Friday, April 10, 2015
The drift higher continues as the Dow rose 99 points on light volume. The advance/declines were positive. Getting to short term overbought on the daily technicals. The summation index continues higher. Expiration week on deck and perhaps the positive bias will take effect. The small stocks aren't outperforming lately and that is a cause for concern. However the TRAN has turned things around and that is a plus. My SPY April calls are now showing a small profit. The best move here will probably be to sell them early next week. GE had a day for the ages as it rose 10% on extraordinary volume. Now money managers are trying to determine how the restructuring announced yesterday puts a number on the price of the stock. Obviously people think that now GE is worth a lot more than it was on Monday. The GE April calls that were almost worthless Monday are now worth ten times what I paid for them. Only one way to describe that, sheer luck. On the GE weekly chart there is now a high volume breakout from a sideways consolidation that lasted for about a year and a half. This move is for real. Gold was up over $10 today on the futures despite another rise in the US dollar. Not sure what that means. The XAU rose 1 1/2, while GDX gained 1/2. Volume was better than it has been but nothing heavy. The technical indicators for the gold shares are in the short term overbought region. Mentally I'm feeling OK and getting better physically as well. Some of the major stock indices are getting close to new all time highs again. However to break through, I think we would need some kind of positive catalyst. I don't see anything like that here. But what do I know? We are due for some type of pause because the volume this week has been light and the breadth hasn't been all that great. But the market will go where it wants to. It will be interesting to see if GE continues to keep going straight up on Monday. I'll need to sell those GE April calls at some point next week. Gold has had some buyers in the past few weeks but I don't think that it is the start of anything substantial. ABX remains the stock of choice there for now as it continues to outperform. The problem is that once everybody knows which stock is doing better, it usually means that it's too late. I don't have any gold share trades in the works right now. I'll be resting and checking the charts over the weekend. Having a solid game plan for next week is a must. For now it's Friday afternoon and time for a break.
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