Wednesday, May 26, 2010
Opened higher and closed lower today as the Dow lost 69 points. That type of price action usually isn't a good sign. We were up well over 100 points early. Advance/declines were positive and the volume was pretty good again. We are oversold and not even getting a decent bounce. It could be dangerous to the downside here. We're about to cross the zero line in the summation index and a crash is possible. Normally there isn't even a threat of a market breakdown barring an abnormal event such as a terrorist attack. However we are now at a critical technical juncture concerning the market itself. We need to turn around in a hurry but I expect weakness tomorrow. We'll see. I still may be interested in the GE calls since GE is showing good relative strength. Gold was up $15 today but the XAU dropped 1/2. ABX fell 1/2, GG was flat and NEM lost 1/3. Volume was average. The dollar had another good day. Perhaps I'll try the gold shares here again but it's risky. However there is still a buy signal on the Gold/XAU ratio. Mentally I'm a bit tired, did not sleep enough. I really think that tomorrow could be a crazy day. We are oversold by all accounts here. I'll have to go over everything tonight and decide if I'll try the GE calls or the ABX calls. But if we do collapse it'll probably be a couple of days. Hopefully I'll be wrong as usual and the market will find its footing here. But I won't be surprised if it doesn't.
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