Well everyone else is talking about gold, so I might as well too. I'm not going to try to call the top but I am going to offer a few observations I've made recently.
1. You hardly see any of those "we buy gold" ads on TV anymore. In fact, recently I've started seeing ads from places that want to sell gold to you. Hmmm...
2. There was a piece on CNBC recently about some company in Europe that's going to bring gold vending machines to the US. That's right, stick in, well I suppose a credit card (I don't think anyone carries enough quarters to buy any visible amount of gold) and out pops a chunk of the shiny stuff. Hmmm...
3. They're even selling gold at the gun show now, of all places. Yes, last weekend, to my surprise, right there amongst the Glocks, the AR's, and the shotguns, was a table with someone selling gold. (I guess at least there, security is not an issue). Hmmm...
4. Today, AUY (Yamana Gold), my favorite gold play, fell out of its ascending RTC channel, indicating that the trend is over. Hmmm...
Friday, October 15, 2010
Soldiering on...
The upward trend in the Dow remains unbroken as it continues to crawl up the ascending daily RTC channel established at the end of August, despite putting in another doji candle that looks just like the one from two days ago.
It sort of feels to me like its been going for a long time and we should be due for a pullback, but consider that the rally back in March of this year lasted over 2 1/2 months. This one is now just 1 1/2 months old. It seems like they just keep knockin' 'em higher in the final hour of trading lately (just like they kept knockin' 'em lower in August). In any case, as long as we do not fall out of the RTC channel, I'm just going to stay long. There is still no sign this rally is over.
Well, I did sell my Alcoa (AA) today. I was ready to throw in the towel at 13.37 so I put in a limit sell on the ask. I came back 10 minutes later to find that it hadn't executed and the price was now 13.23. So wanting to save myself a buck, it ended up costing me 14. Lesson learned (maybe). I still had a 1 1/4 point profit on the trade so I can't complain. And it closed at 13.13 so I still feel vindicated. After yesterday's gap up and today's dark cloud cover that took it right to the bottom of its RTC, it just looked like it was time to bail out.
It sort of feels to me like its been going for a long time and we should be due for a pullback, but consider that the rally back in March of this year lasted over 2 1/2 months. This one is now just 1 1/2 months old. It seems like they just keep knockin' 'em higher in the final hour of trading lately (just like they kept knockin' 'em lower in August). In any case, as long as we do not fall out of the RTC channel, I'm just going to stay long. There is still no sign this rally is over.
Well, I did sell my Alcoa (AA) today. I was ready to throw in the towel at 13.37 so I put in a limit sell on the ask. I came back 10 minutes later to find that it hadn't executed and the price was now 13.23. So wanting to save myself a buck, it ended up costing me 14. Lesson learned (maybe). I still had a 1 1/4 point profit on the trade so I can't complain. And it closed at 13.13 so I still feel vindicated. After yesterday's gap up and today's dark cloud cover that took it right to the bottom of its RTC, it just looked like it was time to bail out.
Wednesday, October 13, 2010
Not yet...
The Dow today took a stab out the lower end of the RTC channel but came right back up thanks at least partly to the hoopla surrounding the launching of the QE2 which helped neutralize the otherwise bearish omens recently on the horizon.
We finished with a 10 point gain and a doji daily candlestick indicating indecision in the market. So still no RTC downturn setup, though we're running in the lower half of the RTC channel so it could happen at any point. The daily ES on the other hand remains solidly in the center of its RTC.
So for the time being, I'm still just sitting tight. And the RTC is doing its job, keeping me from bailing out early.
No trades today. The VZ I sold last week did indeed go lower. We were up 0.97% today and are currently up 23.6% YTD. The Dow is up 5.7% YTD.
We finished with a 10 point gain and a doji daily candlestick indicating indecision in the market. So still no RTC downturn setup, though we're running in the lower half of the RTC channel so it could happen at any point. The daily ES on the other hand remains solidly in the center of its RTC.
So for the time being, I'm still just sitting tight. And the RTC is doing its job, keeping me from bailing out early.
No trades today. The VZ I sold last week did indeed go lower. We were up 0.97% today and are currently up 23.6% YTD. The Dow is up 5.7% YTD.
Tuesday, October 12, 2010
Moving closer
With today's anemic action, holiday impaired or not, the Dow moved closer to the lower RTC line of the current daily uptrend. A down day tomorrow (which is looking likely right now based on the ES futures, currently down 775, or more than they've been down at this hour of the night in a long while) will generate an RTC sell setup. We only need to lose 40 Dow points to enter such a setup.
Then Wednesday will either confirm or reject this setup. I'm still not going short, but I'm starting to think that there's more risk than reward in this market, at least from the swing trader's perspective.
Also, note how the past week's action looks a lot like back in mid-April on the weekly chart, where we just couldn't get past the 200 week MA and then came back down. The indicators on the weekly chart (RSI, stochastic and money flow) are all looking pretty overbought right now. And if that's not enough, note that the dollar index has finally stopped falling over the last two days. All bearish.
The thing about the RTC is that it won't call the top but it's pretty good about identifying the end of a trend. That could possibly happen in the next two days.
Today I sold 200 SPIL (Siliconware Precision) at 5.36 and bought 100 JRO (Nuveen Floating Rate Income Opportunity Fund) at 11.67.
Then Wednesday will either confirm or reject this setup. I'm still not going short, but I'm starting to think that there's more risk than reward in this market, at least from the swing trader's perspective.
Also, note how the past week's action looks a lot like back in mid-April on the weekly chart, where we just couldn't get past the 200 week MA and then came back down. The indicators on the weekly chart (RSI, stochastic and money flow) are all looking pretty overbought right now. And if that's not enough, note that the dollar index has finally stopped falling over the last two days. All bearish.
The thing about the RTC is that it won't call the top but it's pretty good about identifying the end of a trend. That could possibly happen in the next two days.
Today I sold 200 SPIL (Siliconware Precision) at 5.36 and bought 100 JRO (Nuveen Floating Rate Income Opportunity Fund) at 11.67.
Sunday, October 10, 2010
Weekly summary
Well, it appears that rather than falling out the bottom of the daily RTC, the Dow actually moved up right back almost into the center of the channel as we see on this daily chart.
This means that the uptrend remains unbroken and makes it appear less likely that we've got a significant decline coming on Monday, or indeed in the next few days. We also managed to cross the 11K mark, just barely, this past week as well as the 200 week moving average (10,988), both bullish signs. There is no RTC sell signal here.
So I'm still not ready to go short. I'm holding onto my longs and in fact bought 100 shares of NLY (Annaly Mortgage) on Friday as part of my new strategy to add more high yielders to my stock mix. I was also gratified to see that VZ, which I sold Thursday, was down on Friday. Usually when I sell a stock, it goes up the next day :-)
This means that the uptrend remains unbroken and makes it appear less likely that we've got a significant decline coming on Monday, or indeed in the next few days. We also managed to cross the 11K mark, just barely, this past week as well as the 200 week moving average (10,988), both bullish signs. There is no RTC sell signal here.
So I'm still not ready to go short. I'm holding onto my longs and in fact bought 100 shares of NLY (Annaly Mortgage) on Friday as part of my new strategy to add more high yielders to my stock mix. I was also gratified to see that VZ, which I sold Thursday, was down on Friday. Usually when I sell a stock, it goes up the next day :-)
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