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Technical View of What’s Next for Precious Metals, Stocks & the Dollar

March 14, 2010
Last weeks price action unfolded just as we expected. Money poured into stocks with the focus being on small cap, banks and technology stocks. The fact that these sectors are showing strength while utilities, health care and consumer staples lag is a good sign that investors are once again taking risks in the market.

Because investors and traders are bullish on the stock market again the money flow into the safe havens like Gold and Silver decrease. I believe this is the reason stocks moved up last week while precious metals drifted lower.

Below are three charts (Dollar, Gold and Silver) showing what I think is most likely to happen in the coming week or two.

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US Dollar Index – Daily Chart

The US Dollar has put in a very nice bounce/rally since the low in November 2009. Last month the dollar finally reached a key resistance level of 81. I have been talking about this major resistance level since January as the Dollar would find it difficult to break above this level.

Take a look at the daily chart below. You can see a head & shoulders pattern and a neckline which appears to have broken late Friday afternoon. There is a strong chance we could see 78 reached which is the measured move down. If we get follow through selling this week then I would expect 78 to be touched within 5-10 days.

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GLD & SLV ETF Trading Charts

Precious metals have been moving very well for us recently. From looking at the charts using technical analysis we were able to catch the Feb. 5th low and also the Feb. 25th low on a several ETF’s.

As you can see from the GLD and SLV charts, both metals are now in an uptrend showing bullish chart patterns and trading at support. If we see the US Dollar break down next week then be ready to go long gold, silver and stocks.

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Precious Metals, Stocks and the Dollar Trading Conclusion:

As a technical analyst the above charts are pointing to higher prices in the coming day’s which is exciting for us all. BUT when things are this perfect looking we must be very cautious as the market has way to suck people into setups like this and spit them out a couple days later for a nasty loss.

Understanding how the market moves is crucial for avoiding and/or minimizing losses when trades go against us. That is why I continue to wait for my signature low risk setup before putting any money to work.

My focus is to take the least amount of trades possible each year, only focusing on the best of the best setups. My low risk setups require downside risk to be under 3% for the investment of choice when the broad market shows signs of strength, as well. I use several different types of analysis to confirm if a setup has a high probability of winning and those which do are the trades I take along with my subscribers.

It is very important to wait for the market to confirm a move higher before taking a position with this type of setup. The market could go either way quickly and jumping the gun is not a safe bet.

Get My Precious Metals and Index ETF Trading Alerts: www.TheGoldAndOilGuy.com

Chris Vermeulen

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Small Cap Stock Trading Service – ActiveTradingPartners

Hey Everyone,

I just wanted to mention the exclusive stock trading service David Banister and I launched in July. ActiveTradingPartners.com not only has an incredible track record of extremely high annualized gains on our Alerted Trade positions to Partners, but a very good track record of knowing when to Hold, Add, or Sell those same positions, as well as timely market commentary. Riding a stock or ETF to maximum gains is a difficult challenge, and ATP has successfully achieved this over and over again. Many services brag about how great they are at picking stocks or entering trades, but very few follow through with on-going advisories on those same positions, with sell advice at the right time, or with advice on whether to hold those positions through volatility.

Recently, before the recent market correction, ATP advised our Partners to close out of several of our very profitable positions completely. Below are a few samples:

VICL- Closed at $5.10, it dropped to $3.90 shortly thereafter.

SPPI- Closed at $7.15, it dropped to $6.27

CRXX- Closed at $1.80, it dropped to $1.27

JAZZ- Closed at $8.88, it dropped to $7.38

All of the above positions were recommended at much lower prices, and we trimmed profits at higher prices before closing them out. The last thing you want is to give back all your gains in the market.

Here is what some of our “Partners” in the service are saying recently:

Dave, I have not had the pleasure of talking/ meeting with you but just wanted to say how pleased I have been with the service thus far, Chris has been a good trading friend over the years and I am glad that he told me about this , I have probably made enough to pay for three years already.
Shaun Mahoney

We really appreciate the updates and information you supply on your site and your scorecard especially when the markets begins to worry us. When the market tries to shake us out, you provide a timely article to keep us on track. We are very pleased with the outcome of our trades since joining your service.

Thanks again for your constant support.
R.J and C.J–  Husband and Wife

“Hi Dave,
Just a quick note. Thanks so much for frequent updates and commentary. I have just finished first month as a partner. I have averaged over 15% returns even with losing one ATP pick as it got stopped out. Much of my portfolio was underwater when I joined up. I am turning things around as I am able and looking forward to big gains down the road. Very happy with the service. Thanks!”
Chris Webb, Wolfville, Nova Scotia

“Unbelievable. You guys are great. Keep up the good work and I will get you more subscribers. I am not kidding.”
Thorsten Bredberg

“To date this is the best financial service that I have ever subscribed to!”
Colleen Bowersock

“THANK YOU for the commentary on the various trading opportunities. I have made enough to fund the monthly costs of ATP for the next ten years. People at the office just do not understand why I am always smiling!!! Keep up the good work and I hope you enjoyed your vacation.”
Michael Swanberg

Learn more today at www.ActiveTradingPartners.com while we still have a few “Partner” positions available. The service is exclusive to only 200 subscribers.

Chris Vermeulen
www.ActiveTradingPartners.com
www.TheGoldAndOilGuy.com

Chris Vermeulen & ActiveTradingPartners Open Service for Public Members

Active Trading Partners launched its brand new trading and investing commentary service on July 15th, 2009. In the short seven weeks since we launched, ATP has produced numerous stocks that have gained, 30, 40, 50, 60, and even 100%. Below are some excerpts from actual ATP research postings on our new service for Partners/Members. Most recently, we recommended JAZZ last Tuesday, 9/1/09 and it has risen as much as 63% in one week.

Are you getting quality advice, market updates, regular follow ups on your positions, and booking gains on an 80-90% success rate? If not, perhaps you should try a subscription to ActiveTradingPartners.com, where we are unmatched in our returns to partners.

We are limited to 200 subscribers and are nearly filled now, so act now. For $249.00 per month you get 8-10 new positions alerted per month, or about $25.00 per alert. With average historical returns of over 20% per recommendation. $10,000 put into each of our positions since the launch would have returned over 100 fold your $249.00 investment per month.

Samples below:

August 4th, 2009- LRR.TO/LRLMF $1.66
…Linear Gold is a micro cap gold stock, and I usually will hesitate to put these on the ATP service, but this one looks like a great value going forward, and I like the chart set up here as well…Shares outstanding are 34 million. That’s a market cap of 58 million Canadian, or less than 2x future projected net cash flows. They have 24 million in the bank, 0 debt currently, and multiple drill projects. They have leverage later on to future gold price increases, and position to acquire other projects/exploration plays. I’m not seeing a lot of downside here.
Results: Linear Gold ran to $2.28 17 days later for a 37% gain.

August 14th- CRXX- $1.05
… the “Saucer” chart is bullish because of the general sideways movement over a long period of time. This is a transfer of shareholders from old to new, re-setting a large base for the stock. A break over $1.10 could trigger a run back to $1.34 a recent spike high on good news several weeks ago. Also, there is a huge “gap” at $3.00 a share above. This means there is an air pocket where technically there are no sellers until $3.00. The only sellers will be the traders who bought recently, or buy near term. To say that I am excited by the long term prospects of this merger would be an understatement.
Results: CRXX ran to $1.34 within a few days for a 25% gain. It has since risen as high as $1.92 on September 1st, for a 75% gain in 3 weeks for ATP.

August 18th- VICL- $3.35
…with Federated Kauffman paying $3.63 a share just a few weeks ago for 3 million shares, they brought their total to 5.4 million shares. The stock has drifted down and volume has dropped from a 90 day average of over 1 million to just 350,000 or so a day lately. This normally precedes a shift in sentiment and price movement, quite simply the crowd has moved on.
We have an ATP proprietary “Fibonacci Intersection” on Aug 17th, and to ATP it means the stock bottoms around that time and it’s time to start accumulating positions… A break over $3.40 will probably start a new bull trend in the stock.
Results: On September 3rd, 16 days later, VICL hit $5.40 for a 61% gain

August 20th- SPPI- $6.27
SPPI- …When the stock hit 6.05 earlier this week, it was at the bottom of proprietary indicators I have developed as reliable for pivots. I mentioned earlier this week that I had picked some up at 6.12 and 6.15. This afternoon I was an aggressive buyer at a 6.27 average per share and building a position… The chart appears to be very bullish and very oversold at the same time. If I was to hazard a guess, I would see a move up to 6.80-6.90 again, then a pullback, and then a breakout over 7 with a run.
Results: On September 4th, SPPI hit $9.00 a share for a 43% gain in two weeks.

September 1st- JAZZ $7.29
The stock closed 8/31/09 at $7.29 a share and has been in a general trading range for about 5 weeks now. We also have a 5 day reverse head and shoulder pattern, often a leading indicator of a move up. ATP research would not be surprised to see a move towards $10.00 per share over the intermediate time period.
Results: On September 4th, Jazz soared over $10.00 per share for a 40% plus gain in 3 trading days for ATP

September 2nd- RINO $12.60
…accumulating a position in RINO here in the 12.50-12.90 window. The volume has completely dried up on the stock after the recent run from mid 10.70 to 14.88. The pullback is a typical “B Wave” pullback in an “A-B-C’ move to the upside. This actually retraced a perfect Fibonacci 61% retracement of the recent swing move up… The valuation remains very cheap, the company is very under-followed.

Results: Stock closed at $14.27 the next day as Rodman and Renshaw initiated coverage with a $22 target. 13% return in 24 hours.

Please visit our website for more information: www.ActiveTradingPartners.com
Chris Vermeulen