The Stock Market Trend & Hot Sector ETF’s

Trading with the trend should be your main focus for long term success no matter what type of trader you are (Options Trader, Stock Trader, or ETF Trader) although it’s not as easy as it sounds.

The good news is that there is a simple trading model that removes 95% of trading analysis and greatly reduces trading related emotions because the key technical analysis rules based on one of the world’s best chart technicians (John Murphy) technical analysis methods have been applied to the chart automatically. The key is to identify the trend of the market. Once that is known you can focus on trading strategies that take advantage of the current trend.

Over the past few years I have been creating this indicator/chart layout tool which converts my chart reading experience, tips and tricks into a simple system removing analysis paralysis which cause most individuals to second guess what they see and don’t pull the trigger. Using too many indicators or read/listening several other traders commentaries with different views than you causes this paralysis.

My simple red light, green light model clearly shows a viewer the current trend and expected price range (high and low) looking forward a couple days. I uses a series of data points like volatility, volume, cycles, momentum, chart patterns and logic rules. It even shows extreme pivot points helping you find low risk entry prices for both bull and bear market conditions.

Recent trends and signals for the SP500 Index Daily Chart:



Trading With the Trend – The Sweet Spots

Knowing the direction of the market is simple using the chart system above but trading with the trend is not that simple because of natural human behavior. Instead traders fall victim to trying to pick a top or bottom because they think the price is overbought or oversold and they want to catch the next big trend change.

We all know the saying “the market climbs a wall of worry”. Well, the biggest worry most traders have is buying long in a bull market because stocks and price always look overbought and ready to top each week… This leads to people trying to get fancy picking a top only to get their head handed to them a few days or weeks later depending on how stubborn they are to exit a losing position.

The key to long term success is to buy during broad market (SP500) corrections once sentiment, cycles and momentum are starting to flash extreme oversold conditions. These show up as green arrows on the trend chart. At that point most sectors and high beta stocks like IBM, GOOG etc… should be at a key entry points with most of the downside risk removed already. Remember ¾ stocks follow the broad market so it only makes sense to follow it also.

What about a runaway stock market? This is when the stock market does not pullback but just keep grinding its way higher and higher… The only thing you can do is sit in cash, or look for a stock or sector that is having a small pause or pullback and get long with a small position until you get that broad market pullback and major by signal to add more.

Below are a few sectors showing a minor pause/pullback within this bull market:


 

Mid-Week Trend Conclusion:

Overall, the broad market remains in an uptrend. While I would like to see the SP500 pullback and give us another major buy signal like it did in December and February I do mind that much if prices keep running higher as it just give us more cushion and potential profits for when the trend does eventually roll over and flip signals. I hope you found this report interesting. It’s just scratching the surface of this topic but it’s a start. Know the stock market trends by joining my free newsletter at The Gold & Oil Guy.com

Chris Vermeulen


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Chevron CEO on CNBC.... Keep Cash Reserves If Oil Prices Fall

Chevron CEO John Watson discusses where the biggest production growth is occurring globally and what his company plans to do with its $22 billion in cash.



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How to Find High Probability Trades

The last time we shared a webinar hosted by John Carter he gave out a trade for attendees to take, if they felt like it, that netted John 86k. And he's hosting another webinar this week! 

No promises on trade recommendations as he only takes what the market gives him, but I really recommend you sign up for this event for Thursday at 8 p.m. est.

Click here for Webinar Sign up

Here is just an idea of what John will be covering......

*    His favorite options trading strategies,
*    How to find high probability trades,
*    How to manage options trades,
*    How to trade options to generate wealth or income from any account size and more.

If you have decided that it's time to start making real money trading, make time for this event.

John Carter's "How to Find High Probability Trades"

Silver Miners, Gold Miners and the Price Of Gold

Silver and silver mining stocks are front and center for investors and active traders. Because of silvers high volatility (large price swings) it naturally attracts a lot of attention.

First you have seasoned investors who are waiting for the right opportunity to get long or short for the next move. Then you have the active traders playing the day to day price swings. Finally you get the gamblers who are salivating over the potential to double their accounts and are riding the commodity on pure emotions (Fear & Greed). All these things compound the volatility for the investment making it headline news and what everyone wants to be involved in.

The focus of this report is show you where the price of gold, silver and miner stocks are currently trading and what to lookout for in the coming days/weeks. Below is a chart of gold but silver has a similar pattern and will follow or should I say lead the price of gold in percentage terms because of its volatility.

Gold Weekly Chart:

Gold has been testing its long term support level for three weeks. I expect we see price start to move quickly sooner than later but there is potential for it to tread water here until the second half of April. We all know the saying “Sell in May and Go Away” and as we get closer to that date we should start to see money flow into the “Safe Havens” being gold, silver, and miners. While this has not happened many times on the charts I am thinking beyond them and of what the masses are likely to flock to when stocks lose their luster.

Also if you have been following the price of the dollar index you know that its getting a little overbought and when it starts to correct the falling dollar should help send precious metals higher.




Gold & Silver Miners VS Gold Bullion Performance:

The stock market has certain chart patterns that tell chart readers what the holders of that particular investment is feeling emotionally. Knowing how to read these extreme patterns can yield some big gains and works for most investments types (stocks, bonds, commodities and currencies).

Without getting into the boring technical details precious metal stocks are starting show signs of panic selling which typically happens before a major bottom is put in place. A bottom generally takes a week or two for some type of bottoming pattern or base building to form. This is the most volatile time to be trading these investments so trade with caution.



Gold Miners Bullish Percent Index:

Bullish percent indexes are a great way to see how popular an investment is. If you do not know what a bullish percent chart is then you can look it up online and learn more. The way I read it is when it’s up over 75-80 it’s a popular investment and everyone is buying it. It also means it’s in a major uptrend. But you must be aware that when everyone is buying something once price starts to turn down you better be one of the first few out the door before everyone else runs for the door and price crashes.

It’s similar but reversed for investments that are below 20. Everyone is selling, no one wants to own it but once the selling momentum stops price should rebound and rally. Keep in mind this indicator is not great for timing, but confirms that what you are looking at is either oversold, neutral or overbought in the BIG picture.



Weekend Precious Metals Trading Conclusion:

In short, I still like gold, silver, and their related mining stocks. I am watching them very closely for signs of a bottom and will be jumping on that train when the selling momentum looks to have stalled. Keep in mind that all these investments are still in a VERY STRONG DOWN TREND and trying to catch a falling knife is not what I do. Waiting for momentum to shift is my focus as there should be big upside if metals and stocks can find a bottom soon. If gold breaks down below key support as posted on the weekly chart then the uptrend may be over and it will be time to start looking for short positions.

You can get my free weekly reports and ideas here at The Gold & Oil Guy.com

Chris Vermeulen


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Are you using the "Squeeze Trade"

We have had a huge response to John Carters options trading video that we posted on Thursday. Because of some of the feedback and input that has come in John has decided to release a follow up video. Here's a little advice though, before watching the video get out a pen and paper. Personally I think you'll want to take some notes this time around.

Today's video will include more details on individual trades John has been doing. Including how he made 43k trading MA options. The video is only 13 minutes long so no excuses. Here is just a sample of what John will be covering.......

- Three (3) strategies to trade "The Squeeze"
- The secret behind 39 minute charts
- The "Porsche Trade Setup"

Whether you trade options as an expert or beginner we would love to hear your feedback so please feel free to leave a comment.

Just click here to watch John's video

See you in the markets!
Ray C. Parrish
President/CEO The Crude Oil Trader


Exact Setup of a 43k Options Trade

Natural Gas....Is it time to trust the bullish Trade Triangles?

Today we are going to take a look at the technical picture of Natural Gas (NG.J13.E) and analyzing it using the MarketClub Trade Triangles. Natural gas found support at a double bottom level, has moved higher, and put in a weekly MarketClub green Trade Triangle, which is bullish.

If natural gas continues higher and breaks through resistance, it would put in a monthly MarketClub green Trade Triangle, which would be even more bullish. The MACD is on a buy signal and right now everything is pointing to higher prices for natural gas. This is a chart to watch, as big things look to possibly be in store on the upside for natural gas.



Click here to sign up for your own trial of the MarketClub Trade Triangle technology!

EIA: Saudi Arabia was world's largest petroleum producer and net exporter in 2012

Saudi Arabia was the world's largest producer and exporter of petroleum and other liquids in 2012, producing an average of 11.6 million barrels per day (bbl/d) and exporting an estimated 8.6 million bbl/d (net). Saudi Arabia produces more than three times as much of these liquids as the next largest member of the Organization of the Petroleum Exporting Countries (Iran), and as much as the rest of the Arab Middle East put together.

In addition to leading the world in production and exports, Saudi Arabia has an estimated 268 billion barrels of proved oil reserves, over 16% of the global total, and is the only country in the world with extensive spare oil production capacity, which can help cushion market disruptions. While Saudi Arabia has about a hundred major oil and natural gas fields, more than half of its proved reserves are contained in eight fields. Saudi Arabia's (and the world's) largest oil field (Ghawar) alone contains an estimated 70 billion barrels of proved reserves, more than the proved reserves in all but seven other countries.

 

In 2012, 16% of Saudi liquids exports were sent to the United States, accounting for 13% of total U.S. liquids imports. While Canada is the prime supplier of U.S. liquids imports, Saudi Arabia remains an important supplier.

Although leading the world in exports, Saudi Arabia's own liquids consumption is growing. Unlike the United States, Saudi Arabia uses significant amounts of oil for electricity generation, reaching as much as one million bbl/d during hot summer months. Electric demand has doubled since 2000 and is expected to continue its rapid growth. Without initiatives to facilitate fuel switching and increase efficiency, growing volumes of oil, expensive in relation to other fuels, will be consumed domestically.

Finally, as EIA has previously discussed, the choice of accounting conventions for measuring liquids production can also affect which country is considered the world's leading producer at a given date.

Get John Carter's new "Options Trading Strategies for 2013"

Size Doesn't Matter.....Your Account Size that Is

More and more traders are trying their luck in the options trading game. But it has nothing to do with luck. It simply has to do with "time decay", the inevitable passing of time and the hope of reducing your risk and improving your odds of taking a profit before the clock runs out.

This is not an area of the market that anyone should blindly take a spin at. You need to understand the adjustability and broad range of trade structure that allows you to profit whether you are confronting a low volatility market, sideways or consolidating conditions, or a high volatility marketplace.

We get messages here at The Crude Oil Trader on a regular basis asking us to recommend options set ups and make suggestions on our members trades. We pass these messages on to one of two options traders that have become the most highly regarded options traders around. J.W. Jones and John Carter.

This week John has put together a video for us explaining how he is using options as income trades, no matter what the account size. What's interesting is he literally "gives" us the set ups that he uses on his own accounts. You need to see why these trades can be used on any size account and still be profitable. I think this will interest a lot of home gamers and pros alike who are trying to break into options trading. A market that has grown by 500% in the last decade.

One of the things that has made so many people resistant to options trading is just how complicated the talking heads on TV make options trading sound as they rush through their trade of the week. John teaches more about options income trading in a few minutes then you've read in most books.

Here's just a sample of what John will show us in this short video......

* How he made $52,875.00 last week trading Google Options

* His favorite options trading strategy for generating income

* Trading Setups with a probability of 75%

* How to limit your risk when the trade goes against you and much more

Grab a pen and paper so you can take some notes then just click here to watch the video. It's only 12 minutes long and in that short time I think John will change your mindset when it comes to options.

Final Stages of the Advance on SP 500....The Wave Pattern

Our trading partner David Banister has been projecting a potential rally pivot at 1552-1576 for many weeks now. The recent drop to 1485 although harrowing, was a normal fibonacci retracement of the last major rally leg to 1531 pivot highs. Banister believes that this 5 wave advance 1343 pivot lows is nearing an end based on mathematics and relationships to prior waves 1-3.

At 1569 the SP 500 would mark a perfect fibonacci relationships to waves 1-3 for this final 5th wave to the upside. In the big picture, we are still working higher off the 1010 pivot lows on the SP 500, and this rally takes 5 full waves to complete. He thinks we are near wave 3 highs, and wave 4 correction would be up next, followed by another thrust to highs if all goes well this year.

That all said, a multi-week correction and consolidation wave 4 pattern is likely once we pivot at 1552-1576. We should expect this correction to retrace anywhere from 80 -100 points on the SP 500, but one week at a time.

Click here to see his updated pattern views and sign up for free reports.

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Gold, Crude Oil & the SPX Trends and Setups

Over the past year our long term trends and outlooks have not changed for gold, oil or the SP500. Though there has been a lot of sideways price action to keep everyone one their toes and focused on the short term charts.

As we all know if the market does not shake you out, it will wait you out, and sometimes it will do both. So stepping back to review the bigger picture each weeks is crucial in keeping a level trading/investing strategy in motion.

The key to investing success is to always trade with the long term trend and stick with it until price and volume clearly signals a reversal/down trend. Doing this means you truly never catch the market top nor do you catch market bottoms. But the important thing is that you do catch the low risk trending stage of an investment (stage 2 – Bull Market, Stage 4 Bear Market).

Lets take a look at the charts and see where prices stand in the grand scheme of things.

Gold Weekly Futures Trading Chart:

Last week to talk about about how precious metals are nearing a major tipping point and to be aware of those levels because the next move is likely to be huge and you do not want to miss it.

Overall gold and silver remain in a secular bull market and has gone through many similar pauses to what we are watching unfold over the past year. As mentioned above the gold market looks to be trying to not only shake investors out but to wait them out also with this 18 month volatile sideways trend.

A lot of gold bugs, gold and stock investors of mining stocks are starting to give up which can been seen in the price and selling volume for these investments recently. We are contrarians by nature so when we see the masses running for the door we start to become interested in what everyone is unloading at bargain prices.

Gold is now entering an oversold panic selling phase which happens to be at major long term support. This bodes well for a strong bounce or start of a new bull market leg higher for this shiny metal. If gold breaks below $1500 – 1530 levels it could trigger a bear market for precious metals but until then we're bullish at this price. We think we could see another spike lower in gold to test the $1500- $1530 level this week but after that it could be off to the races to new highs.

 

Crude Oil Weekly Trading Chart:

Crude oil had a huge bull market from 2009 until 2011 but since then has been trading sideways in a narrowing bullish range. We expect some big moves this year for oil and technical analysis puts the odds on higher prices. If we do get a breakout and rally then $130 will likely be reached. But if price breaks down then a sharp drop to $50 per barrel looks likely.



Utility & Energy Stocks – XLU – XLE – Weekly Investing Chart

The utility sector has done well and continues to look very bullish for 2013. This high dividend paying sector is liked by many and the price action speaks for its self. If the overall financial market starts to peak then these sectors should hold up well because they are services, dividend and a commodity play wrapped in one.


 

SP500 Trend Daily Chart:

The SP500 continues to be in an uptrend which we are trading with until price and volume tells us otherwise. But there are some early warning signs that another correction or a full blown bear market may be just around the corner.

Again, sticking with the uptrend is key, but knowing what to look for and prepare for is important so that when the trend does change your transition from long positions to short positions is a simple measured move in your portfolios.



Weekend Trend Conclusion:

In short, we remain bullish on stocks and commodity related stocks until I see a trend change in the SP500.

Energy sector is doing well and looks bullish for the next month. As for gold and gold miners, we feel they are entering a low risk entry point to start building a new long position. Risk is low compared to potential reward.

When the price of a commodity or index trade near the apex of a narrowing range or major long term support/resistance level volatility typically increases as fear and greed become heightened which creates larger daily price swings. So be prepared for some turbulence in the coming weeks while the market shakes things up.

If you like our work then be sure to get on our free mailing list to get these emails each week on various investments and investment ideas.



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