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70 Second Market Outlook – Metals, Dollar, Bonds, Stocks, Energy

Over the past year we have had some really interesting things unfold in the market. Investing or even swing trading has been much more difficult because of all the wild economic data and daily headline news from all over the globe causing strong surges or sell offs almost every week.

For a while there you could not hold a position for more than a week without some type of news event moving the market enough to either push you deep in the money or get stopped out for a loss. This has unfortunately caused a lot of individuals to give up on trading which is not a good sign for the financial market as a whole.

The key to navigating stocks which everyone thinks are overbought is to trade small position sizes and focus on the shorter time frames like the 4 hour charts. This chart is my secret weapon and giving you both large price swings which daily chart traders focus on while also showing clear intraday patterns to spot reversals or continuation patterns with precise entry/exit points.

While I could ramble on about why the stock market is primed for major long term growth from this point forward I will keep things short and simple with some 4 hour and daily charts for you to see what I see and what I am thinking should unfold moving forward.

Keep in mind, the most accurate trading opportunities that happen week after week are the quick shifts in sentiment which only last 2-5 days at most which is what most of my charts below are focusing on…

Dollar Index – 4 Hour Chart

This chart shows a mini Head & Shoulders reversal pattern and likely target over the next five sessions. The dollar index has been driving the market for the past couple years so a lower dollar means higher stock and commodity prices.

Dollar Index Trading

Bond Futures – 4 Hour Chart

Money has been flowing into bonds for the past couple weeks with most traders and investors expecting a strong correction in stocks. As you can see the price of bonds hit resistance this week and as of Thursday has now started selling off. Money flowing out of this “Risk Off” asset means money will move to the “Risk On” investments like stocks and commodities.

Bond Futures Trading

Gold Futures – Daily Chart

Gold is stuck in both categories in my opinion. It is a “Risk Off” safe haven when people are scared of falling stock prices, and it is also a “Risk On” speculative investment when people are feeling good about the market. Gold has been trading at key resistance for a couple weeks and looks as though it’s starting its next rally.

Gold Futures Trading

Silver Futures – Daily Chart

Silver is in the same boat as gold though it carries much more volatility than gold. Expect 2-4% swings regularly and sloppy chart patterns in this metal.

Silver Futures Trading

SP500 Futures – Daily Chart

As much as everyone hates to buy stocks up at these lofty prices I hate to say it but I think they are going to keep going up and they could do this for a long time yet. If the dollar index continues to break down then I expect the SP500 to rally another 3% from here (1500) in the next 1-2 weeks.

SP500 Futures Trading

Crude Oil Futures – 4 Hour Chart

Crude oil has not had much attention from me in the past few months. While it has had big price action many of those big days took place on news causing an instant price movement making this extra dangerous to trade. I continue to watch rather than get attached to it.

Crude Oil Futures Trading

Natural Gas Futures – Daily Chart

Natural gas has been a great performer for us in the past 6 months as all the short positions slowly get covered. I just closed out my natural gas ETF trade this week with a 31.9% gain and plan on getting back in once the chart provides another low risk setup.

Natural Gas Futures Trading

Trading Conclusion:

In short, I feel the dollar index along with bonds will correct over the next few weeks. That will trigger buying in stocks and commodities. Keep in mind natural gas dances to its own drum beat. The dollar does not have much affect on its price and most times natural gas is doing the opposite of the broad market. Get My Pre-Market Trading Analysis Video and Intraday Chart Analysis EVERY DAY – www.TheGoldAndOilGuy.com

Chris Vermeulen

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Commodity Futures Are Trading At Pivot Points

The commodity futures charts and gold precious metal stocks have be trading with increased volatility as they bounce between support and resistance levels on the daily and hourly charts.

This report is focused more on technical analysis and charts so that I can show you what I feel these commodities are lining up to do.

GDX ETF – Daily Trading Chart
I posted this chart Monday afternoon to members as a short educational piece and to give warning to those where were currently in short term long positions. This chart clearly shows that when the short term trend is up and we get a black candle (Pop & Drop) the odds tell us that we should see lower prices over the next 24 – 48 hours for silver and gold.

This type of price action may look easy to trade, which it is, but only day traders and even better yet futures traders, can make the most when these setups occur. It doesn’t get anymore exciting than Trading after hours with commodity futures.

The nice thing about trading futures is that charts run around the clock 24 hours a day so you do not get price gaps that miss most of the short term low risk plays. Investment vehicles on the NYSE are limited to trading from 9:30am – 4pm and that really does cut down in the amount of low risk trade setups we get on a monthly basis.
GDX

Silver Commodity Trading Contract YI – Daily Chart
Silver has been tougher to trade than gold recently. Percentage moves are much larger with silver adding more potential risk to buyers and sellers. In addition, silver is not trending strongly like its big sister gold and this adds another level of difficulty. Profits should be taken quickly during this type of price action.

Silver Futures Trading

Silver Futures Trading

Gold Futures Trading YG Contract – Hourly Chart
Gold is my favorite and most profitable investment vehicle. I trade gold using the GLD etf and futures. Last week I wrote about this key resistance level and how I was waiting to trade until the Friday unemployment numbers were out and to see how the market reacted before putting our money to work. Over the weekend the bullish sentiment caused gold to gap above that key resistance level but has sold back down after beginning the new week.

The chart below shows that I am neutral/bearish for the next few days. Heavy selling and the small bear flag is warning me of lower prices. The natural tendency for gold is to drift higher through the night from 6pm EST – 4am EST, so we could see higher prices in the short term but what happens in the following 1-3 days will set the tone for gold.

Gold Futures Trading

Gold Futures Trading

Crude Oil Futures Trading CL – Daily Chart
Oil has pulled back the past few days and is now trading near a support level. I feel it is over sold and could bounce the second half of this week and I will keep my eye on it for members.

Crude Oil Futures Trading

Crude Oil Futures Trading

Natural Gas Futures Trading NG – Daily Chart
Nat gas is the most deadly commodity I know for the uneducated trader. The price swings are wild and WILL trigger you stops no matter where you put them almost. The whipsaw action always seems to form a Mega Phone pattern which means there are higher highs and lower lows during key pivot points forcing shorts to keep coving their positions and longs to keep getting stopped out as they try to protect their down side risk.

I rarely trade Natural Gas because of this. The stats I’ve heard are that almost everyone who actively trades natural gas will lose their money within 3 months. Yikes! So this is why I am so picky trading it.

The current price of NG is trading in the middle of is range. Entering a trade here is 50/50 and just not worth the risk.

Natural Gas Futures Trading

Natural Gas Futures Trading

Commodity Futures Trading Conclusion:
There are not too many exciting things in the market right now. We continue to watch stocks and commodities work through their patterns and cycles as we just jump in and out of the market when the timing is right. It’s like a large game of double Dutch skipping, just have to time the monitor the patterns, speed and cycles so you lower the odds of getting hit.

If you would like to receive my Free Weekly Trading Reports, please visit my website.

Chris Vermeulen
www.TheTechnicalTraders.com