Tuesday, September 30, 2008
Up and down as the roller coaster ride continues. A 485 point snap back on the Dow today with good volume. Advance/declines were 4 to 1 positive. Now a deal is coming, supposedly. I'm sure one is, one way or another. What the market does is another issue. It's a tough trading environment to be sure. A lot of premium in the options and whipsaw moves. I'll have to wait on trying the OEX at this point. The risk is higher than usual at the moment. Gold was down $15 on the futures and continued to sell off in the aftermarket. The XAU lost 1 3/4. ABX and GG each lost a couple bucks on decent volume. NEM dropped 1/2. I bought some GG calls. Not completely oversold technically but I wanted to give it a go. I'm expecting the dollar to fall later this week when the employment report is released and the deal is done for the bailout. I could be wrong but that should support gold. The Gold/XAU ratio is still solidly in the buy zone. So we'll see. GE came back and was up around 2 3/4 on heavy volume. The options barely moved considering GE was up 10%. That is what is meant by an overload of premium in the options. If the underlying instrument moves 10% and the options barely move, that isn't the type of situation you want to get into. If and when things settle down, perhaps GE will be a viable play. Earnings out on October 10th there. Mentally I'm a bit tired, did not sleep well. So what happens next? We will get this bailout deal out of the way and then it's back to earnings and data as market movers. The summation index is back in the negative but it's not going to stay there too long in my opinion. So I would guess we go sideways to higher in the coming months. However longer term I suspect we are still in a bear market. But it's all just a guess in the game. And as recent events have shown, anything can happen.
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