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.

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

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.

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

Is this a "Bearish Outside Reversal" in Natural Gas?

June Natural Gas (NG.M14.E) opened sharply higher in Sunday evenings session, but since the open prices plummeted to a 5 day low. The sell off confirmed a bearish outside reversal ahead of today's U.S. session. June Natural Gas futures remain under pressure from last week's EIA storage report that showed a larger than expected supply build of 82 bcf. Recent weather forecasts have been calling for warmer temperatures across the country which could limit the size of upcoming supply injections.

In recent weeks, we have been in a sideways trend in the June Natural Gas Market as the market decides on which direction it is headed next. The technical analysis in Natural Gas points to bearish in the near term, making way for a potential swing trading opportunity.

In today's trading session, I will be looking to sell June Natural Gas futures at 4.660, or a breach of the 20 Day Moving Average. This breach would confirm the outside reversal in today’s trading session. My first downside target would be 4.500, a recent area of support in the market, at which point I would roll stops to break even. If the 4.500 are is hit, then I would look at 4.380 as my next target, which would be support from the long term trendline. To mitigate risk on the trade, stop loss orders should be placed just above today’s trading range and rolled behind the trade accordingly.

See you in the market!
 Posted courtesy of James Leeney and our trading partners at INO.com



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Chart of The Week - June Crude Oil Futures

As the week starts, our attention turns to the June Crude Oil futures (NYMEX:CL.M14.E). After gaining nearly $7/barrel in less than a month, the market has recently consolidated around $103.50/barrel as it begins to decide which direction it will take. It appears that some of the recent slowing of the market is due to profit taking, as the recent sharp up trend may have gained too much too soon.

There are a number of fundamental factors at play in the market, many of which seem to work in contrast with each other: support from Russia-Ukraine uncertainty, resistance from ample supply concerns, and improved demand prospects following solid U.S. Economic data last week. With a number of different fundamental factors in play – and uncertainty over which fundamental factor the market will focus on moving forward – I will focus on the technical aspects of the market for a potential trading opportunity.

Thursday’s range last week was consolidated within the previous day’s range and a move above or below that range should give us good direction to go off of. The market has started off weak this morning, and being close to $105/barrel resistance, I think that a correction off of this recent move is the more likely direction.

In the case of a move below last Thursday’s low print of 102.75, I would be a seller in this market as it will have broken this consolidation. If filled, I would place a protective stop order above Thursday’s high of $103.92. My short term target would be back down to the recent up trend line, rolling stops behind the position accordingly.

To take advantage of this move with a long term viewpoint, I would look to purchase relatively inexpensive call options and option spreads where risk on the position is limited to what you pay for the option.

Each week our trading partners at INO.com will be providing us a chart of the week as analyzed by a member of their team. We hope that you enjoy and learn from this new feature.


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Tuesday's Trading Gives Crude Oil Bulls Some Hope

Tuesday gives oil bulls some hope, but is this the short of a lifetime in crude oil?

September crude oil closed higher [107.38] on Tuesday. The high range close sets the stage for a steady to higher opening when Wednesday's night session begins. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If September extends the rally off April's low, weekly resistance crossing at 109.45 is the next upside target. Closes below the 20 day moving average crossing at 102.75 would confirm that a short term top has been posted.

First resistance is last Friday's high crossing at 108.93. Second resistance is weekly resistance crossing at 109.45. First support is the 10 day moving average crossing at 106.33. Second support is the 20 day moving average crossing at 102.75.

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