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Dollar Continues to Control Gold, Oil & Equities

Over the past few months it seems as though everything has been tied to the dollar. Simple inter-market analysis makes it obvious that almost everything in the financial market eventually has an affect on stocks and commodities in some way. But recently trading has really been all about the dollar. If you watch the SP500 and gold prices you will notice at times virtually every tick the dollar makes directly affects the price and direction of gold and the SP500 index.

Let’s take a look at some charts to see the underlying trends and what they are telling us…

Dollar Index – Daily Chart

As you can see the trend is clearly down. Currently the dollar is trying to find a bottom as it bounces and pierces the previous high. The question everyone wants to know is if the dollar is about to rally and reverse trends or was Friday’s pierce of the October high just a shake out before the next leg down?

Back in late August the dollar pierced the July high on an intraday basis (shake out) just before prices dropped sharply. I think this could very easily happen again but when you see what gold volume is doing, it’s a different story.

Those who follow me closely know I focus on trading with the underlying trend, but manage my risk by trading smaller position sizes when the market has more uncertainty than normal with is what we are currently experiencing.

GLD – Gold Fund – Daily Chart

Gold and the dollar are almost inverse charts when comparing the two. Gold happens to be testing a key support level and its going to be interesting to see how the price holds up going forward. The one thing that has me concerned is the amount of selling taking place. The chart shows heavy volume selling and could be warning us of a possible trend change in the dollar, gold, oil and equities in the coming weeks.

Again the trend for gold is still up, so I would not be trying to short it at this time, rather look to buy into dips until the market trend proves us wrong. That being said, with the selling volume giving off a negative vibe and the fact that gold has rallied for such a long time, any new positions should be very small…

Crude Oil – Daily Chart

Oil looks to be forming a possible cup and handle pattern. If the Dollar continues to consolidate for another 1-3 weeks and breaks down, then we should see the price of oil trade in the range shown on the chart and eventually breakout to the upside. I have a $95-100 price target on oil if the dollar continues to trend down. Until we see some type of handle form here I am not trading oil.

SPY – SP500 Fund – Daily Chart

The equities market looks to have had one of those days which spooked the herd. Friday the price dropped triggering protective stops with rising volume. I was watching the intraday chart as the SP500 broke below the weeks low, and this triggered protective stops which can be seen on the 1 minute charts. In an uptrend I prefer watching stops get triggered because it means traders are getting taking out of long positions and most likely looking to play the short side. When the masses become bearish on the market, that’s when I start looking to play the upside in a bull market (buy the dip).

The chart below clearly shows the days when the shake outs/running of the stops took place. Most traders were exiting their positions and/or going short because the chart looked bearish. One thing I find that helps my trading is that if the chart looks rally scary (bearish) then I start looking at a shorter term time frame for a possible entry point to go long using price and volume analysis.

Weekend Market Trend Trading Conclusion:

In short, I feel the market is at a critical point which will trigger a very strong movement in the coming days or weeks. Because the dollar, gold, oil and the equities market have had such big moves I think trading VERY DEFENSIVE is the only way to play right now. That means trading small position sizes. Right now I am trading 1/8 – 1/4 the amount of capital I generally use on a trade. Meaning if I typically put $40,000 to work, right now I am only taking positions valued at $10,000.

Remember not to anticipate trend reversals by taking a position early. Continue to trade with the underlying trend with small positions or skip a couple setups if you feel strongly of a possible reversal. Once the trend reverses and the volume confirms, only then should you be playing the new trend. Picking tops can be expensive and stressful.

Get My Daily Pre-Market Trading Analysis Videos, Intraday Updates & Trade Alerts Here: www.GoldAndOilGuy.com

Chris Vermeulen

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Spot Gold Price Charts

Today was another one of those great days for trading the spot gold price using the free intraday charts by Kitco. I’m not sure if anyone watches the free Kitco 24 Hour Spot Gold Price Chart, which is shown below, but I watch it like a hawk. It doesn’t take long to get a feel for how gold moves through out the 24hr day. Once you get a feel for it and see the same things happen every week opportunities start to pop up on the radar.

The Kitco Spot Gold Price Chart, which is provided for free, is an amazing tool for observing gold prices over a 3 day time frame. What I’m going to show you is how it can provide opportunities for daytrading the spot gold price or the Gold GLD ETF.

Free Spot Gold Price Chart – By Kitco

Spot Gold Price Chart

Spot Gold Price Chart


This chart may not look like a quality trading tool but it provides very detailed information for daytrading gold and for swing traders as they get ready to enter or exit a position at the open or close of the trading session. As you look at the chart above you will notice that the price movement each day is very similar even though the price of spot gold is different. Often enough the movements are very similar allowing us to take advantage of daytrading the spot gold price.

Spot Gold Price Chart – Close Up

Spot Gold Intraday Prices

Spot Gold Intraday Prices


This picture does not look like much but it is North America’s standard market trading times 9:30am – 4:00pm ET. You can see the price action following the previous day’s movements. Blue is the previous trading day and Green is Current Trading day. When I see big price movements in gold during these hours I like to take advantage of it the following day. If you didn’t notice the Green line (Today) makes the move before the previous days move. Why? Looks to me like there are a lot of other traders out there like me, getting ready for these opportunities in the spot gold price move before the previous day’s action. Today the market was 20-30 ahead of the previous moves, which happens and should be factored into your trading if you notice this.

Intraday Spot Gold Price Chart

Spot Gold Price Charts

Spot Gold Price Charts


This shows the last 4 spot gold prices using the GLD ETF. As you can see the last for days had the same price movement although today had a larger range to take more profits. This is a 5 minute spot gold chart using GLD. I trade using the 1 minute price chart, as it allows the best timing to enter and exit the positions and keep the 5 minutes chart, which you see above running, as well to keep my head clear for the time and potential price movement.

Today’s Spot Gold Trading Chart

Spot Gold Trading

Spot Gold Trading


Above is the chart I use for trading GLD and my actual trades. I am a very conservative trader and I like to lock in profits. Sometimes I get out a little too early but I generally catch the middle trending moves, which are the safest times to trade in my opinion. I could have held the trade longer today but spooked myself out of the trade because of over thinking. This is the exact reason why I use the 5 minute chart to keep my head on straight but sometimes it’s till not enough and I take profits early.

When there are no swing trading setups I focus on finding these intraday daytrading gold patterns. To see some of my spot gold price trading charts using GLD visit this link: http://www.thegoldandoilguy.com/tag/gold-spot-price/ .

My main focus for trading is swing trading gold ETFs. I wait for a trend reversal or continuation pattern which satisfies my trading model, enter the trade and then exit 50% of position on the first sign of weakness. And exit the second half of the position on a trend line break. My swing trading goal for GLD ETF is 2-5% per trade which would last 2-10 days unless price continues to run. I generally have 10-20 trades per year with the GLD gold ETF.

FREE WEEKLY SPOT GOLD PRICE TRADING CHARTS AND TIPS

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