Another attempt at a one day reversal as the Dow opened higher and closed lower. The Dow fell 20 points on average volume. The advance/declines were positive. We are moving to short term oversold and I would expect a move higher in the stock indices tomorrow or the next day. We also have the positive beginning of the month money flows to bolster the short term bullish case. We've been kind of moving sideways for a week and a half. I expect a positive resolution to the recent indecision. GE fell almost 1/4 on average volume. The Bollinger bands on the daily charts are contracting here. This implies a big move one way or the other soon for GE. I have no idea in which direction. I would still like to get the March calls for GE at some point. We'll see. Gold gained $6 on the futures despite the US dollar being a bit higher today. The XAU was flat. ABX, GG and NEM had fractional moves one way or the other on light volume. I still have in the open order for the ABX February calls. I'm not sure how long I'll leave this order in. However, I'm still a believer in higher prices for the gold shares before the February option expiration. Mentally I'm feeling OK, slept well enough. Seems like we're in a short term holding pattern for the stock indexes here. It should be resolved by Friday at the latest. That's when we'll get the employment report. Gold is overbought and staying there but I still think we've got more room to the upside. We'll see how February starts tomorrow.

The market tried to sell off this morning but buyers stepped in and we closed the day down only 6 points on the Dow. We were down over 100 early. The advance/declines were almost 2 to 1 negative and the volume was weak. We are getting to a point where perhaps we will see some type of pullback in the stock indices. However with the beginning of the month money flows coming in soon, the picture is mixed at best. Any decline can still be purchased in my opinion. The summation index continues higher. GE was off 1/8 on light volume. I'm now looking at the March calls here. No hurry to purchase them though. Maybe at some point in February if we get oversold on a daily basis. Gold fell a touch today on the futures as the US dollar was higher. The XAU was off 1 2/3. ABX and NEM lost 1/3 and GG fell 2/3. Volume was light. I think we are consolidating the recent huge gains in the gold shares and will then move higher. I have an open order in for some ABX February calls. Gold and the gold shares followed the overall market being lower in the morning and then fighting their way back. Mentally I'm feeling OK. Haven't had any real news out of Europe lately and that has contributed to the rise in the stock indexes. It has remained in the background. That could change at any moment and must be kept in mind. Plenty of economic data out this week capped off by the employment report on Friday. We'll see what tomorrow brings.

The Dow was weaker for a second day in a row as we lost 74 points on light volume. The advance/declines were almost 2 to 1 positive as the overall market was stronger than the Dow. The GDP report was a bit weaker than expected. The stock indices, with the exception of the Dow, continued to grind higher this week. We are long overdue for a rest. The back and forth this week could be a sign that the rally is waning. Or not. There seems to be an awful lot of liquidity out there. I'm going to try and wait for some technical evidence of a pending decline. Otherwise the upward grind will continue. GE was flat on light volume. Nothing new to report here. Gold continued to climb, up $5 on the futures and another $5 in the aftermarket. The US dollar was weaker again today. The XAU rose 2 3/4. ABX and GG gained 2/3, while NEM was up a buck. Volume was lighter than the previous 2 days. I had another open order in for some February ABX calls but it wasn't filled and I canceled it. Any kind of pullback or weakness in the gold share calls can be bought in my opinion. I will try and do that next week if I get a chance. I noticed today the volume in the February 50 call strike price for ABX went through the roof. Perhaps that will be the proper choice here. We'll see. Mentally I'm still trying to forget the fact that I missed this explosive move in the gold share calls when I was right there trying to take advantage of it. Obviously improvement is needed. But like I said before, there still may be a chance to make some profit from it. I think the overall market is beginning to signal a change but I could be wrong there as well. It's been an interesting week but now it's time for a break. I'll be going over the charts this weekend and hopefully I'll come up with some type of solid game plan for next week.

We had a one day reversal today as we opened higher and closed lower. The Dow lost 22 points on average volume. The advance/declines were about even. The overall market was weaker than the Dow today and that's the second time we've seen that here lately. No technical damage has been done to this extended rally in the indices but we're beginning to see signs that it's getting tired and may need a rest. February more often than not is a bit weaker when we are in a rising market. GE lost a touch after opening higher as well. Yesterday it looked like we were going to break out to the upside from the congestion zone. Today we are simply still in the zone. Perhaps the GDP report tomorrow will change things. No trades in GE for now but perhaps the March option cycle. Gold continued higher, adding on to yesterdays gains by $25 on the futures. The US dollar was a bit weaker today. The XAU rose 2 1/4. ABX up 1/2, GG tacked on 1 1/8 and NEM added 1/4. Volume was good. I left in an open order for some gold share calls overnight but it wasn't filled. I'm leaving in another open order for some ABX February calls overnight. Since we've seen a valid breakout in gold, I would expect further gains in the gold shares. The timing is late though. Mentally I'm feeling OK, slept good enough. The rally continues in the stock indexes but I think we are beginning to see signs that it is long in the tooth. I could be wrong but we have remained overbought for a very extended time. Gold has broken out and will move higher in my opinion. We'll wrap things up tomorrow and go from there.

The Fed spoke and the market listened as the Dow rose 83 points today on average volume. The advance/declines were 3 to 1 positive. Overbought for weeks now and no sign of a top. I really don't know how long this can go on but I do know this. It will probably last longer than you think and it already has. Summation index continues higher. So the scenario remains the same for now. GE was up 30 cents on OK volume. We're still in the recent congestion zone here but it now looks like GE wants to break out to the upside. I don't have any trades here in mind for GE though. Gold was one of the stories of the day as it rallied $35 dollars on the futures and another $10 in the aftermarket on the Fed. The US dollar fell in reaction to the continued easy US monetary policy. The XAU exploded to the upside by 11 1/3. ABX and GG were both up 3 and NEM rose 2 3/4. Volume was heavy. I placed an overnight order in for the ABX calls but it wasn't filled. I am leaving in an overnight order in for some GG calls in hopes of a pullback. But it probably won't come tomorrow. I do not like to chase moves however in this case price and volume have broken out and that can't be ignored. In retrospect the Gold/XAU ratio was close enough to justify purchasing the gold share calls. The gold exchange traded fund GLD has broken through the downtrend line that has been in effect since September. The next technical expectation would be a pullback towards that line. That will be the point to purchase the gold share calls after missing this opportunity. Mentally I'm feeling a bit miffed for missing the gold share call trade. However the market doesn't care and really, neither should I. But I don't like missing out on decent trades more than I don't like losing money. It doesn't matter though as the game goes on and there will always be another trade. You've got to keep moving on. I'm going to try the gold share calls anyway if I get the chance. I'm also considering some OEX puts for February if we get some sort of RSI or momentum signal. Hasn't happened yet but I'll be looking for that as we go into February. Plenty of economic data at the end of this week but the Fed announcement may trump any of that. We'll see.

We opened lower today and tried to fight our way back but the Dow closed with a loss of 33 points on light volume. The advance/declines were positive. The overall market was stronger than the Dow. Still overbought and still no real pullback. The summation index continues higher. We'll get a Fed announcement tomorrow and that may move things. GE was down 1/8 on light volume. We've been moving sideways here for about 3 weeks. No trades there for now. Gold lost $13 as the US dollar was a bit higher. The XAU lost 3 2/3. ABX off 1 1/2, GG fell a buck and NEM dropped 1 3/4. Volume was average or better. NEM has been the leader for the gold shares and we are setting fresh lows there. Oversold on the gold shares and almost at the Gold/XAU ratio buy signal. It's possible that both gold and the gold shares will decline together. Regardless, I'm going to give the gold share call trade a shot this week if the signal comes through. Mentally I'm feeling tired, did not sleep well. The overall market is overbought and I expect some weakness this week. Today was not a real decline in my opinion. The overall market was too strong. So we'll get through the Fed announcement tomorrow and go from there.

A quiet start to the week as the Dow lost 11 points today on light volume. The advance/declines were positive. Nothing new to report really. We've got the Fed this week and that may be the highlight. Still overbought and I'm looking for some type of pullback this week. But we'll need a catalyst for that and I have no idea what that will be. So we wait. GE lost about 1/4 on light volume. No trades there in the near future. Gold continued higher, up about $14 on the futures. The US dollar was weaker today as the euro has begun to move higher. The XAU was up 3 points. ABX gained 1 1/8, GG rose 3/8 and NEM was flat. Volume was average. I'm looking to get long the gold share calls this week on weakness if it happens. May be too late already. The gold share calls are oversold on the technicals. We don't have the Gold/XAU buy signal just yet. If and when that signal occurs we will have a decent risk/reward to put on that trade. I'm looking at the February ABX or GG calls. ABX has shown the best relative strength lately. We'll see. Mentally I'm feeling OK. A new option cycle started today so the premiums are higher than I'd like. That said, if a trade looks good this week I'm going to give it a shot. Tomorrow could be another waiting on the Fed day. More economic data out later this week. I'll try and be patient here on the gold share calls because gold itself is pretty overbought. Gold is also approaching a downtrend line that could prove to be resistance. We'll watch what happens overseas tonight and go from there.