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Friday, February 27, 2015

Selling today as the Dow lost 82 points on average volume.  The advance/declines were about even.  I don't expect that this is the beginning of any substantial down trend.  We are working off the short term overbought condition in my opinion.  The small stocks were also weak today and that is a change.  But the advance/declines were not negative for the market.  I think this is more of an end of the month thing than anything else.  I could be wrong.  But perhaps there will be an opportunity next week to get some SPY March calls.  We'll see.  GE was up a dime on good volume.  We finished well off of the highs for the session though and that isn't a good sign.  Still, there are 3 weeks to go in the March option cycle and the GE calls that I own are solidly in the black.  Gold was up a few bucks on the futures as the US dollar finished the day little changed.  The XAU rose 1 1/8, while GDX gained 1/3.  Volume was light here.  I think the gold shares have simply come off of oversold levels this week.  I do not think that this is the beginning of a multi-week uptrend.  I'm still considering the April gold share calls at some point next month.  Mentally I'm feeling OK.  After such a huge move higher for the stock indexes in the February option cycle, you cannot expect a repeat here for the March cycle.  I do believe calls are in order for March but the gains will not be as robust as they just were.  Perhaps a doubling of option premium if the timing on the SPY calls is correct.  That's a guess as usual.  I certainly don't have a crystal ball.  I can say that last months set up was much better than what we have so far here.  GE had a good week and has put that trade in the black.  The weekly chart has a bit more room to run but on the daily chart, not so much.  The short term technical indicators for GE remain overbought.  I'll have to plan some type of exit strategy for that trade over the weekend.  I don't have any other new ideas right now.  I'll be checking the charts over the weekend and be back here on Monday to begin the month of March.  For now it's Friday afternoon and time for a break. 

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