this week with respect to the OEX calls.  But that has been the story of my trading year.  Too little, too late and terrible trading was the theme for me this year.  I'll try and get things right going forward.  I'm looking to get some calls before year end for the anticipated rally to begin 2014.  Gold remains unloved and it broke the $1200 level this week.  There is a chance that we could just keep going lower here.  The fundamentals for gold remain bearish.  Next week should be a light volume, little movement affair.  Most of the major players will be off.  I may try and purchase some calls towards the end of the week.  I'll be checking the charts over the weekend.  For now it's Friday afternoon and time for a break.

Digesting yesterdays huge gains as the Dow 11 points on average volume.  The advance/declines were negative.  The overall market was weaker than the Dow.  The summation index has turned back to the upside.  Bur todays session was probably a preview of things to come in the near term.  Lackluster trading with no real direction.  I'd expect a drift higher in the days to come before the new year.  Options expiration tomorrow.  GE was up 1/8 and the volume was good.  The January calls should work here but I'd wait for a pullback to purchase them.  Gold was off sharply today and not only broke support at $1220 but also closed below $1200.  The precious metal futures declined over $40.  The XAU however only fell 1 1/8.  These stocks could be pretty much sold out at this point.  ABX, GG and NEM all lost around 1/3 on good volume.  I'm still considering some gold share calls for January or February.  Purchasing them after Christmas is the idea for now.  Or not at all depending on what happens between now and then.  Mentally I'm feeling OK.  I'm expecting somewhat higher prices tomorrow to close out the week.  The trend is up and getting some calls before the new year begins is the strategy for now.  I did notice some extreme volumes in the January GE calls yesterday but it did not equate with an increase in open interest.  Not exactly sure what the implications there are.  GE is very overbought on the medium term but it appears that there will be one more leg up in the following weeks.  The 27 or 28 strike price should work.  Gold looks like it is about to take out the years low at $1180.  The gold shares are already at this years low.  I might be able to play some bounces but that's about it.  I do not see any sustained rallies there until the fundamentals improve.  When that is, is anybodies guess.  Perhaps I'll just stick trading the OEX.  We'll see what the expiration does tomorrow.

The great taper has begun.  I mean the media loved the name Great Recession so let's call this the great taper.  The Fed has slowly begun to reign in the easy money policy but it was a token gesture to begin with.  At first the markets sold off but then came a huge reversal since most of easy money remains in place.  The Dow soared 292 points on very heavy volume.  The advance/declines were 4 to 1 positive.  Todays price action should move the summation index back to the upside.  We hit a new closing high for the Dow.  The small stocks are lagging just a bit here but that shouldn't be a problem.  The Santa Claus rally is in full swing.  Once again there is no overhead resistance and we'll just have to see how far we can go.  GE was up 1/3 and the volume was pretty good.  A new closing high here as well.  Probably too late for the January calls now but we'll see.  Gold was up $4 on the futures as the US dollar rose slightly.  Gold looks to be falling in the aftermarket.  Todays Fed announcement can't possibly be seen as a positive for gold.  We are still above the $1220 level for now.  The XAU fell a point after being higher before the Fed.  ABX and GG had slight fractional losses, while NEM was flat.  Volume was good for the gold shares.  If and when we get to an oversold level in the gold shares, I might try the calls.  But there is no hurry at this point.  Mentally I'm feeling OK.  So we got the Fed announcement and the next leg up has begun.  Any weakness can be purchased in my opinion.  The holiday rally is in full swing.  I'd probably think that it is prudent to let next week pass before taking on any option positions.  The volume will most likely be pretty light.  I guess I'll be looking at the GE January calls if the opportunity presents itself.  Gold remains in the dumps.  Perhaps we'll get a final washout move down now.  Or maybe it will just be a slow grind to nowhere.  The fundamentals for gold remain negative in my mind.  Better trades from the long side will probably be found elsewhere.  The Fed is now out of the way.  It remains a time to be patient though as we need to get through the holiday trading of next week.  We'll see how the foreign markets react to todays big US rally and go from there.

Some weakness ahead of the Fed as the Dow fell 9 points on light volume.  The advance/declines were slightly negative.  I don't expect any changes from the Fed but who knows?  I could be wrong.  The summation index is still heading lower.  I'm still of the opinion that the Christmas rally will begin at any time now.  But anything goes if we get any surprises from Big Ben.  Technically we're more oversold than overbought for the short term.  Things will all get sorted out after tomorrow.  GE was flat on the day and the volume was light.  Still a wait and see attitude for me towards GE.  Gold fell $14 on the futures today.  The US dollar finished the session little changed again.  The XAU was off 1/3.  ABX, GG and NEM had slight fractional moves one way or the other on light volume.  It is a waiting game here as well.  As long as gold holds $1220 it should be OK.  If we break that level another decline would be in the works.  Mentally I'm feeling OK.  3 days in the December option cycle and a Fed announcement tomorrow.  Whatever volatility we get should happen in the next 3 days.  Then it's holiday mode for a week or so.  So taking on any trades now has more risk than usual I think.  Plus there will be the time decay of a week of light trading.  I think that I'll be on the sidelines until after Christmas.  Gold looks like it is trying to form a base but there is no real buying interest that I can see except for ABX perhaps.  I'm trying to be patient here and have been so far.  We'll see what tomorrow brings.

Some upside to start off the week as the Dow gained 129 points on light volume.  The advance/declines were 2 to 1 positive.  We were short term oversold on the stock indices so some positive price action was expected.  I'd expect tomorrow to be a holding pattern prior to the Fed on Wednesday.  There is a good chance that the decline is now over and we will head up to new highs on the major stock averages.  That's my guess for now.  The summation index has yet to turn back to the upside but another day like today and it will.  GE was up 1/8 or so on average volume.  No trades here for now but perhaps I'll try the January calls before the end of the month.  Gold was up almost $10 on the futures as the US dollar was a little weaker on the session.  The XAU rose 3/4.  ABX and GG were up 1/3, while NEM slipped 1/8.  Volume was average.  ABX has shown good relative strength lately, probably due to a positive article in Barrons last week.  I'm still considering the January gold share calls.  I might try the GDX index this time.  We'll see.  Mentally I'm feeling OK.  I'm expecting the usual holiday rally to begin and today was probably the start.  The only thing that could change things is a very negative day tomorrow or a surprise from the Fed.  I do not expect the Fed to do anything different on Wednesday.  Gold had a positive start to the week but came off of the highs.  As long as $1220 holds for gold I'll continue to consider the gold share calls.  The timing as always is key.  Next week will be a holiday week and the major players will be out.  So any option purchases should probably be delayed for now until the end of December, barring a decent technical signal.  Perhaps I will heed my own advice for a change.  We'll keep an eye on the overseas markets overnight and take it from there.

We got very slight upside today as the Dow gained 15 points on light volume.  The advance/declines were positive.  We are trying to stabilize here in my opinion since we are at the 50 day moving averages in some of the stock indices.  Plus we are now short term oversold.  One week left in the December option cycle and it is possible that it is time to try the OEX calls.  The problem is the summation index that continues lower.  Of course the market will turn to move this indicator back up but picking when that happens is the key.  The summation index could just continue to head lower.  I'm guessing the Fed announcement on Wednesday will be the key.  GE was up 1/3 and the volume was good.  Maybe the strength in GE is letting us know that the market is poised to move higher near term.  That's a guess as usual but it's something to think about over the weekend.  Gold was up about 10 bucks on the futures.  The US dollar was little changed at the end of the day.  The XAU only managed to gain 1/3.  ABX added 1/4 but GG and NEM finished almost unchanged.  The volume was light.  Not sure what to do here now.  The open interest in the GG January call that I was considering contracted quite a bit yesterday.  Whoever had put on such a large position took a lot of it off.  Putting on a gold share call trade here is something else to think about over the weekend.  Mentally I'm feeling OK.  Most of the stock indexes had a negative week.  Is this the beginning of a protracted decline?  Could be but this time of the year is usually positive.  If we don't rally from here soon the implications for next year would be bearish.  We are short term oversold though and I will consider some December OEX calls over the weekend.  Gold has held the $1220 level so far and has a potential double bottom on the weekly charts.  There remains little interest there though as we rallied early in the week and then gave it all right back.  Medium term oversold for the gold shares.  The short term technical picture there is mixed.  I'll be checking the charts here over the weekend.  Next week will probably be the last week of decent volume before the beginning of next year due to the upcoming holidays.  If I do decide on a trade it will have to be put on early in the week most likely.  So we'll see what happens.  Plenty to ponder in the next couple of days.  For now it's Friday afternoon and time for a break.

Continuing lower as the Dow fell 104 points on average volume.  The advance/declines were negative.  The underlying market action was better than a 100 point loss day would imply.  The small stocks were acting better today and I would expect some upside tomorrow due to the short term oversold nature of the stock indices at the moment.  The summation index is still heading lower though.  Certain stock indexes are trying to hold their 50 day moving averages.  They have so far.  The late day weakness again doesn't spark confidence though.  GE was off a few cents and the volume was average for lately.  I still don't have any trades in mind here for now.  Perhaps the January calls.  Gold got pounded today as the futures fell over $30 on a stronger US dollar.  The gold shares fared much better, only off a point.  That's bullish for the short term.  ABX, GG and NEM had fractional moves one way or the other after being lower early on.  Volume was light.  I'm back to considering the January gold share calls but probably not until next week.  Mentally I'm feeling OK.  The McClellan oscillator is getting pretty oversold at this point.  That doesn't mean that it can't go lower but the odds favor some type of bounce there.  After that we could head on back down again but we'll have to see what kind of bounce we get.  A lot will be determined by the Fed next week.  Any surprises there could ramp up the volatility.  Gold had a bounce early in the week and has since given everything back.  That isn't a good sign.  We did hold the $1220 level but perhaps a test of $1200 is still in the works.  The gold shares are still holding their lows from last week so far as well.  The Fed should play a role in the movement for gold as well.  If they begin the tapering in December, conventional wisdom says that won't be positive for the price of gold.  We'll watch what transpires overnight and finish off the trading week tomorrow.

Some steam to the downside today as the Dow fell 129 points on average volume.  The advance/declines were 4 to 1 negative.  The summation index continues lower and that is what we will keep our eye on.  It has kept me defensive on the stock indices here and rightfully so.  But in this game that could all change tomorrow but I don't think that it will.  No real reasons for todays decline as we challenge the 50 day moving averages on some of the stock indexes.  The smaller stocks have been relatively weaker here and that is a negative.  GE was off 1/2 on better volume.  Still above the 50 day moving average here.  Gold was off $4 on the futures and another $5 in the aftermarket.  The US dollar was slightly lower.  The XAU dropped 3 points, giving up what it gained yesterday.  ABX and GG fell 1/2, while NEM lost 3/4.  Volume was light to average.  The price of gold held up pretty good today but not the gold shares.  If we do get more decline in the stock market, the gold shares will most likely follow.  I'm not sure if I'll try the GG January calls right now but it's something to ponder this evening.  Mentally I'm feeling OK.  Weakness prevails here so we'll have to see if the 50 day moving averages provide support.  Still no data to move things but perhaps downside momentum will take over.  Gold had a pause in the recent strength today.  We'll see if the weakness continues tomorrow.  As always we'll keep an eye on the foreign markets to see if they mirror the US action today. 

Just a downside drift today as the Dow fell 52 points on light volume.  The advance/declines were negative.  The stock indices are trying to make up their mind here.  But we could just see sideways price action for a while.  However the summation index is pointing lower.  I still think I'll take my cues from that and look for lower prices until that turns around.  Not much data to move prices around this week.  The short term technicals for some of the indices are back in the overbought zone.  GE was off a nickel and the volume remains tepid.  No trades for GE right here as it looks like the price could go either way.  Gold was the story of the day again in my mind as the futures gained $25.  The US dollar was slightly weaker.  There are no fundamental reasons for gold to rise here.  There is a potential double bottom in place on the weekly charts.  If the bottom is for real, the target would be $1600.  But that remains to be seen.  The XAU jumped 3 1/3.  ABX up 7/8, GG gained 3/4 and NEM added over 1/2.  Volume was good for the gold shares.  My January GG call order was never filled and I canceled it.  Might be too late here but there is a chance that I'll still try this trade.  ABX has shown the best relative strength here so far.  I don't know if actual real interest is being shown for the gold shares.  It could simply be short covering.  However the specific option on GG that I was trying to trade had a huge expansion of open interest last week.  That should say something.  Mentally I'm feeling OK.  RUT is under performing here and that isn't a positive for the stock indexes.  More negative price action would not be a surprise in my opinion.  New price highs would.  8 days left in the December option cycle.  Gold is showing some signs of life but I don't know if it is for real or not.  That said, I'm still keeping a close eye on the GG call options.  I'm still a little gun shy after all of the losing trades over the past year.  We've also already moved up from the technically oversold condition of the gold shares as well.  So we'll see.  

Slight upside today as the Dow gained 5 points on light volume.  The advance/declines were just about even.  Not much to report about todays session.  The summation index is still heading down.  I'm expecting weakness in the coming days and I am not looking for a break out to new highs yet.  The volume on the rally is light.  I do not trust light volume rallies.  GE was up another 1/4.  The volume was nothing special.  If GE is a proxy for the overall market then we should see higher overall prices moving forward.  That remains to be seen.  Gold was up $5 on the futures with a slightly weaker US dollar.  Gold continued to rally in the aftermarket.  There was a lot of chatter over the weekend about gold being sold out along with a possible double bottom being put in.  The XAU rose 1 2/3.  ABX and NEM were up over 1/2, while GG was flat.  Volume was light.  I did place another open order for the January GG calls.  We'll see if it gets filled this time around.  I'm thinking that we'll see more sideways price action for gold near term.  Mentally I'm feeling OK.  Not much economic data to go on this week.  It could be a quiet time for the stock indexes.  That doesn't do much for trading options.  However sometimes you have to be patient.  The fundamentals for gold haven't changed, so I really don't see any big rally coming up anytime soon.  Perhaps the gold share call trade isn't the best idea for this time.  I'll reconsider it overnight.  We'll keep an eye on the overseas action and take it from there.

A huge move back to the upside today as the Dow gained 198 points on light volume.  The advance/declines were almost 3 to 1 positive.  The employment report was better than expected and the stock indices took off.  We were short term oversold so some upside was due.  The only caveat is the light volume.  We'll see if we get any follow through next week.  The small stocks were relatively weaker today and that could mean something in the days ahead.  We've got the Fed in a couple of weeks and things could get dicey if there are indications that the easy money policy is going away.  I'm not really a believer in todays rally until the summation index turns back up.  GE was up 1/2 but the volume was pretty light.  Maybe this is the beginning of a nice move to the upside but without conviction I can't back that theory.  No trades in GE for now.  Gold was off $3 on the futures despite a good jobs number.  The US dollar didn't do much today.  Interesting market action on the release of an important employment report.  There was some volatility in gold but at the end of the session, not much changed.  The XAU had a slight loss.  ABX, GG and NEM had slight fractional moves one way or the other.  Volume was good for NEM, light for the others.  I did not place another order for the GG January calls.  Still oversold for the gold shares and I may try the calls next week.  Mentally I'm feeling OK.  So the jobs report is out of the way and we go from here.  All appears to be fine for the stock indexes and there isn't a lot of economic data due next week.  It looks like new highs are in the offing.  However I just don't feel like todays move up will last.  The short term oversold condition has been alleviated and we'll see where we go from here.  Gold had an interesting session today but there is still no love for the metal itself or the gold shares.  There is a chance that we are trying to put in a bottom at the $1220 level for gold but we could just as easily head down to $1200 as well.  I'm still considering the GG January calls but this could be the wrong idea as well.  However somebody has taken a huge position there for whatever reason.  I'll be checking all the charts over the weekend.  The next two weeks will see the majority of trading being completed for the year as the holidays will once again soon be upon us.  For now it's Friday afternoon and time for a break.

Still heading lower as the Dow fell 68 points on average volume.  The advance/declines were 2 to 1 negative.  Overdue now for a bounce on the stock indices.  Perhaps the employment report will bring back the buyers.  Short term oversold on the stock market right now.  The data appeared stronger than expected.  Perhaps the market is pricing in the end of the easy money game.  The decline hasn't really been volatile to this point.  The summation index is heading lower and does imply lower values moving forward.  So even if we do see some upside tomorrow it may not be the beginning of another leg up.  We'll see.  GE was off about 20 cents and the volume was light.  I'm still going to be patient with regards to the January calls here.  Oversold on the short term here as well.  Gold dropped back $15 and a bit more in the aftermarket.  Negative price action despite a drop in the US dollar.  The XAU gave back the 2 points it gained yesterday.  ABX fell 1/4, while GG and NEM both lost 2/3.  Volume was light to average.  I canceled the open order for the January GG calls.  I'll watch tomorrows open and decide whether to put on the trade again.  Oversold and staying there for the gold shares and that could be dangerous despite the fact that they've been decimated already this year.  Mentally I'm feeling OK.  I've called for a bounce since Tuesday and it hasn't happened.  Perhaps there is something happening under the surface but the decline so far has been muted.  We should get decent market movement tomorrow, one way or the other.  I'll take my cues from the summation index for now.  So a defensive posture is warranted for the near term.  Gold has moved both up and down this week instead of just down.  It will be interesting to see what transpires with gold tomorrow.  I might try the GG calls but I may just do nothing at all.  There really is no interest in owning gold in this environment.  We'll see what tomorrow brings.  

The expected upside today did not materialize as the Dow fell 25 points on good volume.  The advance/declines were negative.  We were down over 100 during the session but made made a mid day comeback.  Perhaps we'll see some upside tomorrow.  The economic data was both positive and negative depending on the stat.  The summation index is trending lower now.  However the daily candlestick charts for the stock indices appear to have put in a hammer.  That may provide some short term support.  Not completely oversold technically yet on a daily basis.  GE had a pretty good reversal on the day and finished positive by a few cents.  We are short term oversold here and today may have been the place to get the January calls.  Time will tell on that.  Gold had a good session, up a bit over $25 on the futures.  Short covering in my opinion since the volume wasn't all that much.  The US dollar didn't do much today either.  The XAU rose 2 1/8.  ABX up 1/8, while both GG and NEM gained 1/2 or so.  Volume was better than average for the gold shares.  My open order for the GG January calls wasn't filled and the premiums have moved up.  The open interest for the particular contract that I'm looking at went up ten fold overnight after yesterdays action.  Obviously somebody is interested in this trade.  If I get a chance in the next few days to buy the options at a reasonable price I'll do it.  Mentally I'm feeling OK.  We are still overdue for some type of decline or pause for the stock indexes.  I'm not sure if the past few days are just going to be it.  We should see some movement with Fridays jobs numbers.  At this point I'm guessing that they will be viewed as a positive.  We'll know in short order.  Gold has a nice move higher but it can only be viewed as a bounce unless we get some follow through upside.  We might be putting in a double bottom on the weekly charts but it is too early to know for sure.  The potential is there but the fundamentals for gold right now are still negative.  We'll keep an eye on the overseas action tonight and go from there.

Still lower today as the Dow fell 94 points on average volume.  The advance/declines were negative.  We finished well off of the lows for the day.  Still not a major decline here and the summation index is moving sideways.  The short term technicals have rolled over for some of the indices.  The overall market was stronger than the Dow here.  After three negative sessions I'd expect tomorrow to be to the upside.  Lots of economic data on board for the next three days.  The VIX has spiked up but we really haven't seen any drastic price erosion.  Not sure what that implies.  GE was off a dime and the volume was average.  Might try the calls if the price reaches the 50 day moving average on the daily charts.  Not there yet.  Gold stabilized today at the $1220 level.  The US dollar was weaker on the session but gold did not respond.  The XAU was off a point.  ABX was flat, while GG and NEM had fractional losses.  Volume was average for ABX and above average for the others.  I did place an overnight order for some January GG calls but it was not filled.  Despite the loss for GG today, the option premiums barely budged.  However the volume for the calls I wanted to purchase exploded.  It was 10 times the open interest.  I don't know if positions were being outright opened or the calls being written to collect the premium.  We'll see how much the open interest expands tomorrow.  I left the open order in overnight.  Mentally I'm feeling OK.  Expect a bounce tomorrow for the stock indexes.  That is the guess here.  After that, who knows?  The employment report on Friday should be a market mover.  The European markets got hit hard overnight.  We'll see if they follow through lower tomorrow.  I'm still waiting for gold to get to $1200 and we are almost there.  My open order for the January GG calls reflects this.  They are priced accordingly.  Let's not forget though that the fundamentals for gold right now are not positive.  Any longs should be trades only.  We'll see what tomorrow brings.

A down day to start the week and month off as the Dow fell 77 points on light volume.  The advance/declines were about 3 to 1 negative.  Todays action may turn the summation index back down again or produce a sideways chart pattern.  We fell apart in the final hour again and that isn't a positive.  However the volume is light and perhaps all the players haven't returned just yet.  Plenty of economic data from Wednesday through Friday capped off with the employment numbers.  We're overdue for some weakness but we've been that way for quite some time.  We will have to see if there is any follow through downside tomorrow.  GE was unchanged on the day and the volume was average.  I'm not in a hurry to get the January calls here but I'm keeping an eye on things.  Gold was one of the stories today as the futures fell almost 30 bucks on a stronger US dollar.  We are getting closer to the important support level at $1200.  The XAU shed 4 1/2.  ABX, GG and NEM all lost a buck or so on slightly better than average volume.  The fundamentals for gold remain horrible.  However the technicals are blown out to the downside and I am considering getting the January GG calls tomorrow.  Or at least placing in an order overnight.  Some of the longer term technicals for GG are in the spot where previously there has been some type of bounce.  I will check things out again tonight.  Mentally I'm feeling OK.  The small stocks fell today as well so maybe we will finally see some sustained negative price action.  Hasn't happened yet though but all the pieces are in place.  But like I've said before, one day doesn't make a trend.  Tomorrow should be interesting.  Gold had a negative session and closed near its lows.  Ditto for the gold shares.  Perhaps this is an area I should just steer clear of.  Something to ponder tonight as I check the gold share charts.  We'll see how the foreign markets react to todays stock index and gold declines.  That should provide a clue for tomorrows open.