Friday, February 18, 2011
Rally is all this market knows as the Dow gained 73 points on expiration Friday. Advance/declines were positive and the volume was average. The overall market was not as strong as the Dow. It's been a great run since the lows of last September with the S&P 500 up about 30%. I could continue on about how overbought we are but I've just about beaten that to death. You just have to find ways to get long and stay with it. Until something changes, that is the game plan. GE lost a touch on light volume again. Nothing doing there. Gold was up a few bucks and the XAU dropped an 1/8. ABX was up 3/4, GG up 1/3 while NEM fell 1/2. Volume picked up a bit here today. The dollar was weaker by about 1/3. 77 is the key level to watch in the US dollar. If we fall through there with volume than the dollar will have broken a key yearly uptrend line. That would propel gold to new highs in my opinion. There's no doubt that the gold shares are overbought here. But as we've seen with the stock indices, things can remain overbought for quite some time. Another factor for gold here is that the month of March is a seasonal weak period for the precious metal. I may look to get some April gold share calls if we see some weakness in the next few weeks. But that may not happen. Mentally I'm doing OK. Actually my mind hasn't been as focused as it needs to be to be successful trading. That is why I have shied away from making any trades recently. I have a family emergency that I must attend to next week and thereafter. I will not be watching the market every day like I normally do. I will also be without Internet access at times as I travel away from my trading base. The daily blog posts will not be as detailed and there will be days where there are no posts at all. The game is hard enough when you can give it the proper attention. It can become virtually impossible if you can't. Thankfully this is something that I've already learned. If you cannot devote the time and effort needed to be successful in the game it is better to stay on the sidelines. That goes double when you are dealing with extreme emotional issues involving loved ones. These situations do not happen often but they do occur. And it works both ways. You can be in such euphoria that it will affect your trading outlook and just as well be depressed with the same trading consequences. Your mental outlook needs to be on an even keel. Your emotions need to be in check. Your trading results depend on your ability to think in a clear rational manner. That probably won't be possible for me in the near term. I'll write the blog when I get a chance but I can't really say how often that will be. One thing for sure is that the markets certainly don't care about me or my situation. It helps to actually know that. The game will always be available when you're ready to give it the needed attention. But for now it's a Friday afternoon before an extended holiday weekend. Time for a break.
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