Friday, September 27, 2013
Still getting a downside bias for the stock indices as the Dow fell 70 points on light volume. The advance/declines were negative. We really should have seen better upside this week considering the short term oversold condition of the stock market. My guess is that a budget deal will be reached and we'll see a rally after that next week. The technicals for the major stock indexes have rolled over. Not so for the small stocks. The summation index is still moving to the upside. The volume has been light lately, which adds to the indecision. We are in a seasonally weak period. GE was off about 1/4 and the volume was very light. The indicators are rolling over here as well. Gold came back a bit on the futures, up $15. The US dollar was lower today. The inverse relationship between these 2 has been in sync lately. The XAU didn't follow gold again and was flat on the day. ABX, GG and NEM were mixed with fractional moves. The volume was light. My October ABX calls are still pretty big losers. I'm still considering the November ABX calls but will wait until next week to make a decision on that trade. Mentally I'm feeling OK. End of the month coming up on Monday and the budget deadline. The weekly chart of the Dow has a bearish look after today in candlestick terms. Also we have an obvious divergence in the RSI vs. price. So even if we get a budget deal and a rally, I don't think it will last. I could be wrong and often am. Gold and the gold shares didn't do much this week. I'm not sure where the next major catalyst will come from. The US budget impasse hasn't caused a rally in the precious metal. Perhaps another gold share trade isn't the best idea. I'll consider all the angles over the weekend. Plenty of charts to go over and keeping an eye on Washington will be in the forefront. Still 3 weeks to go in the October option cycle so opportunity is still there. For now it's Friday afternoon and time for a break.
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