Monday, March 02, 2015
We begin the month of March on a positive note as the Dow gained 156 points on average volume. The advance/declines were positive. The trend remains up and we should find our way higher going forward. No opportunity for purchasing the SPY March calls today. It appears that this trade isn't going to happen at this rate. However the advance/declines today were less than what you would expect for a market up over 150. So the rally is losing internal strength at the moment. That doesn't mean that we won't go higher though. We worked off the near term overbought condition for stocks and now have moved up. GE was up 1/8 and the volume was lighter. Very overbought on a daily basis here but I have a target price in mind but we are not there yet. The GE March calls I own are doing fine. Gold fell $5 on the futures and the US dollar was little changed. The XAU dropped 1 2/3, while GDX fell 1/2. Volume picked up a little on the downside. March is historically the worst month for the price of gold. So at some point this month there should be a good entry point for the April or May gold share calls in my opinion. That is a trade on the horizon. It will take some time for the gold shares to get oversold. There is no rush here. Mentally I'm feeling OK. The small stocks continue to lead the way higher and that is bullish. This rally seems to be getting long in the tooth but there is no top yet. There is no overhead resistance as well. So we have to keep looking for trades on the long side for now. Fridays employment report should be the next market catalyst. Todays gains goes to show that there is still money out there looking for a place to go. The GE March call trade continues to work but I really need to think about an exit. Gold is a waiting game for now. We'll keep an eye on overnight developments and be ready to go tomorrow morning.
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