Monday, September 22, 2008
The roller coaster ride continues as the Dow lost 372 points on heavy volume. Advance/declines were 4 to 1 negative. The volatility to the extreme continues. Was the end of last week just an expiration related event? Do we now go down to new lows from here? Summation index will turn back to the downside with todays action. I don't have the answers. We are in an unprecedented era for the markets. Time will tell where this all ends up. It's a tough trading environment out there but there is money to be made. Risk is high though. There's nothing wrong with waiting until things return to some semblance of normal. Gold took off to the upside by over $40 today. ABX up 3, GG up 4 and NEM up 2 1/2, all on heavy volume. Incredible moves of over 10% in one day again. I am looking to get some gold share calls again if we get some type of pullback. I really don't want to chase it here. The dollar got pounded today and oil was up over 10% as well. I'm trying not to worry about selling out of my gold position early because it's done and over with. You always have to make adjustments and see things where they are now, not yesterday. There's still money to be made in gold in my opinion. GE lost 40 cents on lighter volume than we've seen lately. The premium in the options is off the charts with all the movement lately. I'll have to stay on the sidelines for now there. Mentally I'm feeling good, slept well. The game plan for now is getting some gold share calls again on any pullback. I'm trying to be patient but you never know. The XAU/Gold ratio is still way out of proportion. It's in the buy zone and has been for weeks. Either gold has to come way down or the XAU has to rise. Gold does not look like it is going to drop anytime soon with all that is going on in the world today. So I'll look to the gold shares for now.
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