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Intraday & Swing Trading Gold and Stocks – How To Use Multiple Time Frames For Setups

A couple months ago I started providing more of my intraday charts in hopes to educate traders on current market conditions so they feel like they are “in the zone” for trading. It’s crucial to understand the intraday moves and volume levels if you want to be consistently profitable trader. It doesn’t matter whether you are day trading or swing trading, you must be following daily and intraday charts.

I have been getting a few subscribers asking me: “Why I jump around from time frame to time frame so much?”

It’s a great question as some days I’m using the 60 minute charts, another day the 2 hour chart, and another the daily chart etc… well I hope to answer this question within this education report.

Get My Free Trading Charts

Trading Time Frames & Their Characteristics

Length of Trades – The longer the time frame you are trading the longer the trade will last on average. For example, if you are swing trading using the daily chart most trades will last 2-20 days, but if you are trading the 60 minute chart, then a trade may only last a few hours. Knowing this allows you to be more or less active depending on the market conditions or the amount of time you are available to trade.

Risk Levels/Draw Downs – The longer the time frame the more potential risk/draw down you will have. For example, when trading the daily chart you may set your protective stop below the previous days low. Depending on the investment, that could be $1-$50 per share or contract. Now compare this to someone trading the 5 minute intraday chart playing volume breakouts to generate quick gains. This person’s risk/draw down may only be 5-50 cents per share or contract.

This is the main reason why short term intraday traders play with larger amounts of money. Simply because their risk is so much lower, they can put more on the line for quick profits. On the flip side, swing traders should be trading much smaller positions to compensate for the increased risk.

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Individual Personalities

Every trader sees the market in a completely different way because each of our brains process chart patterns and time frames differently. This is exactly what creates the market, everyone buy and selling at different times creating liquidity and the random chart movements.

The hardest part about trading in my opinion is figuring out what type of trading personality you have? It took me a few years to actually figure this out, but now I know exactly what type of trading strategies I’m good at and which time frames I prefer trading.

Myself, I like swing trading because it does not require a lot of time to follow the market, and trades last several days and sometimes weeks. But I also like to take advantage of the market when volatility rises and the market becomes choppy because this is when intraday trading becomes most profitable, in my opinion.

Personally I do not want to trade every day because it’s a ton of work and stressful. Rather, I prefer to sit back and cherry pick, only taking positions when I see a perfect setup. This way my win/loss ratio is very high, and I do not need to worry about finding trades every day or week.

Quick Note: When I am trading the intraday charts my focus is to find setups on the 60 minute, 2 hour, 4 hour an 8 hour charts. The reason behind this is that these longer intraday time frames provide very accurate trades and each trade lasts a few hours and sometimes a few days. Trading shorter time frames like the 5 minute chart is torture because you end up trading all day every day and to be honest that’s a lot of work and not fun at all.

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So here are some charts showing you how different time frames show you different patterns, insight and setups:

SP500 Mini Futures contract – Daily Chart
Looking at the past 7-8 days we don’t really see anything exciting to trade as far as chart patterns go. So we sit and wait for something to unfold in a few days if we are lucky.

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SP500 Mini Futures – 2 Hour Intraday Trading Chart
What do you see? WOW a big fat head and shoulders pattern which indicates we should see lower prices.

Traders should have been looking to go short when the price was trading at this resistance level and the 5 minute chart confirmed resistance with the long upper candle wicks (reversal candles) shown in the charts below.

Important Note: When entering this trade, we did not know for sure it was going to be a head & shoulders pattern, but there was a high probability of it happening because of the previous couple day’s price action.

Notice how the left shoulder rallied up and got slammed by sellers, then the next rally (the head) also got slammed by sellers. This price action is bearish as institutions, hedge funds etc… dump positions once they have attained their profit goals for certain investments.

The next rally (right shoulder) drifted up slowly to test the previous resistance level. But look at how the price moved higher…. It drifted higher, which is bearish.

So, if buyers were still in control then we would have seen the price shoot straight back to resistance on big volume then form a mini bull flag (drift sideways) as it digests the resistance level before moving higher. It’s this price action here that was screaming at me to go short.

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SP500 Mini – 60 Minute Intraday Trading Chart
The 60 minute chart helps me to clearly measure how much potential there is for this trade. If you understand technical analysis you will know how to calculate a measured move. It’s simple really.

Take the previous move and add it to the where you think the price is headed. I’ve shown it in the chart below.

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Trading Time Frames Conclusion:
Well there you have it. I hope this report answers some basic trading questions.

If you would like to learn and trade at the same time I will be launching a service where I provide all my personal trades and analysis for your to follow along in real-time. Members will receive all my intraday and swing trade alerts for indexes and commodities Futures allowing you to trade which ever vehicle you want whether it’s an ETF, Leveraged ETF, Futures Contract or CFD. This way your timing is accurate and you can trade which ever investment you are comfortable trading with.

There will be a 24/7 chat-room allowing us to trade around the clock when setups arise. Also, members can swap ideas, ask me questions, make new trading buddies etc… There is even a squawk box feature! When I talk everyone logged into the site can hear me for important news or trades alerts.

All trade alerts are instantly posted in the members area, chat-room and sent via email making it one of the most powerful trading services I have seen available online.

If you are interested please fill out the form to be notified for this service. It will have limited availability:

Get Notified Of Launch

Chris Vermeulen
http://www.TheTechnicalTraders.com/

Disclaimer: I currently do not have a position in the ES futures contract.

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Have Metals and Stocks Bottomed Yet?

Everyone is wondering if gold, silver and the indexes have bottomed after last week’s heavy selling. To put things into perspective there were over 30 sell orders for every 1 buy order at the NYSE. That is pure panic and to confirm extreme fear, several of my broker buddies said last week was crazy with clients demanding to liquidate their positions ASAP to be 100% in cash.

This type of sentiment and price movement warns us of a possible market bottom. I am getting the feeling that traders and investors have been expecting this sharp drop I don’t see or feel a large amount of fear in the marketplace. Last Thursday and Friday war crazy but I think we need one more drop to really shake things up before a bottom is set.

Below are some charts showing where the market currently stands and what the charts are pointing to.

GLD Gold ETF Trading – Daily Chart

Gold is clearly trending down on the daily chart. One more thrust down should shake things up enough to trigger the next rally.

SLV Silver ETF Trading – Daily Chart

Silver has formed a Head & Shoulders pattern and has broken through multiple support levels. A measured move to the down side would be $14 for silver which could happen in the coming days.

SP500, NYSE, GOLD Futures, US Dollar Index – Intraday Charts

These charts clearly show the price action of the past month. As you can see the trend of stocks and gold are down with consolidations (pauses). This is the exact reason why you must trade with the trend and not do counter trend trades. Bounces are more like sideway movements making it very difficult to try and play bounces in a down trend.

If you focus on selling at key resistance levels then moves tend to be much more profitable. That being said, we did go long last Friday because of the extreme oversold market level. I was expecting a follow through Monday or Tuesday which has yet to happen. We have now moved our stops to break even or better to eliminate our down side risk.

Spot Gold 24Hr Trading Chart

This chart says it all. The market and gold is very volatile making it difficult to trade right now. Bulls and bears are battling it out. Only time will tell!

Stocks & Commodity Trading Conclusion:

In short, it’s been a slow week without any real exciting moves. Thursday and Friday could be interesting if traders exit their positions going into the long weekend in order to protect themselves from any surprise economic news.

From the looks of gold, silver and the indexes I sense selling could be just around the corner. We are currently long a few positions with our stops are break even or better in hopes for a pop and rally going into the holiday weekend but only time will tell.

My wife and I have our first child due on Saturday so I may disappear for 1-2 days in the coming week as we welcome our little princess into this new and exciting world.

If you would like to receive my trading reports directly to your inbox please visit my website at:

Chris Vermeulen
www.TheGoldAndOilGuy.com

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How to Trade IntraDay Gold and SP500

Last week was an incredible week for trading the intraday charts. With rising volume and volatility prices began to move up or down for extended periods of time allowing traders to profit from these powerful short term price swings.

During times like these traders using the daily charts for their guide found the market very difficult to time because of the whipsaw action each day. In this case, it is definitely best to stay clear of the market until the dust settles. But for a trader who watches the intraday charts, this is when serious money is made on a daily and consistent basis.

Most traders avoid using intraday charts because they either:

1. Think it’s day trading and do not want to sit in front of the computer all day
2. Do not understand how to trade in these “intraday” time frames.

Intraday trading is one of the most over looked yet most profitable trading strategies, in my opinion. One of the reasons I like/love it so much is the fact that it provides high probability setups on a weekly basis and trades generally last 2 -36 hours. Also, this strategy carries very low risk simply because you are in cash most of the time, putting your money to work only when high probability setups form.

If you are an active trader you should have been making money hand over fist last week. Below are close up shots of my charts:

My eSignal Trading Platform

This is my main trading screen which allows me to see the entire market. This, to me, is like a dashboard of an airplane. Each mini intraday chart is like a gauge hinting to what the plane in doing (horizon indicator, fuel, air speed etc.) My custom dashboards quickly allow me know if the market is heading up or down, what speed it is moving measured by volume and momentum, and if all pistons are firing which sector is really moving.

My Custom Dashboard

Quotes for every index and sector
Top Row: 60 minute charts with volume of: DIA, SPY, QQQQ and NYSE
Second Row: 60 min chart of NYSE TRIN, NYSE Adv/Dec, 60min Gold, 60min Oil
Bottom Row: 120 minute chart of the US Dollar, Interactive Brokers Trade Window

In short, I can see waves of money flowing in and out of each sector. These views give me a strong sense as to the strength of momentum. From these observations I determine whether the setup is favorable for shorting into light volume rallies, shorting into resistance levels or buying oversold sell offs in up trends.

Also, the chart patterns on the 60, 240 and 480 minutes charts are so powerful and accurate that you only need 2-3 trades a week in order to make decent money.

I would like to note that I do have 4 larger charts with different time frames allowing me to really get a feel for a trade before I commit money. These charts are Weekly, Daily, 240 minute and the 60 minute chart.

If you want to see some exciting daily charts of gold, sp500, oil and silver check out my weekend report: http://www.thegoldandoilguy.com/articles/gold-sp500-psychology-they-bail-we-buy/

SP500 Day Trading Futures Signal – 30 Minute Chart

The SP500 ES mini contract, or you could have traded the SPY exchange traded fund, provided an excellent intraday short trade last Wednesday.

All the indexes (NYSE, NASDAQ, SP500, DOW) drifted higher on light volume. While you can play the long side of these low volume rallies I prefer to stay in cash and wait for another short setup. Trading with the short term trend (240, 480minute charts) is crucial. Counter trend plays tend to be weak and short lived.

In short, the SP500 drifted into a resistance level on light volume and the NYSE TRIN indicator was rising in a very strong way. The combined information of price, volume and the TRIN indicator were screaming – short the market.

When the TRIN is above 1.00 it means the majority of the trades being executed on high volume NYSE stocks are sell orders. You don’t see the TRIN rise this high without the market selling off as it did on Feb 3rd. But when it does, Bombs Away – time to go short!

The next day the index crashed with panic selling across the board. The NYSE had over 30 sell orders for every 1 buy order. Now that is panic selling and, coincidentally, exactly as has happened at each bottom formed throughout 2009.

Intraday Trading SP500 – 60 Minute Chart

This chart clearly shows the high probability setup which took a few days to form. A short position was taken during the small bear flag pattern. My short position was covered on the break of a new high formed on heavy buying volume.

Intraday Trading Gold Futures – 120 Minute Chart

Gold had virtually the same setup as the SP500.

Intraday Trading Gold & SP500 Futures or ETF’s Conclusion:

As you can see intraday trading is nothing like what most people think it is. Trading using the 60, 240 and 480 minute charts really opens one’s eyes, allowing a panoramic view of the price action the market has to offer.

As most of you know, my goal is to trade low-risk, high-probability setups. And, the less time my money has to be in the market, the better.

If you are interested in getting more Intraday Analysis and Setups for ETF’s, futures and CFD’s be sure to join my free newsletter for Trading Futures and ETF’s:

Chris Vermeulen
www.TheTechnicalTraders.com

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Possible Trend Reversal In Gold and Indexes

Feb 2nd, 2010
We are seeing the market follow through from yesterdays strong rally with the Dow, SP500 and NYSE break the previous highs seen on the hourly charts. We now have a higher and high and waiting for a pullback for a higher low. This would complete the trend reversal and this is also the definition of an uptrend. There is a little more room for stocks and metals to move up today before trading deep into the next short term resistance level.

DOW & SP500 Hourly Charts

Gold Hourly Chart
Gold and silver have put a in the same move as the indexes mentioned above. I figure we will get a pause here for a couple days as the metals try to push up through this resistance level.

US Dollar Hourly Chart
The US Dollar has formed a very nice bull flag and is trading at support. This has me thinking that the majority of index and metals bounce is finished, for now anyways. The dollar should start to bounce in the coming hours which will put pressure downside on metals and large cap stocks.

USO Oil Hourly Chart
Oil has put in a solid bounce as it moves above its previous high set on the hourly chart as it also tries to reverse to the upside.

Quick Wrap-Up
It looks as though the downward trend is starting to reverse back up. During transition periods like this is when things generally get even more choppy. I am on alert for new setups in commodities and ETF’s as this could be a possible bottom.

Get my Trading Reports Via Email Real-Time:

Chris Vermeulen
www.TheTechnicalTraders.com

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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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Educational ETF’s, Futures & CFD’s Low Risk Trading Setups Explained

Jan 29th, 2010
I thought I would put this more detailed report on finding and trading low risk setups for gold, silver, oil indexes etc…. In short it does not matter what time frame you trade with or if you trade exchange traded funds, futures contracts or CFD’s (contract of difference).

This type of trading setup works for virtually every investment but I mainly focus on trading: Gold Futures, Gold ETFs, Gold CFD’s, and the SP500 & Dow 30 futures, ETF’s and CFD’s as I find they are very accurate and profitable.

Obviously swing traders who watch the daily chart will have few trades because it takes weeks and months for these low risk patterns to form. This is the reason I am using short term intraday charts and using a setup from yesterday (Thursday) for demonstrating my trading setups.

My Short Trading Setup – Rough Guideline
1. Trend on 2hour and 1hour charts are down
2. Increased volume during sell offs, and light volume on rallies/rising prices
3. Entry is best at Fibonacci retracement level which is also at a previous resistance level.
4. Set Stop just above the resistance level you are expecting the current price to stop at. Exit if this top is penetrated and wait for a new opportunity.
5. Cover half of your position just before the investment reaches the first level of support to lock in gains and reduce overall risk.
6. Once the price of the investment starts to make a new short term high exit the balance of the position. Shown in the charts below.

DIA – Dow 30 Index Fund
This is a chart I sent to members on Thursday pointing out the market weakness. We had a nice sell off in the morning and the price drifted up on light volume later in the afternoon. This low volume drift is crucial to recognize as it tells you the general public is buying. This is what Big Money likes to see. After they crush the market with their large sell orders in the morning they take a break allowing regular retail traders/investors move the market back up before the big sellers start dumping shares again.

So, I am looking to short at a resistance level in hope the big sellers step back in.

DIA – Dow 30 Index Fund – End of Day
This chart quickly shows the two intraday setups for shorting at resistance levels. Both trades worked out well but wait until you see the results of trading with futures or CFD’s shown later.

Anyways, the first short was a great play but we did not see the big sellers step in, which led to a reversal and the price continued to move higher taking us out for a small profit.

The second short had huge selling volume indicating sellers were back in control. This play we held into the close. The next chart shows how this is done.

DIA – Dow 30 Index Fund – Step By Step Play
The chart is a little small to see but it explains and shows how these low risk setups should have been traded according to my trading strategy to maximize gains while minimizing risk.

Dow 30 Futures & CFD Day Trading Signals/Setups
This is the same Dow 30 index but is zoomed out so we can take advantage of the 24 hour price action which the futures market trades.

Here I show the Fibonacci retracement levels which happen to be at resistance levels from earlier that day.

During regular trading hours the trades were the same as the DIA etf above, but with futures trading you can traded 24 hours a day. So with the last ETF trade I talked about earlier we only made 28 cents profit per share, but with futures we could have held this position until it fully matured netting a total gain of 40 cents per share. This is 42% more profit simply by trading with futures or CFD’s.

To make things more exciting there happened to be another fantastic trade after dinner making us another 45 cent move. These gains may not sound like much but it equals $1000 – $3000 in profits depending on what you are trading ETF’s, Futures contracts, or CFD’s.

End of the Week Trading Education and Wrap Up:
Overall this week was nothing short of awesome!
The overall market is trying to hold up but sellers continue to pull it lower. Unless there is a strong rally into the close on Friday I figure Monday will gap down because the daily charts are very scary looking. This is what makes the general public panic out as it flushes out the remaining sellers, just before the market makes a sizable bounce and possible rally to new highs.

If you are interested in getting more intraday analysis and setups be sure to join my free newsletter for Day Trading:

Chris Vermeulen
www.TheTechnicalTraders.com

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Mid-Week Charts: Gold, Silver, Oil, Nat Gas and SP500

The stock indexes have been trading very choppy making it difficult for swing/trend traders. It’s during times like this when seasoned traders rise above the herd of average traders.

If you only trade one strategy like swing trading or trend trading then you are likely finding it difficult to make money right now. On the other hand, day traders are having a blast right now as they take advantage of the powerful intraday rallies and sell offs.

I personally like swing trading but during times like this, when I know it will not work, I have to switch my strategy to day trading and focus on the 60 minute and 5 minute charts.

SP500 Index Fund – Intraday Setup
I posted this chart earlier this week and I want to be sure everyone takes something away from this chart as I believe it shows a perfect low risk setup for shorting the market, or you could buy a reverse fund which goes up as the market moves down.

At first glance this chart is noisy, but if you simply focus on the all the different color analysis separately you will notice how simple trading can be and what you should be looking for.

Red Analysis:
1. Overall market trend is down so we are looking for a short trade, signs of weakness.
2. First we see a light volume test of the previous high set earlier in the day. The low volume indicates there are not many participants in the move up and that is a weak sign.
3. Between 14:30- 15:30 we notice the price start to drift higher on very light volume. Also, the price moved up into a resistance level. This to me is a perfect setup.
4. You would sell short or buy a reverse index fund at this point hoping for the market to start selling. You could also wait until it started to drop before taking a position but when a chart looks this good I try to get in at the highest price possible.

Blue Analysis:
1. The price starts to drop forming several small bear flags going into 14:30 before bouncing. Also note the volume began to rise as more selling was happening. This tells us that trading activity is predominately selling and that we should also focus on shorting when the time is right.
2. Again, the price starts to drop forming several small bear flags going from 15:00 – 15:45 before bouncing. Also note the volume began to rise as more sellers took part in this short term trend.

Black Analysis:

1. This shows more or less the resistance level, area to short the index and the nice trend down.

Gold GLD ETF Trading
Gold has been under selling pressure since early December. That powerful drop and the chart pattern it has formed will generally resolves itself after an ABC retrace pattern. I have drawn this on the chart which is what I think will happen in the near term. This daily chart of GLD ETF has a small 4 day bear flag and bearish reversal candle which is pointing to lower prices in the near term.

Silver SLV ETF Trading
Silver has a funky looking chart. It has formed a large megaphone pattern and possible head & shoulders pattern. Both are bearish and if we use the Head & Shoulders to calculate where silver could end up trading if it continues to break down, then $14.00 would be a level to look for a bounce.

Natural Gas UNG Fund
The natural gas fund UNG has been in a down trend for over a year and the recent drop looks to be the start of another sell off. This could possibly form a reverse head & shoulders pattern with this drop moving UNG down to the $8.75 – $9.00 area. We will have to wait and watch things unfold for now.


Crude Oil USO Fund

USO looks to be trading at support. I am inclined to patiently wait another session before possibly taking a position.

Mid-Week Trading Conclusion:
In short, I feel the overall market could bounce including stocks and possibly commodities, but the selling is not over yet in my opinion. The drop we have seen in the past week is the half way mark. So this bounce would be the starting of an ABC retrace for stock indexes. During choppy times I like to be sitting in cash and or day trading for short term profits.

Precious metals do look oversold and ready for a small bounce or sideways move; I do think they will head lower. Too many traders are still holding on to their gold positions and until a large number of them get scared out of their positions, we will not see gold rocket higher.

Natural gas looks like it’s about to head much lower this week while oil looks ready for a solid bounce off support.

We continue to wait for new low risk setups as different investment scenarios unfold.

Get my Free Weekly ETF Trading Reports at www.GoldAndOilGuy.com

Chris Vermeulen

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Tis the Season to Trade the Seasonal Charts, Dow, Gold, Silver, Oil and Gas

Dec 2nd, 2009
The market has had a fantastic week so far for stocks and precious metals. The financial and energy sector are underperforming which is a concern, but we continue to hold our positions and will wait until a reversal to lock in our gains.

Things seem to be lining up for stocks and precious metals to take a breather, which is in line with the Dow Jones Seasonal chart below.

Let’s take a look…

Dow Jones ETF
You can see from looking at the chart the repeated pattern of price rallies, leading to exhaustion and a test of support, followed by another repeat of the pattern. It looks as if the broad market is setup for a test of support which could happen within 2-4 days. Then as we near the holiday prices will start to drift higher. This pattern occurs more often than not as seen on the Dow Jones Seasonal chart below.

Broad Market Holiday Rally

Broad Market Holiday Rally

Dow Jones Seasonal Trends
This chart clearly shows weakness in the first half of December and continued strength moving forward. This has not really happened in the past two years which means we are overdue for continued strength. ?

That being said, the previous two years were bear markets and we are now in a bull market. So the tendency is for buying to continue into year end.

Dow Jones Seasonal Trends

Dow Jones Seasonal Trends

GLD ETF Fund
Gold continues to push higher surprising many of us. It seems as though money is rushing into metals and buyers are not particularly concern about price. While this is great for short term traders and those of us in the trade, we must remember that the faster things go up, the quicker they correct.

Don’t get me wrong, I don’t think gold is going to crash, I just think we could get a 10% correction before moving much higher. Gold is also trading near the upper end of the trend channel and could have a 2-4 day consolidation with the broad market before pushing much higher.

GLD ETF Trading

GLD ETF Trading

SLV Exchange Traded Fund
Silver has been underperforming yellow gold but is still a solid investment. It is also trading near the upper end of the trend channel and could have a 2-4 day consolidation with the broad market.

Silver ETF Trade

Silver ETF Trade

USO & UNG Funds
Oil continues to flag from its breakout back in October. This is a bullish pattern. Last Friday we saw oil open much lower then rally back into the trend channel. This is called an outside day and many times this happens to stocks and commodities as it shakes out the weak traders before starting another rally higher. We will keep a close eye for any low risk entry point.

Natural Gas had a nice rally last week which I mentioned looks a lot like a short covering rally. The price action this week suggests it was and has now made a new low. Today on CNBC it was reported that a new source of natural gas has been discovered. This resource is 20 times larger than the biggest source in the US. Enough gas to last the US over 100 years. This added to the selling on both natural gas and oil today.

Energy ETF Newsletter

Energy ETF Newsletter

Trading Conclusion:
Precious metals continue to perform well and it’s important to note that PM stocks are now moving higher with gold. They have been lagging for some time but are on fire again. Great to see!

The Dow Jones index and several others look ready for a breather. The timing of these overbought charts bodes well for the seasonal December pause before the holiday rally. Time will tell.

Energy and financials are both underperforming the market and without their participation we will not see the indexes move much higher.

Continue to hold precious metals positions but be ready to lock in profits if we see the market reverse sharply. I am watching energy for a play but no setups at this time.

Check out my Free ETF Trading Newsletter:

Chris Vermeulen
www.TheGoldAndOilGuy.com

Chris Vermeulen & ActiveTradingPartners Open Service for Public Members

Active Trading Partners launched its brand new trading and investing commentary service on July 15th, 2009. In the short seven weeks since we launched, ATP has produced numerous stocks that have gained, 30, 40, 50, 60, and even 100%. Below are some excerpts from actual ATP research postings on our new service for Partners/Members. Most recently, we recommended JAZZ last Tuesday, 9/1/09 and it has risen as much as 63% in one week.

Are you getting quality advice, market updates, regular follow ups on your positions, and booking gains on an 80-90% success rate? If not, perhaps you should try a subscription to ActiveTradingPartners.com, where we are unmatched in our returns to partners.

We are limited to 200 subscribers and are nearly filled now, so act now. For $249.00 per month you get 8-10 new positions alerted per month, or about $25.00 per alert. With average historical returns of over 20% per recommendation. $10,000 put into each of our positions since the launch would have returned over 100 fold your $249.00 investment per month.

Samples below:

August 4th, 2009- LRR.TO/LRLMF $1.66
…Linear Gold is a micro cap gold stock, and I usually will hesitate to put these on the ATP service, but this one looks like a great value going forward, and I like the chart set up here as well…Shares outstanding are 34 million. That’s a market cap of 58 million Canadian, or less than 2x future projected net cash flows. They have 24 million in the bank, 0 debt currently, and multiple drill projects. They have leverage later on to future gold price increases, and position to acquire other projects/exploration plays. I’m not seeing a lot of downside here.
Results: Linear Gold ran to $2.28 17 days later for a 37% gain.

August 14th- CRXX- $1.05
… the “Saucer” chart is bullish because of the general sideways movement over a long period of time. This is a transfer of shareholders from old to new, re-setting a large base for the stock. A break over $1.10 could trigger a run back to $1.34 a recent spike high on good news several weeks ago. Also, there is a huge “gap” at $3.00 a share above. This means there is an air pocket where technically there are no sellers until $3.00. The only sellers will be the traders who bought recently, or buy near term. To say that I am excited by the long term prospects of this merger would be an understatement.
Results: CRXX ran to $1.34 within a few days for a 25% gain. It has since risen as high as $1.92 on September 1st, for a 75% gain in 3 weeks for ATP.

August 18th- VICL- $3.35
…with Federated Kauffman paying $3.63 a share just a few weeks ago for 3 million shares, they brought their total to 5.4 million shares. The stock has drifted down and volume has dropped from a 90 day average of over 1 million to just 350,000 or so a day lately. This normally precedes a shift in sentiment and price movement, quite simply the crowd has moved on.
We have an ATP proprietary “Fibonacci Intersection” on Aug 17th, and to ATP it means the stock bottoms around that time and it’s time to start accumulating positions… A break over $3.40 will probably start a new bull trend in the stock.
Results: On September 3rd, 16 days later, VICL hit $5.40 for a 61% gain

August 20th- SPPI- $6.27
SPPI- …When the stock hit 6.05 earlier this week, it was at the bottom of proprietary indicators I have developed as reliable for pivots. I mentioned earlier this week that I had picked some up at 6.12 and 6.15. This afternoon I was an aggressive buyer at a 6.27 average per share and building a position… The chart appears to be very bullish and very oversold at the same time. If I was to hazard a guess, I would see a move up to 6.80-6.90 again, then a pullback, and then a breakout over 7 with a run.
Results: On September 4th, SPPI hit $9.00 a share for a 43% gain in two weeks.

September 1st- JAZZ $7.29
The stock closed 8/31/09 at $7.29 a share and has been in a general trading range for about 5 weeks now. We also have a 5 day reverse head and shoulder pattern, often a leading indicator of a move up. ATP research would not be surprised to see a move towards $10.00 per share over the intermediate time period.
Results: On September 4th, Jazz soared over $10.00 per share for a 40% plus gain in 3 trading days for ATP

September 2nd- RINO $12.60
…accumulating a position in RINO here in the 12.50-12.90 window. The volume has completely dried up on the stock after the recent run from mid 10.70 to 14.88. The pullback is a typical “B Wave” pullback in an “A-B-C’ move to the upside. This actually retraced a perfect Fibonacci 61% retracement of the recent swing move up… The valuation remains very cheap, the company is very under-followed.

Results: Stock closed at $14.27 the next day as Rodman and Renshaw initiated coverage with a $22 target. 13% return in 24 hours.

Please visit our website for more information: www.ActiveTradingPartners.com
Chris Vermeulen

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Gold, Silver & Energy Commentary Update Wed Morning

PRECIOUS METALS 

February gold closed higher on Tuesday due to short covering as it consolidated some of Monday’s decline. The high-range close sets the stage for a steady to higher opening on Wednesday. Despite today’s rebound, stochastics and the RSI have turned bearish signaling that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 844.10 are needed to confirm that a top has been posted. If February extends this fall’s rally, October’s high crossing at 938.80 is the next upside target. First sesistance is last Monday’s high crossing at 892.00. Second resistance is October’s high crossing at 938.80. First support is the 20-day moving average crossing at 844.10. Second support is today’s low crossing at 838.80.

March silver posted an inside day with a higher close on Tuesday as it consolidates some of Monday’s decline. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off October’s low, the reaction high crossing at 12.230 is the next upside target. Closes below the 20-day moving average crossing at 10.735 are needed to confirm that a short-term top has been posted. First resistance is Monday’s high crossing at 11.770. Second resistance is the reaction high crossing at 12.230.
First support is the 10-day moving average crossing at 10.930. Second support is the 20-day moving average crossing at
10.735. 

ENERGY MARKETS 

February crude oil closed slightly lower on Tuesday due to light profit taking as it consolidated some of the rally off December’s low. Today’s mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If February extends this month’s rally, the reaction high crossing at 52.95 is the next upside target. Closes above the reaction high crossing at 52.95 are needed to confirm that a short-term low has been posted. Closes below last Wednesday’s low crossing at 36.94 would temper the near-term friendly outlook in
the market. First resistance is today’s high crossing at 50.47. Second resistance is the reaction high crossing at 52.95. First support is the 20-day moving average crossing at 43.96. Second support is the 10-day moving average crossing at 41.94.

Click Here to Read My Special Report: http://www.thegoldandoilguy.com/goldandoilnewsletterjan2.php 

Chris Vermeulen