Wednesday, December 10, 2014
Well, we got a decline today as the Dow fell 268 points on very heavy volume. The advance/declines were 5 to 1 negative. Markets around the world a beginning to drop. The summation index is heading lower. I still don't think this is the beginning of any sustained decline. It would help if we can hold things up right around here. Let me be the first to say that the look on the daily candlestick charts of some of the major averages to me is a reverse head and shoulder pattern. That implies higher prices going out in time. I do not think that we are going to retest the lows from October or anything even close to that. But who knows? The markets go where they want. GE fell another 1/3 and the volume was heavy here as well. The GE March calls that I purchased yesterday are slightly under water. I still like this trade and think that in time it will prove to be a good move. Gold fell a couple bucks on the futures despite a drop in the US dollar. That isn't s good sign for the gold bulls. The XAU fell 2 1/3 after trying to show some life early. ABX shed 1/8, while GG and NEM fell over 1/2. Volume was lighter here. The gold shares basically ended up following the overall market. Mentally and physically I'm tired, still not close to feeling 100%. It affects the trading to be sure. I should be OK by next week. The markets don't care. USO continues to plunge and the volume today was extremely heavy. Maybe it's about time to step up to the plate here but I will have to wait until next week at least. Oversold and staying there on a daily and weekly basis for this issue. The snap back should be pretty violent if you can pick the bottom. The major stock indexes are moving to short term oversold territory. Not so much so on a weekly basis. The summation index heading lower should be where we take our cues from. Perhaps the S&P 500 can see some support at the 50 day moving average at around 2000. That is my best guess at the moment. Both gold and silver are now overbought. Sideways is the most we can expect near term. There was no flight to safety here despite a lower dollar and a decent decline in the stock market. The gold shares continue to disappoint. We'll have to watch the overseas markets tonight and see if they continue lower. Once again, I don't think that this is anything to worry about. Or perhaps since that's what I think you should. But you could make those assumptions on any day about any thing. We'll see what tomorrow brings.
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