With 2012 now behind us it’s time to start looking for some new long term investments which have big potential gains in the new year. Copper is one metal that has caught my eye.
The long term monthly chart of the copper ETF JJC shows a potential cup and handle pattern accompanied with bullish volume characteristics. Last year copper traded sideways in a narrowing range. This type of price action tends to bore traders and investors forcing them to look elsewhere for new to trades. The saying is “If the market doesn’t shake you out, it will wait you out”
You can see on the monthly chart that the interest in this commodity diminished. You can tell because of the sideways movement and declining volume. I like to focus on investments which are out of favor but are showing signs of another big trend starting. getting on the train before it leaves the station can make for a fun ride.
Just click here to take a look at the charts, analysis and our best copper stock setup
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Monday, December 31, 2012
Sunday, December 30, 2012
2013 Forecast – Tis The Season To Drink & Own Coffee
It's always time for coffee, but today Chris Vermeulen shares his coffee trade with us.....
Coffee prices have fallen more than 50% since 2010 which can be seen through the coffee exchange traded fund symbol: JO. This investment seeks to replicate the returns that are potentially available through an unleveraged investment in coffee futures contracts as well as the rate of interest that could be earned on cash collateral invested in specified Treasury Bills.
Weekly, Hourly and Seasonal chart of JO Coffee Exchange Traded Fund
The top weekly chart shows my price targets for 2013 while the lower hourly chart shows strong on balance volume meaning big money is slowly building a long position in coffee. The small white chart is the seasonal chart of coffee futures showing prices historically rise from January–March, then a correction followed by another rally in to May.
Coffee prices are still in a down trend but it looks as though the end is near and if played properly it could provide up to 100% return on your capital in 2013.
Coffee Futures Monthly Long Term Chart
This chart gives you a bird’s eye view on where coffee prices are trading in the big picture scheme of things.
JO Coffee ETF VS. SBUX Starbucks Share Price:
Lower coffee bean prices has helped lift share prices of coffee companies like Starbucks: SBUX, Coffee Holdings Co.: JVA, Coffee Roasters Inc.: GMCR, and PEET’s Coffee: PEET. But cheap coffee may not be around that much longer and the lower earnings for coffee brewers may be closer than most may think.
2013 Caffeine Conclusion:
In short, I have been watching coffee prices for a bottoming pattern for months and I now feel it is getting really close to a bottom and it could be a great trade and investment in the new year. As for companies like Starbucks it will likely not have much of an affect on the bottom line until the second half of the year though it is something to keep an eye on during earning seasons.
If you want my trading and investing ideas each week along with trade alerts for ideas like this then join my newsletter today at The Gold & Oil Guy.com
Chris Vermeulen
Get our Free Trading Videos, Lessons and eBook today!
Coffee prices have fallen more than 50% since 2010 which can be seen through the coffee exchange traded fund symbol: JO. This investment seeks to replicate the returns that are potentially available through an unleveraged investment in coffee futures contracts as well as the rate of interest that could be earned on cash collateral invested in specified Treasury Bills.
Weekly, Hourly and Seasonal chart of JO Coffee Exchange Traded Fund
The top weekly chart shows my price targets for 2013 while the lower hourly chart shows strong on balance volume meaning big money is slowly building a long position in coffee. The small white chart is the seasonal chart of coffee futures showing prices historically rise from January–March, then a correction followed by another rally in to May.
Coffee prices are still in a down trend but it looks as though the end is near and if played properly it could provide up to 100% return on your capital in 2013.
Coffee Futures Monthly Long Term Chart
This chart gives you a bird’s eye view on where coffee prices are trading in the big picture scheme of things.
JO Coffee ETF VS. SBUX Starbucks Share Price:
Lower coffee bean prices has helped lift share prices of coffee companies like Starbucks: SBUX, Coffee Holdings Co.: JVA, Coffee Roasters Inc.: GMCR, and PEET’s Coffee: PEET. But cheap coffee may not be around that much longer and the lower earnings for coffee brewers may be closer than most may think.
2013 Caffeine Conclusion:
In short, I have been watching coffee prices for a bottoming pattern for months and I now feel it is getting really close to a bottom and it could be a great trade and investment in the new year. As for companies like Starbucks it will likely not have much of an affect on the bottom line until the second half of the year though it is something to keep an eye on during earning seasons.
If you want my trading and investing ideas each week along with trade alerts for ideas like this then join my newsletter today at The Gold & Oil Guy.com
Chris Vermeulen
Get our Free Trading Videos, Lessons and eBook today!
Friday, December 28, 2012
B Wave the Seminal Event, blink and you miss it and the C wave up
Today's post comes from David Banister of The Active Trading Partners.com.......
The work at my firm centers firmly around a combination of fundamentals and catalysts, and crowd behavior. Yes, it’s crucial to understand herd mentality if you want to consistently enter profitable swing trades at the right time and price. The Seminal event is analogous to what is called “the tipping point” in a new development stage of a company. Learning to spot the pullback during this seminal event period and pouncing is crucial to making big money in the market.
This seminal event trading pattern I often call the ABC pattern, and we are looking to get long during the “B” wave portion of that 3 wave rally. This B wave is where you get a combination of traders taking profits from the A wave rally as it begins to fade a bit. Along with those profit takers come the late stage buyers who chase price action and therefore often fail in their trading. They often end up stopping out as the B wave progresses, or they get margin called as the B wave decline takes hold.
If you want to become a better swing trader, learn to be patient and not chase the A wave rally. Often a tipping point development is announced and a spike rally ensues, then the buzz picks up online and traders come in and chase the top end of the A wave spike. What you want to learn is to sit on your hands and let the gas run out of the A wave, let the B wave pullback begin… and then slowly scale into your position as traders exit out not believing the move up will hold.
Samples of this are Research in Motion, Nokia, and recently Vivus. We played RIMM and VVUS at my firm and recommended to our subscribers during the B waves. All of those companies were in the down and out mode, sentiment was negative, but then a seminal event took place that sparked an A wave rally to the upside. The early traders rightly take their profits quickly leaving scraps for the chasers. The chasers end up taking losses during the digestive period of the B wave consolidation, which takes many forms on a chart. The smart money then aggressively accumulates the B wave consolidation and profits from the C wave which can be 150-260% bigger than the A wave rally. It’s where the crowd really catches on in a light bulb moment of recognition that this time things are in fact changing fundamentally for the company in question.
Learn to recognize those “seminal events” where the A wave rally takes off, avoid chasing it, then pounce and scale long on the B wave correction. Below are some samples of the ABC pattern.
You can get all of David Banister's public post by joining him at The Active Trading Partners to benefit from swing trades, crowd behavior, and fundamental catalyst patterns.
The work at my firm centers firmly around a combination of fundamentals and catalysts, and crowd behavior. Yes, it’s crucial to understand herd mentality if you want to consistently enter profitable swing trades at the right time and price. The Seminal event is analogous to what is called “the tipping point” in a new development stage of a company. Learning to spot the pullback during this seminal event period and pouncing is crucial to making big money in the market.
This seminal event trading pattern I often call the ABC pattern, and we are looking to get long during the “B” wave portion of that 3 wave rally. This B wave is where you get a combination of traders taking profits from the A wave rally as it begins to fade a bit. Along with those profit takers come the late stage buyers who chase price action and therefore often fail in their trading. They often end up stopping out as the B wave progresses, or they get margin called as the B wave decline takes hold.
If you want to become a better swing trader, learn to be patient and not chase the A wave rally. Often a tipping point development is announced and a spike rally ensues, then the buzz picks up online and traders come in and chase the top end of the A wave spike. What you want to learn is to sit on your hands and let the gas run out of the A wave, let the B wave pullback begin… and then slowly scale into your position as traders exit out not believing the move up will hold.
Samples of this are Research in Motion, Nokia, and recently Vivus. We played RIMM and VVUS at my firm and recommended to our subscribers during the B waves. All of those companies were in the down and out mode, sentiment was negative, but then a seminal event took place that sparked an A wave rally to the upside. The early traders rightly take their profits quickly leaving scraps for the chasers. The chasers end up taking losses during the digestive period of the B wave consolidation, which takes many forms on a chart. The smart money then aggressively accumulates the B wave consolidation and profits from the C wave which can be 150-260% bigger than the A wave rally. It’s where the crowd really catches on in a light bulb moment of recognition that this time things are in fact changing fundamentally for the company in question.
Learn to recognize those “seminal events” where the A wave rally takes off, avoid chasing it, then pounce and scale long on the B wave correction. Below are some samples of the ABC pattern.
You can get all of David Banister's public post by joining him at The Active Trading Partners to benefit from swing trades, crowd behavior, and fundamental catalyst patterns.
Saturday, December 22, 2012
Using a Put Butterfly to Trade Cummins CMI
Today's trade on Cummins comes to us from staffer J.W. Jones....
Entomologists tell us that a group of butterflies can, at the choice of the writer, be termed a lek, a rabble, or a swarm. I was first struck today by the bearish Fibonacci based pattern initially described by Larry Pesavento termed a bearish butterfly which had completed in heavy engine manufacturer Cummins Incorporated (symbol CMI).
As improbable as it might be, I was pleased to find that a high probability option structure that could be used to trade it, the put butterfly. I thought it would be interesting to examine for educational value this rabble.
First, let’s look at the chart pattern. The price pattern termed a butterfly is a high probability reversal pattern that can occur in both bullish and bearish configurations. It is a variant of a two step pattern and also a variant of a more commonly known Fibonacci pattern, the Gartley.
The essential elements of the pattern are an initial impulsive thrust (classically termed the X:A leg), a reversal of 0.618 to 1.00 of the initial thrust (the A:B leg), a second thrust in the direction of the initial leg (the B:C leg), and the final reversal thrust opposite in direction from the initial X:A leg extending from 1.272 to 1.618 of the initial leg.
Verbal descriptions are confusing, but consider the characteristic visual pattern which is easily recognized once the trader is familiar with the pattern.
The pattern completed last Friday as indicated on the graph, and today’s bearish candle constitutes a trigger for the trade. These patterns have approximately a 67% probability of success.
The option position I chose to trade this pattern is that of a classic put butterfly. For those not familiar with this structure it is a three legged structure that is composed of long positions for the wings and a short position for the body.
The classic butterfly is always constructed in the ratio +1/-2/+1 and the long positions are equi-distant from the short position comprising the body. The position is a debit position meaning that money is deducted from the buying power of the account.
An option butterfly can be constructed using either puts or calls. It is important to understand that the maximum profitability of these trade structures occurs when price is at the strike of the body at expiration. Therefore, if an individual butterfly is constructed to express a directional bias, it can be constructed using either puts or calls since the strike price of the body determines maximum profitability.
As an aside, variations of a classic butterfly do exist. Two commonly encountered variants are an iron butterfly and a broken wing butterfly. The iron butterfly is a credit trade and is constructed using both puts and calls.
The broken wing butterfly is built by buying the long options at different distances from the central body. We will discuss these less common positions as different trading opportunities are presented to us.
To return to our current situation in CMI, I chose a put butterfly using the 90/100/110 strike prices in the January series. I chose January because December expiration is only a few days away, and butterflies work best when given a bit of duration.
Had weekly options been available for this underlying, I likely would have chosen to use them in order to tailor the time frame a bit shorter to allow a faster response to changes in P&L.
The P&L graph of this put butterfly is presented below.
Pay particular attention to the intermediate time curves indicated by the two broken lines in relation to the expiration curve indicated by the solid blue line. The broken lines represent the P&L today (the lower broken line) and halfway to expiration (the higher broken line). Note that the butterfly only reaches its maximum profitability at expiration.
Another characteristic is the difference in slope of the intermediate and expiration lines. While the intermediate time frames react gently to changes in price, the pace of reaction to price change increases dramatically as expiration approaches.
It is for this reason that many option traders routinely close their butterfly positions ahead of expiration. Most experienced butterfly traders do not allow their positions to go to expiration because of the position risk with adverse price moves.
We welcome you to try our service to learn about more high probability trade set ups and option positions to extract potential profits while defining risk precisely.
J.W. Jones
Entomologists tell us that a group of butterflies can, at the choice of the writer, be termed a lek, a rabble, or a swarm. I was first struck today by the bearish Fibonacci based pattern initially described by Larry Pesavento termed a bearish butterfly which had completed in heavy engine manufacturer Cummins Incorporated (symbol CMI).
As improbable as it might be, I was pleased to find that a high probability option structure that could be used to trade it, the put butterfly. I thought it would be interesting to examine for educational value this rabble.
First, let’s look at the chart pattern. The price pattern termed a butterfly is a high probability reversal pattern that can occur in both bullish and bearish configurations. It is a variant of a two step pattern and also a variant of a more commonly known Fibonacci pattern, the Gartley.
The essential elements of the pattern are an initial impulsive thrust (classically termed the X:A leg), a reversal of 0.618 to 1.00 of the initial thrust (the A:B leg), a second thrust in the direction of the initial leg (the B:C leg), and the final reversal thrust opposite in direction from the initial X:A leg extending from 1.272 to 1.618 of the initial leg.
Verbal descriptions are confusing, but consider the characteristic visual pattern which is easily recognized once the trader is familiar with the pattern.
The pattern completed last Friday as indicated on the graph, and today’s bearish candle constitutes a trigger for the trade. These patterns have approximately a 67% probability of success.
The option position I chose to trade this pattern is that of a classic put butterfly. For those not familiar with this structure it is a three legged structure that is composed of long positions for the wings and a short position for the body.
The classic butterfly is always constructed in the ratio +1/-2/+1 and the long positions are equi-distant from the short position comprising the body. The position is a debit position meaning that money is deducted from the buying power of the account.
An option butterfly can be constructed using either puts or calls. It is important to understand that the maximum profitability of these trade structures occurs when price is at the strike of the body at expiration. Therefore, if an individual butterfly is constructed to express a directional bias, it can be constructed using either puts or calls since the strike price of the body determines maximum profitability.
As an aside, variations of a classic butterfly do exist. Two commonly encountered variants are an iron butterfly and a broken wing butterfly. The iron butterfly is a credit trade and is constructed using both puts and calls.
The broken wing butterfly is built by buying the long options at different distances from the central body. We will discuss these less common positions as different trading opportunities are presented to us.
To return to our current situation in CMI, I chose a put butterfly using the 90/100/110 strike prices in the January series. I chose January because December expiration is only a few days away, and butterflies work best when given a bit of duration.
Had weekly options been available for this underlying, I likely would have chosen to use them in order to tailor the time frame a bit shorter to allow a faster response to changes in P&L.
The P&L graph of this put butterfly is presented below.
Pay particular attention to the intermediate time curves indicated by the two broken lines in relation to the expiration curve indicated by the solid blue line. The broken lines represent the P&L today (the lower broken line) and halfway to expiration (the higher broken line). Note that the butterfly only reaches its maximum profitability at expiration.
Another characteristic is the difference in slope of the intermediate and expiration lines. While the intermediate time frames react gently to changes in price, the pace of reaction to price change increases dramatically as expiration approaches.
It is for this reason that many option traders routinely close their butterfly positions ahead of expiration. Most experienced butterfly traders do not allow their positions to go to expiration because of the position risk with adverse price moves.
We welcome you to try our service to learn about more high probability trade set ups and option positions to extract potential profits while defining risk precisely.
J.W. Jones
Wednesday, December 19, 2012
Trading the ABC Sentiment Shifts Ahead Of The Crowd
Today David Banister shows us how to spot the 3 day rest B wave for profits......
One of the most obvious keys to successful trading or investing is buying low and selling high. The problem being if it was that easy to pinpoint those low and high points then all traders would be batting 1000%. What we use at my ATP service is a combination of fundamental analysis and catalyst spotting inter-twined with charting techniques. Most of our work revolves around buying substantial dips in a strong stock, 3x ETF’s, or reversal patterns. 3x ETF’s are great for short term swings as they function almost exclusively on crowd behavioral patterns, but it also applies to individual stocks.
In all cases what traders really need to spot ahead of the masses of investors is a subtle shift in sentiment. That key pivot point where the negative sentiment whether it be short term or long term is about to run out of gas, and the bullish sentiment is going to take over and reverse the stock or ETF higher or break the position out of a base pattern.
One of the most common patterns amongst many that we use as trigger points is the ABC pattern. This is a situation where the stock or ETF recently had a strong run. That run produced a flurry of over optimistic sentiment and is reflected in the high spike in the stock from the prior base. We call this the “A Wave High” pivot point. This is where many of the traders who chase short term performance come in with a bang, right near the top.
Read Banisters complete article "Trading the ABC Sentiment Shifts Ahead Of The Crowd"
Get our Free Trading Videos, Lessons and eBook today!
One of the most obvious keys to successful trading or investing is buying low and selling high. The problem being if it was that easy to pinpoint those low and high points then all traders would be batting 1000%. What we use at my ATP service is a combination of fundamental analysis and catalyst spotting inter-twined with charting techniques. Most of our work revolves around buying substantial dips in a strong stock, 3x ETF’s, or reversal patterns. 3x ETF’s are great for short term swings as they function almost exclusively on crowd behavioral patterns, but it also applies to individual stocks.
In all cases what traders really need to spot ahead of the masses of investors is a subtle shift in sentiment. That key pivot point where the negative sentiment whether it be short term or long term is about to run out of gas, and the bullish sentiment is going to take over and reverse the stock or ETF higher or break the position out of a base pattern.
One of the most common patterns amongst many that we use as trigger points is the ABC pattern. This is a situation where the stock or ETF recently had a strong run. That run produced a flurry of over optimistic sentiment and is reflected in the high spike in the stock from the prior base. We call this the “A Wave High” pivot point. This is where many of the traders who chase short term performance come in with a bang, right near the top.
Read Banisters complete article "Trading the ABC Sentiment Shifts Ahead Of The Crowd"
Get our Free Trading Videos, Lessons and eBook today!
Sunday, December 16, 2012
Getting Coal in Your Stocking May Be Exactly What You Want
Looks like the guys at The Gold & Oil Guy.com are working through the weekend as staffer Chris Vermeulen is bringing us yet another great trade to get Mondays trading off to a good start.....
We all want new and exciting electronic gizmos and gadgets for the holiday season. Unfortunately they have the tendency to lose almost all their value within weeks because of newer versions etc… but what if you just got a lump of dirty old coal in your stocking, how would you feel?
The only individuals who would appreciate a dirty gift like that would be those forward looking investors who see major opportunities before they become the next big movers and headline news.
Knowing how to spot Stage 1 patterns is one of the most important bits of information you need to know as an investor. This one pattern is how I found RIMM which now up 100% in the past 30 days, ANR up 30% in two weeks, FSLR up 20% in 20 days and the list goes on. My main focus is on ETFs because of lower risk they provide but very powerful when applied to individual stocks.
Coal and coal stocks have been out of favor for almost two years now. But these unwanted and hated shares may soon be owned by the masses, or at least by traders and investors. A few weeks ago to I talked about the four stages all investments go through and which patters you must be able to spot in order to make huge money investing while having very limited downside risk.
In summary, Trade with the BIG BOARD and only focusing on buying stocks, ETFs etc… as they are coming out of a Stage 1 Accumulation Basing Pattern. This puts the odds greatly in your favor for not only winning the majority of your trades but to generate above average returns.
The New York Stock Exchange is the big board. This chart formed a reversal candle last week which points to lower prices. Its likely we see a 1-2 week dip before buyers step back in. Until then individual stocks should pause or form mini bull flags until the sellers are finished and buyers step back into risk on assets (equities).
Coal stocks have been bouncing bottom for some time and if you did not review the Stages Report using the link above then do so now so you know what to expect in detail.
KOL coal exchange traded fund is a basket of coal companies and is starting to show signs of a new bull market. A breakout and close above $26.00 should trigger strong buying with the potential of a 21% gain before it hits my first price target. This could go way past that but one target at a time folks.
Naturally I would like to see a bull flag or pause in KOL over the next couple weeks, then look to get long using the pivot low of that pause/bull flag as my protective stop. I’m not jumping in here as the broad market looks ready to correct and ¾ stocks follow the big board which will pull KOL down.
I pointed out ANR at $7.50 at the beginning of December to followers as it was the best looking coal stock I could find. The two key indicators “Price” and “Volume” were clearly pointing to higher prices and the potential gain even if it was just played up to the Stage 1 Resistance Level still netted a 30% move. Crazy part is that there is the potential for a 100% rally to my first price target.
In short, I really like the coal sector for the first quarter of 2013. I’m not too worried about the fiscal cliff as it’s not the end of the world and the US along with most other countries are all bankrupt together in my opinion. New rules and ideas will be implemented and life and business will continue… I am not to worried.
I am expecting stocks to continue sideways or higher into May at which time a serious correction could take place. But not to worry as we take things one week at time and will be adjusting my outlook accordingly.
Just click here to Get My Trade Ideas & alerts delivered to your inbox. Visit the The Gold & Oil Guy
Chris Vermeulen
Get our Free Trading Videos, Lessons and eBook today!
We all want new and exciting electronic gizmos and gadgets for the holiday season. Unfortunately they have the tendency to lose almost all their value within weeks because of newer versions etc… but what if you just got a lump of dirty old coal in your stocking, how would you feel?
The only individuals who would appreciate a dirty gift like that would be those forward looking investors who see major opportunities before they become the next big movers and headline news.
Knowing how to spot Stage 1 patterns is one of the most important bits of information you need to know as an investor. This one pattern is how I found RIMM which now up 100% in the past 30 days, ANR up 30% in two weeks, FSLR up 20% in 20 days and the list goes on. My main focus is on ETFs because of lower risk they provide but very powerful when applied to individual stocks.
Coal and coal stocks have been out of favor for almost two years now. But these unwanted and hated shares may soon be owned by the masses, or at least by traders and investors. A few weeks ago to I talked about the four stages all investments go through and which patters you must be able to spot in order to make huge money investing while having very limited downside risk.
In summary, Trade with the BIG BOARD and only focusing on buying stocks, ETFs etc… as they are coming out of a Stage 1 Accumulation Basing Pattern. This puts the odds greatly in your favor for not only winning the majority of your trades but to generate above average returns.
The BIG BOARD – NYSE – Weekly Major Stock Market Trend
The New York Stock Exchange is the big board. This chart formed a reversal candle last week which points to lower prices. Its likely we see a 1-2 week dip before buyers step back in. Until then individual stocks should pause or form mini bull flags until the sellers are finished and buyers step back into risk on assets (equities).
Coal Sector ETF Showing Stage 1 Basing Pattern
Coal stocks have been bouncing bottom for some time and if you did not review the Stages Report using the link above then do so now so you know what to expect in detail.
KOL coal exchange traded fund is a basket of coal companies and is starting to show signs of a new bull market. A breakout and close above $26.00 should trigger strong buying with the potential of a 21% gain before it hits my first price target. This could go way past that but one target at a time folks.
Naturally I would like to see a bull flag or pause in KOL over the next couple weeks, then look to get long using the pivot low of that pause/bull flag as my protective stop. I’m not jumping in here as the broad market looks ready to correct and ¾ stocks follow the big board which will pull KOL down.
ANR – My Top Coal Stock Pick
I pointed out ANR at $7.50 at the beginning of December to followers as it was the best looking coal stock I could find. The two key indicators “Price” and “Volume” were clearly pointing to higher prices and the potential gain even if it was just played up to the Stage 1 Resistance Level still netted a 30% move. Crazy part is that there is the potential for a 100% rally to my first price target.
You want Gizmos or Coal in You’re Stocking???
In short, I really like the coal sector for the first quarter of 2013. I’m not too worried about the fiscal cliff as it’s not the end of the world and the US along with most other countries are all bankrupt together in my opinion. New rules and ideas will be implemented and life and business will continue… I am not to worried.
I am expecting stocks to continue sideways or higher into May at which time a serious correction could take place. But not to worry as we take things one week at time and will be adjusting my outlook accordingly.
Just click here to Get My Trade Ideas & alerts delivered to your inbox. Visit the The Gold & Oil Guy
Chris Vermeulen
Get our Free Trading Videos, Lessons and eBook today!
Thursday, December 13, 2012
Mid week trades to focus on .... SPX, U.S. Dollar and Natural Gas
Yesterday’s price action was very bearish yet again and we are patiently waiting for a counter trend pullback to happen. While three are some good looking plays out there I really do not want to get long until the market clears the air with a bout or three of strong selling. Remember 3:4 stocks follow the market and the odds of picking a commodity or ETF that bucks the trend is unlikely.
SP500 / Broad Stock Market
We have seen a bug run up in stocks this month and things are looking a little long in the teeth. A large number of stocks are trading above their upper Bollinger band and the broad market is testing that key resistance level also. Typically when a Bollinger band is reached we see price reverse for a couple days at minimum.
While the equities market is in a new uptrend as seen by the moving averages I pullback seems imminient. The last two days has formed reversal candles and are pointing to lower prices.
Dollar Index Hourly Chart
This chart shows a possible bottom forming in the dollar pointing to a 3-8 day pullback in stocks.
Gold Futures Hourly Chart
Natural Gas Hourly Chart
Morning Trading Conclusion
Looking at the charts on several different time frames, not all shown here, technical analysis shows a pullback in stocks is highly likely. This is what we are currently positioned for.
The US dollars downward momentum is slowing and if it can find a bid today it should trigger strong selling in both stocks and commodities. Gold and silver are down sharply along with miners.
We have been watching natural gas for a few months and know that it has been trading inverse to what stocks do. This bodes well for a bounce in natural gas if stocks start a sell off. That being said, natural gas is trading at a key tipping point that could spark a very fast and hard drop. This knife can fall at a speed that will take a slice out of your trading account if not traded and managed properly (tiny position and use of a stop). I actually like natural gas the more it moves down and could issue a buy alert on it today or this week. I would like to see volume decline at this level showing the momentum is slowing......
Chris Vermeulen
Just click here to get Chris Vermeulens ETF Trade Alerts in your inbox
Also, get our Free Trading Videos, Lessons and eBook today!
SP500 / Broad Stock Market
We have seen a bug run up in stocks this month and things are looking a little long in the teeth. A large number of stocks are trading above their upper Bollinger band and the broad market is testing that key resistance level also. Typically when a Bollinger band is reached we see price reverse for a couple days at minimum.
While the equities market is in a new uptrend as seen by the moving averages I pullback seems imminient. The last two days has formed reversal candles and are pointing to lower prices.
Dollar Index Hourly Chart
This chart shows a possible bottom forming in the dollar pointing to a 3-8 day pullback in stocks.
Gold Futures Hourly Chart
Natural Gas Hourly Chart
Morning Trading Conclusion
Looking at the charts on several different time frames, not all shown here, technical analysis shows a pullback in stocks is highly likely. This is what we are currently positioned for.
The US dollars downward momentum is slowing and if it can find a bid today it should trigger strong selling in both stocks and commodities. Gold and silver are down sharply along with miners.
We have been watching natural gas for a few months and know that it has been trading inverse to what stocks do. This bodes well for a bounce in natural gas if stocks start a sell off. That being said, natural gas is trading at a key tipping point that could spark a very fast and hard drop. This knife can fall at a speed that will take a slice out of your trading account if not traded and managed properly (tiny position and use of a stop). I actually like natural gas the more it moves down and could issue a buy alert on it today or this week. I would like to see volume decline at this level showing the momentum is slowing......
Chris Vermeulen
Just click here to get Chris Vermeulens ETF Trade Alerts in your inbox
Also, get our Free Trading Videos, Lessons and eBook today!
Monday, December 10, 2012
Is this "an emerging low" in gold stocks?
Gold stocks have been in another recent downtrend, which makes sense during a “wave 2″ correction in GOLD.
If we review the GDX ETF for Gold Stocks we can see a possible triple bottom formation. This one though looks bullish for a reversal trade to the upside near term as GOLD forms a C wave bottom.
This triple bottom looks like a series of higher lows should the 43-44 GDX ranges hold near term. The MACD line is still trending down, but in very oversold territory as in the prior two lows that had massive rallies.
Ways to play a reversal for the aggressive stock investor is NUGT ETF, which is a 300% long leveraged ETF based loosely on the GDX ETF (1x).
The specific timing of entering NUGT is of course tricky and best saved for our ATP trading service. That said, assuming GOLD does bottom at 1681 or 1631 near term, the GOLD stocks tend to lead the metal higher.… so they will bottom BEFORE the metal.
Here is the GDX long term chart showing what looks like an emerging Tradeable low...
Learn more about our trading partners, ATP, at The Active Trading Partners and click here to review recent samples here.
Get our Free Trading Videos, Lessons and eBook today!
If we review the GDX ETF for Gold Stocks we can see a possible triple bottom formation. This one though looks bullish for a reversal trade to the upside near term as GOLD forms a C wave bottom.
This triple bottom looks like a series of higher lows should the 43-44 GDX ranges hold near term. The MACD line is still trending down, but in very oversold territory as in the prior two lows that had massive rallies.
Ways to play a reversal for the aggressive stock investor is NUGT ETF, which is a 300% long leveraged ETF based loosely on the GDX ETF (1x).
The specific timing of entering NUGT is of course tricky and best saved for our ATP trading service. That said, assuming GOLD does bottom at 1681 or 1631 near term, the GOLD stocks tend to lead the metal higher.… so they will bottom BEFORE the metal.
Here is the GDX long term chart showing what looks like an emerging Tradeable low...
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Friday, December 7, 2012
What the VIX Term Structure is Saying About the Fiscal Cliff
The past few weeks have been full of a constant barrage of press conferences and public statements from the charlatans in Washington D.C. Politicians cannot pass up a chance to get in front of the cameras and the media has used the “fiscal cliff” as a mechanism to scare average Americans further about their future.
Interestingly enough, amid all of the nonsense that has been going on stocks have remained resilient. I think sometimes its important to just step back away from the media’s noise and just look at some price charts for more clarity. The S&P 500 Index has been trading in a relatively tight range now for over 6 trading sessions as shown here by the great staff at The Technical Traders.com......
Read "What the VIX Term Structure is Saying About the Fiscal Cliff"
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Interestingly enough, amid all of the nonsense that has been going on stocks have remained resilient. I think sometimes its important to just step back away from the media’s noise and just look at some price charts for more clarity. The S&P 500 Index has been trading in a relatively tight range now for over 6 trading sessions as shown here by the great staff at The Technical Traders.com......
Read "What the VIX Term Structure is Saying About the Fiscal Cliff"
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Thursday, December 6, 2012
Energy Sector Storm Brewing – Oil & Gas Stocks
From Chris Vermeulen of The Gold & Oil Guy.com .....
Oil and gas along with their equities have been under performing for the most part of 2012 and they are still under heavy selling pressure.
I watch the oil futures chart very closely for price and volume action. And the one thing that is clear for oil is that big sellers are still unloading copious amounts of contracts which is keeping the price from moving higher. Oil is trading in a very large range and is trending its way back down the lower reversal zone currently. Once price reverses back up and starts heading towards the $100 and $105 levels it will trigger strong buying across the entire energy sector.
Crude Oil, Energy & Utility Sector Chart – Weekly Time Frame
The chart below shows the light crude oil price along with the energy and utilities sectors. The patterns on the chart are clearly pointing to higher prices but the price of oil must shows signs of strength before that will happen. Once XLE & XLU prices break above their upper resistance levels (blue dotted line) they should takeoff and provide double digit returns.
Looking at the XLU utilities sector above I am sure you noticed the steady rise in the price the last couple of years. This was a result in the low interest rates in bond price and a shift from investors looking for higher yields for their money. Utility stocks carry below average risk in the world of equities and pay out a steady and healthy dividend year after year. So this is where long term investment capital has/is being parked for the time being.
Utility Stock Sector – Deeper Look – 2 Hour Candle Chart Time Frame
Last week I covered utility stocks in detail showing you the Stage 1 – Accumulation base which they had formed. The chart below shows the recent price action on the 2 hour candle chart and recent run up. You can learn more about how to take advantage of this sector here.
Oil and Gas Services – Daily Time Frame
This chart shows a very bullish picture for the services along with its relative strength to oil (USO) at the bottom. While the sector looks a little overbought here on the short term chart, overall it’s pointing to much higher prices.
Energy Sector Conclusion:
In short, crude oil looks to be trading in a VERY large range without any sign a breakout above or below its channel lines for several months at the minimum. But if the lower channel line is reached and oil starts to trend up then these energy related sector ETFs should post some very large gains and should not be ignored.
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Chris Vermeulen
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Oil and gas along with their equities have been under performing for the most part of 2012 and they are still under heavy selling pressure.
I watch the oil futures chart very closely for price and volume action. And the one thing that is clear for oil is that big sellers are still unloading copious amounts of contracts which is keeping the price from moving higher. Oil is trading in a very large range and is trending its way back down the lower reversal zone currently. Once price reverses back up and starts heading towards the $100 and $105 levels it will trigger strong buying across the entire energy sector.
Crude Oil, Energy & Utility Sector Chart – Weekly Time Frame
The chart below shows the light crude oil price along with the energy and utilities sectors. The patterns on the chart are clearly pointing to higher prices but the price of oil must shows signs of strength before that will happen. Once XLE & XLU prices break above their upper resistance levels (blue dotted line) they should takeoff and provide double digit returns.
Looking at the XLU utilities sector above I am sure you noticed the steady rise in the price the last couple of years. This was a result in the low interest rates in bond price and a shift from investors looking for higher yields for their money. Utility stocks carry below average risk in the world of equities and pay out a steady and healthy dividend year after year. So this is where long term investment capital has/is being parked for the time being.
Utility Stock Sector – Deeper Look – 2 Hour Candle Chart Time Frame
Last week I covered utility stocks in detail showing you the Stage 1 – Accumulation base which they had formed. The chart below shows the recent price action on the 2 hour candle chart and recent run up. You can learn more about how to take advantage of this sector here.
Oil and Gas Services – Daily Time Frame
This chart shows a very bullish picture for the services along with its relative strength to oil (USO) at the bottom. While the sector looks a little overbought here on the short term chart, overall it’s pointing to much higher prices.
Energy Sector Conclusion:
In short, crude oil looks to be trading in a VERY large range without any sign a breakout above or below its channel lines for several months at the minimum. But if the lower channel line is reached and oil starts to trend up then these energy related sector ETFs should post some very large gains and should not be ignored.
Get These Weekly Trade/Investment Ideas In Your Inbox FREE by visiting here at The Gold & Oil Guy.com
Chris Vermeulen
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Wednesday, December 5, 2012
Gold Should Be Nearing A Major Bottom
The recent rally in Gold took the metal from the 1620’s to roughly 1800 per ounce before the ensuing corrective action began. Back around October 20th we warned our readers about a likely “ wave 2” correction in Gold and we had several reasons for that warnings. One of the biggest concerns we had was that the sentiment surveys were running very hot at the time. The percentage of professional advisors polled that were bullish on GOLD was 88%, with 7% neutral and only 7% bearish. Elliott Wave Theory is the foundation of our work, though we are sure to mix in other clues and elements to “fact check” our reads. When you see sentiment readings that high, coupled with a $180 rally leading up to those readings, you can begin to look for clues of a top.
The other warning signal we noted was the MACD signal which had crossed south and was a topping warning signal to get out of GOLD for intermediate traders. At the time, we surmised that a “wave 2” correction in sentiment, and therefore price was required to work off the overbought conditions. The first level attacked the 1681 areas roughly and then a “B” wave rally to 1751 roughly ensued. Wave 2’s are made up of a 3 wave pattern, A down- B up- and C down to finish. It appears that GOLD is now in the final C wave down in sentiment to complete the correction pattern.
Clues for the “C” wave include the Goldman Sachs quasi-bearish 2013 GOLD forecast that came out today. In addition, the media attempting to explain the drop in GOLD as being related to stronger than expected economic indicators or fiscal cliff negotiations, neither of which make any sense at all.
We expect GOLD therefore to complete the C wave correction at 1631 or 1681 specifically. There are Fibonacci fractal relationships to the first leg down (The A wave) at those levels, and they tend to repeat themselves in terms of crowd behavior. At the 1681 level we have the C wave equal to 61.8% of the A wave amplitude. At 1631 we have a more traditional C wave equal to the A wave. In either event, look for a washout low in GOLD occurring at anytime near term, and for traders to start scaling in long.
Below is the GLD ETF chart showing the two most likely bottoms for the precious metal, one of which already qualifies as of today’s trading:
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The other warning signal we noted was the MACD signal which had crossed south and was a topping warning signal to get out of GOLD for intermediate traders. At the time, we surmised that a “wave 2” correction in sentiment, and therefore price was required to work off the overbought conditions. The first level attacked the 1681 areas roughly and then a “B” wave rally to 1751 roughly ensued. Wave 2’s are made up of a 3 wave pattern, A down- B up- and C down to finish. It appears that GOLD is now in the final C wave down in sentiment to complete the correction pattern.
Clues for the “C” wave include the Goldman Sachs quasi-bearish 2013 GOLD forecast that came out today. In addition, the media attempting to explain the drop in GOLD as being related to stronger than expected economic indicators or fiscal cliff negotiations, neither of which make any sense at all.
We expect GOLD therefore to complete the C wave correction at 1631 or 1681 specifically. There are Fibonacci fractal relationships to the first leg down (The A wave) at those levels, and they tend to repeat themselves in terms of crowd behavior. At the 1681 level we have the C wave equal to 61.8% of the A wave amplitude. At 1631 we have a more traditional C wave equal to the A wave. In either event, look for a washout low in GOLD occurring at anytime near term, and for traders to start scaling in long.
Below is the GLD ETF chart showing the two most likely bottoms for the precious metal, one of which already qualifies as of today’s trading:
Monday, December 3, 2012
Is the SP 500 at a Crucial Pivot Point?
We had an interesting 131 point SP 500 decline from the summer fall highs of 1474 to the recent 1344 lows. Interesting because in the work that I do, we focus on crowd behavioral patterns, sentiment, and Elliott Wave Theory. There is no one technical analysis methodology that works all the time, so it’s important to incorporate other elements into your work to help with some clues. Let’s examine the crossroad we are at right now around 1420 on the SP 500 and why the next move may be a “tell” as they say in poker.
The correction from the 1474 highs can be read as a 3 wave correction, which in Elliott Wave Theory is corrective against the major trend, which so far has been up. 3 wave corrections serve to work off over zealousness of the crowd and above average bullish sentiment. To be sure, at the 1474 highs the sentiment surveys were running pretty hot and near 3 year highs, a flag that waved a warning sign for us. The correction though worked off that sentiment and at 1344 was in fact a Fibonacci 61.8% retracement of the rally from 1257-1474 that we witnessed this summer. These type of Fibonacci fractal retracements at 61.8% are common correction patterns in bull cycles.
What we need to see near term on this crossroad then is a clear cut rally over the 1424 area, which now is a 61.8% upwards retracement of the drop from 1474-1344. Why is that important to clear? Because 61.8% also is a common upwards retracement for a wave 2 counter-rally in a downward trend. Clearing that hurdle would indicate that the rally from the 1344 lows is more than just a counter-trend rally, and likely the confirmed start of a solid leg upwards towards highs for this bull market cycle.
This is why we like to draw these lines in the sands and let our subscribers be aware of what to watch and why. The above chart gives you an idea of where we are at in the current cycle. Consider joining us so we can help you with daily updates on the SP 500 and Gold, stop scratching your head and guessing as to the patterns in the markets today! Go to Market Trends Forecast.com and sign up for our free weekly reports.
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The correction from the 1474 highs can be read as a 3 wave correction, which in Elliott Wave Theory is corrective against the major trend, which so far has been up. 3 wave corrections serve to work off over zealousness of the crowd and above average bullish sentiment. To be sure, at the 1474 highs the sentiment surveys were running pretty hot and near 3 year highs, a flag that waved a warning sign for us. The correction though worked off that sentiment and at 1344 was in fact a Fibonacci 61.8% retracement of the rally from 1257-1474 that we witnessed this summer. These type of Fibonacci fractal retracements at 61.8% are common correction patterns in bull cycles.
What we need to see near term on this crossroad then is a clear cut rally over the 1424 area, which now is a 61.8% upwards retracement of the drop from 1474-1344. Why is that important to clear? Because 61.8% also is a common upwards retracement for a wave 2 counter-rally in a downward trend. Clearing that hurdle would indicate that the rally from the 1344 lows is more than just a counter-trend rally, and likely the confirmed start of a solid leg upwards towards highs for this bull market cycle.
This is why we like to draw these lines in the sands and let our subscribers be aware of what to watch and why. The above chart gives you an idea of where we are at in the current cycle. Consider joining us so we can help you with daily updates on the SP 500 and Gold, stop scratching your head and guessing as to the patterns in the markets today! Go to Market Trends Forecast.com and sign up for our free weekly reports.
Get our Free Trading Videos, Lessons and eBook today!
Sunday, December 2, 2012
Gold, Silver and Miners in Stage 1 Accumulation Mode
We don’t hear much about gold and silver anymore on the news. This time last year you could not go 5 minutes without a TV or radio station talking about them. Why is this? Simple really, precious metals have been building a Stage 1 Basing Pattern for the last 12 months. This boring sideways trading range is how the market gets most of those long holders out of an investment before it starts another move up. The saying is “If the market doesn’t shake you out, it will wait you out”.
We all know time in money so the above statement makes a lot of sense doesn’t it? Instead of having your money sitting in an investment that has clearly displayed a large sideways range with month and possibly years before any significant breakout will occur, why would you want their money in it doing nothing? There are other opportunities which you could be putting your money into that could generate more gains until the precious metals sector sets up with a high probability trading pattern.
The good news is that gold, silver and precious metal miner stocks are forming a very large Stage 1 Accumulation pattern on the weekly chart. This points to a multi month rally in prices if they breakout above our resistance levels.
The chart below shows a lot of analysis and to the untrained eye this may look messy and confusing, so take your time to review it. In short, what we are showing are sideways price patterns using the previous highs and lows for support and resistance levels. The analysis shows the shift in prices from bearish (down), to Neutral (sideways). The exciting part about this pattern is that a new bull market should emerge if our analysis is correct. Now, we are not talking about 5 -10% move here, we are talking about a multi month and possibly a year long rally in precious metals that could allow some individuals to retire early if played properly.
A break above our red dotted resistance lines should trigger aggressive buying in gold miners along with physical gold bullion.
In the past month we have been giving out some of my Stage 1 trading ideas which have generated some decent gains for those who follow along. All but one have generated gains with FSLR 12.5%, FB 12%, RIMM 54%, AAPL 5%, TLT 2.5%, XLU 1.5%, and KOL down -5.2%.
This chart of silver and silver miner stocks (SIL), shows a very similar pattern to that of its big shiny sister (Yellow Gold). Silver carries a lot more risk because of its industrial usage. Also this commodity is thinly traded and can move very quickly on a daily basis compared to gold. Because of these quick price movements it has attracted a lot of speculative money which also has increased the volatility. More often than not silver will move 2-3 times more on a percentage bases than that of yellow gold.
This chart compares three precious metals miner ETFS (GDX – Gold Miners, SIL – Silver Miners, NUGT 3x Leveraged Gold Miners).
Silver miners have held up the best because the herd saw how big the move was a year ago and are front running the next potential rally. But, depending on how you read the charts and sentiment it may be pointing to the dormant gold miners for a bigger than expected rally. But debating which one will breakout and run the most is a conversation/debate of its own and even I can argue both sides. The safe play is that even if gold miners (GDX & GDXJ) underperform the silver miners (SIL), the NUGT which is 3x leveraged gold miners should be the same if not outperform silver miners.
In short, we favor trading the miners over physical bullion simply because the charts show much more profit potential than if one was to buy the bullion exchange traded funds GLD and SLV.
The market seems to be setting up for some very large moves in 2013 and members of our trading newsletter should do very well. Be sure to join and follow along at The Gold & Oil Guy.com
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We all know time in money so the above statement makes a lot of sense doesn’t it? Instead of having your money sitting in an investment that has clearly displayed a large sideways range with month and possibly years before any significant breakout will occur, why would you want their money in it doing nothing? There are other opportunities which you could be putting your money into that could generate more gains until the precious metals sector sets up with a high probability trading pattern.
The good news is that gold, silver and precious metal miner stocks are forming a very large Stage 1 Accumulation pattern on the weekly chart. This points to a multi month rally in prices if they breakout above our resistance levels.
The chart below shows a lot of analysis and to the untrained eye this may look messy and confusing, so take your time to review it. In short, what we are showing are sideways price patterns using the previous highs and lows for support and resistance levels. The analysis shows the shift in prices from bearish (down), to Neutral (sideways). The exciting part about this pattern is that a new bull market should emerge if our analysis is correct. Now, we are not talking about 5 -10% move here, we are talking about a multi month and possibly a year long rally in precious metals that could allow some individuals to retire early if played properly.
A break above our red dotted resistance lines should trigger aggressive buying in gold miners along with physical gold bullion.
In the past month we have been giving out some of my Stage 1 trading ideas which have generated some decent gains for those who follow along. All but one have generated gains with FSLR 12.5%, FB 12%, RIMM 54%, AAPL 5%, TLT 2.5%, XLU 1.5%, and KOL down -5.2%.
This chart of silver and silver miner stocks (SIL), shows a very similar pattern to that of its big shiny sister (Yellow Gold). Silver carries a lot more risk because of its industrial usage. Also this commodity is thinly traded and can move very quickly on a daily basis compared to gold. Because of these quick price movements it has attracted a lot of speculative money which also has increased the volatility. More often than not silver will move 2-3 times more on a percentage bases than that of yellow gold.
This chart compares three precious metals miner ETFS (GDX – Gold Miners, SIL – Silver Miners, NUGT 3x Leveraged Gold Miners).
Silver miners have held up the best because the herd saw how big the move was a year ago and are front running the next potential rally. But, depending on how you read the charts and sentiment it may be pointing to the dormant gold miners for a bigger than expected rally. But debating which one will breakout and run the most is a conversation/debate of its own and even I can argue both sides. The safe play is that even if gold miners (GDX & GDXJ) underperform the silver miners (SIL), the NUGT which is 3x leveraged gold miners should be the same if not outperform silver miners.
Precious Metals & Miners Trading Conclusion
In short, we favor trading the miners over physical bullion simply because the charts show much more profit potential than if one was to buy the bullion exchange traded funds GLD and SLV.
The market seems to be setting up for some very large moves in 2013 and members of our trading newsletter should do very well. Be sure to join and follow along at The Gold & Oil Guy.com
Get our Free Trading Videos, Lessons and eBook today!
Thursday, November 29, 2012
Playing the Long Term Trends in a Stock- ASPS Sample
Our trading partner David Banister must be in the holiday/giving spirit this week as he keeps cranking out the free trading advice....
How many times have you bought a stock and then a few weeks perhaps have gone by and you get frustrated with lack of real net movement? You see all kinds of other stocks moving every day and finally you give up, sell your stock and go chase another one. Inevitably what happens in many cases is you find out later that your instincts were right and your research was correct, as the stock you gave up on finally takes off leaving you frustrated.
Sometimes it helps to understand the long term picture of a stock cycle and try to determine where you may be at in the big picture. This way you may be more willing to sit on a stock a bit longer, understanding it may need some time to work off a prior large move to the upside. Stocks often consolidate in fibonacci periods of time, as those revolve mainly around sentiment related to the stock or the company itself. You can see big up moves that come out of nowhere and last for several weeks, and then many weeks of consolidation or mild decline. These are actually crowd behavioral movements playing out as sentiment swings from too bearish to overly bullish and back again.
In the sample below we outline ASPS, a strong growth company in the right sector at the right time. We can’t be sure that this stock will break out to the upside, but we do like the fundamentals and the catalysts ahead. At ATP we look for both technical and fundamental marriages as it were, and then do our best to time the entry and exits accordingly. ASPS plans to spin out two divisions as a stock dividend to shareholders in the next 30 days or so, and we think that will catalyze the shares as sentiment turns north.
In the meantime, the stock trades between 100 and 107 per share frustrating anyone who expects an immediate pop. Taking a look at a multi month chart with weekly views we can see that this actually has been consolidating for several weeks in a normal pattern. In this case the 20 week moving average line seems to be the bogey for this stock cycle for ASPS, and as we approach that line we may see a shift back north in sentiment. Should we be wrong, we will know if the stock breaks down materially from this crowd pattern in play now.
Above is the chart as of November 29th, let’s see how it plays out: Be sure to read our article about “Buying in the Trenches” as well. Disclosure: Our ATP service has recommended a long position in ASPS within the past few weeks.
Go to Active Trading Partners and subscribe by using coupon code AD499ATP in the coupon code field at the bottom of the sign up form. Sign up for quarterly and the discount will be applied at checkout, and you will get The Market Trend Forecast for free as well.
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How many times have you bought a stock and then a few weeks perhaps have gone by and you get frustrated with lack of real net movement? You see all kinds of other stocks moving every day and finally you give up, sell your stock and go chase another one. Inevitably what happens in many cases is you find out later that your instincts were right and your research was correct, as the stock you gave up on finally takes off leaving you frustrated.
Sometimes it helps to understand the long term picture of a stock cycle and try to determine where you may be at in the big picture. This way you may be more willing to sit on a stock a bit longer, understanding it may need some time to work off a prior large move to the upside. Stocks often consolidate in fibonacci periods of time, as those revolve mainly around sentiment related to the stock or the company itself. You can see big up moves that come out of nowhere and last for several weeks, and then many weeks of consolidation or mild decline. These are actually crowd behavioral movements playing out as sentiment swings from too bearish to overly bullish and back again.
In the sample below we outline ASPS, a strong growth company in the right sector at the right time. We can’t be sure that this stock will break out to the upside, but we do like the fundamentals and the catalysts ahead. At ATP we look for both technical and fundamental marriages as it were, and then do our best to time the entry and exits accordingly. ASPS plans to spin out two divisions as a stock dividend to shareholders in the next 30 days or so, and we think that will catalyze the shares as sentiment turns north.
In the meantime, the stock trades between 100 and 107 per share frustrating anyone who expects an immediate pop. Taking a look at a multi month chart with weekly views we can see that this actually has been consolidating for several weeks in a normal pattern. In this case the 20 week moving average line seems to be the bogey for this stock cycle for ASPS, and as we approach that line we may see a shift back north in sentiment. Should we be wrong, we will know if the stock breaks down materially from this crowd pattern in play now.
Above is the chart as of November 29th, let’s see how it plays out: Be sure to read our article about “Buying in the Trenches” as well. Disclosure: Our ATP service has recommended a long position in ASPS within the past few weeks.
Go to Active Trading Partners and subscribe by using coupon code AD499ATP in the coupon code field at the bottom of the sign up form. Sign up for quarterly and the discount will be applied at checkout, and you will get The Market Trend Forecast for free as well.
Get our Free Trading Videos, Lessons and eBook today!
Wednesday, November 28, 2012
What are the U.S. Dollar and Equities Market Relationships in the Near Term
The SP 500 is likely to pullback from a 66 point rally off the 1343 pivots. Those pivots were right at a Fibonacci fractal retracement of 61.8% of the Summer rally. That rally ran from 1267-1474 as we all know in hindsight, and the correction was a normal correction within a bull cycle.
Near term, we had a nice run to 1409 and met resistance there. We would expect a pullback to the 1384 areas on the SP 500, if not a bit lower in the coming days. The US Dollar is likely to get a bounce which will also pull down Precious Metals along with stocks near term.
We think this could be a opportunity to buy as we approach pivot pullback buy points, but of course we will monitor in the event the pullback becomes more dire than expected.
Below are charts of the US Dollar and The SP 500 Index and potential near term movements to monitor. Over at our we closed out long positions in NUGT ETF with nice gains yesterday as well as stocks with trading profits while we watch the pullback action.
From COT staff writer David Banister
Just click here to sign up for Banisters forecast service that gives you his daily updates and free weekly reports that will keep you on the right side of the markets.
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Near term, we had a nice run to 1409 and met resistance there. We would expect a pullback to the 1384 areas on the SP 500, if not a bit lower in the coming days. The US Dollar is likely to get a bounce which will also pull down Precious Metals along with stocks near term.
We think this could be a opportunity to buy as we approach pivot pullback buy points, but of course we will monitor in the event the pullback becomes more dire than expected.
Below are charts of the US Dollar and The SP 500 Index and potential near term movements to monitor. Over at our we closed out long positions in NUGT ETF with nice gains yesterday as well as stocks with trading profits while we watch the pullback action.
From COT staff writer David Banister
Just click here to sign up for Banisters forecast service that gives you his daily updates and free weekly reports that will keep you on the right side of the markets.
Get our Free Trading Videos, Lessons and eBook today!
Tuesday, November 27, 2012
Are the Utilities Bottoming?.....It’s the Season to Own Utility Stocks
Over the past week we have been keeping our eye on several key sectors and stocks for potentially large end of year rallies to lock in more gains before 2013.
Our recent calls have been RIMM (up 54%), AAPL (up 5%), FB (up 8%) so it’s been a great month thus far. That being said there are three other plays that look amazing and one of them is the utilities sector.
Looking back 30 years clearly utilities have a tendency to rally going into year end. What makes this setup so exciting is that the Obama tax for 2013 has caused many investors to lock in capital gains along with dividend gains so the utility sector has recently been beaten.
We always like to cheer for the underdogs because they can make large moves quickly and this season its utility stocks.
30 Year Seasonality – Utilities Stocks
Utility Sector ETFs:
In the graph below we show the main utility ETFs for trading. Simple analysis clearly shows the selling momentum is slowing and where price should go if it can breakout above the red dotted resistance line. Exchange traded funds XLU, FXU, IDU, and DBU are the funds we found to be setting up.
Utilities Sector Trading Conclusion:
While we feel utilities are about start moving higher it is important to mention that the broad market is setting up for a 1-3 day pullback. If the stock market does pullback this week then we should see utilities pullback also. What we are looking for is a minor pullback in XLU with price holding up above $34 while the stock market pulls back.
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Our recent calls have been RIMM (up 54%), AAPL (up 5%), FB (up 8%) so it’s been a great month thus far. That being said there are three other plays that look amazing and one of them is the utilities sector.
Looking back 30 years clearly utilities have a tendency to rally going into year end. What makes this setup so exciting is that the Obama tax for 2013 has caused many investors to lock in capital gains along with dividend gains so the utility sector has recently been beaten.
We always like to cheer for the underdogs because they can make large moves quickly and this season its utility stocks.
30 Year Seasonality – Utilities Stocks
Utility Sector ETFs:
In the graph below we show the main utility ETFs for trading. Simple analysis clearly shows the selling momentum is slowing and where price should go if it can breakout above the red dotted resistance line. Exchange traded funds XLU, FXU, IDU, and DBU are the funds we found to be setting up.
Utilities Sector Trading Conclusion:
While we feel utilities are about start moving higher it is important to mention that the broad market is setting up for a 1-3 day pullback. If the stock market does pullback this week then we should see utilities pullback also. What we are looking for is a minor pullback in XLU with price holding up above $34 while the stock market pulls back.
Just Click Here if you would like to get our simple yet profitable ETF & stock trading ideas. It's simple, just join our newsletter today at The Gold & Oil Guy.com
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Monday, November 26, 2012
Why the S&P 500 & Gold Rallied in the Face of Negative News
The amount of negative news that we have seen recently has been mind blowing. Europe is going into recession, Greece and several other countries are on the verge of bankruptcy, the Middle East is a powder keg, and the U.S. is facing a fiscal cliff. Shockingly for most retail traders, the past week has produced a very strong return for U.S. equity indexes as well as risk assets in general.
Retail investors often times consistently lose money because they focus on the financial media and all of the negative news that is out there. Trust me, as a longer term trader and investor, there is never an absence of negative news or potentially poor economic possibilities. This is not to say that markets cannot decline, investors just need to understand that markets are cyclical in nature and do not ever move in a straight line.
Based on what I was reading from most of the financial blogosphere recently, you would think that the entire world was about to end. A few blogs were calling for an all out collapse late last week or a possible crash this past Monday, November 19th. As is typically the case, the market prognosticators were wrong with the calls for a crash or an absolute collapse in financial markets.
Unlike those blogs, members of my service at the Traders Video Playbook were getting information indicating that we were expecting higher prices. At our service, we lay out regular videos covering a variety of underlying assets from the S&P 500 Index and oil futures, to gold and treasury futures. The focus is purely on analysis of various underlying assets across multiple time frames. We cover intraday time frames as well as daily and weekly swing time frames throughout the week with videos and written updates.
To put into perspective what we were seeing in the marketplace on Monday November 19th, the following charts were sent out to our members during intraday trading that day....Click here for "Why the S&P 500 & Gold Rallied in the Face of Negative News"
See you in the markets,
J.W. Jones
Get our Free Trading Videos, Lessons and eBook today!
Retail investors often times consistently lose money because they focus on the financial media and all of the negative news that is out there. Trust me, as a longer term trader and investor, there is never an absence of negative news or potentially poor economic possibilities. This is not to say that markets cannot decline, investors just need to understand that markets are cyclical in nature and do not ever move in a straight line.
Based on what I was reading from most of the financial blogosphere recently, you would think that the entire world was about to end. A few blogs were calling for an all out collapse late last week or a possible crash this past Monday, November 19th. As is typically the case, the market prognosticators were wrong with the calls for a crash or an absolute collapse in financial markets.
Unlike those blogs, members of my service at the Traders Video Playbook were getting information indicating that we were expecting higher prices. At our service, we lay out regular videos covering a variety of underlying assets from the S&P 500 Index and oil futures, to gold and treasury futures. The focus is purely on analysis of various underlying assets across multiple time frames. We cover intraday time frames as well as daily and weekly swing time frames throughout the week with videos and written updates.
To put into perspective what we were seeing in the marketplace on Monday November 19th, the following charts were sent out to our members during intraday trading that day....Click here for "Why the S&P 500 & Gold Rallied in the Face of Negative News"
See you in the markets,
J.W. Jones
Get our Free Trading Videos, Lessons and eBook today!
Sunday, November 25, 2012
Dollar tell us Stocks are Likely to Pullback – Simple Analysis
The stock market is at a very critical pivot point which I feel will generate opportunities in December and for the first quarter of 2013.
Trading with the trend is not always an easy task. It is human nature to predict and jump to conclusions and usually it’s better to trade with the trend no matter what your emotions are telling you. The current trend is down and I stick with that until we are proven wrong.
If you carefully analyze the charts below you will understand where we are trading in the market and what the risks are at this point. The question is are in the middle of a trend reversal back up, or is this just a bounce within a down trend? Either way, any pullback this week should be aggressively managed to lock in gains and tighten stops because it could go either way and you do not want to be on the wrong side of the table.
The chart below shows the US dollar index 4 hour chart. It looks as though we should start to see a bounce this week and that should put pressure on stocks and commodities.
The SP500 (SPY etf) below that shows my analysis and key price levels. I took a short position on the SPY Friday afternoon as I feel a pullback is imminent. That being said, all I need is one big down day and I will be pulling money off the table to lock in gains and tighten my stop.
For a detailed educational lesson on stock market cycles read my mini course "The Golden Nugget That Makes Traders Wealthy Trading"
My trading charts make reading the market simple, quick and precise so if you want this type of analysis and trade ideas delivered to your inbox every day including my Pre-Market video analysis then join my newsletter here at The Gold & Oil Guy.com
Chris Vermeulen
Trading with the trend is not always an easy task. It is human nature to predict and jump to conclusions and usually it’s better to trade with the trend no matter what your emotions are telling you. The current trend is down and I stick with that until we are proven wrong.
If you carefully analyze the charts below you will understand where we are trading in the market and what the risks are at this point. The question is are in the middle of a trend reversal back up, or is this just a bounce within a down trend? Either way, any pullback this week should be aggressively managed to lock in gains and tighten stops because it could go either way and you do not want to be on the wrong side of the table.
The chart below shows the US dollar index 4 hour chart. It looks as though we should start to see a bounce this week and that should put pressure on stocks and commodities.
The SP500 (SPY etf) below that shows my analysis and key price levels. I took a short position on the SPY Friday afternoon as I feel a pullback is imminent. That being said, all I need is one big down day and I will be pulling money off the table to lock in gains and tighten my stop.
For a detailed educational lesson on stock market cycles read my mini course "The Golden Nugget That Makes Traders Wealthy Trading"
My trading charts make reading the market simple, quick and precise so if you want this type of analysis and trade ideas delivered to your inbox every day including my Pre-Market video analysis then join my newsletter here at The Gold & Oil Guy.com
Chris Vermeulen
Friday, November 23, 2012
Markets are Cyclical in Nature....Make sure you know these "Four Stages of Stocks"
Our good friend and trading partner Chris Vermeulen has put together an article detailing his classic economic theory that dissects the economic cycle into four distinct stages..... expansion, trough, decline and recovery. And he explains in detail why a stock is no different, and proceeds through these cycles.
Knowing this information is crucial to survival as this cycle happens on all time frames (1 minute chart all the way up to yearly charts). Harnessing this information for trade selection and timing greatly reduces the amount of trades you take, while focusing only on new leaders which have massive upside potential.
So take a few minutes and click here to read Markets are Cyclical in Nature....Make sure you know these "Four Stages of Stocks"
Knowing this information is crucial to survival as this cycle happens on all time frames (1 minute chart all the way up to yearly charts). Harnessing this information for trade selection and timing greatly reduces the amount of trades you take, while focusing only on new leaders which have massive upside potential.
So take a few minutes and click here to read Markets are Cyclical in Nature....Make sure you know these "Four Stages of Stocks"
Thursday, November 22, 2012
Natural Gas Trade Idea....Buying in the Trenches Pays Off
Recently we wrote about Natural Gas ETF UGAZ on the ATP Free Blog site as a sample of buying the dip or using the “cup with handle” dip buying for profits. Our November 11th article discussed waiting for a pullback to the 30-31 ranges on UGAZ and then going long for a reversal.
Within 48 hours the dip came into the buy range, and within a few days UGAZ ran to the $38 range for as much as a 24% reversal trade gain. Even now some 9 days later UGAZ trades around $36 per share for nice gains.
Another sample we had for subscribers was on November 7th in RIMM stock. We advised waiting for a pullback from 9.15 ranges to the 8.50-8.70 ranges. When the pullback came this is what we sent to subscribers:
ATP Active Trade Alert
RIMM- 8.64 has fallen as projected in to the 8.50-8.75 swing entry buy ranges.
This is an active trade meaning 1-5 days likely and a stop should be placed at 4-6% below your entry and NO LOWER than 8.00 for aggressive partners who take the trade.
Now on November 20th, about two weeks later, RIMM is trading near $10.00 per share. The stock fell to 8.14 during the market correction which was above the $8.00 stop and above a 6% stop loss range from entry. Partners who remained long would now be sitting on gains of 14%.
Consider joining our Swing Trading service we call Active Trading Partners and get education, advice, and on going daily updates. You will also receive our Market Trend Forecast service which covers Gold, Silver, and the SP 500 short and intermediate forecasts.
Go to ActiveTradingPartners.com and subscribe by using coupon code AD499ATP in the coupon code field at the bottom of the sign up form. Sign up for quarterly and the discount will be applied at checkout, and you will get The Market Trend Forecast for free as well.
Within 48 hours the dip came into the buy range, and within a few days UGAZ ran to the $38 range for as much as a 24% reversal trade gain. Even now some 9 days later UGAZ trades around $36 per share for nice gains.
Another sample we had for subscribers was on November 7th in RIMM stock. We advised waiting for a pullback from 9.15 ranges to the 8.50-8.70 ranges. When the pullback came this is what we sent to subscribers:
ATP Active Trade Alert
RIMM- 8.64 has fallen as projected in to the 8.50-8.75 swing entry buy ranges.
This is an active trade meaning 1-5 days likely and a stop should be placed at 4-6% below your entry and NO LOWER than 8.00 for aggressive partners who take the trade.
Now on November 20th, about two weeks later, RIMM is trading near $10.00 per share. The stock fell to 8.14 during the market correction which was above the $8.00 stop and above a 6% stop loss range from entry. Partners who remained long would now be sitting on gains of 14%.
Consider joining our Swing Trading service we call Active Trading Partners and get education, advice, and on going daily updates. You will also receive our Market Trend Forecast service which covers Gold, Silver, and the SP 500 short and intermediate forecasts.
Go to ActiveTradingPartners.com and subscribe by using coupon code AD499ATP in the coupon code field at the bottom of the sign up form. Sign up for quarterly and the discount will be applied at checkout, and you will get The Market Trend Forecast for free as well.
Keep Your Eye On Trends & Reversals.....SPY, RIMM, KOL
Today our trading partner Chris Vermeulen gives us some trades to keep an eye on....
The equities market technically still has another day of positive momentum behind it and with a short holiday week higher prices are favored.
This morning in the video I mentioned how oil continues to look untradible because of the sharp news related swings and lack of clear chart patterns. Yesterday it rallied over 2% and today is back down 2%.… Steer clear of this beast…
SP500 (broad market) continues to grind sideways/higher today. Volume is very light which bodes well for lower prices in the coming days. I would love to see a Pop-N-Drop tomorrow which is when the index gaps higher at the open into a resistance zone at which point we would be looking to get short (buy the SDS).
Research In Motion shares hit our first resistance level after being upgraded this morning…. Buy the rumor sell the news…? If you are long taking some money off the table here is smart play and to move your stop to break even or better.
Coal sector is looking tasty today and we may take a long position in KOL, but I will update if I do so.
Chris Vermeulen
Get our Free Trading Videos, Lessons and eBook today!
The equities market technically still has another day of positive momentum behind it and with a short holiday week higher prices are favored.
This morning in the video I mentioned how oil continues to look untradible because of the sharp news related swings and lack of clear chart patterns. Yesterday it rallied over 2% and today is back down 2%.… Steer clear of this beast…
SP500 (broad market) continues to grind sideways/higher today. Volume is very light which bodes well for lower prices in the coming days. I would love to see a Pop-N-Drop tomorrow which is when the index gaps higher at the open into a resistance zone at which point we would be looking to get short (buy the SDS).
Research In Motion shares hit our first resistance level after being upgraded this morning…. Buy the rumor sell the news…? If you are long taking some money off the table here is smart play and to move your stop to break even or better.
Coal sector is looking tasty today and we may take a long position in KOL, but I will update if I do so.
Chris Vermeulen
Get our Free Trading Videos, Lessons and eBook today!
Tuesday, November 20, 2012
Implied Volatility Crush in AAPL Can Lead to Profits
The last time our trading partner J.W. Jones showed us a set up for Apple [AAPL] options it was one of our most popular post in years, and it paid off big for readers. And J.W. is at it again with a pre-holiday call on Apple.......
The recent massive sell off in AAPL stock has presented some interesting opportunities for low risk trades. For long time readers of this column, you may recognize that my portfolio usually contains an AAPL position.
Why? I cannot overemphasize the importance of trading liquid instruments, and in the current world, very few underlying issues have options with the degree of liquidity routinely available in a wide spectrum of strike prices and expiration dates.
What is the big deal about liquidity? When markets trade in an orderly fashion it is usually possible to negotiate a reasonable price for all but the most illiquid underlying. However, when blood is running in the street, market makers will routinely widen bid / ask spreads and attempt to extract well more than a pound of flesh. It is only in the most liquid series that any hope of a reasonable exit in these times can be found.
OK, sermon is over.... I like AAPL! For those who have not looked at the option chain for AAPL since last Thursday, I want to call attention to another new aspect of the tremendous flexibility that exists in this name.
Entirely new sets of weekly options are now trading, not just those for the next upcoming Friday expiration.....
Click here to read J.W.s entire post "Implied Volatility Crush in AAPL Can Lead to Profits"
Get our Free Trading Videos, Lessons and eBook today!
The recent massive sell off in AAPL stock has presented some interesting opportunities for low risk trades. For long time readers of this column, you may recognize that my portfolio usually contains an AAPL position.
Why? I cannot overemphasize the importance of trading liquid instruments, and in the current world, very few underlying issues have options with the degree of liquidity routinely available in a wide spectrum of strike prices and expiration dates.
What is the big deal about liquidity? When markets trade in an orderly fashion it is usually possible to negotiate a reasonable price for all but the most illiquid underlying. However, when blood is running in the street, market makers will routinely widen bid / ask spreads and attempt to extract well more than a pound of flesh. It is only in the most liquid series that any hope of a reasonable exit in these times can be found.
OK, sermon is over.... I like AAPL! For those who have not looked at the option chain for AAPL since last Thursday, I want to call attention to another new aspect of the tremendous flexibility that exists in this name.
Entirely new sets of weekly options are now trading, not just those for the next upcoming Friday expiration.....
Click here to read J.W.s entire post "Implied Volatility Crush in AAPL Can Lead to Profits"
Get our Free Trading Videos, Lessons and eBook today!
Sunday, November 18, 2012
Free Workshop Video: Advanced Trading Applications of Candlestick Charting
Candlesticks, used by many....truly understood by few. As a special treat to Stock Market Club readers, Gary Wagner is offering you an in depth look into candlestick charting. Join co-founder of Wagner Financial Group. and acclaimed author as he walks you through set ups in ways you can take your candlestick charting to a new level.
In this video workshop you'll discover the crucial chart patterns that candlesticks reveal - how to interpret them and how to use them to pinpoint market turns. You'll also learn how to use candlesticks in combination with familiar technical indicators like Stochastics, %R, Relative Strength Index and Moving Averages to create a dynamic, synergistic and extremely successful trading system.
Click here to watch Advanced Trading Applications of Candlestick Charting
In this video workshop you'll discover the crucial chart patterns that candlesticks reveal - how to interpret them and how to use them to pinpoint market turns. You'll also learn how to use candlesticks in combination with familiar technical indicators like Stochastics, %R, Relative Strength Index and Moving Averages to create a dynamic, synergistic and extremely successful trading system.
Click here to watch Advanced Trading Applications of Candlestick Charting
Thursday, November 8, 2012
Did the SP500 Finally Bottom?
From our trading partner David A. Banister at Market Trends Forecast.com......
The SP 500 finally caved to match or go a bit lower than the SP 500 futures lows of about 11 days ago in yesterday’s action. The drop to the 1390 area is within our 1386-1400 pivot points for a major wave low pattern that we outlined as far back as September 25th for our subscribers.
Our work centers around sentiment and crowd behavior, the headlines are of interest but only tell you the psychology of the publishing arms or talking heads at the time. Often headlines can be negative and the market climbs, or positive and the market is dropping. So the key for our work is figuring out where we are in the sentiment patterns of the crowd, and then to anticipate the pivots ahead of time and invest accordingly.
In fact, in just 24 hours or so we had a 43 point SP 500 drop… this is interesting because the same thing happened at the June 2012 lows as well. Back then we had outlined pivots in the 1250-1270 areas as likely lows, and the market ended up bottoming at 1267. This bottom area yesterday fits within pivots we were able to anticipate 7 weeks ago, without any knowledge of the election or other headlines around the world.
Often, major washout days like yesterday centering around major news (Election) can create the final panic sell-off to complete a wave pattern of negative sentiment to the downside and then reverse the markets higher in new bullish pattern. To be sure, there are many sentiment headwinds like the Fiscal Cliff and more in the coming weeks…but markets tend to price all that in ahead of time right?
At yesterdays lows the market seems to have completed all requirements for a C wave of an ABC complicated decline from the 1474 SP 500 highs and so far an 8 Fibonacci week correction period.
What we expect is a rally now and again, we need to get back up and over 1423-1427 pivots this time and hold more than 24 hours, but the odds of a rally are now at 75% from here. IF we fail to hold the 1388 pivots, then the next levels are 1372 and 1363 to watch.
Bottom Line? Most metrics have been met for a wave pattern low, (Whether this be wave 4 or wave 2 doesnt much matter just yet) and the market now has a chance to start a wave 5 or wave 3 rally to the upside. Lets watch 1388 areas to hold first, then we will watch 1403, then 1423-1427 pivots to clear. We are neutral to bullish now after this washout
Back on Sept 25th we did a chart forecasting a drop to 1395-1400 as likely before the downtrend would end, now let’s see if the market can get some legs here. We have included that old chart here to show you how crowds are fairly predictable in their behavioral patterns in advance.
Consider joining us for free weekly reports, or you can get a subscription discount and daily reports at Market Trends Forecast.com
Get our Free Trading Videos, Lessons and eBook today!
The SP 500 finally caved to match or go a bit lower than the SP 500 futures lows of about 11 days ago in yesterday’s action. The drop to the 1390 area is within our 1386-1400 pivot points for a major wave low pattern that we outlined as far back as September 25th for our subscribers.
Our work centers around sentiment and crowd behavior, the headlines are of interest but only tell you the psychology of the publishing arms or talking heads at the time. Often headlines can be negative and the market climbs, or positive and the market is dropping. So the key for our work is figuring out where we are in the sentiment patterns of the crowd, and then to anticipate the pivots ahead of time and invest accordingly.
In fact, in just 24 hours or so we had a 43 point SP 500 drop… this is interesting because the same thing happened at the June 2012 lows as well. Back then we had outlined pivots in the 1250-1270 areas as likely lows, and the market ended up bottoming at 1267. This bottom area yesterday fits within pivots we were able to anticipate 7 weeks ago, without any knowledge of the election or other headlines around the world.
Often, major washout days like yesterday centering around major news (Election) can create the final panic sell-off to complete a wave pattern of negative sentiment to the downside and then reverse the markets higher in new bullish pattern. To be sure, there are many sentiment headwinds like the Fiscal Cliff and more in the coming weeks…but markets tend to price all that in ahead of time right?
At yesterdays lows the market seems to have completed all requirements for a C wave of an ABC complicated decline from the 1474 SP 500 highs and so far an 8 Fibonacci week correction period.
What we expect is a rally now and again, we need to get back up and over 1423-1427 pivots this time and hold more than 24 hours, but the odds of a rally are now at 75% from here. IF we fail to hold the 1388 pivots, then the next levels are 1372 and 1363 to watch.
Bottom Line? Most metrics have been met for a wave pattern low, (Whether this be wave 4 or wave 2 doesnt much matter just yet) and the market now has a chance to start a wave 5 or wave 3 rally to the upside. Lets watch 1388 areas to hold first, then we will watch 1403, then 1423-1427 pivots to clear. We are neutral to bullish now after this washout
Back on Sept 25th we did a chart forecasting a drop to 1395-1400 as likely before the downtrend would end, now let’s see if the market can get some legs here. We have included that old chart here to show you how crowds are fairly predictable in their behavioral patterns in advance.
Consider joining us for free weekly reports, or you can get a subscription discount and daily reports at Market Trends Forecast.com
Get our Free Trading Videos, Lessons and eBook today!
Wednesday, November 7, 2012
Google Earnings Trading Idea
We recently discussed the impending release of third quarter earnings for Google (GOOG), analyzed the expected move in light of then current options pricing, discussed the expected behavior of the implied volatility of the options, and finally constructed an option trade structure we thought had a high probability of success. I thought it would be helpful to discuss how our prognostications fared and finally to consider “lessons learned” in this exercise.
This column is essentially a trade journal entry. I would encourage all traders to make such entries routinely; each trade, whether it is economically successful or not, has an embedded lesson. No trader ever reaches the point at which he executes perfectly. The lesson has been paid for. It is foolish not to capture its message.
Google was scheduled to report earnings after the closing market bell on Thursday, October 18. It is worth noting that most options players wait until an hour or less prior to earnings release to enter earnings trades. These last minute players were completely shut out because of an unexpected early earnings release mid-day on Wednesday.
Prior to this unforeseen early release of information the stock was trading around $755. The stock immediately sold off and traded wrapped around $680 / share for the next few days. This 10% sell off was the largest move on earnings for the prior four quarters. The recent range of price moves on earnings had been between 2% and 8%.
The second portion of our prospective analysis was to calculate the anticipated move that was reflected in the options pricing. We calculated the impending move at $34.60; roughly 50% of the actual move that occurred. This means that the move on earnings was a 2 standard deviation move, a very unusual event.
Our statistics tell us that the 1 standard deviation calculated move of +/- $34.60 / share would have contained 68% of the occurrences of the move. The actual 2 standard deviation event would have contained 95% of the movement events.
We discussed the fact that playing earnings directionally is difficult. Obviously those sufficiently prescient to predict this massive sell off and structure appropriate options positions did well. In this particular case, simply buying puts would have been a profitable strategy since the move was so much larger than anticipated.
However, it is critical to realize that a trading strategy that can survive over the long haul cannot be based on statistically improbable events. Traders who simply buy options ahead of earnings release are engaging in low probability strategies that will not be successful when used over a sufficient number of events that the probabilities are realized.
We considered the example of a high probability trade, a triple calendar. This trade was designed to deliver profit over a wide range of prices and profit from the anticipated volatility collapse on the front month contracts.
To recap, the original P&L curve is presented below:
This trade was designed to be short term and was planned to conclude on the Friday following earnings. The original break even points for the trade were around $670 and $840 and were outside double the expected move. The trade had approximately a 90% chance of profitability.
At expiration on Friday, the planned duration of the trade, the price of GOOG was $682, within the initially projected zone of profitability. So how did the trade do?
It was a scratch, losing $8. The reason for the loss was that the collapse in implied volatility extended to the December series options we were long to a greater degree than anticipated.
While a negative economic outcome is never welcome, I feel quite good about the result in light of the magnitude of the price move. I feel this is an example of how a well constructed trade exposes the trader to minimal loss even when price movements occur well outside the predicted range.
Happy Trading!
Simple ONE Trade Per Week Trading Strategy?
J.W. Jones
This column is essentially a trade journal entry. I would encourage all traders to make such entries routinely; each trade, whether it is economically successful or not, has an embedded lesson. No trader ever reaches the point at which he executes perfectly. The lesson has been paid for. It is foolish not to capture its message.
Google was scheduled to report earnings after the closing market bell on Thursday, October 18. It is worth noting that most options players wait until an hour or less prior to earnings release to enter earnings trades. These last minute players were completely shut out because of an unexpected early earnings release mid-day on Wednesday.
Prior to this unforeseen early release of information the stock was trading around $755. The stock immediately sold off and traded wrapped around $680 / share for the next few days. This 10% sell off was the largest move on earnings for the prior four quarters. The recent range of price moves on earnings had been between 2% and 8%.
The second portion of our prospective analysis was to calculate the anticipated move that was reflected in the options pricing. We calculated the impending move at $34.60; roughly 50% of the actual move that occurred. This means that the move on earnings was a 2 standard deviation move, a very unusual event.
Our statistics tell us that the 1 standard deviation calculated move of +/- $34.60 / share would have contained 68% of the occurrences of the move. The actual 2 standard deviation event would have contained 95% of the movement events.
We discussed the fact that playing earnings directionally is difficult. Obviously those sufficiently prescient to predict this massive sell off and structure appropriate options positions did well. In this particular case, simply buying puts would have been a profitable strategy since the move was so much larger than anticipated.
However, it is critical to realize that a trading strategy that can survive over the long haul cannot be based on statistically improbable events. Traders who simply buy options ahead of earnings release are engaging in low probability strategies that will not be successful when used over a sufficient number of events that the probabilities are realized.
We considered the example of a high probability trade, a triple calendar. This trade was designed to deliver profit over a wide range of prices and profit from the anticipated volatility collapse on the front month contracts.
To recap, the original P&L curve is presented below:
This trade was designed to be short term and was planned to conclude on the Friday following earnings. The original break even points for the trade were around $670 and $840 and were outside double the expected move. The trade had approximately a 90% chance of profitability.
At expiration on Friday, the planned duration of the trade, the price of GOOG was $682, within the initially projected zone of profitability. So how did the trade do?
It was a scratch, losing $8. The reason for the loss was that the collapse in implied volatility extended to the December series options we were long to a greater degree than anticipated.
While a negative economic outcome is never welcome, I feel quite good about the result in light of the magnitude of the price move. I feel this is an example of how a well constructed trade exposes the trader to minimal loss even when price movements occur well outside the predicted range.
Happy Trading!
Simple ONE Trade Per Week Trading Strategy?
Join Option Trading Signals.com today with our 14 Day Trial
J.W. JonesThis doesn't have to be hard....Post Election Trading Made Simple
Our trading partner Chris Vermeulen gives us his take on trading the post election markets.......
Over the past two months shares of gold (GLD) and Apple (AAPL) have had a sizable bite taken out of their share price. Active traders along with the longer term investors have had a wild ride this fall watching these investments slide to multi month lows. The big question is when will gold and apple shares bounce?
Here we are again with another election behind us and Barack Obama in the White House again. Many think this means four years of the same thing… Printing, Inflation and higher stock prices.
Is this good or bad for Americans or the world for that matter? I doubt it, but who really knows and who cares because there is nothing anyone can do about it now. So buckle up your seat belt and focus on trading and investing with major trend both within the United States and abroad using exchange traded funds.
Currently the broad stock market and commodities are in a full blown bull market so the focus should be to buy the dips until proven wrong. Here are some charts showing the important breakout levels for Apple, metals, oil and key indexes like the Russell 2000.....Check out "Post-Election Trading Made Simple"
Get Chris' Free Trading Videos, Lessons and eBook today!
Over the past two months shares of gold (GLD) and Apple (AAPL) have had a sizable bite taken out of their share price. Active traders along with the longer term investors have had a wild ride this fall watching these investments slide to multi month lows. The big question is when will gold and apple shares bounce?
Here we are again with another election behind us and Barack Obama in the White House again. Many think this means four years of the same thing… Printing, Inflation and higher stock prices.
Is this good or bad for Americans or the world for that matter? I doubt it, but who really knows and who cares because there is nothing anyone can do about it now. So buckle up your seat belt and focus on trading and investing with major trend both within the United States and abroad using exchange traded funds.
Currently the broad stock market and commodities are in a full blown bull market so the focus should be to buy the dips until proven wrong. Here are some charts showing the important breakout levels for Apple, metals, oil and key indexes like the Russell 2000.....Check out "Post-Election Trading Made Simple"
Get Chris' Free Trading Videos, Lessons and eBook today!
Monday, November 5, 2012
Why E-Minis Are One of Our Favorite Markets
We here at the Stock Market Club don't talk about E-Mini trading a lot, but there's a reason why the E-Mini futures are one of our favorite markets to trade.....
They're just so darn consistent, the opportunities are easy to spot, and the potential for making daily income is unlike any market we've ever seen!
The problem is most people approach the E-Minis all wrong....
Well, that's about to change....
You'll see what we mean inside of the free video presentation our trading partner Todd Mitchell created for you here.
Not only will you discover the real reason why so many traders use the E-Minis to make money, but he shows you how you can start taking advantage of these opportunities regardless of how large or small your trading account is.
Access is limited [really, no kidding] and that's why we don't intend to leave this video up for long, so please be sure to watch it today!
In this video Todd will also teach you the 3 times of day that offer the most profitable trading opportunities (and when you want to stay out of the market!), how to pull in profits without struggle, a 4 - step sequence to boost your trading profits immediately, and a lot more.
This could be the game changer you are looking for...Click here to watch the video.
Happy trading and we'll see you in the markets!
Ray C. Parrish
President/CEO at The Stock Market Club
They're just so darn consistent, the opportunities are easy to spot, and the potential for making daily income is unlike any market we've ever seen!
The problem is most people approach the E-Minis all wrong....
Well, that's about to change....
You'll see what we mean inside of the free video presentation our trading partner Todd Mitchell created for you here.
Not only will you discover the real reason why so many traders use the E-Minis to make money, but he shows you how you can start taking advantage of these opportunities regardless of how large or small your trading account is.
Access is limited [really, no kidding] and that's why we don't intend to leave this video up for long, so please be sure to watch it today!
In this video Todd will also teach you the 3 times of day that offer the most profitable trading opportunities (and when you want to stay out of the market!), how to pull in profits without struggle, a 4 - step sequence to boost your trading profits immediately, and a lot more.
This could be the game changer you are looking for...Click here to watch the video.
Happy trading and we'll see you in the markets!
Ray C. Parrish
President/CEO at The Stock Market Club
Sunday, November 4, 2012
The Election Cycle – What to Expect in Stocks & Bond Prices
By: Chris Vermeulen of The Gold & Oil Guy.com.......
It is that time in the presidential cycle that gets everyone emotional and concerned with the future outlook of the United States. While everyone has their opinion on whom they think is best for America, I promised myself a long time ago to keep my thoughts to myself for two key reasons. ONE: only 50% of Americans will agree with me J, and TWO: I am Canadian so I do not experience what Americans go through on a daily basis.
My thinking is if Obama wins then we will see Quantitative Easing continue. And with the recent positive economic numbers on Friday it should give some confidence to investors that things are SLOWLY stabilizing (Bullish for Stocks). But, if Romney wins then we could see Quantitative Easing be cut or eliminated which is obviously bad for equities.
So, let’s just jump into the charts of what I feel will unfold in the next few days and months.
Using the season chart of the four year election cycle we can see what the Dow Jones Index has done in past election periods. Obviously every market environment is drastically different in each situation but overall we see stronger stock price. This is naturally a very emotional time for investors but once the election is finished most individuals become more confident simply because there is a leader that has four years to make things better and there is nothing they can do about it now and the campaigning and debating is over.
DIA – Dow Jones Industrial Average – Daily Chart:
Looking at the chart of Dow DIA Index fund you can see a 5-6 month cycle in the market which has a positive skew. Just so you understand what a positive skew is I will explain.
Positive Skew is when the market is trending up making a series of higher highs and higher lows. Because there are naturally more buyers during a bull market each cycle upswing lasts longer then when the cycle down downswing. So you get longer rallies which sends your secondary indicators (stochastics, volatility, put/call ratios, advance decline line etc…) in the overbought levels for extended periods of time. Those trying to pick a top continually get their head handed to them. The focus must be on buying the pullbacks. Keep in mind volatility is higher which meaning risk per trade is higher. Overall in the long run you stand a much higher chance of making money trading with the trend than trying counter trend trades (picking a top).
So as you can see below it looks like the stock market will be trying to put in the bottom over the next week or two which falls in line with our election cycle. It is very important to know that during intermediate cycle lows is where some of the biggest drops take place. These sharp drops are what is needed to cleanse the market one last time to shake as many traders with tight stops out of the market before it reverses and starts the next rally. I would like to see a 1-3 day market sell off as that would be the signature bottoming pattern I like to buy.
Bond Prices – Moving Against the Norm…..
Bond investors are some of the most conservative people in the market. They do not like to take risks so they dump their money into bonds to make a tiny profit in exchange for low risk (volatility). The nature of these investors put more money into bonds as we enter the election because they are nervous about not knowing who will be in control of the country.
After the election finished some money flows out of bonds and into stocks because there is now a president and direction for the country. Generally come the new year investors move to bonds as the safe haven as they try to figure out what their game plan is for new year.
So looking forward to this week and the next 2 months I would not be surprised to see bond prices rise or trade sideways while stocks move higher. This analysis is based on Obama winning. If Romney wins then I feel bonds will rally much more and stocks could sell off.
TLT Bond Exchange Traded Fund – Daily Chart:
Here is a chart of 20+ year bonds showing a possible reversal to the upside that could trigger as soon as next week. This chart is forward looking 1 – 2 weeks. Overall the trend remains down but if Romney wins I feel bonds breakout above the red resistance levels and trigger a new uptrend.
Election Year Trading Cycle Conclusion:
Next week is going to be very interesting to watch unfold. I generally do not like to trade or invest before news of this magnitude so trade smaller sizes if you do as price action could be wild.
Get my Daily Trading Analysis & Trade Setups at The Gold & Oil Guy.com
Chris Vermeulen
It is that time in the presidential cycle that gets everyone emotional and concerned with the future outlook of the United States. While everyone has their opinion on whom they think is best for America, I promised myself a long time ago to keep my thoughts to myself for two key reasons. ONE: only 50% of Americans will agree with me J, and TWO: I am Canadian so I do not experience what Americans go through on a daily basis.
My thinking is if Obama wins then we will see Quantitative Easing continue. And with the recent positive economic numbers on Friday it should give some confidence to investors that things are SLOWLY stabilizing (Bullish for Stocks). But, if Romney wins then we could see Quantitative Easing be cut or eliminated which is obviously bad for equities.
So, let’s just jump into the charts of what I feel will unfold in the next few days and months.
Using the season chart of the four year election cycle we can see what the Dow Jones Index has done in past election periods. Obviously every market environment is drastically different in each situation but overall we see stronger stock price. This is naturally a very emotional time for investors but once the election is finished most individuals become more confident simply because there is a leader that has four years to make things better and there is nothing they can do about it now and the campaigning and debating is over.
DIA – Dow Jones Industrial Average – Daily Chart:
Looking at the chart of Dow DIA Index fund you can see a 5-6 month cycle in the market which has a positive skew. Just so you understand what a positive skew is I will explain.
Positive Skew is when the market is trending up making a series of higher highs and higher lows. Because there are naturally more buyers during a bull market each cycle upswing lasts longer then when the cycle down downswing. So you get longer rallies which sends your secondary indicators (stochastics, volatility, put/call ratios, advance decline line etc…) in the overbought levels for extended periods of time. Those trying to pick a top continually get their head handed to them. The focus must be on buying the pullbacks. Keep in mind volatility is higher which meaning risk per trade is higher. Overall in the long run you stand a much higher chance of making money trading with the trend than trying counter trend trades (picking a top).
So as you can see below it looks like the stock market will be trying to put in the bottom over the next week or two which falls in line with our election cycle. It is very important to know that during intermediate cycle lows is where some of the biggest drops take place. These sharp drops are what is needed to cleanse the market one last time to shake as many traders with tight stops out of the market before it reverses and starts the next rally. I would like to see a 1-3 day market sell off as that would be the signature bottoming pattern I like to buy.
Bond Prices – Moving Against the Norm…..
Bond investors are some of the most conservative people in the market. They do not like to take risks so they dump their money into bonds to make a tiny profit in exchange for low risk (volatility). The nature of these investors put more money into bonds as we enter the election because they are nervous about not knowing who will be in control of the country.
After the election finished some money flows out of bonds and into stocks because there is now a president and direction for the country. Generally come the new year investors move to bonds as the safe haven as they try to figure out what their game plan is for new year.
So looking forward to this week and the next 2 months I would not be surprised to see bond prices rise or trade sideways while stocks move higher. This analysis is based on Obama winning. If Romney wins then I feel bonds will rally much more and stocks could sell off.
TLT Bond Exchange Traded Fund – Daily Chart:
Here is a chart of 20+ year bonds showing a possible reversal to the upside that could trigger as soon as next week. This chart is forward looking 1 – 2 weeks. Overall the trend remains down but if Romney wins I feel bonds breakout above the red resistance levels and trigger a new uptrend.
Election Year Trading Cycle Conclusion:
Next week is going to be very interesting to watch unfold. I generally do not like to trade or invest before news of this magnitude so trade smaller sizes if you do as price action could be wild.
Get my Daily Trading Analysis & Trade Setups at The Gold & Oil Guy.com
Chris Vermeulen
Thursday, November 1, 2012
AAPL Looks Ready Bounce and our Next Best Trade Ideas
AAPL shares have been in free fall mode all October spooking investors with a $120 drop from the all time high in September. As well all know, though it’s hard to follow without a proven trading strategy to keep us focused but the key is that you must buy when others are selling and then sell when everyone is buying.
Apple shares really have helped in holding the overall stock market up in the past but recently it has been a big drag on the broad market. Taking a look at the chart below you can see my analysis and thoughts of this giant.
The red horizontal line shows the key level where high volume traded in the past. For the market to reset (flush out investors/traders) it must shake as many longs out before it can start rising again. By the price breaking below that level which also happens to be a Century Number $600, most of the stops were placed down around this level. The volume spike of 40,000,000 shares clearly shows it triggered stops once that $600 level was broken. We want stops run because it give more power to the next rally/bounce.
NASDAQ Index:
The NASDAQ has formed a similar chart pattern and is heavily weighted with AAPL shares. Trading NQ futures, QQQ, QLD or the XLK exchange traded fund as a much more affordable way to play a bounce/rally in the coming weeks.
Russell 2000 Index:
I really like the Russell 2000 index because small cap stocks can rally hard and fast outperforming the large caps like AAPL, SP500, NASDAQ and DOW. This index is looking ripe for a bounce in the coming days which could trigger the next major rally to new highs. You can plan this index through TF futures contract, IWM, TNA, UWM exchange traded funds.
Trading Conclusion:
While this setup looks very promising because the election is almost over and the Santa Clause rally is just around the corner. Know that some of the biggest drops in the market happens during times when the market is running the stops. It is a natural tendency to take big positions which things look great, but that is not how you do it....Take calculated position sizes knowing indexes could fall another 2-3% before putting in a real washout bottom.
Get My Trade Alerts at The Gold & Oil Guy.com
Chris Vermeulen
Get our Free Trading Videos, Lessons and eBook today!
Apple shares really have helped in holding the overall stock market up in the past but recently it has been a big drag on the broad market. Taking a look at the chart below you can see my analysis and thoughts of this giant.
The red horizontal line shows the key level where high volume traded in the past. For the market to reset (flush out investors/traders) it must shake as many longs out before it can start rising again. By the price breaking below that level which also happens to be a Century Number $600, most of the stops were placed down around this level. The volume spike of 40,000,000 shares clearly shows it triggered stops once that $600 level was broken. We want stops run because it give more power to the next rally/bounce.
NASDAQ Index:
The NASDAQ has formed a similar chart pattern and is heavily weighted with AAPL shares. Trading NQ futures, QQQ, QLD or the XLK exchange traded fund as a much more affordable way to play a bounce/rally in the coming weeks.
Russell 2000 Index:
I really like the Russell 2000 index because small cap stocks can rally hard and fast outperforming the large caps like AAPL, SP500, NASDAQ and DOW. This index is looking ripe for a bounce in the coming days which could trigger the next major rally to new highs. You can plan this index through TF futures contract, IWM, TNA, UWM exchange traded funds.
Trading Conclusion:
While this setup looks very promising because the election is almost over and the Santa Clause rally is just around the corner. Know that some of the biggest drops in the market happens during times when the market is running the stops. It is a natural tendency to take big positions which things look great, but that is not how you do it....Take calculated position sizes knowing indexes could fall another 2-3% before putting in a real washout bottom.
Get My Trade Alerts at The Gold & Oil Guy.com
Chris Vermeulen
Get our Free Trading Videos, Lessons and eBook today!
Sunday, October 28, 2012
Is Santa Coming Early for Gold & Gold Mining Stocks?
By: Chris Vermeulen at The Gold & Oil Guy.com
If you own physical gold, gold mining stocks or plan on buying anything related to precious metals before year end, you are likely going to get excited because of what my analysis and outlook shows.
Since gold topped abruptly a year ago (Sept 2011) with a massive wave of selling which sent the price of gold from $1920 down to $1535, technical analysts knew that type of damage which had be done to the chart pattern could take a year or more to stabilize before gold would be able to continue higher.
Fast forwarding twelve months to today (Oct 2012). You can see that gold looks to have stabilized and is building a basing pattern (launch pad) for another major rally. The charts illustrated below show my big picture analysis, thoughts and investment idea.
Weekly Spot Gold Chart:
The weekly chart can be a very powerful tool for understanding the overall trend. This chart clearly shows the last major correction and basing pattern in gold back in 2008 – 2009. Right now gold looks to be forming a very similar pattern.
Keep in mind this is a weekly chart and if you compare the 2009 basing pattern to where we are today I still feel it could take 3 – 6 months before gold truly breaks out to the upside and kicks into high gear. The point of this chart is to provide a rough guide for what to expect in the coming weeks and months.
Weekly Chart of Junior Gold Miner Stocks:
If you follow gold closely then you likely already know junior gold mining stocks can lead the price of gold up to two weeks. Meaning gold mining stocks which you can track by looking at GDX and GDXJ exchange traded funds will form strong bullish chart patterns and generally start moving up in price before physical gold.
The chart below shows the junior gold miner ETF with a VERY BULLISH chart and volume pattern. Remember that gold stocks are a leveraged play on gold in most cases. For example, if gold moves up 1% we typically see GDX and GDXJ move 2-4%. Because they act as a leveraged play on physical gold smart money and big institutions start accumulating these investments in anticipation of gold rising.
GDXJ has formed a tight bull flag and the volume levels confirm there is big money moving into these investments. The first price target on GDXJ using technical analysis for a measured move points to the $32 area. Looking forward twelve months with gold trading above $2000 we could see this fund more than double in value.
Bonus: while most traders focus on GDX gold miner fund, I prefer the GDXJ fund because its almost identical in price performance BUT it pays you a 5% dividend....
Gold’s Seasonality:
It’s that time of year again where gold tends to move higher. Below you can see where we are and what the price of gold typically does in November.
Gold Investing & Trading Conclusion:
Looking forward one month (November) and factoring in the recent pullback in gold to known support levels along with strong buying of junior gold mining stocks, I feel gold will take another run at the $1800 level and for GDXJ to test its previous higher of $25.50 at minimum. If both those levels get taken out then a massive bull market for precious metals could be triggered. Only time will tell.
Get my Daily Trading Analysis & Trade Setups at The Gold & Oil Guy.com
Chris Vermeulen
Get our Free Trading Videos, Lessons and eBook today!
If you own physical gold, gold mining stocks or plan on buying anything related to precious metals before year end, you are likely going to get excited because of what my analysis and outlook shows.
Since gold topped abruptly a year ago (Sept 2011) with a massive wave of selling which sent the price of gold from $1920 down to $1535, technical analysts knew that type of damage which had be done to the chart pattern could take a year or more to stabilize before gold would be able to continue higher.
Fast forwarding twelve months to today (Oct 2012). You can see that gold looks to have stabilized and is building a basing pattern (launch pad) for another major rally. The charts illustrated below show my big picture analysis, thoughts and investment idea.
Weekly Spot Gold Chart:
The weekly chart can be a very powerful tool for understanding the overall trend. This chart clearly shows the last major correction and basing pattern in gold back in 2008 – 2009. Right now gold looks to be forming a very similar pattern.
Keep in mind this is a weekly chart and if you compare the 2009 basing pattern to where we are today I still feel it could take 3 – 6 months before gold truly breaks out to the upside and kicks into high gear. The point of this chart is to provide a rough guide for what to expect in the coming weeks and months.
Weekly Chart of Junior Gold Miner Stocks:
If you follow gold closely then you likely already know junior gold mining stocks can lead the price of gold up to two weeks. Meaning gold mining stocks which you can track by looking at GDX and GDXJ exchange traded funds will form strong bullish chart patterns and generally start moving up in price before physical gold.
The chart below shows the junior gold miner ETF with a VERY BULLISH chart and volume pattern. Remember that gold stocks are a leveraged play on gold in most cases. For example, if gold moves up 1% we typically see GDX and GDXJ move 2-4%. Because they act as a leveraged play on physical gold smart money and big institutions start accumulating these investments in anticipation of gold rising.
GDXJ has formed a tight bull flag and the volume levels confirm there is big money moving into these investments. The first price target on GDXJ using technical analysis for a measured move points to the $32 area. Looking forward twelve months with gold trading above $2000 we could see this fund more than double in value.
Bonus: while most traders focus on GDX gold miner fund, I prefer the GDXJ fund because its almost identical in price performance BUT it pays you a 5% dividend....
Gold’s Seasonality:
It’s that time of year again where gold tends to move higher. Below you can see where we are and what the price of gold typically does in November.
Gold Investing & Trading Conclusion:
Looking forward one month (November) and factoring in the recent pullback in gold to known support levels along with strong buying of junior gold mining stocks, I feel gold will take another run at the $1800 level and for GDXJ to test its previous higher of $25.50 at minimum. If both those levels get taken out then a massive bull market for precious metals could be triggered. Only time will tell.
Get my Daily Trading Analysis & Trade Setups at The Gold & Oil Guy.com
Chris Vermeulen
Get our Free Trading Videos, Lessons and eBook today!
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