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Friday, May 24, 2013

We had a sell-off early but then a steady grind back to the upside as the Dow finished the day with a gain of 8 points on light volume.  The advance/declines were negative.  The technicals for the stock indices have rolled over but we are not getting much of a decline.  The summation index is heading lower and prices are holding up rather well.  Perhaps the price action this week is simply a pause in the momentum run up.  It sure feels that way.  Money is buying whatever dips we get.  We'll have a long weekend to figure out a game plan for next week.  GE was off 1/8 on average volume.  The technicals have rolled over here as well after hitting a new yearly high.  No trades in mind for GE.  Gold fell $5 on the futures and a bit more in the aftermarket.  The US dollar was a bit weaker today as well.  The XAU was off 1 1/4.  ABX, GG and NEM all had fractional losses on lighter volume.  ABX was actually halted from trading today for 3 hours due to an unfavorable ruling and fine from one of its mines in Chile.  Considering the stock did not just fall apart when it re-opened is a good sign going forward in my opinion.  Of course owning the ABX October calls does sometimes create a bullish bias when I look at this stock.  At any rate gold still needs to hold above the crash lows and it has so far.  Some type of rally would be nice but a sideways consolidation is another possible outcome as well.  Mentally I'm feeling OK.  A down week for the stock indexes but it isn't a negative trend yet.  The medium term technicals here remain overbought.  Unless we get a strong break to the downside, the trend remains up.  But we have to keep in mind that this has been a momentum driven move.  When it does end, it won't be pretty.  Gold has the opposite picture.  Medium term oversold here and below the 200 day moving average.  Same story for the gold shares.  Perhaps buying the longer term ABX calls was a mistake.  I still need to see where we close out the month there to determine my time frame for selling them.  They are still somehow slightly in the black.  Plenty to think about over the extended weekend.  But right now it's a Friday afternoon and time for a break.

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