Gold

Gold has been widely used throughout the world as a vehicle for monetary exchange, either by issuance and recognition of gold coins or other bare metal quantities, or through gold-convertible paper instruments by establishing gold standards in which the total value of issued money is represented in a store of gold reserves. Many holders of gold store it in form of bullion coins or bars as a hedge against inflation or other economic disruptions. However, some economists do not believe gold serves as a hedge against inflation or currency depreciation.

Sterling Market Commentary for Friday March 16th, 2012

March 16, 2012 sterlinginvestments 0

It is also very important to remember that today is quarterly options and futures expiration day. It is not unusual to see a short reversal of the overall trend as traders unwind their position, only to see the trend resume at the start of next week. Therefore a word or warning, there is always the possibility that any perceived upward trend of the last couple of days could be reversed at the start of next week.

This morning we have managed to select our candidate for today’s trading position. We are looking at covered puts on Newmont Mining ‘NEM’. We have not yet selected the options position and will tweet our selection as soon as it is made. On Twitter we can be found at sterlinginv

Sterling Market Commentary for Thursday March 15th, 2012

March 15, 2012 sterlinginvestments 0

Twitter Model Portfolio Tweet Policy: Currently Sterling Investment Services is managing a trading strategy based upon covered puts and calls. Sterling Investments is currently running a “Model Portfolio” that is based upon this strategy. It should be noted, that at this point in time, Sterling Investment Services is only “paper trading” this model portfolio, and not actually executing trades and creating actual positions within this model portfolio. Therefore, please do not look for actual volume associated with our options selections. It is Sterling Investment Services goal to initiate trading in an actual account based upon our model portfolio in the near future. When that change actually occurs, Sterling Investments will notify its readers via Twitter and our website.

Sterling Market Commentary for Tuesday March 13th, 2012

March 13, 2012 sterlinginvestments 0

I have written many times in the past that I believe that during options expiration week you will see a reversal of the overall trend of the market as traders unwind their positions prior to the actual expiration; then following expiration at the start of the next current month, the trend will resume. What that means for today and this month is that I have felt there is a slight downward bias to the market, that could see a temporary reversal back to the upside this week before resuming its slight downward movement next week. ….

Sterling Market Commentary for March 12th, 2012

March 12, 2012 sterlinginvestments 0

In looking at the charts from Friday’s trading activity there was not a whole lot to see, it was pretty much a dull market. There really was not a whole lot to see, with many of the sector indices and individual stocks are somewhere between support and resistance. Basically a lot of sideways movement, but not a lot of clear breakouts to the upside or downside. There has been a definite decrease in the volatility in the markets this year. While this decreased volatility has gotten a minor amount of coverage in the press, one of the consistent themes for this decreased volatility is the upcoming “Volker Rule,” and that many of the big banks and investment banking firms have curtailed their proprietary trading operations. I definitely believe that time will tell on this topic, I do think the volatility last fall had gotten out of hand, and that sort of volatility can do long term damage to the market. While I still have some mixed feelings about the Volker Rule, I think any reduction in volatility, if it can be legitimately attributed to the Volker Rule, is more of an unintended consequence than a designed effect.

Sterling Market Commentary for Thursday March 8th, 2012

March 8, 2012 sterlinginvestments 0

In looking at the charts from Wednesday’s trading the trend of the market remains weak, however yesterday’s big bounce tends to pull stocks and indices that recently broke below support back above those support levels. What this really ends up doing in my opinion is that it greatly reduces the number of potential trading candidates for the day. It also tends to throw the continuation of any downtrend in doubt.

With the volatility we have seen in the market over the last several years I have adopted my strategy from one of being a purely short term, day trader to one of selling covered puts and calls. This results in my building a portfolio of covered puts and calls over the course of a month that then reverts back to cash on options expiration. During this process I generally try to build a portfolio that is a mixture of long and short positions. I am looking for today to be a day where I can balance out my put positions with a call position that will not get stopped out prior to expiration.

Sterling Market Commentary for Wednesday March 7th, 2012

March 7, 2012 sterlinginvestments 0

A Few Thoughts on Wednesday’s Market: In looking at the charts from yesterday’s trading activity it is pretty clear that basically every index I track has broken its upward or sideways trend and looks to starting what should be at least a short term pullback. There only 2 stocks with a more than a million shares in average daily trading volume that closed at a new yearly high yesterday; and the very vast majority of the heavy volume stocks moved lower on the day.

I continue to see support on the Dow Jones Industrial Average coming in at….

Sterling Market Commentary for Tuesday March 6th, 2012

March 6, 2012 sterlinginvestments 0

In my review of the charts from yesterday’s trading activity I noticed that the vast majority of the various indices I track appear to be starting to move lower. This is generally a bearish signal for the overall market. The second thing I noticed was the vast majority of the heavy volume stocks appear to be moving lower, another bearish signal for the overall market. It looks to me as if we are starting a market pullback. If that is the case, then I expect the Dow Jones Industrial Average to move lower and test support at 12,719.49 If that level fails to hold support on the Dow Jones Industrial Average, then I see a good possibility that the Dow Industrials will move lower and test …..

Sterling Market Commentary for Monday March 5th, 2012

March 5, 2012 sterlinginvestments 0

In looking at the charts from Friday’s market activity I noticed three (3) things that really stood out. The first thing I noticed is that a majority of the sector indices I looked at had negative chart patterns. This is generally a precursor for a broader market pullback. The second thing I noticed was very few of the stocks setting new yearly highs had average daily trading volume above 1 million shares. To me, this indicates that the larger companies are not participating as much in the recent market rally. The third thing I noticed was the majority of the stocks with heavy volume looked to be moving lower. This is generally a bearish trading signal.

Sterling Market Commentary for Friday February 24th, 2012 – A Quick Look at Oil

February 24, 2012 sterlinginvestments 0

Also, it should be noted that despite the upward movement of the Dow Jones Industrial Average and the S&P 500, the Dow Jones Transportation Index has been moving lower. For those who believe in the Dow Theory this is a negative signal for the overall market. My thoughts are that the Dow Transports are being pushed lower due to higher oil prices; additionally the Dow Jones Transportation Average is generally considered to be a fairly reliable indicator as transports companies ship goods and services, thus providing a good look at where the economy is going. If this trend continues, then the odds are that the broad market will follow the transports lower, not the other way around. ….

Sterling Market Commentary for Tuesday February 21st, 2012

February 21, 2012 sterlinginvestments 0

In looking at the charts from Friday’s market, the vast majority of the stocks and various sector indices I looked at continue have upward chart patterns. This is obviously a busllish sign for the market. However, a point of concern is that the Dow Jones Transportation Average now has a negative chart pattern and appears to be headed lower. While the Dow Jones Transportation Average may reverse this trend and head back higher, my concerns are that the rising price of oil and other regulatory issues are going to put the earnings of the components under pressure and ultimately send the Dow Jones Transportation Average lower. However, if you believe in the Dow Theory, as I do, then