We ended the year on a down note as the Dow fell 69 points on holiday light volume. The advance/declines were negative. No real news of the day or anything else to report. All the players will be back next week after another long weekend. GE was off 1/8. I'm carrying the GE calls that I own into the new year. That was the plan and I'm sticking to it. I'm expecting the stock indices to move higher in the beginning of 2012 and GE should go along for the ride. GE's earnings come out on January expiration Friday but I won't be holding them that long. At least I hope not. Gold had good day, up $25 on the futures and it was higher than that during day. The US dollar was weaker. The XAU was up only 1 1/4 though. ABX was flat, GG up 3/4 and NEM fell 1/3. A mixed bag to be sure. Volume was light. I'm pretty sure that I'm going to try the gold share calls in the beginning of January. I just need to see a decent signal in the Gold/XAU ratio. We'll see if that happens. Mentally I'm feeling OK. Today puts a close to the 2011 trading year. My trading account gained about 65% for the year. It should have been better and it could have been worse. At least it wasn't a repeat of last years debacle. But it really doesn't matter. Win or lose, it's over and done with. The only thing relevant now is the trading for 2012. You have to keep trying to move forward in the game and sometimes it isn't easy. The only thing that I can say for sure is that you've got to keep doing the work. Day in and day out. Week in and week out. Month in and month out. Year in and year out. There are no shortcuts. Do that and you might have a chance. Don't do it and your doomed. My general scenario at the moment is to be looking for strength in the stock indices at the beginning of the year. That should give me an opportunity to dump the GE calls. I'd also like to try the gold share calls for the January option cycle as we still have three weeks to go there. That's about all on my radar screen for now. We're still subject to headline risk out of Europe with their ongoing debt problems. Trouble there could pop up at any time. However for now it's the last Friday afternoon of 2011 and time for a rest. Here's wishing everyone a prosperous trading year in 2012.

Back to the upside today as the Dow gained 135 points on holiday light volume. The advance/declines were almost 4 to 1 positive. We had the opposite of yesterdays action today. I don't think that it means much in the overall scheme of things. Just trying to muddle through this light volume week. I still think we will be going higher in the beginning of next year. GE gained 1/4 and we're still overbought here. Nothing much to do with the calls here but to wait for next year. Gold was the story of the day again as it fell almost $25 on the futures. Came back a bit in the aftermarket. The US dollar was a bit weaker today. However the XAU rose 3 points. ABX, GG and NEM were all higher by 7/8. Will the gold shares lead the precious metal higher? Don't know. There is a positive RSI divergence with ABX on the daily charts. The Gold/XAU ratio isn't near a buy signal here though. I would like to try the gold share calls and perhaps next week will present an opportunity. We'll see. Mentally I'm feeling tired, did not sleep enough. Just waiting for the week to end. Tomorrow should be a non event.

Moving lower today as the Dow lost 140 points on light volume. The advance/declines were 4 to 1 negative. Bad news out of Europe this morning, at least that was the perception. The market is still hostage to the headlines as it has been for quite some time. Working off the overbought condition in the stock indices is my take on things at the moment. I could be wrong as usual. It's still a holiday mode market until next week. GE was off 1/8 on light volume again. My GE calls are losing ground but I'm still holding on until next year. That has been the plan and I'm sticking to it for now. Gold took another hit today, the futures were off $30 and fell another $10 in the aftermarket. The US dollar rose on the weaker European debt perception. The XAU was off 6 1/3. ABX down 1 1/4, GG off 1 2/3 and NEM dropped 2. Volume picked up to the downside. Could be the final tax-loss selling for the year or we could be starting another leg down in gold. Not sure but I still would like to try the gold share calls again early next year. Haven't gotten the Gold/XAU ratio signal yet but we are getting close. Trying not to do anything this week. Mentally I'm feeling tired, did not sleep well. Just hanging around for the rest of the year. Light volume skews the moves this week. Markets are in holiday mode. 2 trading days to go.

A slow holiday trading session as the Dow lost 2 points on very light volume. The advance/declines were about even. I'd expect more of the same for the rest of the week as we are in holiday mode. I think there will be a downside bias, since we are short term overbought. I do not expect a lot of news out of Europe or anywhere else this week. GE dropped about 1/4 on light volume. My GE calls are still in the black. I would expect some weakness here as well and that would relieve the overbought condition that we're in for GE. I still will be holding this trade into the new year. Gold fell $10 on the futures today and the US dollar dropped a touch. The XAU lost 2 1/2. ABX and NEM fell 1/2, while GG shed 2/3. Volume extremely light. I am looking at the gold share calls again for January. Oversold and staying there for the gold shares. When the Gold/XAU ratio hits the buy point, I will give this trade a shot. Mentally I'm feeling OK, it was a nice long break from the trading action. Not much to do but get ready for next year at this point. I'll be keeping an eye on things but I don't expect any surprises this week. I expect some drift lower, that's about it.

The Santa Claus rally lives on as the Dow gained 124 points today on very light holiday volume. The advance/declines were 2 to 1 positive. Summation index moving to the upside, implying higher prices going forward. Trying to get through overhead resistance here on the stock indices but the volume is light. The Dow is the leader right now and that usually isn't bullish. I'd like to see the small stocks take the lead but it hasn't happened. Overbought on the stock indexes. GE gained 1/8 on light volume. Very overbought here and some pullback would be healthy for going forward in January. My GE calls remain in the black and we've hit the initial target that I had in mind. I'm holding on until next year for now. Gold dropped a few bucks on the futures in quiet trading. The US dollar was basically flat on the day. The XAU gained a point. ABX up 1/8, GG rose 3/8 and NEM tacked on 7/8. Volume was extremely light. Oversold, staying there and perhaps next week I'll try the gold share calls again. We'll see. Mentally I'm feeling OK, slept well. All was pretty positive for the stock indices this week except for the low volume. The trend is up. Gold just hung around all week after its recent debacle. Probably more of the same is in store there. A long holiday weekend is on tap and next week should be slow too as we wait for the new year. It's the first Friday afternoon in winter and time for a break.

Moving to the upside as the Dow gained 62 points on light volume. The advance/declines were 3 to 1 positive. The summation index is now moving back to the upside. It looks as though the Santa Claus rally has begun. Of course it could all turn around tomorrow if something negative comes out of Europe. We are right at resistance lines on the major stock indices, below them on the small stocks. We would have to get through them on good volume to continue higher in my opinion. I'm still a believer in higher stock prices going forward. GE continues to amaze as it gained 3/8 today on good volume. We have reached what was my target at $18. I'm going to continue to hold onto the calls into next year as I originally planned. GE is very overextended here and some type of pullback would be helpful for continuing to hold on. However with the price moving higher on good volume, the trend is clearly up. The GE calls I have are still in the black and continue to gain ground. Gold lost a few bucks in the futures and 5 more in the aftermarket. The US dollar bounced around and finished the day about where it started. The XAU fell 1 1/4. ABX and GG lost 1/3 but where lower during the session. NEM dropped 1 7/8. Volume was light. I'm still looking at the January gold share calls but that is about it. I don't plan on attempting this trade until a decent signal presents itself. That is the plan. The gold shares are pretty oversold and staying that way. Mentally I'm feeling tired once again as I did not sleep well. Tomorrow is a Friday before a long holiday weekend and I would not expect any big moves. It should be a slow affair. Next week should be about the same. Unless something occurs in Europe. If that is the case, anything could happen.

We were negative for most of the day but came back by the close to finish with a gain of 4 points on the Dow. The advance/declines were positive and the volume was light. Today the headlines out of Europe weren't viewed as favorable, hence the weakness. So back and forth we go. I still feel that higher stock index prices are in the future, with the future being the next few months. The smaller stocks didn't do well today and they are usually the leaders at this time of the year. On the other side of the coin, the transports are just about to break their overhead resistance. If that happens it will be bullish for the overall market. GE continues to show incredible relative strength in my opinion, up 3/8 today on good volume. And I'm not just saying that because I own some GE calls. GE could be a harbinger of better stock prices going forward as well. Still very overbought here short term. We are approaching the price target that I had in mind for this trade. May have to readjust expectations. The calls I have are still in the black. Gold was down $4 on the futures today. The US dollar was a bit higher. The XAU was flat. The gold shares were mixed, with ABX and NEM showing fractional gains. GG lost 2/3. Volume was light. I'm still trying not to put on a trade here yet. I'm waiting for the signal from the Gold/XAU ratio, if it happens. Plenty of time in the January option cycle with the extra week tacked on. There are 3 days off for holidays though. Mentally I'm feeling tired, did not sleep enough. I would expect some drift here for the rest of the week as we approach the Christmas holiday. It's a time to be patient in my opinion.