Friday, January 03, 2014
A mixed bag today as the Dow rose 28 points on light volume. The advance/declines were almost 2 to 1 positive. The overall market indices were weaker than the Dow. The NASDAQ was lower once again. When the small stocks are leading the way lower it isn't bullish. We're still overbought on most of the technical indicators. I believe that we are in the beginning of building a top. I would expect that we will see some upside at the beginning of next week. However that market will go where it wants. GE was flat on the day. No trades there for now. Gold continues to the upside as the futures gained over $10. The US dollar was higher again as well. Gold has broken out above a down trend line of the past two months. The next line of resistance comes in at $1280. The XAU fell 7/8 and has stopped at resistance. ABX off 1/8, GG down 1/3 and NEM was flat on the session. Volume was lighter on the decline. I placed another order for the January GG calls and wasn't filled. I'll probably try again on Monday. Mentally I'm feeling a bit tired, did not sleep well. Next week will bring the return of all the players on Wall Street. So we'll get a better idea of where things are headed. But I'll say it again. We are closer to a top than we are a bottom. Getting long stocks here should be a short term proposition. Some of the technicals are still wildly overbought and that is not the best place to be to get long. So we'll see. Gold has found a bid but with the strength in the dollar I'm not sure how long that can last. That said, I'd still like to try a short term trade in the gold share calls if we see some weakness at the beginning of next week there. However the optimum time to enter that trade has passed. It is something to ponder over the weekend. I'll be checking the charts again in the next two days to come up with something for the January option cycle. For now it's Friday afternoon and time for a break.
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