Wednesday, October 30, 2013
Volatility returned today with the Fed. The Dow fell 61 points on good volume. The advance/declines were 2 to 1 negative. Nothing new from the Fed but it was an excuse to take profits I'd imagine. The economic data remains status quo. No GDP report today as it is now delayed due to the government shutdown. We hit a new intra-day high on the Dow today. Perhaps this is the beginning of working off the extreme overbought condition of the stock indices. Regardless, the trend is still up for stocks. GE was up another 1/8 and the volume remains good. I can't see any major market decline in the works with a strong showing in GE. I could be wrong but probably not with regards to this theory. Gold got bounced around on the Fed as well. The yellow futures were up around $3 on the session but sold off $20 in the aftermarket before coming back a bit. The US dollar was higher today as well. The XAU sold off after the Fed as well but came back to end the day with a gain of 1 1/2. Not exactly sure what to make of that action but it appears to be bullish. ABX was up 3/4, GG added 1/8and NEM rose 3/8. Volume was pretty good for the gold shares, especially for ABX. It looks like somebody knows something here about the earnings due tomorrow. It looks like the same price action we saw with GE the day before its earnings announcement. But we all know anything can happen in this game. Mentally I'm feeling OK. The small stocks have begun to under perform recently and that is not a positive for the stock indexes. No trend line damage for now. Also one day doesn't mean it's a turnaround. But it is something to keep an eye on. Gold really had a whipsaw session today. The recent stronger US dollar is not a positive sign for gold. My November ABX call trade is back to showing a nice profit. How this trade goes will most likely be determined by the earnings report tomorrow. If todays price action is any indication, the report will be viewed as a positive. We'll see how the foreign markets react to todays US market developments and go from there.
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