Thursday, January 15, 2015
The Dow fell 104 points and closed near the low of the day. Volume was good once again and the advance/declines were 2 to 1 negative. The summation index is heading lower. The up trend lines from October on the various stock indices have been broken. I certainly do not know what is going on in the markets at this time. A surprise currency announcement from Switzerland changed the landscape today. Once again there are things going on that I do not have the information on. However the market reflects all that is known and unknown supposedly. But it doesn't like uncertainty and that is where we are at now. GE was off 1/8 on lighter volume ahead of the earnings. Perhaps as GE goes tomorrow so does the market. The GE March call trade hangs in the balance. Gold soared on the news from the Swiss. The futures were up $30. The US dollar was up a bit on the session as well. The XAU rose almost 4 points and GDX gained 1 1/4. Volume was huge for the gold shares. Gains on the day for some of the gold shares were close to 10%. Technically these issues are overbought. The two day decline this week can be viewed as a snap back to the breakout point for the gold share indices. I'll have to look at the calls here again if we get any weakness. Price and volume are very positive. Mentally I'm feeling OK. It's been a tough week for stocks and I don't see anything to turn things around in the near term. We are working our way to a short term oversold condition. There is a holiday weekend in the US coming up. I don't see a lot of buying before that but you never know. The usual positive bias for expiration week did not materialize. Oil headed back down today and until we at least see some stabilization there, the market will be on edge. Once again I've been completely off on my theory and trading at the start of this year. Gold appears to have broken out from a reverse head and shoulders pattern on the daily candlestick chart. The measuring objective would be to about the $1340 level. I'm looking at the February ABX and GDX calls. But I'll need to see the technical indicators come off of their overbought levels. We'll watch and see if there are any other foreign market surprises overnight and close out the week tomorrow.
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