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Monday, March 26, 2012

We started the last week of March with a bang as the Dow gained 160 points on light volume. The advance/declines were 3 to 1 positive. This should move the summation index back to the upside. Big Ben Bernanke said the US would keep interest rates low. This isn't new news. However the market will go where it wants. Still overbought and still moving higher. It's a broken record but you cannot fight it. There were no sellers today. Plenty of liquidity it seems. GE was up 1/4 on light volume. I'm still looking at the May calls here if the price gets to what I'd like to pay for them. May not happen at this rate. No hurry here as GE is usually a pretty slow mover. Gold had another good day as the US dollar was weaker. The gold futures were up $23 and gained some more in the aftermarket. The XAU only rose 2 3/4 though. ABX gained 3/4, GG up 1 1/8 and NEM managed only an 1/8 higher. Volume was nothing special. My April ABX calls are solidly in the black. Both the daily and weekly charts look constructive now here but I would still like to try the May calls. However once again the relative strength is with GG, as the options there have appreciated much better than ABX here. But my focus is on the April ABX calls since that is the position that I've taken. The Gold/XAU ratio remains in the bullish buy zone. Mentally I'm feeling OK, slept well enough but still on the back-up computer. The stock indices continue to the upside with no end in sight for the rally. There is no technical damage to say that the rally is going to end. Looking for calls to purchase remains a winning strategy. You cannot fight the trend, the tape or the Fed. Once again gold is moving higher and the gold shares are lagging. That usually isn't bullish going forward but the gold share charts are looking bullish at the moment. We'll see what happens in the overseas market and go from there.

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