Friday, March 21, 2014
Another mixed day to be sure on expiration Friday. The Dow fell around 25 points on heavy volume. The advance/declines were positive though. However the small stocks were much weaker than the overall market and that is not a good sign. The major indices also had a one day reversal to the downside by opening higher and then closing lower. But it was option expiration so we don't know how much any of this really matters. Yeah, it's confusing but there is not clear picture of direction for me at the moment. The technicals are now more mid-range than anything else. Could go either way or simply sideways. GE was up 1/8 but finished well off of the highs for the session. No trades there for now. Gold stabilized for now and was up five bucks on the futures. The US dollar finished the day little changed. Ditto for the XAU. ABX, GG and NEM also were basically unchanged on the trading day and finished off of their highs as well. I still think the gold shares need to take a breather here for maybe another week or so. Or perhaps it is the beginning of something more to the downside. I'll be keeping an eye on how far the retracement goes. The May ABX calls are still the plan for the next trade. Mentally I'm feeling OK. Looking at the daily charts for the stock indexes, I could make a case for a rollover to the downside here. The candlestick patterns after todays price action look bearish. But we'll have to let the market tell us which way it is going to go since there are no clear technical signals that I can see right now. The S&P 500 barely reached a new all time high today and then sold off. Gold had a tough week and I am going to try and remain patient there to make the next trade. I also could be completely off in trying to purchase the gold share calls in the coming weeks as well. The fundamentals for gold aren't really bullish going forward in my mind right now. That would limit the upside potential even if we get another rally. So perhaps I'll have to rethink this idea again. Just as everything lined up well for gold during this recent rally, things will have to look completely bad for it to be a trading buy again. Patience is the key for now. Plenty to ponder over the weekend and many charts to go over as well. For now it's Friday afternoon and time for a break.
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