Wednesday, September 17, 2014
Now at least we have the Fed out of the way for a while. The Dow gained 24 points on average volume. The advance/declines were slightly positive. The market got a pop to the upside after the Fed announcement but sold off in the final hour. It's options expiration week and the positive bias is certainly present. But if you look closely, the breadth is starting to deteriorate. The summation index is still heading lower. I'm a believer in lower prices moving forward for the next few weeks. GE was up a few cents and the volume was average. No trades here for now. My September puts will expire worthless. Gold was flat on the futures but off over ten bucks in the aftermarket. The fundamentals remain bearish here. The XAU dropped almost two points. ABX, GG and NEM were all off 1/3 or more on average volume. I'm waiting for gold to drop to $1200 before I think about getting the January gold share calls. Even then, it may not be the right idea. But gold and the gold shares are blown out to the downside, so at least some kind of bounce is way overdue. Mentally I'm feeling tired, did not sleep well. Volatility picked up today and I expect some more near term. I think tomorrow will be a bit more interesting than traders expect. I left in an order to sell my remaining September OEX puts. They are almost worthless and will essentially be a total loss. From here on out I will be implementing my new trading rules. That should limit any future losses to 50% max. It is long overdue. But supposedly you learn more from your mistakes than from your successes. That is certainly the case for me at this point. Gold and silver continue to drop and there is no end in sight. There is no rush to do anything on the long side here. I will try my best to be patient at this point. We'll see what happens in the overnight markets and await the vote in Scotland tomorrow. Although Scotland is a minor player in the whole scheme of the market, the outcome of the vote will be a reason for the currency markets to move.
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