Friday, April 12, 2013
After being down almost 75 points during the session, the Dow came all the way back to finish the day basically unchanged. The advance/declines were negative and the volume remains light. Money continues to flow into stocks as the buy the dip mentality persists. You can't argue with success. There is no resistance to the upside. I still think the stock indices will remain firm into the expiration next week. After that, who knows? GE was off 1/8 on very light volume. No trades here for now. Gold got absolutely crushed today as it took out the all important $1550 level. The precious metal futures were off over $60 and more in the aftermarket. The US dollar was little changed on the trading day. The XAU fell 6 points. ABX fell another 2 buck, GG slid 1 1/2 and NEM shed 2 1/4. Volume was huge once again. The market blew through my stop loss order on the ABX May calls, so I dumped them at the market. It turned out to be a 70% loss after all. I have been buying calls on ABX all the way down for the past year and have lost practically every time. This week I got sliced and diced on the catching falling knife attempt. Mentally I'm feeling as if whatever I'm trying to trade so far this year just isn't working out. With the exception of a couple of GE trades early, whatever I'm trading has been a loser. Commodities are dropping along with the precious metals. Either there is too much supply or the overall world economy is weaker than we are giving it credit for. The stock indices seem to be saying that there is too much supply. Money continues to find a home in stocks. The only caveat is that the volume has been light on this upside breakout. We'll see if the rally continues but there is nothing to stop it at the moment. Gold has now broken the support that it needed to hold. The trend is down. Perhaps the gold shares were foreshadowing this breakdown in gold. Obviously I was stuck on the long side here for the gold shares when the trend was down. That was a huge mistake. I still believe that ABX under $25 is a longer term winner. I will be looking at the volume and open interest on the October and January calls here to see if there was any accumulation today. I will also have to see where the ultimate long term support is for gold itself on a monthly and yearly chart. I'll need to find the up trend line from the 2000 lows to see where the support lies. I don't think that it has been broken yet. So there will be plenty of work to do over the weekend. For now it's Friday afternoon and time for a break.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment