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Are Precious Metals Melting or Firming Up

Jan 31, 2010
The past two months have been tough on the precious metals sector. We saw precious metals lead the market higher all of last year until December 2009 when prices plummeted as the US Dollar started to bounce. The continued rise in stocks indicated an extreme overbought condition and alerted us that a sharp pullback was going to take place.

Many traders including myself were surprised that the broad market did not sell down with the metals. In December the market looked and felt ready for a sharp pullback but new money continued to flow into stocks, pushing the market higher. This slow and steady grind higher was very frustrating to watch because the market was making new highs day after day while obviously needing to take a breather at any time.

It’s this grind higher that sucks in the last retail buyers before prices collapse, unfortunately leaving many holding overpriced securities and commodities for sale another day.

Since gold lead the market up last year it should be the first to correct and also pullback quicker and deeper than its followers (stock market). This is what we are seeing now which I explain below using charts.

HUI – Gold Stock Index – Monthly Gold Trading Chart
I use this exact month chart for helping to time long term trends for gold and gold stocks. It looks as though we have temporarily formed a double top with this current breakdown. It will most likely take several months to repair the damage done to this chart and possibly more than a year.

There are two options for this chart:
1 – It will form a bullish flag or pennant then continue its move higher.

2 – Or will continue to slide, indicating sellers are in control and that we are looking at a multi year trading range as the market digests the 10 year rally in gold.

The HUI:GOLD Ratio – Weekly Gold Trading Chart
This chart goes up if gold stocks are out performing the price of gold and down if they are underperforming. From 2001 – 2006 the chart looked very bullish but as time went on the ratio really started to look weaker and weaker.

The 2008 meltdown crushed precious metal stocks and the recent rally back up to resistance looks very bearish. It looks like a large bear market rally (test of breakdown level). This also goes for the monthly chart above. I cannot say either chart is looking bullish anymore. Things really depend on how strong the next bounce/rally is so we can gauge the strength behind the move (dead cat bounce, or legitimate rally).

Gold GLD ETF – Daily GLD Trading Chart
The next three charts really pull things together in my opinion in terms of how much selling is left in the market on the daily chart time frame.

Here I have drawn on a daily chart showing what I figure will unfold over time. This is the same pattern that I have been talking about since early December. I love trading ABC retrace patterns because of their accuracy and follow through on trend reversals.

In short, if we see gold break this support level then traders are going to panic out of the market sending the GLD fund towards the $101-$103 level. This panic selling is exactly what is needed if we want to see gold continue a sustainable and strong bull market rally higher.

Silver SLV ETF – Silver Trading Chart
Silver has been a little more difficult to trade as the chart clearly shows the choppy price action. I feel that if silver breaks this level of support we should expect to see $14-$14.50 quickly.

US Dollar Trading – Daily Dollar Trading Chart
This chart pulls the above GLD and SLV charts together. Both gold and silver have more room to fall before reaching a major support level. Knowing that and looking at this chart of the Dollar you can see the Dollar has approximately the same amount of room to rally.

So in a perfect trading scenario, the dollar will continue to climb for a few more days to reach resistance and in return that will push gold and silver down for a few more days.

Precious Metals Trading Conclusion:
I think this week will be a pivotal one. I can see the dollar moving higher sending precious metals and stocks down enough to shake traders out of their long positions in gold, silver and stocks. Once the sentiment turns bearish we will begin looking for an oversold speculative trade and possibly a low risk trend trade setup.

As for the energy sector, both crude oil and natural gas look weak and I continue to patiently await a low risk setup for each.

If you would like to get my Gold Newsletter please join here:

Chris Vermeulen
www.GoldAndOilGuy.com

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Are Commodities and the Dow Index Dead?

It was a heart pounding week on Wall Street as traders and investors locked in profits during 2010’s first round of earnings season. While it is normal to see selling of shares after good news hits the market, last weeks melt down was over exaggerated and for good reasons.

In short, we expected good earnings and that is why the markets have been crawling higher the past couple months (buy on rumor, sell on news). But what made last weeks sell off so strong was the fact the market was way overbought on the short term time frame and looking ready for a correction already. So we saw twice the selling pressure crammed into one week.

Looking back at a 12 year chart of the Dow Jones Industrial Average we can see the market is now trading at a major resistance level. There are two scenarios the market will likely follow in the coming 12 months. And it could take a year for each of these scenarios to unfold.

Scenario #1 – The market could top then start heading lower to test the 2009 March low. I don’t want this but it could still happen. Topping is a process. Unlike most bottoms which happen very quickly, tops tend to drag out much longer. In this case I figure we are looking at 4-12 month time frame for the market to truly roll over and confirm that we are in a major bear market again.

Scenario #2 – If the market holds up relatively well and forms a bull flag then we can expect to see higher prices in the future. If this happens it will take 4-12 months to unfold also.

Both scenarios have characteristics associated with them, so as the market progresses I will update on the market internals which will help tell us if the underlying market is holding up well or deteriorating. Only time will tell and we will play it one candle at a time.

Dow Jones Industrial Average – What Is Next?


Gold Stocks – Rockets or Rocks?

The gold stock index closed below its support trend line which held up for over a year. This is not a good sign for gold or gold stocks but there is light at the end of the tunnel.

Simple technical analysis is telling us to be cautious at these price levels. If we zoom way out on the charts the current price level and chart patterns on these charts scare me. The gold stock/Gold ratio chart is trading under resistance and the HUI (gold stock index) is trading near the 2008 high. What I do not like is the technical breakdown on the HUI monthly chart. You can see the trend line break on the chart with my small zoomed in picture.

The good news is that everything looks to be extremely over sold on the 60 minute charts so I am expecting a bounce across the entire market for a 1-5 day dead cat bounce. Friday we did see gold stocks move up strong off their lows out performing the price of gold. This is positive for gold and stocks. Depending on how that unfolds we could take a short term momentum play to profit from a possible leg lower.

Precious Metals ETF Daily Charts – Gold & Silver

Gold and silver lost some shine last week as they plunged towards their next support level. A bounce is expected but then I feel we are heading lower and this will likely shake out the majority of traders before starting another rally higher.

On Jan 13th I posted a report indicating gold and silver were headed lower because of the recent price action as silver and gold both had a Pop & Drop chart pattern with heavy selling volume on the 60 minute chart: http://www.thegoldandoilguy.com/articles/commodity-gold-futures-trading/

Energy Fund Trading – USO & UNG


I am really starting to like USO for an oversold bounce off support. I would like to see the market reaction on Monday before we do anything. With everything closing near their lows on Friday, panic selling from fear may creep into the minds of traders and investors.

Natural Gas fund looks to be setting up a bull flag. It will be interesting to watch this progress.

Commodity and Stock Market Index Trading Conclusion:

This month looks and feels like last Jan – March, but reversed. The market is now getting choppy as the bulls and bears fight for direction making is difficult to swing trade. Times like these are best for intraday traders, not swing traders. Trading tops is actually much more difficult than trading a bottoming market in my opinion so I will be picky with trade setups. My number one goal is to preserve capital and avoid choppy market conditions as part of managing risk.

Final trading thoughts, I look for the broad market to get a possible bounce this week, but I feel lower prices are still to come. The USO oil fund looks prime for the picking and that could be our next trade.

If you would like to receive my Free ETF Trading Newsletter visit my website:

Chris Vermeulen
ETF Trading Gold Newsletter

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Holiday Gold, Oil and Index Trend Trading

Dec 27th 2009
Another holiday trading extravaganza!!!

Last week the market fell into its regular holiday tradition of light volume, as institutions and big traders enjoyed the holidays thus allowing prices to drift higher. We still have one more week of light trading volume before this year and holiday season is officially over.

Trading during low volume times is regularly misinterpreted. Many traders figure they should not be trading this time of the year but from my experience, the last two weeks of the year are amazing for short term swing plays or day trading. The market seems to be much more predictable when the large program traders are not involved.

Also the more speculative plays (small and mid cap stocks) always seem to out perform as buyers bid the prices higher into the light selling volume. This is most likely why we are seeing the NASDAQ and Russell 2000 indexes making some nice gains of late.

Take a look at the charts…

Broad Market & NASDAQ Low Volume Rally

Stock Market Trend

Stock Market Trend

GLD ETF Trading – Daily Chart
Gold prices broke down as expected in early December and are now nearing a possible bottom. The past 3 weeks have provided some very exciting day trades shorting spot gold prices. In the next few weeks I will be starting to provide more spot gold charts and intraday price action for all the international traders and futures traders ?

I did not provide the chart of silver as it trades very similar to gold. When the time comes I will provide detailed analysis for entry and exit points for members.

Gold Market Trend

Gold Market Trend

Crude Oil USO Trend Trading
USO fund had a very nice pullback in early December and I pointed out a spec play at $35.50 with targets set at $37, $38 and $40. So far the first two profit taking targets have been reached.

Sorry for all the lines on the chart but sometimes it’s the only way to remember where all the crucial levels are for trading pivot points.

Oil Trend Trading

Oil Trend Trading

Natural Gas UNG Trend Trading
Natural gas trades like a bucking bronco. It’s a tough ride if you do not understand market psychology and apply strict money management to your positions.

Last weeks price action closed with a bearish candle after testing resistance twice. We could get a short trade this week depending on what happens from here. Let’s keep our eyes open for a low risk setup.

Natural Gas Trend

Natural Gas Trend


Market Trends Trading Conclusion:

This year has been fantastic for making money, but next year will most likely be much more difficult if we see the market top and head south or trend sideways. The market topping is not an event; rather a process and trend following systems will start having more losing trades than winners as the market momentum shifts from up, to sideways then down.

Don’t get me wrong, I am not saying I think its going to roll over and head south, cause quite frankly no one knows what its going to do from this point forward. This is the reason we are in cash and patiently awaiting new low risk opportunities to place our money. The joy of trading with technical analysis is that you don’t care which direction the markets go because the analysis, if done correctly, allows you to profit in all market conditions using different trading strategies.

The board market
, in my opinion, is way overbought due to the holiday rally. But we must remember there is another low volume week as we approach New Years and this could extend the rally more. Smaller trading positions should be used until we enter the New Year and volume steps back into the market.

Gold and silver are in a short term down trend and trading near a resistance level. We could see prices drop quickly or rally from here. So we are letting things unfold before making a commitment.

Oil
continues to move higher and last weeks weakening US dollar helped give oil a boost.

Natural gas is trading at resistance and looks ready to head back down. The daily and 30 minute chart did not setup a signal to short Natural Gas, but it was very close.

As usual, I will update on the market and provide daily updates and trades to members.

Free Gold ETF Trading Newsletter

Chris Vermeulen
www.GoldAndOilGuy.com – Gold Newsletter

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What’s Next for Stocks, Gold, Silver, Oil & Nat Gas?

December 13, 2009
The past three weeks have been interesting to watch as the Dow (DIA ETF) has broadened causing traders to be shaken in and out of positions. Commodities have been under pressure as the US dollar has risen. Below are some charts of these investments and what I think could happen in the next couple weeks.

DIA – Exchange Traded Fund
As you can see the broadening formation is bearish as it results in a short term pullback. This type of price action is what frustrates breakout and novice traders. As traders jump into positions once the previous high is broken, they hope for a rally. Instead the market briefly moves higher then reverses and moves down to penetrate the previous pivot low. This is where breakout traders place their stops and as the market knows this, it obliges by moving below this level to shake out these traders before it rallies again.

That being said, it looks like stocks could make a new high this week, just enough to suck in more short term breakout traders before rolling over once again to test a deeper support level. A pullback to the $99-100 level would make for a great buy point.

DIA ETF Trade

DIA ETF Trade

GLD – Gold Exchange Traded Fund
The strengthening dollar is putting pressure on precious metals with gold testing the first support level. Depending on what the dollar does in the coming days we could see gold test the second support level.

In my opinion gold can test the second support level without triggering any major sell signals for traders and investors. The trend will still be up and it is important to know the horizontal support level is more important than a trend line support level.

GLD Gold Trend

GLD Gold Trend

SLV – Exchange Traded Fund
Silver is in the same boat at gold. Only time will tell if we get a bounce or a further test lower. Either way, the underlying trend is still up and we will be able trade it.

SLV Silver Trading

SLV Silver Trading

USO – Oil Exchange Traded Fund
Oil broke down out of its bull flag last week and is currently testing both trend line support and horizontal support levels. We could see a short term bounce here to the $37, 38 or 40 levels. Taking money off the table at each resistance level and raising your stop is an important money management strategy I use for this type of play.

This is a high risk type of play which I am not taking part in. But I do find it fun to track plays like this for educational reasons.

How to trade Oil

How to trade Oil

UNG – Natural Gas Exchange Traded Fund
The natural gas fund is a touchy topic with so many traders. I get emails every day asking why I trade UNG because of the contango and the fact that so many people have lost money with it; they don’t want to touch it again. My answer is very simple, it works perfectly fine for short term trading which lasts 1-20 days. “If it works, Don’t Fix It”.
I do agree UNG is tougher than other ETFs to trade, but it still makes money and that is what our goal is.

Anyways natural gas has found some support and is bouncing around. We could see it trend sideways or up until a test of our blue resistance trend line is reached. From there we can asses the situation for a possible trade.

The underlying trend is down on the monthly and weekly charts so do not get too excited about going long anytime soon.

UNg Natural Gas Trade

UNg Natural Gas Trade

ETF Trading Conclusion:
Overall the market feels a little top heavy and the price action on the charts are saying the same thing. My short term indicators are telling me the Dow (DIA fund) is over bought and ready for a couple days of selling. With any luck we will see a test of support which will flush out most short term traders this week, then a nice low volume rally going into Christmas. On the other hand, the market has been holding up well and prices could continue to drift higher from here. If that is the case we simply continue to hold our current long positions and enjoy the ride.

Silver and gold are testing support levels and if the market continues to rally here, I figure precious metals will follow. But if we see stocks pull back and test support, then we will most likely see the metals pull back further also.

Crude oil has formed a scary looking chart as it flushes out traders on this recent drop. My general rule for spec plays is to buy when the chart looks scary, but is trading at multiple support levels. It is very difficult to buy at these levels but as my good buddy David Banister from ActiveTradingPartners.com always says, “Buy when they Cry, Sell when it’s Loud”. Meaning buy when everyone is panicking out of their positions, and sell when everyone is buying into the move usually seen by high volume levels and much higher prices.

Natural Gas is jumping around like crazy. We continue to wait for a tradable price pattern to form in conjunction with a support or resistance level to help put the odds more on our side.

If you would like to receive my Free ETF Trading Newsletter:

Chris Vermeulen
www.TheGoldAndOilGuy.com

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ETF Trading Gold Oil and the Index

December 9th, 2009
Etf trading has made it so easy for traders and investors to get maximum exposure to the entire market without the high fees of mutual funds and manager. There are now etfs covering almost every investment type whether it’s stocks, indexes, sectors, commodities, bonds, real estate, currencies etc…

In this short report I will quickly show a few charts on what is happening for precious metals and energy.

HUI – Gold Stock
This monthly chart of the gold stocks index you can see how easy it is to trade the market and avoid large sell offs when using technical analysis. Currently gold stocks are in a bull market, testing the 2008 highs. Until we are proven wrong buying stocks after a pullback is a winning strategy.

Gold Stocks Trading

Gold Stocks Trading

Trading the GLD ETF
We have been in the GLD etf for a few months as we ride this bull to new highs. This chart clearly shows how buying dips in a bull market can really pay off. I do have certain criteria which must be met before buying dips so I know the odds are in my favor.

Gold ETF Alert

Gold ETF Alert

ETF Trade Silver
Silver along with gold and oil are looking ready for an oversold bounce. I don’t think prices will jump and rally higher right out of the gate but eventually I feel the will head higher.

SLV Trading Newsletter

SLV Trading Newsletter

Crude Oil Fund Trade
Crude oil looks prime for the picking. It is currently oversold and testing 2 support levels. The downside momentum is still strong so this selling could last another 1-2 days but I’m expecting it to soon.

This is not a low risk setup. This is more of a short term aggressive contrarian play. For those of you who like heart pounding plays ?

USO Fund Trade

USO Fund Trade

Natural Gas Fund Chart
Natural gas has been taking its time to bottom. Virtually every bottom picker has been burned this year. I am starting to hear everyone get more bearish on it again which is great! It should bottom any day then! LOL….

Seriously it cannot get much more bearish for gas. We don’t have enough space to store it and companies are finding more natural gas in the ground every day. Because it sounds like a terrible investment it must be getting close to a bottom. If this is the start of a flat basing pattern, then I expect it could drag out for a few months before actually making a nice move up.

UNG Nat Gas Trend

UNG Nat Gas Trend

Dow Jones DIA ETF
The Dow looks similar to gold and silver. I feel we are ready for a 1-2 day bounce then we go a little lower to shake traders out of the market before heading higher.

DIA ETF Trading

DIA ETF Trading

ETF Trading Conclusion:
Gold stocks and the broad market are in a bull market. The recent pullback has many traders worried. I think this an opportunity to bet into some positions before the next rally. Buying the dips in a bull market is a low risk trade until proven wrong. I think we still have more of a pullback yet but then we could have a very profitable year end Xmas rally.

Natural Gas is just bumping along bottom I think. Not expecting any trade for a few weeks anyways.

Crude Oil looks like its ready for a move whether it is a 1-2 day bounce or the start of a new leg higher. If you loot at late Sept you can see USO broke down on heavy volume shaking most traders out of their positions just before the next leg higher, and this is what I feel it is doing now. Only time will tell.

Let’s see how the second half of this week unfolds.

Join my Free ETF Trading Newsletter

Chris Vermeulen
www.TheGoldAndOilGuy.com

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Do Stocks and Commodity ETFs Take a Pause or Melt Down?

Dec 6th, 2009
The first half of last week started out strong with stock and precious metal ETFs moving higher. The week ended with less certainty of direction. The energy sector underperformed the market with crude oil and natural gas moving lower.

Below are some ETF charts showing where the broad market and commodities are trading with some analysis showing what could transpire going into the year end holiday season.

DIA ETF – Daily Trading Chart
The DIA ETF that I am using to represent the Dow Industrial Average looks to be over bought and ready for a pullback. The broadening formation indicates volatility is rising and that the bulls are losing control. This pattern occurs in all time frames and in stocks, commodities and exchange traded funds. Remember this pattern when looking at charts as it could save you some money.

Using simple analysis we can see where the Dow is likely to test. With any luck this could happen quickly and be followed by a nice low volume rally going into to the holiday.

DIA ETF Trading

DIA ETF Trading

GLD Gold Exchange Traded Fund – Daily & Weekly Charts
Gold had a huge rally the first half of the week but gave it all back and then some on Friday. I have been warning about this sharp profit taking correction for a few days making sure everyone had tightened their stops or started to trim their positions. We locked in a nice 11.9% gain on Friday as our stop for GLD was triggered.

GLD fund is likely to trade in one of two scenarios this week:
1. Move side-ways after last week’s sell off
2. Or continue moving down as investors and short term traders review Friday’s action and place their sell orders for Monday.

Take a look at the small weekly chart which is located within the daily chart below. We had a very big volume week and a reversal candle indicating a shift in momentum. If we are lucky this could be a quick pause before another move up, but I am thinking gold will need several weeks to gain its footing. Only time will tell, and either way we will be ready.

GLD Exchange Trade Fund Alerts

GLD Exchange Trade Fund Alerts

SLV Fund – Daily & Weekly Charts
Silver had a sharp pullback with gold on Friday but because silver did not have investors tripping over each other trying to buy it like gold, the sell off was much more controlled. Silver breached the lower trend channel line but closed back above it to end the week.

Silver is trading at the lower level of its trend channel and at a support level. There is a good change it will bounce Monday or Tuesday. But until we see what gold is doing at the open Monday morning I would not be jumping into anything at this point.

The weekly chart shows a reversal candle signaling strong selling pressure and this is the reason I would not be buying here. Let’s watch for a few days and see what happens.

SLV Trading Analysis

SLV Trading Analysis

USO Oil Fund – Weekly Charts
Crude oil has been weak the past 2 months as it drifts sideways from the October breakout. Not much to say here other than let’s wait for some action and a low risk setup.

USO Oil Fund

USO Oil Fund

UNG Natural Gas Fund – 60 Minute and Weekly Chart
This year I think natural gas has taken more money from traders than any other fund. Virtually everyone has been burned by this extremely over sold commodity. The 60 minute chart shows three resistance levels. But if you combine all of them there is significant resistance from $8.80 – $9.25. That is the test of the August lows.

We reached the August lows and that is what triggered the bounce and short covering rally 2 weeks ago. We have now seen prices slip below that level on rising volume which is bearish. With prices below this major resistance level I think we will see sellers step in on each bounce to push prices back down.

UNG Natural Gas Trading Fund

UNG Natural Gas Trading Fund

Stocks and Commodity ETF Trading Conclusion:
The broad stock market looks ready for a small correction. That being said the tape does not lie and we continue to see money flow into stocks which is why the dow, sp500 and Russell 2000 are holding up well. These crossed signals are the reason money/position management is so important for traders. Scaling in and out of positions during oversold and overbought conditions is crucial for pulling money out of the market consistently.

I do this by tightening my stop to lock in a gain on 25-50% of my position, while holding a core position in the event prices continue to rise. This way I make a premium on part of my trade and have my stop moved to break even or higher for the core position allowing it some wiggle room as prices consolidate before the next leg higher.

Gold and silver could go either way quickly this week. We have locked in some good money last week and now we hold our core position. From here I expect the gold and silver to play out in one of three ways:
1. Prices continue higher and we ride our core positions for larger gains.
2. Price continues to correct and we get another low risk entry point to add to our core position, then prices rally.
3. Or, precious metals have a melt down and we take a small 5% gain on our core position.

Crude Oil and Natural Gas are not tradable at this time. We need to see more price action before a high probability setup will develop. Let’s watch and wait these out some more.

If you would like to receive my Free Weekly ETF Trading Newsletter visit my website:

Chris Vermeulen
www.TheGoldAndOilGuy.com

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Weak Dollar Boosts Commodities – So What’s Next?

Another fantastic week for precious metals as the US dollar continues its slide lower. Energy commodities like oil and natural gas are having some difficulty finding buyers.

When commodities start to trend they become very profitable for those riding them up or down. But when a short term trend starts to virtually go straight up (parabolic) then we must be prepared for a sharp pullback. Once the price starts to slide I figure a lot of short term traders will begin locking in profits, sending gold down.

I’ve recently discovered the Money Flows table from The Wall Street Journal and I gotta say it’s awesome. My thanks to a trading buddy for bringing this resource as well as hidden gem play – DFSH – to my attention.

The Money Flow table calculates whether money is moving in or out of a stock or ETF on a given day, and whether it is selling on strength or buying on weakness. It also tells you if there are more up or down ticks. Really powerful stuff in my opinion.

For example, the GLD gold fund continued its move higher today as it must follow the underlying commodity. And though the fund traded higher institutions were selling their positions in masse. For every 9 block trades bought there were 100 block trades on the sell side. This is strong evidence that institutions/large traders are moving out of GLD. Indeed, over $161 million dollars moved out of GLD today alone and a total of $251 million dollars in the two days preceding today.

The SPY fund was 12 buy orders for every 100 sell orders. Today alone over $675 million was flowing out of SPY which his CRAZY huge.
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Check out the table: http://online.wsj.com/mdc/public/page/2_3022-mflppg-moneyflow-20091125.html?mod=mdc_pastcalendar

GLD ETF Trading – Weekly & Daily Trading Charts
Gold continues to claw its way higher as trader’s trip over each other trying to buy this shiny investment. The weekly chart clearly shows a parabolic spike. Vertical spikes like this do not last for long, but the largest percentage of the move will be made riding this trend up with a tight stop.

Gold Trader

Gold Trader

SLV ETF Trading – Weekly & Daily Trading Charts
Silver is still trending up but lagging its big sister (yellow gold). The daily chart shows a nice mini bull flag and we could get an upside pop soon.

ETF Trading

ETF Trading

USO Fund Trading – Weekly & Daily Charts to Trade
Crude oil just does not have people participating. The dollar is dropping yet oil continues to be dormant. It has provided several intraday plays as it trades the top and bottom of the trend channel.

Oil Trader

Oil Trader

UNG Fund Trading – Trade the Weekly & Daily Charts
Natural gas really came to life today. It looks like people started to cover their shorts and it just kept running up for the entire session. I mentioned in a previous report that the $9 level could be a bottom and today’s reversal sure makes it look good to the eye. But if this is a short coving rally, prices are still headed lower yet.

Gas Trading

Gas Trading


ETF Trader Conclusion:

Gold continues its incredible rally and we love every minute of it. I keep moving our stops to lock in maximum gains while providing enough wiggle room for more growth.

Silver and precious metals stocks are lagging and that is a concern. The charts look solid but I think investors are not currently willing to pay higher prices for riskier plays which include silver and precious metal stocks.

Crude oil is just drifting lower in a controlled manner. The chart looks bullish but buyers just are not in a panic to buy it right now.

Natural Gas has put in a nice bounce this week. I expect a lot of this is short covering and it could rally to the $10.50 – $11.00 area if all goes well.

The broad market is starting to look and feel over bought. We could see the market continue higher Friday because of the holiday light trading volume which virtually always moves the markets, or whatever investment is HOT, higher. This is because the large traders take time off so there are not a lot of large sellers in the market. But be ready for next week because these nice lofty prices could start tumbling down.

I just want to wish everyone a great holiday!

Get my Economic Trading Indicator Tool and my Free Weekly Trading Reports:

Chris Vermeulen
www.GoldAndOilGuy.com