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Tuesday, May 06, 2014

As promised we got a decent move today as the Dow fell 129 points on average volume.  The advance/declines were 2 to 1 negative.  This should move the summation index to the downside.  The small stocks helped lead the way down.  We finished near the lows of the session and that isn't bullish.  We could not build on the turnaround from yesterday.  There are now hanging man candlesticks on the major index daily charts.  I think that now the most we can hope for is a sideways pattern from here on the bullish side.  The bears will anticipate a solid drop from here.  GE was off over 1/3 and the volume remains light.  No volume equals no interest and that is where the market is at.  Gold was flat on the session despite a good drop in the US dollar.  The US dollar is at critical support near the 79 level.  If this level breaks on good volume, the dollar will be headed much lower.  This should help gold but who knows?  The XAU fell 3/4.  ABX and GG were flat, while NEM shed 1/4.  Volume was extremely light here.  Eight days to go for my May ABX call trade and they are showing a 50 % loss.  We are still right at the up trend line of almost a year in the making.  I'm still expecting some type of bounce off this line but will it occur in the next week and a half?  That will determine the outcome of this trade.  Mentally I'm feeling tired, not enough sleep and other outside influences on my mind.  The markets move on though.  The small stocks could not get above their short term declining tops lines and that is bearish.  The sell in May crowd could start showing up about now too if we keep heading lower.  Lack of volume is a concern for the bulls.  Of course the market will go where it wants but after today it looks like we are going to head lower.  Gold is trying to get something going to the upside but has yet to have a sustained rally.  The gold shares have been moving sideways for over a month.  The unrest in the Ukraine is not lending any upside momentum to gold.  Perhaps a breakdown in the US dollar will be a catalyst.  That remains to be seen.  My May ABX call trade is running out of time.  We'll keep an eye on the overnight action and see what tomorrow brings.

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