Friday, May 25, 2012
We ended the week with a whimper as the Dow fell 75 points on extremely light volume. The advance/declines were slightly positive. The overall market was stronger than the Dow. Nobody is really going to commit any money to this market ahead of a long holiday weekend. We have worked off the recent short term oversold condition but the price gains haven't been that much. The longer this continues, the less bullish my opinion gets. GE was off a touch on the same very light volume. I have no open orders here but will remain in the camp of looking at the July calls. Gold was up $11 on the futures and a bit more in the aftermarket. The US dollar was up a touch today. Thin markets all the way around. The XAU gained 3/4. ABX, GG and NEM all had fractional gains on light volume. I canceled my open order for the June ABX calls and I'll try again next week. Any pullback in the gold shares can be purchased in my opinion. If ABX comes back to the trend line that it broke this week, that will be the time to buy the June calls. May or may not happen. Short term overbought on the gold shares here. Mentally I'm doing OK. The stock indices are in a wait and see mode as the problems in Greece continue to dominate trading decisions. We'll get some important US economic data next week but it may not matter if something big happens in Europe. It's a tougher than usual trading environment. I'm still a believer that a crash is not coming anytime soon. But perhaps sideways will be the trend and not the advance that I previously thought. Time will tell. I'll be checking the charts over the long weekend in hopes of coming up with some type of game plan for the coming week. For now it's Friday afternoon and time for a rest.
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