Some downside today on the comments from Ben Bernanke as the Dow fell 53 points on better volume. The advance/declines were 2 to 1 negative. Summation index now falling to the downside. We also have a negative divergence on the RSI for the S&P 500. So perhaps this is the start of something more to the downside than we've seen since the rally started back in December. I'm not totally convinced of that but we'll see what transpires as we move forward. I am now looking at perhaps the OEX calls for March but not just yet. GE fell 1/8 on average volume. We've been moving sideways for two months now. I am no longer considering the March calls here. I will opt to try the OEX if we get an oversold signal on the overall market. Gold was really the story of the day as far as I'm concerned as it got clobbered on the Bernanke babble. The yellow metal fell about $75 on the futures and another $15 in the aftermarket. The US dollar rallied on the Fed chairmans comments. The XAU dropped 6 2/3. ABX down 1 3/4, GG fell 1 1/2 and NEM off by 2 1/2. Volume was heavy. I dumped the ABX calls that I had for a 25% loss. Interestingly enough they were still showing a profit in the first half hour. However I did not have a stop loss order in place and then hesitated to sell since we were so close to breaking out above $50. But the markets will go where they want and adjustments must be made. I was too slow today. Mentally I'm a bit tired, could have slept more. Another trade and another loss. Not good for the confidence level but you've got to keep moving on. Beginning of the month on tap tomorrow. With the negative RSI divergence on the stock indices, I'll most likely be on the sidelines until we get oversold. Which hasn't happened in quite some time. I will also have to let gold settle down before I place another trade there. With March being historically a poor month for the price of gold it seems to be the prudent course of action for now. I'm not happy with the result of the ABX call trade today but there isn't much you can do when you don't put forth the full effort. In retrospect I should have placed a stop loss order when the trade got profitable again yesterday. I also noticed too late this morning that the heavy volume yesterday on the ABX calls did not expand the open interest. In fact the open interest declined significantly. That was another clue that I picked up on when it was already past the point of no return. None of that matters now though. The next trade is what's important.

The grind higher continues as the Dow gained 23 points on light volume. The advances barely beat out the declines. The overall market was stronger than the Dow. The advance is really starting to look thin as the advance/declines are not strong. However the trend remains up until we get some type of meaningful decline. Hasn't happened yet but be aware that it could commence at any time. That's my guess of the situation at the moment. GE was up 1/8 on light volume. Moving sideways at a slightly higher level but no breakout as of yet. I'm not planning on buying the March calls anymore but I suppose that could change. Gold moved higher today as the US dollar was lower. The precious metals futures were up $13. The XAU was up 3 7/8. ABX up almost a buck, GG rose 1 2/3 and NEM gained 1/2. Volume was average. My ABX calls are back in the black. We are getting close to breaking through the resistance at $50 for both ABX and GG. GG is acting much better though and the option premiums reflect that. We will need to see good volume as we move above $50 on these 2 stocks to be sure that the breakout is valid. If it even happens. Mentally I'm feeling OK, slept well enough. Overall stock indices are overbought as they have been for weeks on end. I would not be surprised to see some near term weakness but I do expect higher prices into the March expiration. Gold is approaching the $1800 level and I would expect to see some hesitation or consolidation there. The US dollar is close to the 78 level and I see support there at 77. That level on the US dollar is a logical place to take the profits on gold in my opinion. That is where I'd like to dump the ABX calls, if I hold them that long. The weekly charts on the gold shares still look constructive to the upside. Of course this could all change tomorrow as the markets will go wherever they want. The Fed beige book and the end of the month are on tap.

Some volatility returned today but at the close the Dow only lost a bit more than a point on light volume. The advance/declines were even. Still overbought and nothing has changed for the indices. The trend remains up. Some economic data out this week but no big numbers. But as usual anything can happen. Europe seems to be on the back burner for now. GE was off 1/8 on light volume. The technicals here look to be rolling over and that could present a problem for the overall market if GE is once again leading the market. However we haven't broken the support for GE which lies at around the $18.50 area. Gold was practically flat on the day but dropped $7 in the aftermarket. The US dollar was up a bit today. The XAU fell 1 3/4. ABX down 1/3, GG off 1/4 and NEM dropped a buck. Volume was light. My ABX calls are now in the red. This trade is more and more looking like a loser. I'll need to see a turnaround in ABX shortly or I'll just have to exit. The only positive is that the Gold/XAU ratio is almost at the buy point again. Mentally I'm feeling OK, could have slept better. End of the month coming up so we'll see what that brings for the stock indexes. I'm not exactly sure where we're headed here but it feels like lower could be the near term direction. Gold isn't acting well to start the week and that could doom my ABX calls. We'll see what tomorrow brings.

It seemed like a day of just marking time as the Dow finished lower by a point and two thirds. The advance/declines were about even and the volume was pretty light. The overall market was stronger than the Dow. We're still overbought both short and medium term on the stock indices. We're still grinding higher as well. GE was little changed once again on very light volume. I'm not exactly sure about a March option trade here now. We've had every opportunity to break out higher here and it hasn't happened. Perhaps if we drift back to the 50 day moving average on the daily charts, I'll try the calls. Gold was lower today, down around $10 on the futures. The US dollar was lower today as well so the non confirmation with the price of gold is troubling for the longs. And I'm one of the longs. The XAU fell 2 1/4 today. ABX was off 3/4, GG down 7/8 and NEM fell 1 1/4. Volume was light to average. My ABX calls are right back at where I purchased them. I expected some hesitation at the $50 level for ABX but I don't like the way the stock and gold acted today. The daily candlestick chart looks ominous as well unless we turn things around in a hurry at the beginning of next week. I'm not giving up on this trade just yet because this could just be a pause before we move higher. But if it isn't, this trade will be another loser. Mentally I'm feeling OK, slept well enough. It seems like we're still waiting for some type of market correction that never comes. It has been quite a long time since we've seen even a drop of 3 or 4 days. The trend remains up until further notice. Gold had a good week but we'll need to see some follow through next week to bolster the bullish cause. I'll be checking the charts over the weekend to come up with some type of game plan for next week. For now it's Friday afternoon and time for a break.

A one day reversal to the upside as the Dow opened lower and closed higher. We gained 46 points on light volume. The advance/declines were over 2 to 1 positive. The over the counter stocks had a good day and that's usually bullish going forward. No real news to report and the economic data was relatively benign. We'll see if we can build on todays gains tomorrow. GE closed down a touch but was well off of the days lows. I still might try the March calls here with 3 weeks left in the option cycle. I will consider this trade over the weekend. Gold continued its run higher by gaining $15 on the futures but lost ground in the aftermarket. The US dollar had a decent drop today. The XAU was up a point. ABX gained 1/8, GG up 1/4 and NEM rose a buck. Volume was average. My ABX calls are still in the black but they finished well off of the days high. ABX and GG are running into short term resistance and I would expect a pause in the recent rally here. I expect that we will break through the resistance next week but that's a guess as usual. Anything can happen. Mentally I'm feeling OK, slept well enough. I'm looking for higher prices in the stock indices and expect the uptrend to continue into the March option expiration. I'm also thinking that gold will hit $1800 next week and we are already almost there. What happens when we get to $1800 will be the key. A break through that level will probably mean a run at the all time highs. However there is a possible negative RSI divergence on the daily gold chart. So the jury is still out there. I'll be keeping an eye on the ABX calls that I have but I anticipate holding them into next week at the least. We'll get through tomorrows trading session and reassess things from there.

Kind of a lackluster session today as the Dow fell 27 points on light volume. The advance/declines were negative. The summation index is heading lower. We do need to work off the overbought condition. I do not see any huge decline in the works and I would expect higher prices by the March expiration. GE was flat on light volume. Still trying to break out of the top of the range as we have just gotten above it. We'll need to see some volume to the upside to confirm. Gold had another good day, up $12 on the futures and another $8 in the aftermarket. The US dollar was a bit higher today. The XAU gained 3 points. ABX up a buck, GG rose 3/4 and NEM higher by 1 1/4. My ABX calls are in the black. However the GG option prices are increasing better than the ABX option prices, given the same price moves in the underlying stocks. The GG March calls at this point would have been a better choice. We're not overbought on the gold share calls yet. Mentally I'm feeling OK. Not a lot of economic data this week and it's a short week as well. I'm not expecting any huge moves one way or the other for the stock indices. Gold is acting well and I think the next target there is $1800. We'll see. February is usually a challenging month for the market but that hasn't happened yet. Still a week to go.

The big news today was the Greek bailout deal was approved, so perhaps that won't dominate the headlines for awhile. I doubt that the problem is really solved though. The Dow gained 15 points on light volume. The advance/declines were about even. The overall market was weaker than the Dow. Still overbought on the stock indices and still trying to move higher. GE was up 1/8 on light volume. We are breaking through the top of the trend channel today. However the volume wasn't all that great. I still am considering the GE March calls though. Gold was another story of the day as it gained over $30 on the futures. The US dollar was a bit lower. The XAU gained 5 1/3. ABX and GG up 1 3/8, while NEM rose 2 1/8. Volume was average. NEM is breaking above a declining tops line on the daily charts that has been in effect since November. That is a bullish sign. I'm a believer that gold will be moving higher in the short term. I bought some March ABX calls today. I am chasing the move here but I feel that in this case that it's warranted. I could be wrong. Mentally I'm feeling OK, slept well enough. I checked the charts over the weekend and thought that getting long the gold shares was the right idea for now. I do know that March is historically the worst month for the price of gold. I do not think that I'll be holding onto this trade until the March expiration. The gold share technicals have room to move to the upside and the Gold/XAU ratio signal was flashing a buy again this morning. So I decided to place the trade. We'll see what happens. The stock indexes continue to play the same tune. Higher prices despite being overbought on the technicals. Sooner or later they will need to take a much needed rest. I think that there will be buyers on any dips though. We'll see what happens overseas tonight and go from there.