Chris Vermeulen's trade set up for the first week of July.....
As talked about almost two weeks ago when the SP500 trend reversed to the down side we have been waiting for a bounce in price to short the market (buy and inverse ETF). That happened last week and now we are waiting for the market to shake out the short positions and suck in as many traders to get long before the next wave of major selling takes place.
It seems traders are becoming bullish again as prices rise and they are dumping their precious metal positions and rotating into equities again from the looks of things. Also if you know the Dow Theory then you know the industrial and transportation sectors tend to lead the broad market. Well today the only two sectors trading lower are just those two.
See the charts for a visual
Wednesday, July 3, 2013
Monday, July 1, 2013
They Just Rang A Bell On Gold and Gold Stocks
Our trading partner David A. Banister of Market Trend Forecast has been the go to guy on gold and precious metals. Let's check in with Banister and see if he thinks the bottom is in for gold.
As they say on Wall Street, “They don’t ring bells at the top” and for sure they usually don’t give you a phone call at the bottom either. Many heads have rolled trying to call this recent near 2 year downdraft in Gold in terms of bottom callers, me included. I thought we would never get much below 1440 or so from the 1923 highs, but alas we all know we did.
What makes me think that last week put in the final Gold low for the bear cycle? Too many things to mention, but based on the work I do enough to give me some chutzpah to make this call now. The 1180’s are very close to a classic ABC 61.8% Fibonacci retracement of the prior 34 month bull cycle. That cycle ran from October 2008 to August 2011 with a rally from $681 to $1900’s area. The most recent 21 plus month decline dropped right into the 61% pivot retracement of that entire move, and over a Fibonacci 21 month period as well! Human behavior does repeat over and over again, and as we all know in hindsight at the tops everyone is bullish and at the bottoms everyone is bearish.
I think it’s pretty much as simple as that. Investors get overly optimistic and exuberant in all kinds of asset classes and finally at the highs everyone believes the rally can only go on and on forever. At the opposite near the bottoms nearly everyone is calling for lower prices and further catastrophe ahead. Stocks in the sector are priced for near bankruptcy. Newsletter writers are universally bearish, and the small trader has a big short position. Only a few weeks ago the Bullish Percentile index measurement on the Gold Stock Index was at 0! That means nobody was bullish on the Gold stocks by the measure that is used. We quickly had an 8% rally in the index after that reading, then in the last few weeks we came all the way back down again to even lower levels!
If you watched the action last Thursday as Gold was melting down below $1200 a curious thing happened. The gold miners were ignoring the move and going green! On Friday, as Gold reversed to 1234 they went ballistic with one of my favorite miners going up 16% on Friday alone on the highest volume in 5 years! Those are the signals I’ve been waiting for to call the capitulation lows. My guess is some money managers are front running the coming 3rd quarter rotation they see in Gold and Gold Miners, Copper, Coal, and other commodity stocks.
So below is my basic GLD ETF multiyear chart using very simple monthly views to see the big picture. You can see a classic ABC pattern of bear market correction and now a near 61.8% perfect Fibonacci retracement of the prior leg up. I’d say enough is enough, pick your spots and start buying.
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As they say on Wall Street, “They don’t ring bells at the top” and for sure they usually don’t give you a phone call at the bottom either. Many heads have rolled trying to call this recent near 2 year downdraft in Gold in terms of bottom callers, me included. I thought we would never get much below 1440 or so from the 1923 highs, but alas we all know we did.
What makes me think that last week put in the final Gold low for the bear cycle? Too many things to mention, but based on the work I do enough to give me some chutzpah to make this call now. The 1180’s are very close to a classic ABC 61.8% Fibonacci retracement of the prior 34 month bull cycle. That cycle ran from October 2008 to August 2011 with a rally from $681 to $1900’s area. The most recent 21 plus month decline dropped right into the 61% pivot retracement of that entire move, and over a Fibonacci 21 month period as well! Human behavior does repeat over and over again, and as we all know in hindsight at the tops everyone is bullish and at the bottoms everyone is bearish.
I think it’s pretty much as simple as that. Investors get overly optimistic and exuberant in all kinds of asset classes and finally at the highs everyone believes the rally can only go on and on forever. At the opposite near the bottoms nearly everyone is calling for lower prices and further catastrophe ahead. Stocks in the sector are priced for near bankruptcy. Newsletter writers are universally bearish, and the small trader has a big short position. Only a few weeks ago the Bullish Percentile index measurement on the Gold Stock Index was at 0! That means nobody was bullish on the Gold stocks by the measure that is used. We quickly had an 8% rally in the index after that reading, then in the last few weeks we came all the way back down again to even lower levels!
If you watched the action last Thursday as Gold was melting down below $1200 a curious thing happened. The gold miners were ignoring the move and going green! On Friday, as Gold reversed to 1234 they went ballistic with one of my favorite miners going up 16% on Friday alone on the highest volume in 5 years! Those are the signals I’ve been waiting for to call the capitulation lows. My guess is some money managers are front running the coming 3rd quarter rotation they see in Gold and Gold Miners, Copper, Coal, and other commodity stocks.
So below is my basic GLD ETF multiyear chart using very simple monthly views to see the big picture. You can see a classic ABC pattern of bear market correction and now a near 61.8% perfect Fibonacci retracement of the prior leg up. I’d say enough is enough, pick your spots and start buying.
Don't miss a single call from David Banister....sign up here today!
The Bible for Commodity Traders....Get our free eBook now!
Sunday, June 30, 2013
Precious Metals Futures Weekly Update
Silver futures finished up $.95 today at 19.49 in the July contract and as I stated in previous blogs I thought silver could hit the $18 level and it did trade as low as 18.18 in the early session today, however I still believe prices are headed lower and I would not be bullish the precious metals at this time.
Copper futures which I’ve been recommending short positions across the board finished at 3.0560 a pound unchanged for the trading day but I do believe prices are headed substantially lower from these levels as higher interest rates are keeping a lid on precious metals prices so look for copper prices to possibly hit 2.50 in the next month or so.
The trends have really been strong in recent weeks and if you been listening to any of my recommendations you have been doing extremely well and I do believe that commodity prices are still headed lower so take advantage of it by selling the futures contract or by buying bear put spreads limiting your risk to what the spread premium costs.
Trend: Lower – Chart structure: Terrible
Posted courtesy of our trading partner Mike Seery
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Weekly Coffee Futures Update
The chart structure in coffee is starting to improve and I still am recommending short positions thinking prices could drop all the way down to the 100 level in the coming months as the commodity markets in general look very pessimistic in my opinion as higher interest rates and a rising U.S dollar are keeping a lid on prices at this point in time.
The weather in Brazil is outstanding with a record crop which should put more pressure on prices as the frost premium is simply coming out of the market as traders are looking for a possible bottom in the near future.
Posted courtesy of our trading partner Mike Seery
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Friday, June 28, 2013
Less then 24 hours to enroll for our “Spread Trading Strategies for Growing a Small Account” class this Saturday
Less then 24 hours to get enrolled for Saturdays class with John carter, "Spread Trading Strategies for Growing a Small Account”. Get your seat now for this class that will be held this Saturday June 29th from 1:00 – 5:00 p.m. Can you get the same training hedge fund managers get for their traders? Now you can. Whether you are trading stocks, crude oil, commodities or currencies John Carter of "Simpler Options" has put together an easy to understand course that will show you how you can use the same trading methods he teaches fund managers and it can be done in any size account. No matter how big or small.
In this comprehensive class John will teach us.....
* How to use spreads to create low-risk high-probability trades
* Basic to advanced spread trading strategies
* How to make money, even when you’re wrong
* How to steadily & consistently grow your small account through spreads
* How to trade spreads “end of day” so you don’t go bug eyed looking at charts all day
And much more...
This course is being recorded, and you will receive a link to view it and download it the same day, and a DVD of the course within 3-4 weeks.
Just Click Here to Enroll Today!
Thursday, June 27, 2013
OTS Profits Through the Market Correction
During the recent carnage our friends at Options Trading Signals managed to lock in 16.80%, 32.20%, & 41.49% returns. Let's see how J.W. Jones and the staff at OTS can help us do the same......
As we move into Quarter end, many investors and traders suffered a sizable drawdown in mid to late June. However, members of Options Trading Signals closed 3 trades during the selling carnage for huge overall gains.
As a professional trader, a focus on implied volatility, probability of success, and a typically contrarian market view have served members well since the inception of the service back in December of 2010. A summarized description of recent action in the OTS Portfolio is described below.
On June 13th the OTS Portfolio took a Put Debit Spread on VXX. The reasoning behind the trade was the expectation that volatility would decline going into triple witching on Friday’s expiration. As expected, volatility contracted and on June 19th the VXX position was closed for a gross gain per spread of $21. The maximum risk per spread was $125 so the trade produced a gross gain of around 16.80%.
Entire article > "During Recent Market Carnage, OTS Locked in 16.80%, 32.20%, & 41.49% Returns"
Enroll now for our “Spread Trading Strategies for Growing a Small Account” class this Saturday, June 29th from 1:00 – 5:00 p.m.
As we move into Quarter end, many investors and traders suffered a sizable drawdown in mid to late June. However, members of Options Trading Signals closed 3 trades during the selling carnage for huge overall gains.
As a professional trader, a focus on implied volatility, probability of success, and a typically contrarian market view have served members well since the inception of the service back in December of 2010. A summarized description of recent action in the OTS Portfolio is described below.
On June 13th the OTS Portfolio took a Put Debit Spread on VXX. The reasoning behind the trade was the expectation that volatility would decline going into triple witching on Friday’s expiration. As expected, volatility contracted and on June 19th the VXX position was closed for a gross gain per spread of $21. The maximum risk per spread was $125 so the trade produced a gross gain of around 16.80%.
Entire article > "During Recent Market Carnage, OTS Locked in 16.80%, 32.20%, & 41.49% Returns"
Enroll now for our “Spread Trading Strategies for Growing a Small Account” class this Saturday, June 29th from 1:00 – 5:00 p.m.
Wednesday, June 26, 2013
Precious Metals Life Cycle Nears an End – Final Stage of Denial
The life cycle of most things not matter what it is (living, product, service, ideas etc…) go through four stages and the stock market is no different. Those who recently gave in and bought gold, silver, mining stocks, coins will be enter this stage of the market in complete denial. They still think this is a pullback and a recover should be just around the corner.
Well the good news is a recovery bounce should be nearing, but if technical analysis, market sentiment and the stages theory are correct then a bounce is all it will be followed by years of lower prices and dormancy.
I really do hate to be a mega bear or mega bull on anything long term but the charts have painted a clear picture this year for precious metals and I want to share what I see. Take a look at the chart below which shows a typical investment life cycle using the four stage theory.
Read my entire article here > "The Four Stages Theory....Precious Metals Life Cycle Nears an End – Final Stage of Denial"
Enroll now for our “Spread Trading Strategies for Growing a Small Account” class this Saturday 1:00 – 5:00 p.m.
Enroll now for our “Spread Trading Strategies for Growing a Small Account” class this Saturday
In this comprehensive class John will teach us.....
* How to use spreads to create low-risk high-probability trades
* Basic to advanced spread trading strategies
* How to make money, even when you’re wrong
* How to steadily & consistently grow your small account through spreads
* How to trade spreads “end of day” so you don’t go bug eyed looking at charts all day
And much more...
This course is being recorded, and you will receive a link to view it and download it the same day, and a DVD of the course within 3-4 weeks.
Just Click Here to Enroll Today!
Monday, June 24, 2013
Next webinar "Using Spreads with Maximum Success" featuring John Carter
So John has scheduled a special webinar for this Tuesday, June 25th at 8 p.m. est, that will do just that. Hope you can make it to this special event where John is not only going to teach us how to use spreads but how it can be done in any size trading account. No matter how big or small your account is.
Just click here for details and to get your seat reservation
John's years of experience and success make all of his events 'can't miss'. Remember, there's no cost to attend, but make sure you take notes so you can apply what he teaches to your trading Wednesday morning, the very next trading day.
See you there,
Ray @ The Crude Oil Trader
Watch "Using Spreads with Maximum Success"
Sunday, June 23, 2013
Could TPLM Be The Most Undervalued Bakken Producer
Earlier this month, I did a deep dive analysis on Triangle Petroleum (click here to get your free trend analysis for Triangle Petroleum). I argued based on recent acquisitions, this Bakken energy producer was tremendously undervalued compared to its acreage and production. I postulated that the stock could double over the next 18-24 months. The stock sold at $5.40 a share at the time of the article. TPLM has moved up more than 25% since then and I continue to see further upside ahead of this fast growing producer.
Today, I want to talk about quite possibly the most undervalued producer in the Bakken that I have in my own portfolio, Emerald Oil (EOX). I would have led with Emerald, except the company has been a serial disappointment to investors over the last couple of years. However, its production and acreage is significantly undervalued by the market. The company also appears to be picking up some positive catalysts and finally looks poised to enable a sustained rise in its equity price.
The company is a small ($160mm market capitalization) independent E&P concern. The company’s main production comes from the 54,000 net acres (23,500 operated acres/30,500 non-operated acres) it has in the Bakken shale region (Williston). It has tens of thousands of other net acres in other shale regions outside the Bakken. Emerald’s main production comes from its core Williston acreage and it has been in the process of selling off its other properties to raise capital to concentrate on developing its operated acreage in the Bakken
Read the Full Story Here
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