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Gold, Silver, Oil & Nat Gas Going Wild!

Nov 4th, 2009
Precious Metals ETF have gone wild the past 2 weeks. Last week we saw gold and silver prices drop sharply as it shook out short term trader’s stop orders before breaking out and moving higher. Also there is a disconnect between the gold and the dollar.

Energy commodities like natural gas and crude oil are moving in opposite directions and look to be picking up speed. Natural gas is losing pressure and oil is on fire.

GLD ETF Trading – Pivot Trading Low
Last week we had our pivot trading low generate another buy signal for gold. Trading pivot lows is a simple trading strategy. I call them low risk setups and take advantage of buying a stock, commodity or currency after a pullback to support and when a reversal candle is formed. This chart clearly shows when you are trading with the trend buying on the dips is generally a low risk play with great up side potential.

Gold Bull Market Pivot Trading Low

Gold Bull Market Pivot Trading Low

Precious Metals ETF Trading – Gold Bullion Takes Control
This is a chart which shows the performance of gold stocks (red), silver bullion (blue) and gold bullion (green). As you can see the past 2 weeks while the market has been selling down precious metals stocks have been hit harder than silver and gold.

Because of the heavy selling in stocks recently the smart money had been going into commodities especially gold bullion. Gold stocks are a great play but this is telling us investors feel safer in physical bullion than stocks.

Gold is the most known precious metal and safe haven which is why it’s holding value better than silver and stocks. This week we are seeing gold become more valuable in several major currencies which means gold is actually making a real move higher.

Gold Bullion, Silver Bullion, Precious Metal Stocks

Gold Bullion, Silver Bullion, Precious Metal Stocks

USO ETF Trading – Breakout & Bull Flag
Crude oil has had some great breakouts this year and it looks like we are about to get another buy signal shortly. We had a breakout in Oct from the large pennant and are now flagging which is very bullish. We could see USO reach $50 in the next month or two.

Crude Oil Bull Market Breakout

Crude Oil Bull Market Breakout

UNG ETF Trading – Pivot Low or Waterfall Sell Off?
Natural gas is at a crucial level for a higher low bounce or another massive panic sell off. Trading right now with UNG is a 50/50 shot so we will just have to wait and let things unfold more before taking any action.

Natural Gas Pivot Low Bear Market

Natural Gas Pivot Low Bear Market


The Stock Markets, Precious Metals & Energy Trading Conclusion:

The market is starting to feel a little squirmy as it tries to find support. Small cap stocks continue to get crushed while blue chip (large cap) stocks are holding more of their value. Gold has broken higher this week while silver and precious metal stocks under perform their big sister Yellow Gold.

Crude oil is holding up nicely forming a 3 week bull flag and showing signs of life while natural gas continues to get hammered.

The market has been jumpy the past 2 weeks because market participants are very uneasy about the future direction of the US dollar.

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Chris Vermeulen

The Triple Time Frame Breakout in Gold and Nat Gas

We have been waiting for gold to breakout above the 2008 high for almost 2 years. These charts show we are slowly working our way there.

Gold Stocks Index – The Leading Indicator for Gold Bullion
I watch the price of gold stocks very closely because when there is large divergence from the price action of gold bullion I can get in a trade before the general public does.
Tuesday we saw gold stocks put in a powerful rally yet gold bullion did not move much. This told me there was going to be some positive action Wednesday in gold and there was a very nice rally, indeed.

This monthly chart of gold stocks shows a monthly breakout which is exciting to see. Most rallies last between 3-6 months on a breakout like this. That being said we could still have another 1-3 months of sideways price action as gold bullion tries to clear out the over head supply.

If you follow Australian gold stocks check out http://www.sharefilter.com/ for more info.

Gold Trading Breakout Signal

Gold Trading Breakout Signal

Gold Bullion – Monthly Timing Chart
The gold chart clearly shows that we are near a major breakout. You can also see the similar price action before the last major breakout which is encouraging.

Gold Breakout Trading Newsletter

Gold Breakout Trading Newsletter

GLD Gold Bullion Trust – Weekly Timing Chart
Gold has broken out of is bullish pennant and now trying to break through the overhead resistance. So far the price action is strong but do not expect a breakout instantly. The market always has a way of dragging things out much longer than one may anticipate.

Gold Bullion Trading Breakout

Gold Bullion Trading Breakout

GLD Gold Bullion ETF – Daily Timing Chart
The daily chart clearly shows that if we continue to form a bull flag or some type of pennant formation it major breakout could takes weeks from here.

Gold ETF Breakout Trading

Gold ETF Breakout Trading

Natural Gas – Weekly Timing Chart
Several weeks’ back I pointed out that Natural Gas was extremely over sold and at 10 year lows which was a good point to start scaling into a position. This high risk setup has paid off well for those following actively trading the over bought and over sold conditions with me.

We now have a breakout and are waiting for a low risk entry point to buy more natural gas.

Natural Gas Breakout Signal Trading

Natural Gas Breakout Signal Trading


Crude Oil – Weekly Timing Chart

Crude oil continues to trade within a set of bull wedges making it difficult to get a low risk setup. I trade over bought, over sold and trends, not sideways/trend less investments which USO has been in my eyes for a few months.

Soon enough it will flash a buy or sell signal for me and we will be active again with USO and other oil funds.

Crude Oil Bul Market Trading

Crude Oil Bul Market Trading

Weekly Market Timing Conclusion:
Overall our precious metal stocks and bullion trades are doing well. We continue to wait for a breakout, hopefully to the upside, but have protection stops in place to lock in gains if prices drop on us.

The energy sector has been tricky because oil is trend less and natural gas has gone straight up. Again my focus is on low risk, high probability trades and I don’t chase or make trades when there is nothing to trade.

If you would like to receive my Free Weekly Trading Reports like this please visit my website: www.TheGoldAndOilGuy.com

Chris Vermeulen