Thursday, May 30, 2013
A slight bounce in the Dow today as it gained 21 points on average volume. The advance/declines were positive. The overall market was stronger than the Dow. The McClellan oscillator reached a very oversold level yesterday so some type of positive relief was due. The stock indices are still on the oversold side here though. However the anemic reaction to the oversold condition has me concerned for the bullish cause here. I'm guessing that we should move higher in the coming few days but that may be an opportunity to purchase some OEX June puts. We'll see. GE was flat on the session and the volume was light. We've had a nice run since the end of April for GE. Perhaps it's time for a pause. Gold rallied again on the weaker US dollar. The precious metal futures rose $20 as the dollar had another very weak day. The XAU came to life again with a gain of about 5 1/2. ABX and GG rose 1 1/2, while NEM tacked on 1 1/4. Volume was good for the gold shares implying that the move higher has legs. My October ABX calls are solidly back in the black. Mentally I'm feeling OK. The GDP revision was only adjusted down slightly but that was enough to start the day with a rally. But the day ended on a weak note and the tone of the market seems to have changed. That could all change with a couple of solid up days. However the summation index is still trending down and that cannot be ignored. Gold is right at a declining tops line on the daily chart that began in mid April. The gold shares have already broken through that line and we'll see if gold itself can follow. A strong close of the month tomorrow for ABX will put that trade in a better position going forward. Money has flowed into the gold shares the past couple of days. We'll see if that continues. We'll watch the foreign trading overnight and close out the month tomorrow.
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