We focus on Gold, Oil, Silver, Index & Sector ETFs. When following our technical analysis and proven ETF trading strategy, trades become very clear and simple to execute
Over the past few weeks and months, my research team and I have been actively publishing this research to help you better understand what is really happening in the markets right now. With Gold trading above $2,000 for the first time and Silver trading near $27.50, skilled traders need to understand the risks in the markets that precious metals are warning of. Think of it like this, as long as Gold continues to trade near or above $1900, the risk levels in the global markets are at extreme levels for traders and investors. If Gold breaks above $2,400, then there is a very real concern that the global markets could be close to some type of decline/collapse event.
1990 TO 2010: SIMILARITIES ABOUND
My research team believes the US stock market has already peaked near the January/February 2018 market highs. Our proprietary index analysis and price modeling systems suggest the US stock market has been buoyed by the U.S. Federal Reserve stimulus and foreign capital inflows (investment) while the US Dollar has strengthened. This trend may continue for a number of weeks or months, but precious metals are already warning that real fear has accelerated to levels we’ve not seen since 2010-2011....Continue Reading Here.
Yesterday’s action in the equity markets is a grim reminder of just how fragile the economic and financial system is globally. We would not dismiss the market action as just another pullback in the market.
The sharp down move should not be ignored, in my opinion. We are looking at a key support level on the S&P 500 at $1220. A close below that level will accelerate the decline to the next key level of support, which is $1180. That move may have to wait until Friday as traders jockey for positions today. For the year, the S&P at the moment is down, the NASDAQ is flat, and the DOW is barely higher with gain of 3%.
The copper market gave a pretty strong negative signal yesterday, as it moved below the $3.50 level. The copper market is telling us that demand is just not there for this industrial metal. For some time now, we have been discussing the trials and tribulations of Europe and all the drama that has become a Greek tragedy. The fact that they have a new prime minister in Greece does not change one thing, in my opinion.
Italy is now the star of the show, and we are not convinced that Prime Minister Berlusconi is going to step down off his pedestal anytime soon. Politicians still have a “quick fix” mentality and are counting on that to solve this mega financial mess. The reality is, there is no quick fix. It is going to take years for this mess to be cleaned up, and in all likelihood it will get ugly.
The best thing a trader can do at the present time is to watch the market action, as it will tell you exactly what to do. We believe the rest of this week is going to be a very important one, particularly where we close tomorrow. If we have a negative close on Friday below $1220 on the S&P 500, we would then expect to see this index move lower for the balance of November.
Now let's take a look at our trend analysis for gold........
Today’s move in the gold market push gold to its lowest levels in five days before recovering. We expect gold to begin to consolidate around the $1,750 area, give or take $10 – $15 either way. Our Chart Analysis Score remains intact, with a positive +75 reading indicating that this market is in strong hands. With gold moving higher it indicates to us to be very concerned about what is happening in Europe and the financial markets. Long term, intermediate term and short term trends remain positive for this precious metal. Intermediate and long term traders should maintain long positions with the appropriate money management stops in place.
Gold spent most of the winter of 2010 trading in a narrowing sideways range. Looking at the (GLD) ETF, the range is slightly uptrending due to higher lows, making it somewhat of an "ascending triangle" formation. This type of pattern of decreasing volatility (also can be seen in the Band Width Indicator at the bottom of the below chart), will eventually lead to a big breakout.
The direction of the breakout? Signs point to an bullish upside move, but it's not certain. Daily Percent R has mostly stayed above the 50 mid-level and GLD is trading above its uptrending 20 and 40 day Exponential Moving Averages (purple and red trendlines at top). But, MACD and DMI aren't showing much sings of strength, in my view.
Targets for GLD should the breakout occur soon? Upside, 145 looks a likely target, downside, 120 should be strong support. Advanced option traders who want to bank on a volatility expansion could consider buying GLD option volatility here with it priced around 18%.
Peter Schiff, President of Euro Pacific Capital and author of "How an Economy Grows And Why It Crashes", reveals why he wants the return of the gold standard and how he's buying gold.
The gold market jumped early on in trading today (6/17) based on economic data that came out indicating that the future wasn't quite as rosy as everyone first thought.
In today's video on gold, we share with you the 4 instruments that we are looking at and share with you our projections for the spot gold market.
As always our videos are free to watch and there are no registration requirements. Please feel free to leave a message and let us know what you think of the video and the current direction of the gold market.
So far this week has been pretty slow. Large cap stocks continue to lag the market which can be observed by looking at the Dow Jones Industrial Average which still has room to move higher before breaking the January high.
One important thing to note is that volume has picked up this week considerably, particularly on the SP500 and OEX. It’s difficult to say if this volume is a good sign or not.
A lot of stocks and sectors are trading near their January high and this gives traders a reason to unload shares. On the flip side, the several sectors and indexes have broken their January high and this triggers a surge in volume as breakout traders try to take advantage of the new high and momentum. So you can see how the surge of volume is not a useful indicator right now.
Here are some charts of what I think we could see in the coming weeks.
US Dollar Index – Daily Trading Chart I follow the US dollar index very closely simply because it affects the prices of stocks and commodities. I used a line chart below in order to take out the daily candle stick noise which made it very difficult for our eyes to pick up this pattern.
The chart shows a possible head & shoulders pattern and if that is the case then we should see the dollar start to slide lower. In turn, this would boost stocks and commodities. This is the fuel that I think could really move the market sharply higher in the coming weeks.
GLD Gold ETF – Daily Trading Chart The price of gold looks to be setup for a nice bounce off support and the timing could just work out if the US Dollar starts to drop over the next few days. There could be a low risk setup just around the corner.
SLV Silver ETF – Daily Trading Chart Silver has held up well but today’s reversal candle to the downside scares me a little. The odds are that silver will carry this strong momentum selling down for another 1-2 days. Again, with any luck, it will test support and the US Dollar will start to slide lower.
Crude Oil – Daily Trading Chart Oil has had a great run the past month but as you can see it’s currently trading at the top of a large trading range. I would like to see a sideways move before it takes another run at the $84 level, but the 7 day bull flag that formed two weeks ago may have been enough to maintain the upward momentum. Again, if the Dollar drops we will see oil rally.
Natural Gas – Daily Trading Chart This chart is actually very attractive looking. Even if you do not understand how to read charts I think it’s safe to say this one is a no brainer.
I will be closely watching for a potential low risk setup in the coming days.
Mid-Week Trading Conclusion: In short, stocks and indexes are trading at resistance levels with many of them making new highs and that is great to see.
A lot of things are trading in limbo waiting to see what the US Dollar is going to do. Several months ago I posted some charts showing that 81 would be a key resistance level for the dollar. If it broke above that then 84 would be the next key level to watch. So we just have to wait and see… the hardest part of trading is the waiting.
Gold, silver, oil and natural gas all look like they could continue higher in the next few days if things unfold that quickly. But the market always finds a way to drag out moves so we could still be a 2-3 weeks away.
I hope this report helps give you an idea of where things are at in the market.
A newspaper in China reported that an official from the China Gold Association said the county is unlikely to buy gold from IMF. 'It's not feasible for China buy the IMF bullion, as any purchase or even intent to do so would trigger market speculation and volatility'. Rather, the official stated China will increase gold reserves by acquiring gold mines abroad.
The news is disappointing as the market had hoped some central banks or official sectors will absorb IMF's remaining gold sales of 191.3 metric tons. Gold price plunges with the benchmark contract breaking below near term support at 1100. Currently trading at 1090.5, the yellow metal has fallen for a 3th consecutive day.
Gold's sharp fall and break of 1099.1 support today indicates that choppy recovery from 1044.5 has completed at 1131.5 after failing to sustain above 1126.4 resistance. The development also suggests that whole correction from 1227.5 is still in progress. Intraday bias is flipped back to the downside for retesting 1044.5 low first. On the upside, note that another rise above 1131.5 resistance now should confirm that fall from 1227.5 has completed with three waves down to 1044.5 and should bring retest of this high.
In the bigger picture, outlook remains broadly unchanged. Price actions from 1227.5 are treated as corrections to rise from 931.3 only. Hence, even in case of another fall, downside is expected to be contained by 100% projection of 1227.2 to 1075.2 from 1163 at 1010.7, which is close to 1000 psychological level and bring long term up trend resumption. Decisive break of 1163 resistance will indicate that such correction has already completed and the long term up trend is set to resume for another high above 1227.5.....Comex Gold Continuous Contract 4 Hours Chart.
Everyone is wondering if gold, silver and the indexes have bottomed after last week’s heavy selling. To put things into perspective there were over 30 sell orders for every 1 buy order at the NYSE. That is pure panic and to confirm extreme fear, several of my broker buddies said last week was crazy with clients demanding to liquidate their positions ASAP to be 100% in cash.
This type of sentiment and price movement warns us of a possible market bottom. I am getting the feeling that traders and investors have been expecting this sharp drop I don’t see or feel a large amount of fear in the marketplace. Last Thursday and Friday war crazy but I think we need one more drop to really shake things up before a bottom is set.
Below are some charts showing where the market currently stands and what the charts are pointing to.
GLD Gold ETF Trading – Daily Chart
Gold is clearly trending down on the daily chart. One more thrust down should shake things up enough to trigger the next rally.
SLV Silver ETF Trading – Daily Chart
Silver has formed a Head & Shoulders pattern and has broken through multiple support levels. A measured move to the down side would be $14 for silver which could happen in the coming days.
SP500, NYSE, GOLD Futures, US Dollar Index – Intraday Charts
These charts clearly show the price action of the past month. As you can see the trend of stocks and gold are down with consolidations (pauses). This is the exact reason why you must trade with the trend and not do counter trend trades. Bounces are more like sideway movements making it very difficult to try and play bounces in a down trend.
If you focus on selling at key resistance levels then moves tend to be much more profitable. That being said, we did go long last Friday because of the extreme oversold market level. I was expecting a follow through Monday or Tuesday which has yet to happen. We have now moved our stops to break even or better to eliminate our down side risk.
Spot Gold 24Hr Trading Chart
This chart says it all. The market and gold is very volatile making it difficult to trade right now. Bulls and bears are battling it out. Only time will tell!
Stocks & Commodity Trading Conclusion:
In short, it’s been a slow week without any real exciting moves. Thursday and Friday could be interesting if traders exit their positions going into the long weekend in order to protect themselves from any surprise economic news.
From the looks of gold, silver and the indexes I sense selling could be just around the corner. We are currently long a few positions with our stops are break even or better in hopes for a pop and rally going into the holiday weekend but only time will tell.
