Saturday, April 30, 2016

Our Next Technical Price Targets for Gold & Silver

I have pointed out earlier, gold is forming a possible short term top. It is on the verge of completing a bearish ‘Head and Shoulder’ pattern. The pattern is confirmed if gold closes below $1220/oz. The downside pattern target for this setup is $1138/oz. 
If gold starts to rally and breaks out to the upside, then we should see the $1396 level be reached based on technical analysis.
I will open a new long gold position when the time feels right. With technical analysis strongly suggesting gold and silver have bottomed, New breakouts to the upside in metals and mining stocks can be bought.
goldtargets
On the other hand, silver has formed an almost perfect cup and handle pattern and has broken out of it. It has reached its first target objective; chances are that silver will either consolidate or pullback after having met its target or move up to $18.70/oz. levels, which is the pattern target of the ‘Cup and Handle’ pattern formation. However, new buying is not advised at current levels due to a poor risk-reward ratio.
If you have not read the post about what the Silver COT data is warning us about be sure to read this short post: Click Here
silvertarget
If we take a look and monitor the gold/silver ratio closely, recently, the ratio had touched its resistance of the past 20 years. Every time the ratio has returned from the resistance, the minimum it has retraced is to the levels of 45.
There are no reasons to believe that it will be any different this time around. Hypothetically, if gold were to remain at $1236/oz. and if the ratio corrects to 45, silver will reach $27.5/oz., which is a 62% increase from current levels.
Hence, it is prudent to stay with silver for a better return compared to gold once price has a pause to regroup before the next rally.
ratiotarget
How to Trade Gold & Silver Conclusion:
Buying gold and silver offer different rate of returns to the investors. If an investor is able to time both the precious metals, then the total returns will be ‘astronomically high’ in the future.
My timing ‘cycles’ provide signals both for the short term and the long term. The price action of both gold and silver along with my cycles have been showing VERY strong “Cycle Skew”, which I explain in detail in my book “Technical Trading Mastery”. This cycle skew is telling us that precious metals are now in a strong uptrend and is another confirming indicator that support much higher prices long term.
During the first half of a bull market trading price patterns and upside breakouts tend to work very well. Because interest in the sector is growing and more buyers continue to enter that market, price pattern breakouts are the last chance to get a position before price has its next rally higher.
I will continue to inform my subscribers of new swing trades, and even more importantly the long term investing "Set it and Forget It" ETF trades to ride out the new bull and bear markets for massive profits.
Keep following me to know more at: www.The Gold and Oil Guy.com
Chris Vermeulen



Stock & ETF Trading Signals

Wednesday, April 20, 2016

Here’s The Only Oil Stock You Should Own Right Now

By Justin Spittler

It was the most important oil meeting in years. The world was watching closely on Sunday as 16 major oil nations met in Doha, Qatar. Saudi Arabia and Russia, two of the world’s biggest oil producers, were among the heavyweights in attendance. The purpose of the meeting: to reach an agreement to “freeze” oil production at current levels. It was the first time in fifteen years that OPEC, a cartel of 13 oil producing countries, met with nonmembers to discuss freezing output.

As you likely know, the price of oil has crashed 75% since June 2014. Thanks to new methods like “fracking,” the world has too much oil. According to the International Energy Association, oil companies produce about 1.4 million more barrels of oil a day than the global economy consumes. 

In February, oil hits its lowest price since 2003. Low oil prices have slammed economies that depend on oil. For example, Saudi Arabia posted its largest budget deficit in history last year. And Russia’s currency has lost 49% of its value since oil prices began to decline.

Low oil prices have slammed major oil companies, too. Last year, British oil giant BP (BP) recorded its biggest annual loss ever. U.S. oil giants Exxon Mobil (XOM) and Chevron (CVX) earned their lowest annual profits since 2002 last year. Since June 2014, shares of these three oil companies are down 27% on average.

Many experts hoped an agreement to freeze production would support oil prices…
But the countries failed to reach an agreement. Bloomberg Business explained why.
Discussions broke down after Saudi Arabia and other Gulf countries rejected any deal unless all OPEC members joined including Iran…
Iran didn’t even attend the meeting in Doha…
For years, economic sanctions have cut off Iran from the global economy. These sanctions were put in place to prevent Iran from building a nuclear bomb. They crippled Iran's economy in the process. Iran’s oil exports have plunged 45% since 2011.

The U.S. and five other countries lifted these sanctions last year. With the sanctions gone, Iran plans to significantly boost its oil production. In March, Iran pumped 3.3 million barrels per day (bpd), which made it the world’s sixth-biggest oil producer. It hopes to soon increase that to 4 million bpd.
Iran also plans to double its oil exports. In February, Iran sold oil to Europe for the first time since 2012. Bloomberg Business explains:
Iran’s oil minister called a proposal by Saudi Arabia and Russia to freeze oil production “ridiculous” as it seeks to boost output after years of sanctions constrained sales.
Yesterday, the price of oil plunged 6.4% on the bad news…
But it recovered almost all its losses, ending the day down just 0.7%. Today, it’s up 3.2% Oil stocks shrugged off the bad news, too. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which tracks major U.S. oil producers, rose 2% yesterday. We see this as an important bullish sign for oil stocks. This bad news could have easily pushed oil below $30 a barrel. Instead, oil is trading higher today than it was yesterday.

It looks like the worst is over for oil stocks…
Although we’re not “calling the bottom” in oil stocks, we do think the oil market has entered a new phase.
You see, when an industry crashes as hard as oil has over the past 18 months, all stocks in the industry usually tank. Even the best companies suffer big losses. But when a crashing market nears a bottom, things start to change. Investors looking for bargains begin to buy top quality companies. Strong companies start to separate themselves from the weak. That’s happening in the oil sector now.

For example, Exxon, the world’s largest publicly traded oil company, has jumped 14% this year. Chevron, the second largest, has jumped 11%. These are both large, quality oil companies. Meanwhile, weaker companies are still fighting to survive. They’re bleeding cash. To make money, they need oil at $50 or higher. Yesterday, oil closed at $41.47…and that’s after a 50% rally since February. We’re not saying oil prices are ready to head higher. As we mentioned, the world is still oversupplied by about 1.4 million barrels per day. We’ll likely see more defaults and bankruptcies in the oil sector.

But we are saying now is a good time to start buying cheap, extremely high quality oil stocks…
Because oil is likely to stay low for at least several more months, it’s important to buy only the very best oil businesses. Stick with companies that have big margins, plenty of cash, and little debt. Only invest in companies that can make money even if oil stays low.

Nick Giambruno, editor of Crisis Investing, just recommended one such oil company. If you don’t know Nick, his specialty is buying quality assets for cheap, when no one else wants them. Following this strategy has allowed him to make large gains for subscribers, like the 210% gain he made on Cypriot hospitality business Lordos Hotels in the wake of that country’s banking crisis a few years back. Nick has been keeping a close eye on the oil industry for months…waiting for the right time to buy. And last month, he told his readers it was finally time to “pull the trigger.”

He recommended a world class oil company with “trophy assets” in America’s richest oil regions...a rock solid balance sheet…and some of the industry’s best profit margins. Most importantly, the company is making money. According to Nick, some of the company’s projects are profitable at as low as $35 oil.
Nick is certain this company will survive the current downturn. Its stock could deliver huge gains when oil prices recover past $50.

You can learn more about this opportunity by signing up for Crisis Investing. Click here to begin your risk-free trial.

Chart of the Day

Silver is having its best day in six months. If you’ve been reading the Dispatch, you know silver recently “broke out.” More specifically, it “carved a bottom.” That happens when an asset stops falling, forms a bottom for a period of time, and starts heading higher. Assets often keep rising after carving bottoms. As you can see below, that’s exactly what silver’s done. Today, silver skyrocketed 5.3%, its biggest jump since October. Silver is now up 23% on the year. It’s at its highest price since last April.

At risk of sounding like a broken record, we think silver is headed much higher. It could easily triple in the coming years. Silver stocks, which are leveraged to the price of silver, could go even higher. If you would like to speculate on higher silver prices, we recommend you watch a short video we just put together. It explains how you could grow your money by 10x or more in the coming years. If interested, you’ll want to watch this presentation soon. It will no longer be available after tomorrow.

Click here to watch.



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Stock & ETF Trading Signals

Monday, April 11, 2016

Massive Surge in Precious Metals and a New Spike Alert

Metals and mining stocks continue to rock higher decoupling from our cycle analysis to create a strong impulse wave higher. This is what I feared last week and talked about happening and is the reason we had our protective stop for our short gold trade so we would keep that trade as a winner. Also, my gut was warning that this cycle break and emotional rally was trying to happen, and that is why we did not re-enter a short position in this sector.
The last two weeks this sector has been moving fairly sporadically and out of sync. Because of this, I have not covered it in much detail. Yesterday Obama announced an unexpected and expedited closed door meeting with the FED for today. I think this may have everyone worried and buying metals today.
Today’s massive gap and rally actually have me very interested in a short trade for gold. With the chart forming a balance head and shoulders pattern, price trading at resistance, a news/fear based rally, along with a short term cycle topping today, this could be a great low-risk trade and price may fade back down over the next 1-3 days.
See chart below or login to view:
goldshort

Couple things to touch on here:
First, I would like to mention and be clear that while I share some spike alert setups here and there with you, those trades are not the main focus of this newsletter and my trading. This year the way the markets have been gyrating spike trades have definitely filled the void for a lack of swing trades and long term investment positions.
We will sooner than later start building some new long term positions and have swing trades. But it is difficult because so many markets are all trying to change directions and chopping around. I don’t want us holding onto trades that will be all over the place for several weeks before moving in our favor. We don’t need that stress. Rather, I’m trying to hold off as long as I can before getting positioned. Don’t worry, they are coming!
Second, I know many of you love the price spikes as they provide a steady stream of winning trades each week. Friday morning was a quick $900 profit, and this morning in the video I shared with you the SPY price spike that took place in pre market today. I traded it also for a quick day trade pocketing $400.00 in less than 1 hour to kick start the week.
You can see my trade today with my Interactive Brokers account. I waited to enter this trade until I felt the market shook out the short positions and got everyone bullish for the day. Then I sold short 1 the ES mini futures contract at 10:01am.
I have explained the market shakeout move before. How we see a price spike and the market, but the price will first move in the opposite direction to get everyone on the wrong side of the trade before it makes its move to reach the spike target.
Then 59 minutes later at 11:00am I bought back my short position and locked in 8 points ($50 per point x 8 = $400). Then another short position in the afternoon as the market started to breakdown again to fill the morning spike for another 11.5 points ($50 per point x $11.5 = $575).
spiketargets
Just these three trades you were able to pocket $1,8670.00 which is more than enough to cover 4 years of me sharing analysis and trades with you… not too shabby!
I will be creating a mini course/guide on how to trade Spike Alerts soon because there is an art to doing it well. Plus, I am working on a solution so those of you who want to keep rocking with the price spikes can do so without me bombarding every member with all this day trading/momentum analysis and updates.
I totally understand and feel for those who just want long term and swing trades and not intraday updates all the time. So, I’m working to satisfy both groups.

Get Chris' Swing Trading and Long Term Investing Signals....Just Click Here!


Stock & ETF Trading Signals

Wednesday, April 6, 2016

Don Kaufman shows us how to "Protect & Profit" in any Market

Today we want to introduce the newest member of our team, Don Kaufman. Don has made quite a mark in the last couple months with the introduction of his new TheoTrade program. Truth is, some of our readers have stated they are getting more from his free videos then some of the more expensive programs they have purchased.

Don will be bringing us a free webinar monthly to keep us on the cutting edge of these extremely volatile markets. Just take advantage of any one of his free items. Getting his free eBook or even just watching his most recent free video will guarantee that you will get notified of the free webinars.

So what's in the "How to Protect & Profit in Any Market" eBook?

This 50 page eBook [visit here for free download] will teach you what you need to know to start playing the markets instead of the markets playing you.

Your Portfolio Deserves More Than a 50/50 Chance 
It has been shown statistically, over the long run, that fundamental and technical analysis is right about 50% of the time. Flipping a coin will give you the same percentage. As the author of A Random Walk Down Wall Street, Malkiel states, “Technical and Fundamental analysis is a science giving astrology a good name.” Why flip a coin when you can use high probability options strategies?

Diversification is Dead
As a Wall Street saying goes, "When they raid the house they take everyone." Professionals consider diversification as a hedge for people who don’t know how to hedge. Think about it - would you protect the value of your own home against a potential fire by diversifying, that is, buying two houses so if one burns down, the appreciation in the other offsets your loss? Of course not! You insure your home so if it burns down, the insurance covers most of the loss. Welcome to one aspect of using options. Real professionals know how to use options to protect their portfolio from any shock to the markets.

Be The House 
Today, investing in the stock market is a big gamble, almost like going to Vegas and playing the slots. And we all know what happens with slot machines. The House always wins. It may take a loss occasionally, but the overall strategy assures that the House will always come out on top. Options let's you turn the tide and be the house. Find out how you can put the odds in your favor.

Get Don's FREE eBook "The Rebel's Guide to Trading Options"....Just Visit Here!

See you in the markets,
Ray C. Parrish
aka the Crude Oil Trader

About Don Kaufman 
Don is one of the industry's leading financial strategists and educational authorities with 18 years of financial industry experience. Prior to co-founding TheoTrade, Mr. Kaufman spent 6 years at TD Ameritrade as Director of the Trader Group. At TD Ameritrade Mr. Kaufman handled thinkorswim® content and client education which included the design, build, and execution of what has become the industry standard in financial education. He started his career at thinkorswim® in 2000 (acquired by TD Ameritrade in 2009), where he served as chief derivatives instructor, helping the firm progress into the industry leader in retail options trading and investor education services.

Sunday, April 3, 2016

The Answer to the Biggest Question in the Markets Right Now

By Justin Spittler

Are we in a bear market or a bull market? If you’ve been reading the Dispatch, you know that U.S. stocks have had a wild ride this year. The S&P got off to a horrible start in 2016, plunging 11% in just six weeks. But since mid-February, stocks have staged a huge bounce, climbing 13%. Regular readers know we’ve been skeptical of this big rally. We’ve argued that until the S&P 500 sets a new high, there’s little reason to be bullish. And we just got another clue that this rally is “suspect”.

The initial public offering (IPO) market is at financial-crisis lows.....
An IPO is when a private company goes public by selling stock to investors. The health of the IPO market can say a lot about the state of the stock market. Buying stock at its IPO is typically a high risk, high potential move. IPOs have a lot of potential because they’re often involved in a new or exciting business. Many investors who buy are hoping to get in early on the next Starbucks, Facebook, or Google.

However, IPOs are also very risky. The companies are often based on new or unproven business models. Many companies with an IPO are losing money every quarter. Some barely earn any revenue at all. More often than not, investors who buy IPOs are buying hopes and dreams, not stable, profitable business. When markets are healthy, investors are more willing to take a chance at buying an IPO. But when markets are shaky, IPOs tend to do poorly, as investors seek safer, more stable investments.

The number of U.S. IPOs plunged to a seven-year low last quarter.....
Investor’s Business Daily reported on Wednesday.
Just eight IPOs got out the door in Q1, down 76% from 34 in Q1 2015. That was the fewest IPOs since Q1 2009, which had just one. The $700 million in proceeds raised was the lowest total in 20 years, down 87% from the $5.5 billion raised in Q1 2015, according to Renaissance Capital, which manages two IPO-focused exchange traded funds.
Like us, The Wall Street Journal thinks this is a bad omen for the rest of the stock market.
[I]f the pace of IPOs doesn’t accelerate, it could be a warning sign for the rally.

The U.S. IPO market is heading toward its worst year since the financial crisis.....
On Tuesday, VentureBeat reported that just 24 companies have filed for IPOs this year. You can see in the chart below that the IPO market is on track to have its worst year since 2008.


We warned that the IPO market was slowing in October.....
Back then, the IPO market was just starting to show cracks. The S&P 500 was coming off its first 10% decline in four years. Companies are hesitant to go public when markets are volatile, because nervous investors are less likely to buy shares in an IPO. We also noted that several high profile companies either cancelled or postponed their IPOs. Supermarket chain Albertsons, which delayed going public in October, still hasn’t had its IPO.

Casey Research founder Doug Casey said to avoid one of the year’s most anticipated IPOs.…
The Italian carmaker Ferrari (RACE) went public on October 21. Days before the IPO, Doug urged readers of The Casey Report to not buy the stock.
Ferrari is going to have an IPO on its stock soon. A smart move on their part; when the ducks are quacking, you should feed them. I wouldn’t touch it if your broker offers you some…
Doug’s call was spot-on. Ferrari’s stock has plunged 25% since its IPO.

Most of last year’s IPOs have been huge disappointments..…
Investor’s Business Daily reports:
Among all IPOs of 2015, their stocks are down 18% on average from their IPO price and down 28% after the first trading day, Renaissance says.

Instead of buying IPOs, investors have been buying “defensive” stocks..…
For example, utility stocks have jumped 13% this year. The S&P 500 is up just 1%.
As Dispatch readers know, utilities tend to perform well when markets are shaky. No matter how bad the economy gets, folks still need running water, electricity, and gas to heat their homes. Investors often pile into utility stocks for safety.

Consumer staple stocks, which sell things like groceries, toothpaste, and laundry detergent, have also done well this year. The Consumer Staples Select Sector SPDR ETF (XLP), which tracks 39 consumer staple stocks, is up 5%. It hit an all-time high on Wednesday. Like water and electricity, folks buy these items no matter what’s happening with the economy.

Investors are also buying gold..…
As we often say, gold is money. It’s preserved wealth through economic depressions, currency crises, and every other kind of financial disaster. Investors often buy gold when they’re concerned about the economy or stocks. This year, the price of gold is up 16%. Yesterday, gold closed its best quarter since 1986.

Gold is the ultimate defensive asset.....
Even though utilities and consumer staple stocks are less risky than most stocks, they’re still stocks. They generally move with the rest of the market. During the 2008 financial crisis, the S&P 500 plunged 57%. Utilities fell 49%. Consumer staple stocks fell 34%. Gold only fell 29%. And in the aftermath of the crisis, gold recovered much more quickly than stocks. It went on to surge 167% from November 2008 to September 2011.

Today, gold is coming off a five-year bear market.....
It’s down 36% from its 2011 high. But as we mentioned earlier, gold has taken off this year. In case you missed it, Casey Research founder Doug Casey recently wrote an essay explaining why gold could easily triple. You can read it here.

There’s more risk than opportunity in U.S. stocks right now.....
The S&P 500 has climbed 205% since March 2009. That’s far more than the average gain of 136% for U.S. bull markets since 1932. The S&P 500 is also 56% more expensive than its historic average, according to the long term CAPE valuation ratio. U.S. stocks have only been more expensive three times in history: before the Great Depression...during the dot-com bubble...and leading up to the 2008 financial crisis.

Investors who buy U.S. stocks today are betting that the market keeps breaking records. That’s not a gamble we want to make. On top of owning gold, we encourage you to set aside cash. This will help you avoid major losses should U.S. stocks fall. And it will put you in a position to buy stocks when they get cheaper.

You could also make money “shorting” one of America’s most vulnerable industries.....
“Shorting” a stock is betting that it will go down. E.B. Tucker, editor of The Casey Report, recently recommended shorting a major American airline.The airline industry has been booming since the 2008–2009 financial crisis. But E.B. thinks the good times are coming to an end. In short, E.B. thinks the industry boomed on cheap credit, and that it will suffer huge losses when the easy money stops flowing.

E.B is targeting the most vulnerable U.S. airline. The company’s stock has surged an incredible 1,600% since March 2009. That’s eight times the return of the S&P 500. But like most stocks, it’s gone nowhere this year. It hasn’t set a new high since May. E.B. thinks this stock could plunge more than 50%. You can get in on this trade by signing up for The Casey Report. Click here to begin your risk-free trial.

Chart of the Day

Investors have turned bearish on biotech stocks. Today’s chart shows the performance of the iShares Biotechnology ETF (IBB), which tracks 189 biotechnology companies. Biotech companies develop or manufacture new drugs. Some of these companies are trying to cure diseases like cancer, HIV, and Alzheimer’s. Because a successful new drug can be worth billions of dollars, biotech stocks can soar hundreds of percent in short periods.

But they are also very risky. Most young biotech companies only have one or two products. And many biotech companies don’t make any money. Biotechs are the type of stocks investors like to own in a strong bull market. Between March 2009 and July 2015, IBB surged 574%. The S&P 500 gained 215% over that time. Since July, IBB has plunged 34%. It’s trading at its lowest price since October 2014.
The selloff in risky biotech stocks is more proof that investors have gone on the defensive.



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