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DIA, UUP, GLD, SLV & XLE Funds Shift Momentum?

Today we had a reversal day for the broad market, us dollar, precious metals and oil. The market is over extended. We have seen the market rally 20% since the July low.

Inter-market analysis is important to understand because everything is related in some way. The next month will be very interesting with the US dollar trying to rally, which will put pressure on precious metals, stocks and commodities.

DIA ETF – Dow Industrial Fund
Stocks look to have formed a similar pattern as the March rally this year. The market has the same feel and price action that we saw during the June high, which is telling me we should move stops up to protect profits. Wednesday the market had an intraday reversal and that is a sign of weakness. The past four trading day’s is the same as the July bottom (multiple Doji Candles). Doji candles indicate a possible reversal.

DIA ETF Trading Newsletter

DIA ETF Trading Newsletter

Broad Market Volatility Index
Here is a weekly volatility chart that shows we are at a long term support level. The saying is, buy when the VIX is high, sell when the VIX is low. Just to be clear, I am not saying sell everything. I am just pointing out that the market is ready for a multi week correction. I am tightening my stops and limiting my position size for new log positions.

VIX Volatility Index Trading

VIX Volatility Index Trading

UUP ETF – US Dollar Intraday Price Action
The dollar sold down Wednesday, then rallied very strong into the close, indicating a shift in momentum. The dollar has been trending down for several months and ready for a bounce.

UUP US Dollar Trading Fund

UUP US Dollar Trading Fund


Precious Metals Under Pressure

Below is a chart of Gold and Silver showing the weakness on Wednesday and the sharp sell off late in the session, when the US dollar started to rally.

Precious Metals Trading Newsletter

Precious Metals Trading Newsletter

XLE Energy ETF – Intraday Chart
Energy sector moved down in the morning and managed to wiggle its way back to positive territory late in the day, but when the US dollar rallied, crude oil and the energy sector sold off sharply.

XLE Energy Trading Newsletter

XLE Energy Trading Newsletter

Inter-Market Analysis Conclusion:
In my opinion things look to be setup for a multi week shift in momentum. It looks like the US Dollar will bounce putting pressure on precious metals, stocks, and commodities like crude oil.

Stocks look ready to correct and a bounce in the dollar will trigger the correction.

Gold is at a major resistance level, and taking a breather at this level would be normal price action. Gold has also been trading in sync with stocks, so this relationship is most likely still in place. If stocks move down, so will gold.

Crude oil is having a tough time moving higher and with Wednesday’s higher than expected oil inventory levels, there will be more down side pressure.

Currently we have several profitable position and we will be tightening our stops and looking for new opportunities in the coming days.

If you would like to receive my Free Weekly Trading Reports for ETF’s or Stock Trading Reports please visit my websites: www.GoldAndOilGuy.com and www.ActiveTradingPartner.com

Chris Vermeulen

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ETF Trading for GLD, SLV, UNG, USO Funds

Commodity ETF trading charts allow us to track and trade the underlying commodities with ease. I have provided a few daily charts to show were current commodity prices and chart pattern are at.

GLD Gold ETF Trading – Daily Chart
As you can see from the chart below GLD had a nice 4 day rally breaking out of a longer term pattern (weekly chart – pennant pattern). This bullish action triggered several different types of traders/investors to buy into the move including us. After taking some short term profits we continue to hold a core position with a stop in place to lock in more profit if we see the GLD ETF move lower from here.

Interest for GLD is decreasing which you can see from the volume divergence on the chart. This is a bearish sign, but we remain long until the price action tells us to get out and wait for a new short term trade.

GLD ETF Trading Newsletter

GLD ETF Trading Newsletter

SLV Silver ETF Trading – Daily Chart
SLV ETF has been trending upwards for about a month and is now trading in the middle of its trend channel. We could see silver trade sideway or down for a couple days as the price consolidates. We continue to hold a core position and wait for a technical breakdown to lock in more profit, or have other possible low risk setups to add more to our position.

SLV ETF Trading Newsletter

SLV ETF Trading Newsletter

UNG ETF Trading – Daily Chart
The UNG etf looks like it may be ready for a pullback and shorting this fund or buying a nat gas bear fund could be a good trade in the coming days. Notice the two price moves lower back in May & July. They were both followed by two bounces before making another leg lower. UNG could easily move up to $12.50 level but a technical breakdown will trigger speculative sellers. Shorting a fund like this which has terrible contango can actually help improve your returns. I will post an update for members if we have a short play on it later this week.

UNg ETF Trading Newsletter

UNg ETF Trading Newsletter

USO ETF Trading – Daily Chart
USO etf trading has been slow in the past couple months because of the sideways price action. With any luck we may get a low risk buy signal before the longer term (weekly Chart – Pennant Pattern) breakout, which will trigger speculative traders to buy oil again. I continue to follow this fund for potential buy signals for my clients.

USO ET Trading Newsletter

USO ET Trading Newsletter

USO, UNG, SLV and GLD ETF Trading Conclusion:
GLD traders should be ready to take profits if we see a continued move lower below our blue trend channel. I am always sure I do not take a loss on a trade once it becomes profitable by 2% or more and this is the key to consistent gains.

SLV ETF traders have been rewarded nicely in the past couple weeks. The price of silver has more room to fall before breaking down or bouncing so wait for one or the other before jumping. Following a trading model allows you to make consistent returns and catch large rallies over time for much larger gains. But you must follow the charts with a technical eye and discipline.

UNG traders had a very nice 25% rally from the perfect waterfall sell off a few weeks back. The price is now getting close to a resistance level so tighten your stops to lock in maximum gains before the price rolls over. I may have a short play for this commodity if we get a proper setup.

USO crude oil traders have been twiddling their thumbs as they wait for a breakdown or new rally higher. This chart pattern looks similar to the GLD breakout we had so oil could put in a much larger percent move than GLD with any luck in the coming months.

In short we continue to hold our positions and ride the market with protective stops in place. Lest see what happens this week.

If you would like to receive my Free Weekly Trading Reports via email please enter your email address on my website: www.GoldAndOilGuy.com or Stock Trading Reports at www.ActiveTradingPartner.com

Chris Vermeulen