Gold and Crude Oil Showing Signs of Strength and Higher Prices

This has been an interesting year for both gold and oil. There has been wild price swings due to extreme political, economic and weather events round the globe making these commodities a little more difficult to trade than normal. That being said if we look at the charts it appears we could be at the beginning stages of another major rally in both stocks and commodities.

Let’s just jump right into the charts…..

Gold Miner Stock Bullish Percent Index:
If you take a look at the bullish percent chart for gold miner stocks it appears that stocks are trading at the lower reversal zone. The last time we had a similar setup like this gold rallied 15% and gold stocks jumped nearly 25% over the following 3 months.

Gold Bullion 4 Hour Futures Chart:
This chart of gold shows us that a bottom formed in early July and that buyers are now in control. It looks as though we are getting the first impulse leg which should top out around $1550. After that I would expect some type of pause or pullback before price continues higher. This is also when I will be looking to enter precious metals as long as price and volume action confirm this upward thrust.

Energy Sector Bullish Percent Index:
While these bullish percent charts are not the best for entry points in the market, they do warn us of possible tops or bottoms. This allows us to adjust our protective stops, entry prices and or profit targets. This BP chart of the energy sector looks as though it’s trying to bottom. I would like to see the June high get taken out on both the BP chart and XLE etf before thinking energy is in a new uptrend.

Crude Oil 4 Hour Futures Chart:
This chart shows the inverse head and shoulders pattern which formed over the past couple weeks. Simple analysis provides us with a short term bullish pattern and price target.

Mid-Week Trading Conclusion:
In short, I feel the US dollar is about to start heading lower once again and that will help boost stocks and commodities. Most stocks and commodities are trading just under key resistance levels so the next couple trading sessions are important. We need to see another push higher for these resistance levels to be taken out. If that happens then the sky is the limit for the next rally.

Also, I would like to see the energy and financial sectors start to rally here and Also we need to see the US dollar head back down in the coming sessions.

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Metals Market Takes Center Stage in Wednesday Trading

The stars of the show today have to be the metal markets. Gold has rallied $50 from the low that we witnessed last week and is up over 1% today. Silver is even better with a rally of 1.82%. It seems as though the global anxiety factor is creeping back into the markets and people are getting more and more distrustful of what’s going on in the world.

The question is, can the Democrats and Republicans stop their bickering long enough and come to an agreement on the debt ceiling? Eventually, I’m sure there will be some sort of compromise that will probably make both the liberals and the conservatives mad. It’s really time to stop all this bickering and start making some hard and difficult choices. I’m not sure the current set of politicians have the chutzpah to do this.

The banks stocks took a little hit today and it’s clear that these stocks are not out of the woods yet.

Let’s take a look at how things are shaping up today and go to the charts to see how we can protect and make your money grow. Click here to watch the video.

S&P 500: +100. The $1,340 level is proving to be the decisive place for the S&P 500. We’re now at the top of the Donchian channel and the market is very overbought. We expect to see more two-way action in the days ahead and eventually this market to roll over and possibly form the right shoulder of the head and shoulders formation. Although, trade triangles remain in a positive mode and that should not be ignored. Look for support to come into this market around the $1,300 level.

Silver: +75. Silver will put in another positive performance today moving up over the $36 an ounce level. This market is fast approaching the top of the Donchian trading channel and also moving into overbought territory. Our trade triangle technology is mixed at the moment with the longer-term trend being positive and the intermediate term trend being negative. Intermediate term traders should be on the sidelines in this market. We still believe that silver is building a major energy base to go higher.

Gold: +75. Gold has rallied over $50 an ounce in the space of four trading days and is acting like it is making a major energy base to push higher later in the quarter. Resistance starts around the $1,540 range. Long-term trends with the trade triangles are positive while intermediate term trends are neutral.

Crude Oil: -55. It looks as though the crude oil market has reached a level of equilibrium with the $98 a barrel price acting as some short term resistance point. We are still looking for this market to potentially challenge the triple digits over $100 a barrel. The market is however overbought so we may see some more two-way action. We are still watching the bullish engulfing line from last week and a higher close this week confirms that a bottom is in place.

The Dollar Index: -65. The market bounce we described in yesterday’s 1 PM update for the dollar index took place with the dollar over the $75 level for the first time in six days. This market remains trapped in a broad trading range, however the longer term trend for the dollar index is still negative according to our trade triangle technology. Resistance remains between $75 and $76.

Thomson Reuters/Jefferies CRB Commodity Index: -65. This index is back to the midpoint of the Donchian trade channel and has just moved into an overbought situation. We expect that we will see more backing and filling in this market before it starts to move higher. If crude oil goes to $100 a barrel, then we are probably looking at this index around $350. Look for support at $335 and again at $330.

Just Click Here to watch our most current video for Wednesday July 6th.


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SP500, Financials and Tech Stocks Playing off of our June 19th Article

A couple weeks back on June 19th Chris Vermeulen posted an analysis on how the stock market was bottoming and that we needed a couple key sectors to participate before we would get a solid bounce. You can quickly review the charts at  "Is This Market Flashing a Buy Signal or Another Market Collapse"

Today’s report plays directly off the June 19th analysis showing you the price movement from then on.

SP500 – SPY ETF Daily Chart
As you can see during early June the market became volatile with a broadening formation. This type of price action is an early warning that a trend reversal is near. It was only two days later when we saw stocks make a new high, which is the first ingredient for a trend reversal to take place. But once a higher high was made sellers quickly jumped back into the market pulling price back down. Keep in mind the higher high which was made was another early sign that a trend reversal was likely to happen.

During this time I was watching the charts like a hawk keeping a close eye on the time and sales window which I have filtered to show me only orders with a market value of $3million dollar or larger. This helps me keep a close eye on what the big money players are doing… Following their coat tails if done correctly will help keep you out of the market at times and also gets you in before the masses jump on the wagon.

The two key sectors I talked about on June 19th were the Financials and Tech. Both these sectors must move up if we are to get a decent bounce/rally in the market.

Financial Sector Daily Chart:
By zooming out on the daily chart we can see in terms of both price and volume that the financial sector was at a major support level. Also it had just fallen sharply for more than a week making it oversold and ready for a bounce.

Only a couple days later financial stocks rocketed 11% higher as expected and the broad market (SP500) posted some decent gains for us also.

Let’s take a look at the financial sector:
The tech sector was in the same boat as the financials above… Tech stocks jumped an average 6%.

Weekend Trading Conclusion:
In short, I feel the market has shown us some decent upward momentum and everything is now at the point where a pause is likely. I expect some type of pause or pullback in the coming week and then the market has a major decision to make. Will it continue and start a new leg higher or roll over and die… That’s the next key question/action about to take shape and I will help guide you through these times each day with my pre-market morning video analysis.

Get Chris Vermeulens Daily Pre-Market Trend Trading Videos, intraday updates and weekly market reports for at a big discount for at The Gold and Oil Guy.com

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Susan Jackson: Trade Triangles Show Crude Oil and U.S. Dollar Falling Together

In today's video we have INO.com's own Susan Jackson analyzing the major markets including fall of crude oil and the U.S. Dollar.

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Crude Oil, Natural Gas and Gold Week Ending Market Commentary

Crude oil posted an inside day with a higher close on Friday as it consolidated some of this week's decline. The mid range close sets the stage for a steady opening on Monday. Stochastics and the RSI are oversold, diverging and are turning neutral to bullish hinting that a low might be in or is near. Closes above the 20 day moving average crossing at 97.85 are needed to confirm that a short term low has been posted. If August extends this month's decline, the 50% retracement level of the 2009-2011 rally crossing at 86.32 is the next downside target. First resistance is the 10 day moving average crossing at 94.70. Second resistance is the 20 day moving average crossing at 97.85. First support is Thursday's low crossing at 89.69. Second support is the 50% retracement level of the 2009-2011 rally crossing at 86.32.

Natural gas closed higher due to short covering on Friday as it consolidated some of this month's decline. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If August extends the decline off this month's high, the 87% retracement level of the March-June rally crossing at 4.119 is the next downside target. Closes above the 20 day moving average crossing at 4.593 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 4.430. Second resistance is the 20 day moving average crossing at 4.593. First support is Thursday's low crossing at 4.186. Second support is the 87% retracement level of the March-June rally crossing at 4.119.

Gold closed sharply lower for the second day in a row on Friday as it extended yesterday's breakout below this year's uptrend line crossing near 1529.80. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are diverging and are turning bearish signaling that sideways to lower prices are possible near term. Today's close below the reaction low crossing at 1511.40 confirms a top has been posted and trend change has taken place. Closes above the 20 day moving average crossing at 1534.60 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 1529.80. Second resistance is the 20 day moving average crossing at 1534.60. First support is today's low crossing at 1498.50. Second support is the 38% retracement level of this year's rally crossing at 1477.10.


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Rigzone: Crude Oil Falls on IEA's Surprise Move

Crude prices plummeted to a four month low Thursday after the International Energy Agency (IEA) said it would release an emergency oil supply to alleviate high prices.

In an attempt to offset the supply disruption caused by Libya's civil war, the IEA said it will release 60 million barrels of oil over a 30 day period. Its members will release 2 million barrels of oil per day (bpd). Half of the amount will be provided by the U.S. Strategic Petroleum Reserve, which currently stores 727 million barrels of crude.

The IEA last tapped emergency resources in September 2005 after Hurricane Katrina disrupted production on the U.S. Gulf Coast.

Light, sweet crude lost $4.39 Thursday, settling at $91.02 a barrel. Prices traded as low as $89.69 and peaked at $94.47. Meanwhile, Brent crude ended Thursday's session at $107.26 a barrel, down $6.95. Goldman Sachs claims IEA's surprise release could cause Brent prices to decrease by $10-$12 a barrel by the end of July.

Likewise, natural gas for July delivery settled lower at $4.193 per thousand cubic feet. The drop came on government reports showing an increase in U.S. inventories. The U.S. Energy Information Administration (EIA) said stockpiles grew by 98 billion cubic feet last week. This marks the year's second largest increase in U.S. natural gas inventories.

The intraday range for natural gas was $4.15 to $4.34 Thursday. Front month gasoline futures settled down 13.57 cents at $2.84 a gallon. Prices fluctuated between $2.785 and $2.955 a gallon.

Posted courtesy of Rigzone.Com

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Does Helicopter Ben Really Know Best?

Yesterday it was Greece, today it’s Ben Bernanke and the FED. What is really going on with the equity market is that no one has strong feelings either on the upside or downside . This neutrality is reflected in our +55 reading indicating that the market remains in a trading range. Today we want to do something a little bit different, I am going to go through each of the markets quickly, and then zoom in and focus on two markets crude oil and silver. I think you’ll find our analysis quite interesting and informative.

Now let’s take a look at what’s happening in the markets....

S&P 500: +65. The market action continues to reflect a trading range. Major downside support is at $1,250. Upside resistance begins at $1,300.

Silver: +75. We talk about this market in more detail in the video, so tune in!

Gold: +100. All systems are go for gold but the market appears to be going up grudgingly. The weekly Donchian channel has resistance at $1,575 today. Major support at $1,513.

Crude Oil: -75. We also cover this with more detail in today’s video.

The Dollar Index: -80. Our indicators are still negative longer-term for the dollar. Minor support at $74.00. Major support at $73.00. Look for a test of the lower line of the Donchian channel which comes in at $73.54.

The Thomson Reuters/Jefferies CRB Commodity Index: +55. We are at the lower range of the Donchian channel and the market is oversold. We would not rule out some sort of bounce from current levels. Market remains in a broad trading range.

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New Video: Greece Votes Tonight, Sell Indicators for Crude Oil, Gold Buy Signals Galore!

All eyes are on Greece as the vote will be taken this afternoon at five o’clock Eastern standard Time. That is a vote of confidence on the last 30 measures and also on the government. As you know, the market has been in an oversold condition and I think today’s rally was reflective of that move from an oversold condition.

Crucial 5 PM Vote comes in when the markets are closed. If there is a vote that is negative then these markets will come crashing down tomorrow. This is just like gambling in that no one knows what’s going to happen with the Greek government. My own view is if they do agree on what they’re doing it will just be kicking the can down the road.
Now let’s take a look at the markets.....

S&P 500: +55. The market action continues to reflect a trading range. Yesterday we mentioned that this market was at the lower range of the channel and expected amounts. Today is that bounce. Major downside support is at $1,250.

Silver: +55. This market continues to contract and it does look like it is getting ready for a move one way or the other. We would wait for our trade triangles to kick in to give us that direction. Market is oversold and expect to see a bounce from current levels. Near term resistance at $39.00. Support at $34.00.

Gold: +100. All systems are go for gold and we expect this market to do better. The Donchian channel has resistance at $1,353 today. Major support at $1,513.

Crude Oil: -100. Today’s action in crude oil is very negative. The trend in crude oil is clearly down with all of our Trade Triangles in a negative position. The market did bounce as we expected from the lower levels of the Donchian channel. Look for more two way action in this market.

The Dollar Index: -80. Our indicators are still negative longer term for the dollar. Minor support at $74.00. Major support at $73.00. Look for a test of the lower line of the Donchian channel which comes in at $73.54.

The Thomson Reuters/Jefferies CRB Commodity Index: +55. We are at the lower end of the Donchian channel and the market is oversold. We would not rule out some sort of bounce from current levels. Market still appears to be in a broad trading range.

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U.S. Financials Still Look Sick....Would You Have Bet on the Malaysian Index?

The big news over the weekend was Greece and the 17 nations were unable to come to an agreement to put together a package for that beleaguered country. This agreement has been pushed off yet again until July. Markets both here and Europe initially reacted in a negative fashion but have come back and appear to be regrouping and rethinking the implications of this delay.

The bank stocks however still look sick and the trends are clearly down in this sector.

The Shanghai and Hong Kong indexes are also looking very negative as are most equity indexes around the world. The only index that is looking positive using our trade triangle technology is the Malaysian index.

Let’s take a look at the major markets now.....

S&P 500: -60. The market action continues to reflect a trading range. The market is at the lower end of the Donchian channel and is oversold so we may see a rally to resistance around $1,300. Major downside support is at $1,250.

Silver: +55. I would watch this market very carefully as I feel that it is probably at the lower end of its range. We would use the Donchian channel as support. We may bounce around for another couple of weeks but come July I think we’ll see this market on the move. Market is oversold and expect to see a bounce from current levels. Near term resistance at $36.00. Support at $34.00.

Gold: +90. All systems are go for gold and we expect this market to do better. The Donchian channel has resistance at $1,353 today. Major support at $1,513.

Crude Oil: -90. The trend in crude oil is clearly down with all of our Trade Triangles in a negative position. The market is however heavily oversold and at the lower end of the Donchian channel. We would expect to see a bounce from current levels but would like to see more positive action.

The Dollar Index: -65. Our indicators are still negative longer term for the dollar. Minor support at $74.00. Major support at $73.00. Big resistance at $76.00.

The Thomson Reuters/Jefferies CRB Commodity Index: -70. We are at the lower end of the Donchian channel and the market is oversold. We would not rule out some sort of bounce from current levels. Market still appears to be in a broad trading range.



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Is This Market Flashing a Buy Signal or Another Market Collapse?

Since the first trading session in May we have seen the stock market sell off. The old saying “sell in May and go away” was dead on again this year. Here we are 7 weeks later with the stock market continuing to lose ground. This extended sell off has everyone all worked up that this is the beginning of another market collapse.

Let’s take a quick look at the SP500 hourly chart covering the month of June.

As you can see, price is still falling but every couple of trading sessions we get some big money players nibbling on stocks accumulating shares and running the market higher. This type of price action is typically an early signal that the market is trying to bottom.

There are two key ingredients for a higher stock market and both have been missing from the mix for a couple months. The two key sectors which have a significant weighting in terms of the broader market are the financial and technology stocks.

Let’s take a look at the financial sector:
As you can see on the bottom of this chart, financials started to lag the market in late January. Ever since then this sector has been in a strong downtrend pulling the broad market averages lower with it. The good news is that this sector has just reached a major support zone and is looking ripe for a bounce and possible rally.

The other main ingredient to a higher stock market is the technology sector.

Looking at the technology sector:
Here we can see technology stocks have been pulling back for several weeks. Tech stocks are now trading down at a major support zone and they look oversold. A bounce from this level is very likely in the coming week.

Weekend Trading Conclusion:
In short, I continue to feel the market is trying to bottom here and we are at the tipping point when things get volatile and choppy just before we get a trend reversal in the S&P 500. Keep an eye on the short term charts of financials and technology sectors. Once they start making higher highs and higher lows on the 60 minute charts I believe it will be the start of a nice bounce and possible rally.

Get Chris Vermeulens free weekly technical analysis on sectors here at The Gold and Oil Guy.Com

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