Friday, October 31, 2014
Another incredible run to the upside today as the Dow gained 194 points on heavy volume to finish the month of October. The advance/declines were over 3 to 1 positive. The summation index continues higher. We are once again hitting all time highs in some of the major stock indices. I certainly cannot explain it but as I say here a lot, the market goes where it wants. No real declines to get long but perhaps that will change in November. Technically overbought and staying there. No OEX trades in mind at the moment. I guess the next big events will be the election on Tuesday and the employment report a week from today. GE was only up 1/8 today on average volume. GE did not participate as much in todays rally. I still like the March calls here eventually. Gold got clocked again today as the futures fell over $25. The US dollar had a very strong session on the heels of a weak Japanese yen. The XAU dropped 3 1/8. ABX lost 3/8, GG was down 1 1/2 but came all the way back to be slightly positive. NEM got smashed on the earnings report and lost 1 1/2. Volume was extremely heavy for the gold shares today. I keep thinking that we have seen the blow out downside washout for these stocks, yet they keep going lower. I did put in another order for the January ABX calls but it wasn't filled. The action in GG today was interesting for at least in this stock, traders are saying enough is enough. I'll probably try ABX again on Monday. Mentally I'm feeling OK. Small losses in the last two OEX trades but I can live with that. At least I executed the trades as planned and did not deviate form my trading rules. The stock indexes have come roaring back from the lows of mid October. I do not see any barriers in the way of higher prices from here for a while. Wear above the old resistance in both the Dow and the S&P 500. The good volume confirms the breakout. I'll be taking a closer look at the charts over the weekend. Gold has broken its support at the $1180 level and I don't know how low it can go. Perhaps all the way back to $1000? I'd be guessing if I said I knew. The gold shares are so blown out here that I am pretty sure I will be attempting the calls next week for the January option cycle. Plenty of charts to look at there as well. It was a crazy month of October in the markets. I don't expect a repeat of that anytime soon but you never know. For now it's Friday afternoon and time for a break.
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