Gold, Silver, Oil and Natural Gas Mid-Week Trading Charts

From guest analyst Chris Vermeulen....

So far this week has been pretty slow. Large cap stocks continue to lag the market which can be observed by looking at the Dow Jones Industrial Average which still has room to move higher before breaking the January high.

One important thing to note is that volume has picked up this week considerably, particularly on the SP500 and OEX. It’s difficult to say if this volume is a good sign or not.

A lot of stocks and sectors are trading near their January high and this gives traders a reason to unload shares. On the flip side, the several sectors and indexes have broken their January high and this triggers a surge in volume as breakout traders try to take advantage of the new high and momentum. So you can see how the surge of volume is not a useful indicator right now.

Here are some charts of what I think we could see in the coming weeks.

US Dollar Index – Daily Trading Chart
I follow the US dollar index very closely simply because it affects the prices of stocks and commodities. I used a line chart below in order to take out the daily candle stick noise which made it very difficult for our eyes to pick up this pattern.

The chart shows a possible head & shoulders pattern and if that is the case then we should see the dollar start to slide lower. In turn, this would boost stocks and commodities. This is the fuel that I think could really move the market sharply higher in the coming weeks.



GLD Gold ETF – Daily Trading Chart
The price of gold looks to be setup for a nice bounce off support and the timing could just work out if the US Dollar starts to drop over the next few days. There could be a low risk setup just around the corner.



SLV Silver ETF – Daily Trading Chart
Silver has held up well but today’s reversal candle to the downside scares me a little. The odds are that silver will carry this strong momentum selling down for another 1-2 days. Again, with any luck, it will test support and the US Dollar will start to slide lower.



Crude Oil – Daily Trading Chart
Oil has had a great run the past month but as you can see it’s currently trading at the top of a large trading range. I would like to see a sideways move before it takes another run at the $84 level, but the 7 day bull flag that formed two weeks ago may have been enough to maintain the upward momentum. Again, if the Dollar drops we will see oil rally.



Natural Gas – Daily Trading Chart
This chart is actually very attractive looking. Even if you do not understand how to read charts I think it’s safe to say this one is a no brainer.

I will be closely watching for a potential low risk setup in the coming days.


Mid-Week Trading Conclusion:
In short, stocks and indexes are trading at resistance levels with many of them making new highs and that is great to see.

A lot of things are trading in limbo waiting to see what the US Dollar is going to do. Several months ago I posted some charts showing that 81 would be a key resistance level for the dollar. If it broke above that then 84 would be the next key level to watch. So we just have to wait and see… the hardest part of trading is the waiting.

Gold, silver, oil and natural gas all look like they could continue higher in the next few days if things unfold that quickly. But the market always finds a way to drag out moves so we could still be a 2-3 weeks away.

I hope this report helps give you an idea of where things are at in the market.

Just click here to receive Chris Vermeulens Free Trading Reports and Analysis.


Share

Year End Commodity & ETF Trend Trading Signals

Well, here we are with only hours left before the year is over. Virtually every investment is up other than the US dollar. Not much has changed since my last gold market trends report. But I have provided some interesting charts that show us what is possible in the coming weeks for the dollar, gold and natural gas.

US Dollar Trend Analysis – Resistance Levels
The dollar has shown some strength in the past month. It was a no brainer trade for 2009. You were either long gold or short the dollar. The chart below shows the key resistance levels for the $USD. I have a feeling we are going to see the dollar test the 80 -81 levels before rolling over and heading south again.

If this happens then gold and silver will continue to pull back. I am actually hoping the dollar moves higher and gold drops back to test the $1000-1060 level. This would clear the way for gold and the dollar to continue with their longer term trends with increased momentum (dollar collapses, gold goes parabolic).



GLD Gold ETF – Daily Chart
The daily gold swing trading chart is really starting to look attractive for a buy signal. Depending on what the US dollar does in the coming days will set the tone for gold.

We could see gold start to rally starting tomorrow or it will become volatile and start to sell off sharply in the coming days. Right now we have very light volume so any moves/breakouts cannot be taken seriously or with a large position.

If the dollar starts to rally we could see the GLD ETF drop to the $97.50 – $103 level.



Spot Gold Trend Analysis – 18 Day, 1hr Bar Chart
Starting in 2010 I will be providing futures trading analysis and signals so I thought I would provide a chart of the spot gold trend I have been day trading over the holidays.

This may seem like I am going against my #1 trading Rule – Never Trade Against the Trend, but the trend changes depending on time frame and trading style you are using. In short, gold reversed very strong 18 days ago just as we anticipated it would. The selling momentum was so strong it made for excellent gold futures day trading setups which I took advantage of over the past 10 trading days.

The chart below is of the 100 ounce gold GC Feb 10 futures contract which I traded. The chart is shrunk down and does not show my setups, nor does the chart look very sexy, but it clearly shows the direction of the trend and the BIG SELLING VOLUME.

The table shows my recent trades and if you take a close look all of the trades I did were Short Trades. Because the momentum and trend is down on this time frame I only traded perfect short setups (profiting from gold as it loses value).



UNG Natural Gas Trading Fund
UNG appears to be trading at resistance and starting to look like its rolling over. It did move above last weeks high which voids the reversal candle we had Tuesday and Thursday, or else it would have been a short setup for us. I don’t chase a trade, that’s my #2 rule, so I am waiting for a possible bounce here, test of resistance then another reversal back down.



Commodity & ETF Year End Trends
In short, we continue the waiting game for more setups in the coming weeks as volatility and volume creep back into the market. The dollar and gold are currently trading at pivot points and no one knows which way to play them.

Trading futures run virtually 24 hours a day and have provided some excellent trading opportunities that I will be providing in the coming weeks for traders.

Natural Gas is trading at pivot point and looking ready for another move down.

Crude oil and the board market I feel will top out in the next 2-5 days but nothing worth putting any money on at this time.

I would like to thank everyone for their kind words and support over the past 12 months. I wish you all a happy and safe New Years!

Just Click Here to sign up for FREE Weekly Newsletter and so much more from The Gold and Oil Guy.



Share