Thursday, April 17, 2014
Another bounce around session as the Dow lost 16 points on average volume. The advance/declines were positive. A pre-holiday expiration with no real direction. The summation index is now moving higher again. The overall market was stronger than the Dow. I'm still not convinced we are on the verge of a major rally here. We are getting back to short term overbought for the stock indices so we will have to see if that brings another wave of selling. If things are more positive than I presume, the market will shrug off the overbought condition and move higher. We'll see. GE had a positive reaction to its earning but finished off of the highs for the session. GE gained about 1/2 on heavy volume. Obviously in retrospect buying the April calls in the beginning of the week was the correct play. Gold was down almost $10 in the futures market. The US dollar had a slight gain and did finish off of its lows. The XAU fell 2/3. ABX, GG and NEM all had fractional losses on light volume. My open order for the May ABX calls wasn't filled after I adjusted the price lower. I do believe that I am going to do this trade next week and probably on Monday. I'll check everything out over the weekend and decide what I'm willing to pay. ABX earnings are due in a week and a half. Mentally I'm feeling tired, did not sleep well. It appears that the decline is over now that we've had four positive sessions in a row. I'm still advising caution. The small stocks continue to lag and that is not a bullish sign. We are also entering a seasonally weak period for stocks. I don't have any OEX trades in mind for the near term. Gold had a down week and there does not appear to be any buying interest for the precious metal despite continued unrest in the Ukraine. The gold shares were weak as well and closed on their lows. We will roll into the May option cycle on Monday. I'm pretty sure that I am going to buy some calls on weakness if we see any in ABX next week. That is the game plan at the moment. A long holiday weekend is upon us. That gives me plenty of time to check the charts and the indicators before attempting the next trade. It's Thursday afternoon and time for a break.
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