Weekly Precious Metals Market Recap with Mike Seery

It's time to check in with our trading partner Mike Seery on where he sees precious metals heading for the end of the 1st week of trading in July.

The precious metals continue their downturn as higher interest rates are pressuring gold down $37 an ounce at 12.14 which is a new closing low and as I’ve been telling people through many previous blogs to keep selling the precious metals as there really is no reason to own gold since deflation is in the air not inflation.

Silver futures are down $.95 in the July contract at 18.75 looking to retest recent lows with the possibility of prices going down to the $15 level here in the next couple of weeks as the tide has turned in the commodity market.

I have been recommending a short copper position for quite some time as copper was absolutely pummeled today down 1100 points at 3.06 a pound placing a stop above the 10 day high which is 3.17 and I do believe copper prices are headed steadily lower possibly down to 2.50 in the next 4 to 6 weeks as demand has weakened tremendously in China and higher interest rates will put the kibosh on copper prices in my opinion.

All of the precious metals are trading far below their 20 and 100 day moving average and I believe that will continue for quite some time as the U.S dollar is the place to park money due to the fact that interest rates are much higher here than overseas which will continue to put pressure on the precious metals in my opinion.

Precious metals trend....lower, Chart structure.....excellent.

Here's more commodity news [including sugar, grains, orange juice, cotton, coffee] from Mike for the first week of July....Just click here.

Leading Sectors, Cycles and Momentum Point To Drop This Week

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

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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Precious Metals Futures Weekly Update

The precious metals rallied on Friday afternoon but have been absolutely crushed this week with gold settling at 1,226 an ounce up around $15, however prices hit a new 3 year low this week trading as low as 1,179 and as I’ve been recommending in many previous blogs to be short the precious metals sector but at this point in time with extreme volatility & very poor chart structure I’m recommending to be taking profits and sit on the sidelines.

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

Coffee futures closed slightly lower Friday afternoon basically trading unchanged for the week still trading below their 20 and 100 day moving average right near fresh 3 year lows settling last Friday at 122.35 and going out today around 123.00 a pound continuing its bearish momentum.

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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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!

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.

Precious Metals Life Cycle Nears an End – Final Stage of Denial

Today's post from our trading partner Chris Vermeulen.....

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

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!

Next webinar "Using Spreads with Maximum Success" featuring John Carter

Our trading partner John Carter of Simple Options notified us today that with the current market conditions we had better bring our clients up to speed on how to maximize their profits with spreads.

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"