Wednesday, February 12, 2014
We took a breather today from the recent rally as the Dow lost 30 points on light volume. The advance/declines were positive. Short term overbought and some more downside is expected in the next few days. Retail sales out tomorrow with the Fed head speaking again should be market movers. Although we may pull back some, I do not expect a retest of the recent lows. The rally has come too far for that in my humble opinion. GE was off a few cents and the volume was light. The 200 day moving average held here. Gold was up another 5 bucks on the futures but came back in the aftermarket. The US dollar finished little changed on the day. The gold shares took a hit though. The XAU fell 2 3/4, while GDX lost 7/8. There are now bearish engulfing pattern of the daily candlestick charts here. Plus gold rose while the gold shares fell and that isn't bullish. ABX and GG dropped around 2/3. NEM lost 1/3. Volume was good. My ABX February calls are now showing a loss. The GDX February calls are still showing a small profit. The ABX earnings will determine the gains or losses I suppose. Obviously I should have exited these trades yesterday. The RSI indicators were at the top of the channels. I guess I'll be out of these trades tomorrow unless ABX takes off to the upside. Mentally I'm feeling as though I've just made the same kind of mistake that characterized all of last year. The trades had a good profit and the technicals were overbought but here I am still holding them. The game is always battled within oneself. I need to get better, no doubt about that. No idea what to expect from tomorrow but I'd be guessing that the retail sales number will be weak. The market reaction is what to watch as usual. I'm looking for some near term weakness for the stock indexes but nothing like what we have recently seen. Gold has been acting well but todays action in the gold shares is not bullish. Unless we get a complete turnaround in the gold stock indices tomorrow, lower prices are in the offing. At the least a sideways consolidation. With only six days left in the February option cycle, the trades I'm holding don't have much time left. Tomorrow will most likely be the key. We'll see what transpires overnight and go from there.
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