Tuesday, September 10, 2013
Follow through to the upside and the volume was good as the Dow gained 128 points. The advance/declines were 2 to 1 positive. The summation index is heading higher. We made it to the 1680 level on the S&P 500 and are plowing ahead. The volume to the upside on the TRAN today was impressive. So perhaps September won't be so bad for the stock market after all. I did place an order today for some October OEX puts but it wasn't filled. Both short and medium term overbought for the stock indices. No sellers to be found though. All technical signs seem to be pointing to even higher prices. Perhaps attempting the OEX puts is the wrong strategy here. GE was up 1/2 on average volume. Looks like it is too late for the calls there now. I suppose the September 23s were the way to go but hindsight is always correct. Gold dropped as peace is now trying to break out in Syria. Well not exactly peace but perhaps no US involvement. The precious metal futures dropped over $20. The US dollar was little changed today. The XAU fell 3 2/3. ABX down 3/4, GG off 1 7/8 and NEM shed 1 1/8. Volume picked up to the downside and that is bearish for the gold shares. My October ABX calls are still in the black but have lost a lot of their former profit. Mentally I'm feeling OK. We are in a rally and I do not know where it came from. Perhaps it is a bounce from the zero line in the summation index. Perhaps we have a long way to go on the upside but I am still inclined to try the October stock index puts. However just because the market is overbought, it doesn't mean that we can't go higher. The foreign stock markets are poised to break out here as well. So maybe we are in some type of liquidity flood around the world. That's a guess and I have no reasons for the upside that we are seeing right now. Gold needs to hold the up trend line that began in July. This means the $1350 level is crucial for gold in the near term. We are oversold so there's a chance that we will hold there. But as usual there are no guarantees. We'll keep an eye on things overnight and decide whether or not to get short tomorrow.
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