Chris Vermeulen: Gold & Silver Pullback as Forecasted ..... Now for the Big Opportunity

A few weeks ago I wrote about how gold was starting to top and that everyone should expect a very sharp drop to the low $1600 area. How I came to this conclusion was though the use of inter-market analysis combining price patterns, gold futures volume, the dollar index and market sentiment. This allowed me to understand what the majority of other traders/investors were thinking and feeling. By knowing each of these market variables and crowd behavior I can accurately see into the future a few days with a high probability of success and most importantly with low downside risk.

Click Here to view part-1 on how I properly forecasted that gold would fall sharply in August "Dollar’s On the Verge of a Relief Rally...... Look Out!"

At the time when I forecasted gold to reach the low $1600 area gold was still building the top pattern so I could not say how long a recovering would likely take nor did I know exactly when to re-enter a long position. But now that we have seen how gold arrived at my target price I can form a new forecast.

Spot Gold Price Forecast – Daily Chart:

The gold chart below clearly shows rising volatility along with my topping pattern of three surges to new highs. It was August 31st when I warned subscribers and my followers that gold was about to top and that everyone should be taking profits or at least tightening their stops to lock in gains. Only three days later gold topped and it has not stopped falling since.

On August 8th gold had a large opening gap to the upside. This means the price opened the next day much higher from where it closed the previous session. It’s important to note that gaps especially for gold almost always get filled within a couple months. Seeing this gave me a solid reason to think that gold should pullback to this level during the next big correction in price.

Also during the month of August gold had to pullbacks only to continue to make the third and final high. This told me that when the top is put in place was a very high probability that we see the price of gold drop below both of Augusts’ lows and that would trigger stop orders sending the market sharply lower.

Now that we are seeing the stops being flushed out of the market it means the majority of speculative traders have exited their positions. So speculative traders who caused the large surge in gold to take place are now out. Once all the speculative traders have exited which should take place in the coming weeks or two we can expect some type of bounce or rally. I will keep a close eye on the intraday charts for subscribers as we near a potentially major trade setup.

Where are we in this gold bull market?

Well I feel gold is more fairly priced between $1632- $1660 area. Currently gold is trading at $1660 but if things play out like I have seen in the past we just may get one more dip this week to the $1600 area before gold truly puts in a bottom. Because gold went from a new high all the way down to Friday’s panic selling washout instead of a controlled ABC correction I feel a bottom will be more of a one day event. This type of bottom carries more risk and is more difficult to time and trade. So scaling in with a small position at this level and adding on a drop to $1630 then $1600 could prove to be the safest way into a gold position.

Forward looking I see gold bottoming over the next week or two then a nice relief rally to the $1775 area. Depending on how gold arrives there will alter my next gold forecast so let’s wait and see how things unfold.

Spot Silver Price Forecast – Weekly Chart:

Silver I call the "un-Safe" haven because to me it’s not a safe haven in the way everyone’s believes it be. I hear and see everyone including friends and family selling all their stocks and putting their money into silver. To me buying large amounts of silver with your retirement money is just ridiculous. I m sure my statement here will trigger an inbox of silver perma bulls (silver bugs) to send me hate mail but that’s fine as my assistant filters my emails so I don’t have to keep being reminded how rude some humans can be over an simple opinion........

Investments that can lose 25% in value within 2 days or lose 40% of it’s value in 5 months should not be traded nor invested in with large portions of anyone’s life savings, especially if you are over the age of 50 and have not proven to be a constantly profitable trader. No one can stomach losing that much of their nest egg.

That being said I do feel silver is in a similar situation as gold. I do feel a bottom is near. Silver has formed an ABC correction and the price and volume patterns seem to be in line with a typical bottoming pattern. After Friday’s massive selloff I feel silver may slide a little lower yet before putting in a bottom.

One thing to keep in mind with silver is that it is very thinly traded; there are a lot of speculative traders involved which push and pull the price to extreme levels on a regular basis. So if the broad stock market continues to sell off sharply then I expect silver to follow suit.

Pre-Week Precious Metals Trend Analysis Trading Conclusion:

The price action we have seen this year for both gold and silver indicate were are just warming up for something really big to happen. It could be a massive parabolic rally to ridiculous new highs in 2012 or it could be a large unwinding of the safe havens as countries sort out their issues and the big money starts moving out of metals and into currencies and stocks.

Only time will tell and that is why I analyze the market multiple times per week to stay on top of both long term and short term trends. So if you want to keep up with current trends and trades for gold, silver, oil, bonds and the stocks market check out TGAOG at The Gold and Oil Guy.com

Oil N' Gold: Crude Oil Weekly Technical Outlook For Sunday Sept. 25th

Crude oil dropped sharply to as low as 77.55 last week and the development affirmed the case that consolidation from 75.71 is finished at 90.52 and whole decline from 114.83 is resuming. Initial bias remains on the downside this week with 82.21 minor resistance intact. Retest of 75.71 should be seen first. Break will target 70 psychological level and then 100% projection of 100.62 to 75.51 from 90.52 at 65.60. On the upside, above 82.21 minor resistance will turn bias neutral and bring consolidations. But recovery should be limited by 4 hours 55 EMA (now at 85.68) and bring fall resumption.

In the bigger picture, medium term rebound from 33.2 is treated as the second leg of consolidation pattern from 147.24 and should have finished at 114.83 already. Current decline should target next key cluster support at 64.23 (61.8% retracement of 33.2 to 114.83 at 64.38) next. Sustained break will pave the way to retest 33.2 low. On the upside, break of 90.52 resistance is needed to invalidate this view or we'll stay bearish in crude oil now.

In the long term picture, crude oil is in a long term consolidation pattern from 147.27, with first wave completed at 33.2, second wave might be finished. Upon confirmation of medium term reversal, the third wave of the pattern should have started for a retest on 33.2 low.

Nymex Crude Oil Continuous Contract 4 Hours Chart

Crude Oil Makes Sharp Move Below $80, Here's Your Numbers For Friday Morning

Crude oil traded lower overnight and continues south of $80 this morning as it extends this week's sharp decline. Stochastics and the RSI are bearish signaling that lower prices are possible....make that "likely"....in the near term.

Is cluster support of  64.23 on the table? That's what trading shops are talking about today. And it's looking more and more like a possibility.

If November extends this week's decline, August's low crossing at 76.61 is the next downside target. Closes above the 20 day moving average crossing at 87.17 would confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 86.34. Second resistance is the 20 day moving average crossing at 87.17. First support is the overnight low crossing at 78.36. Second support is August's low crossing at 76.61. Crude oil pivot point for Fridays trading is 81.72.


Recent "don't miss" articles.....

Gold Continues to Correct as Forecast in a 4th Wave Pattern

Recent Market Trends Remain in Place ..... Get Positioned!

It's a Simple Theory.... Lower Equity Prices, Means Lower Consumption of Crude Oil

The massive move down in the crude oil market today is largely reflected in what we have been saying about this market for the past several weeks. It only underscores just how powerful our longer term Trade Triangle technology is. As you may recall we are tying the crude oil market with the equity markets. As the equity markets go, so does crude oil at the moment.

The theory is lower equity prices, means lower consumption of oil. It’s not important whether we agree or disagree with that statement. What is important is how the market is acting. Pay attention to the MACD that is beginning to lose momentum and could be rolling over to the downside if we have any more negative closes. Short, Intermediate and Long term traders should continue to be short the crude oil market.

November crude oil closed sharply lower on Thursday as it extended this week's breakout below August's uptrend line. The low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If November extends this week's decline, August's low crossing at 76.61 is the next downside target.

Closes above the 20 day moving average crossing at 87.49 would temper the near term bearish outlook. First resistance is the 20 day moving average crossing at 87.49. Second support is last Tuesday's high crossing at 90.60. First support is today's low crossing at 79.66. Second support is August's low crossing at 76.61.

Monthly Trade Triangles for Long Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = – 100

Recent articles.....

Gold Continues to Correct as Forecast in a 4th Wave Pattern

Recent Market Trends Remain in Place ..... Get Positioned!

David Banister: Gold Continues to Correct as Forecast in a 4th Wave Pattern

I got a bit of hate email over the last few weeks from the Gold Bugs who thought I didn’t know what I was talking about when I forecasted a multi-month consolidation and correction in Gold was imminent. I’ve written ad nauseum about crowd behavioral patterns as they related to both stock markets and precious metals. 

It should not come as a surprise that Gold is continuing to drop after a 34 Fibonacci month rally from $681 to $1910 per ounce. That rally came in five clear Elliott Waves and ended with a parabolic race to the top. I consistently warned my subscribers and readers of my articles about not being caught holding the bag and to take defensive measures.

My most recent update was to simply try to figure out whether the continuing correction in Gold would take the form of an ABC pattern or an ABCDE Triangle Pattern. It is becoming more clear that the official pattern is ABC. In English it means that the first leg down from 1910 to 1702 was the “A” Wave, the rally back up to 1920 was the “B” wave. 

The C wave is continuing underway and one of my longstanding targets is $1643, which is a Fibonacci fractal relationship to the prior lows and highs, and also conveniently fills in a “Gap” in the Gold chart in the 1650’s.

During these 4th wave consolidation periods, it reduces sentiment back down to normal levels and lets the economics of the move in Gold catch up with the price action that was extended. The first area to watch is the retest of $1702 spot pricing for a C wave low, but the evidence is for a further drop to $1643 before I would get too interested in trying to game Gold to the upside.

Here is the chart I sent out 9 days ago with Gold at $1837 forecasting a possible C wave continuing lower:

I’ve stayed away from either shorting Gold or going long gold while I watch and confirm the 4th wave pattern. It’s simply the smart way to go knowing that upside will be difficult to obtain and downside risks are high. It does now appear that I am eliminating the Triangle pattern and sticking with the ABC Correction with the C wave still working its way lower. If $1702 breaks, then you should expect to see 1620-1643 as next pivot low ranges.

If you’d like to stay ahead of the SP 500, Silver, and Gold trends, check out TMTF at Market Trend Forecast.Com and take advantage of our free occasional reports or a 33% 48 hour coupon to sign up for 5-7 updates a week.

Chris Vermeulen: Recent Market Trends Remain in Place ..... Get Positioned!

What a trading session Wednesday was with the FOMC meeting and the FED coming out leaving the Fed Funds Rate unchanged at 0.25% and saying the economy is looking weak and will not likely to get better any time soon. This wave of negative news triggered a selling spree across the board in stocks, metals, and oil. On the flip side all that money being pulled out of those investments was being dumped into bonds and the dollar currency.

So the question everyone is asking is why almost every asset class sold off after the Federal Reserve’s statement today? The next question is how do we position ourselves to profit?

Understanding how the market moves is not a simple task, if it was that easy everyone would be pulling money out of the market on a daily or monthly basis. With that being said, moves can be anticipated if enough indicators are pointing to the same outcome.

Gold, SP500 and Oil 10 Minute Charts Showing Todays 2:15 FED News
Over the past few weeks we have been seeing stocks, oil, and gold turn bearish with similar price and volume action. Having three major investment vehicles hinting towards a move in the same direction as each other increases the odds for that move to occur. With the Fed coming out with negative news and no quantitative easing on tap, a rally in the dollar was triggered because inflation (printing of money) is not in the picture for some time still.

Bonds and Dollar Index 10 Minute Charts Showing Today’s 2:15 FED News

Now if we look at the safe havens we can see the positive side to today’s news.

Bonds have been trading higher for some time and the key in trading is to trade with the trend. Though it’s easier said than done… In this morning’s pre-market analysis I talked about bond prices and how they are looking toppy but we need one more large surge higher before I will consider looking for a short trade setup. Today’s news sent bonds surging higher which I feel will happen for a few more days. Once the momentum stalls out of bonds, then I may be looking to short bonds using the TBT inverse bond fund.

The fact that there is no quantitative easing planned is bullish for the dollar. Stepping back a few weeks we have seen the dollar index rally very strongly. The move up was an impulse wave meaning a trend reversal from the multi-month down trend. Knowing that the dollar had shifted from a down trend to a strong uptrend prior to the Fed’s announcement today was our tip off to being long the dollar several days ago at a much lower price level.

Mid-Week Market Trend Conclusion:
In short, I feel the intermediate trend (5-20 days) remains firmly down for stocks and crude oil. Silver is more of a wild card because it is more of an industrial metal/speculative investment and it can move at times with gold or down with stocks.......

Looking at gold. I am bullish on gold long term but at this time I remain neutral until I see how the next couple trading sessions play out.

Bonds I remain neutral because they have moved a long way without any substantial pause or pullback and I feel one really positive headline news item could send bonds sharply lower.

The dollar index shifted from a strong down trend to a very strong up trend last month and I feel we could see another substantial rally unfold. I have an 80.00 – 81.00 price target on the dollar index at this time.

Consider joining me at The Gold and Oil Guy for ETF trade ideas on the SP500, crude oil, gold, and silver with great accuracy. Check it out at The Gold and Oil Guy.com

Commodities Collapse as Fed Operation Twist Sends Oil to 4 Week Low

No surprise to us, the Feds operation twist has failed to lift market sentiment and it's showing in any commodity that trades against the dollar. Crude oil was sharply lower in the overnight session as it extends this week's breakout below August's uptrend line. Stochastics and the RSI are bearish signaling that lower prices are likely near term.

So now we shift our focus to the Eurozone. Greece announced a new round of austerity measures. Pensions above 1200 euro will be cut by -20%, pensions paid to those younger than 55 will be trimmed by 40% for the amount exceeding 1000 euro and wages will be reduced for 30,000 state employees. While fiscal consolidation accelerates, protests also intensify. Public services will be suspended for 24 hours in Athens today. Flights to and from the Athens International Airport will also be disrupted as staff walk out for 3 hours proving that getting the Greek public to play along and play nice will prove near impossible.

If crude oil extends this week's decline, August's low crossing at 76.61 is the next downside target. Closes above the 20 day moving average crossing at 87.58 would confirm that a short term low has been posted.

First resistance is the 20 day moving average crossing at 87.58. Second resistance is last Tuesday's high crossing at 90.60. First support is the reaction low crossing at 79.76. Second support is August's low crossing at 76.61. Crude oil pivot point for Thursday morning trading is 86.19.

Bloomberg: Crude Oil Drops a Second Day as Fed Sees Economic Risk

Crude oil fell for a second day in New York as investors speculated that fuel demand will falter after the U.S. Federal Reserve said there are “significant downside risks” to the economic outlook of the world’s biggest crude consuming nation.

Futures slipped as much as 2.1 percent after dropping 1.2 percent yesterday. The Fed said it will buy $400 billion of long term debt in an attempt to keep the economy from relapsing into a recession. U.S. gasoline stockpiles climbed more than forecast last week and the nation’s oil production rose to the highest in eight years, Energy Department reports showed.

“It’s quite clear at the moment there is a lot of bearishness,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty Ltd. in Sydney. “The global growth scenario continues to be clouded, all the commodities were hit and oil clearly didn’t escape.”

Crude for November delivery dropped as much as $1.77 to $84.15 a barrel in electronic trading on the New York Mercantile Exchange and was at $84.51 at 12:29 p.m. Sydney time. The contract yesterday fell $1 to $85.92. Prices are 13 percent higher the past year......Read the entire article.

Adam Hewison: Lloyds of London Pulls Deposits From Banks on Debt Crisis

As traders, we are bombarded with news. Some of it is useful, but a lot of it is just fluff to fill up airspace time. One piece that caught my eye this morning, which I haven’t seen reported in the main media, concerns the venerable Lloyds of London insurance company. This company was founded in 1688 in a London coffeehouse and has gone through wars, boom and bust cycles, every money mania known to man and has always managed to survive. The article claimed that Lloyds of London is taking their cash out of the European banks this morning. From Businessweek Magazine "Lloyds of London Pulls Deposits From Banks on Debt Crisis"

Quite frankly this is shocking, but not surprising given Lloyds’ survival instincts. Lloyds of London is one of the most conservative companies, run by some of the smartest people on the planet. Perhaps it’s an early warning sign about what could potentially happen in Europe.
It is something to think about.

Crude Oil Market Commentary
There is not much going on in the crude oil market, as it continues to remain in a fairly broad trading range with resistance very evident at the $90 a barrel level. Support comes into this market between $84 and 84.50 a barrel. The crude oil market is presenting a mixed picture at the moment with our longer term monthly Trade Triangle negative and our intermediate term weekly Trade Triangle positive. This has created a trading range at the moment. The crude oil market remains in a sort of sideways motion, but with a bias to testing the lower range of the Donchian trading channel.

The Williams % R indicator is stuck in the middle giving no real clue as to direction. Also pay attention to the MACD since it is beginning to lose momentum and could be rolling over to the downside if we have any more negative closes. We do not think that the crude oil market is ready to go higher, based on our long term monthly Trade Triangle which remains negative. The $90 a barrel resistance continues to stop this market on the upside. Look for crude oil to continue to move in a sideways to lower manner.

November crude oil closed lower on Wednesday as it consolidates below August's uptrend line crossing near 87.60. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. Closes below last Monday's low crossing at 85.17 would confirm an end to the corrective rally off August's low while opening the door for a larger degree decline into the end of September. Closes above the May-July downtrend line crossing near 91.34 would confirm an end to this summer's decline.

First resistance is last Tuesday's high crossing at 90.60. Second resistance is the May-July downtrend line crossing near 91.34. First support is last Monday's low crossing at 85.17. Second support is the reaction low crossing at 83.47.

Monthly Trade Triangles for Long Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = – 75

Oil N' Gold: Crude Oil, Natural Gas, Gold and Silver Market Commentary

Crude Oil posted an inside day with a higher close on Tuesday as it consolidated some of Monday's decline but remains below August's uptrend line crossing. The high range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI have turned bearish signalling that sideways to lower prices are possible near term.

Natural Gas closed lower on Tuesday as it extends the decline off last week's high. The low range close sets the stage for a steady to lower opening when Wednesday's night session begins trading. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near term. If it extends this summer's decline, monthly support crossing is the next downside target. Closes above the 20 day moving average crossing would signal that a short term low has been posted.

Gold posted an inside day with a higher close on Tuesday as it consolidates some of this month's decline but remains below the 20 day moving average. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain neutral to bearish signalling that sideways to lower prices are possible near term. If it extends this month's decline, the reaction low crossing is the next downside target. If it renews this year's rally into uncharted territory, upside target are hard to project.

Silver posted an inside day with a higher close on Tuesday as it consolidates some of this month's decline but remains below the July-August uptrend line crossing. The high-range close set the stage for a steady opening on Wednesday. Stochastics and the RSI remain neutral to bearish signalling that sideways to lower prices are possible near term. If it extends this month's decline, the reaction low crossing is the next downside target. Closes above the 20 day moving average crossing would temper the near term bearish outlook.

U.S. to Sell New Onshore Alaska Oil Leases "Late This Year"

The U.S. government plans to sell oil leases on public land in Alaska's national petroleum reserve "late this year," the Bureau of Land Management said Tuesday.

The BLM said it plans to sell leases on tracts of land in the northeast and northwest areas of the reserve. In preparing for the sale, the agency issued a draft "determination of adequacy" showing that the leases meet the requirements of the National Environmental Policy Act.

The lease sale is part of an effort by the Obama administration to conduct annual oil and natural gas lease sales in the reserve, the agency said.


Posted courtesy of Rigzone.Com

J.W. Jones: The SP 500 and the Dollar Ahead of the Fed Meeting

The Federal Reserve is holding a two day meeting Tuesday and Wednesday of this week. Market participants are expecting the Federal Reserve to prop up financial markets yet again with some grand new plan. The fact is the Federal Reserve is running out of bullets.

Interest rates cannot move much lower in terms of the Federal Funds rate, additional quantitative easing seems redundant since Treasury yields are close to all time lows, and finally a twisting of maturities will do little to alter the current economic conditions. The Federal Reserve is just repeating practices which have proven over a long term do little to create jobs or get the economy moving in the right direction. A stock market rally does not help a person looking for a job!

It is possible that even if the Federal Reserve proposes additional stimulus the market could sell off. I have been trading less in this environment and have been focusing on looking for trade setups that could work regardless of price action. For now I am sitting predominantly in cash waiting to see how price action reacts to the news flow tomorrow.

S&P 500
If I had to guess, I continue to believe that the S&P 500 will get back to test the key 1,250 – 1,280 price level. While this resistance level is apparent, Mr. Market will be able to tear up traders if price jams into that resistance zone. Mr. Market loves nothing more than to shake people out of positions. If price works higher I would expect the 1,250 – 1,280 price range to offer just enough risk / reward to get investors and traders involved in a choppy trading environment. The key upside levels on the S&P 500 are shown below on the daily chart of the S&P 500 Index ($SPX):



The flip side of that argument would see the S&P 500 jamming into recent resistance around the 1,230 price level. If prices rolled over and momentum picked up, a test of the recent August lows would likely transpire and could produce a breakdown and a lower low.

When looking at recent price action, the S&P 500 Index has put in a series of higher lows which is a bullish signal, however the S&P 500 has a long road ahead to break out above the 2011 highs. If the S&P 500 carves out a lower high on the S&P 500 Index at 1,230, 1,250, or even 1,280 and subsequently takes out the August lows then the secular bear will be back. The weekly chart of the S&P 500 Index ($SPX) shown below illustrates key support levels:



For now I am just going to sit in cash and wait for Mr. Market to provide me with some better clues. The trading range is pretty wide going from around 1,100 to 1,280. What I will be watching for is a strong move supported with volume that pushes price out of this range. As of the close today, price action was trading around the middle of this range but depending on how price action reacts to the news that comes out Wednesday it is possible that in coming days we could see a breakout in either direction.

Dow Jones Industrial Average
It will likely surprise long time readers that I am actually going to comment on the Dow. I will keep this brief, but I wanted to point it out to readers as I have not heard much mention of this pattern in the main stream financial media.

Over the weekend I was looking at some longer term charts and I accidentally stumbled across this head and shoulders pattern on a weekly chart of the Dow Jones Industrial Average. I rarely pay much attention to the Dow as I monitor the S&P 500 closely. However, I could not ignore what I was seeing. I also noted that a similar pattern also exists on the S&P 500.

I am generally not the kind of trader who tries to predict where price action will arrive in the distant future. However, I am not going to ignore clear chart patterns that I recognize regardless of the time frame I am looking at.

For those not familiar with a head and shoulders pattern, it is a very ominous signal. Head and shoulders patterns are generally topping formations that if triggered result in violent selloffs. On this chart the pattern is obvious and if the pattern were triggered the forthcoming price action would be decisively negative for domestic equities. The long term monthly chart of the Dow is shown below:



If the pattern is triggered on an undercut of the March 2009 lows, the head and shoulders formation would produce selling pressure that would target the 3,800 – 4,000 level on the Dow. Yes, you read that right! I want readers to recognize that this pattern is not a given and it could play out over a long period of time. The pattern would suggest that a test of the 2009 lows is possible, but I will leave the likelihood of that test up to Mr. Market.

I view this pattern as a potential warning signal for long term equity positions. Consequently, it is far too early to jump into a plethora of short positions or sell every equity position owned simply because of this pattern. While I do not know where price goes from here or if this pattern will ever trigger, I think market participants should be aware of its existence.

It would take the perfect concatenation of events to push prices down to the March 2009 lows, but unfortunately the condition of social mood paired with all of the risks facing financial markets is notable. The recent selloff in August came on the heels of a head and shoulders pattern that was triggered. We all know how August played out, but this pattern on the Dow Jones Industrial Average has a long way to go before it can even trigger. Time will tell, but readers should at the very least put this chart pattern on your radar!

U.S. Dollar Index
The U.S. Dollar Index has ripped higher by more than 5% since August 29th. The strength in the Dollar has likely been precipitated by fear based on the European sovereign debt and banking crisis. While the Dollar certainly has long term flaws, it may simply be the best of the worst.

If the situation in Europe begins to break down further based on any number of events it could likely push the U.S. Dollar Index considerably higher. My trading partner Chris Vermeulen has been riding this strong impulse wave with his subscribers Swing trading the UUP etf and thinks there is big potential still if  Euro Land fears continue to rise.

The daily chart of the Dollar Index futures is shown below:



Mid-Week Market Trend Conclusion
Wednesday will be filled with a variety of news and headlines. The Greek government is meeting and a news release regarding the conference will likely come out around the time domestic markets in the United States open. The news has the potential to move markets considerably.


In addition, the Federal Reserve is set to end its September meeting and market participants will be sitting on the edge of their seats waiting to hear from the Federal Reserve about any stimulus the central bank may provide.


Overall, the news and headlines on Wednesday will certainly impact the current conditions of financial markets. Right now I am pleased to be sitting primarily in cash. I have a few positions open, but for the most part the trades are not directional and are profitable based on time decay.

The one directional trade I have on presently is a remaining sliver of a position I have already taken profits from and stops are in place. While I have been risk averse the past few trading sessions, I am flush with cash and ready to accept new risk if high probability setups emerge.

However, the best trade can sometimes be no trade at all and I intend to remain patient. Risk is extremely high!

Subscribers had over 100% return in August and already up over 50+% for September! Review my track record and join now at Options Trading Signals.com and receive a 24 hour 66% off coupon.

Are Sky High Gold Prices Justified?

Peter Turville-Ince, Head of Commodity & Equities Strategy at Compass Global Markets does not feel that gold is in a bubble especially with central bank inaction and the chances of rising inflation over the long term.

Crude Oil Market Commentary For Tuesday Sept. 20th

The crude oil market is presenting a mixed picture at the moment with our longer term monthly Trade Triangle negative and our intermediate term weekly Trade Triangle positive. This has created a trading range at the moment. The crude oil market remains in a sort of sideways motion, but with a bias toward testing the lower range of the Donchian trading channel. The Williams % R indicator is stuck in the middle, giving no real clue to direction.

Also pay attention to the MACD since it is beginning to lose momentum and could be rolling over to the downside if we have any more negative closes. We do not think that the crude oil market is ready to go higher, based on our long term monthly Trade Triangle which remains negative. The $90 a barrel resistance continues to stop this market on the upside. Look for crude oil to continue to move in a sideways to lower manner.

November crude oil posted an inside day with a higher close on Tuesday as it consolidated some of Monday's decline but remains below August's uptrend line crossing near 87.07. The mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term. Closes below last Monday's low crossing at 85.17 would confirm an end to the corrective rally off August's low while opening the door for a larger-degree decline into the end of September.

Closes above the May-July downtrend line crossing near 91.62 would confirm an end to this summer's decline. First resistance is last Tuesday's high crossing at 90.60. Second resistance is the May-July downtrend line crossing near 91.62. First support is last Monday's low crossing at 85.17. Second support is the reaction low crossing at 83.47.

Monthly Trade Triangles for Long Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = – 65


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Bloomberg: Crude Oil Gains for First Time in Three Days

Crude oil rose for the first time in three days as advancing European equity markets eased concern that the region’s debt crisis is damping demand for fuel, while investors bet that some supplies may be at risk.

Futures in New York gained as much as 1.4 percent, halting a slide of more than 4 percent in the previous two trading days, as the Stoxx Europe 600 index advanced 1.6 percent. Opposition fighters in Libya continued to battle loyalists at the town of Bani Walid and the city of Sirte, while anti government protests in Yemen left 50 people dead this week.

“Given the scale of the price fall, we are seeing some buying interest out there,” said Amrita Sen, a London based analyst at Barclays Plc. “The fundamentals still look robust with demand, even after slowing down, outpacing supply growth.”

Oil for October delivery on the New York Mercantile Exchange gained as much as $1.21 to $86.91 a barrel and was at $86.75 a barrel at 12:48 p.m. London time. The contract fell 2.6 percent yesterday and will expire today. The more actively traded November future was up $1.02 at $86.83 a barrel.

Brent crude for November settlement was up $1.40 at $110.54 a barrel on the ICE Futures Europe exchange in London. The contract yesterday fell 2.7 percent to $109.14 a barrel. The European benchmark future was at a premium of $23.67 to the November price of West Texas Intermediate, compared with a record settlement of $26.87 on Sept. 6......Read the entire Bloomberg article.


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Phil Flynn: Twisted

Oil prices are trying to rebound in the aftermath of Greek default fears and despite the fact that S&P decided to downgrade Italy. Is it possible the Fed is getting ready to do the twist?

Lets twist again like we did last summer, ok back in the sixties when the Federal Reserve, in an attempt to stimulate long term investment, would buy paper at the long end of the yield curve thereby driving down yields in the hopes that individual investors and business would start making some long term commitment with their money.

Looking at the yield curve and the falling rates on the long end there seems to be a large sector of the trading population that thinks this is a done deal. Today it is the first day of the Federal Open Market Committee and it appears that instead of QE-3d, baby let's do the twist.

Of course the reason that the Fed is twisted is the fact that QE2 did not seem to have the desired effect. The fall out of rising oil and commodity prices and the fact that the money seemed to stay in bank vaults as opposed to getting into the real economy, is making it more difficult for the Fed to justify its 3D version. Now the question is, will it work and is it bullish or bearish for oil?......Read the entire PFGs Best article.

OPEC’s $1 Trillion Cash Quiets Poor of the Middle East

Saudi Arabia will spend $43 billion on its poorer citizens and religious institutions. Kuwaitis are getting free food for a year. Civil servants in Algeria received a 34 percent pay rise. Desert cities in the United Arab Emirates may soon enjoy uninterrupted electricity.

Organization of Petroleum Exporting Countries members are poised to earn an unprecedented $1 trillion this year, according to the U.S. Energy Department, as the group’s benchmark oil measure exceeded $100 a barrel for the longest period ever. They are promising to plow record amounts into public and social programs after pro democracy movements overthrew rulers in Tunisia, Egypt and Libya and spread to Yemen and Syria.

Unlike past booms, when Abu Dhabi bought English soccer club Manchester City and Qatar acquired a stake in luxury carmaker Porsche SE, Gulf nations pledged $150 billion in additional spending this year on their citizens. They will need to keep U.S. benchmark West Texas Intermediate crude oil at more than $80 a barrel to afford their promises, according to Bank of America Corp.....Read the entire article.

Crude Oil and Gold Market Commentary For Monday Evening Sept. 19th

The October crude oil contract was immediately on the defensive when it opened today and moved down to the key $85.00 support level. This is a very important area for this market and we would view a close below $85.00 as a very negative sign for crude oil. This would break a support trendline that began on August 9th.

We do not think that the crude oil market is ready to go higher, based on our long term monthly Trade Triangle which remains negative. The $90 a barrel resistance continues to stop this market on the upside. Look for crude oil to continue to move in a sideways to lower manner.

Crude oil closed lower on Monday and below August's uptrend line crossing near 86.62. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are overbought, diverging and are turning bearish signaling that sideways to lower prices are possible near term.

Closes below last Monday's low crossing at 85.17 would confirm an end to the corrective rally off August's low while opening the door for a larger degree decline into the end of September. Closes above the May-July downtrend line crossing near 91.86 would confirm an end to this summer's decline. First resistance is last Tuesday's high crossing at 90.60. Second resistance is the May-July downtrend line crossing near 91.86. First support is last Monday's low crossing at 85.17. Second support is the reaction low crossing at 83.47.

Monthly Trade Triangles for Long Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = – 75

The gold bulls have to be disappointed with today’s market action even though the longer term trend for gold remains positive. We still believe that the $1,750 area is important support for spot gold. Providing that our monthly and weekly Trade Triangles remain intact, we want to approach this market from the long side.

The Williams % R is once again in an oversold condition. The $1,840 level is resistance for gold at the moment. Support comes in around the $1,775 and extends all the way down to $1,750. Intermediate and long term traders should maintain long positions with the appropriate money management stops in place.

December gold closed lower on Monday as it consolidates below the 20 day moving average. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If December extends this month's decline, the reaction low crossing at 1705.40 is the next downside target. If December renews this year's rally into uncharted territory, upside target are hard to project. First resistance is this month's high crossing at 1920.70. First support is last Friday's low crossing at 1765.40. Second support is the reaction low crossing at 1705.40.

Monthly Trade Triangles for Long Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = + 55


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EIA Report: World Wide Energy Use Expected to Increase 53% by 2035

In a statement released on Monday the EIA, the U.S. Energy Information Administration, predicts that the worlds energy consumption will increase by as much as 53% by 2035. in China and India.

Todays report, the 2011 International Energy Outlook, predicts that consumption of energy from renewable and alternative sources will be the fastest growing in the energy sector. Reaching 15% of the world energy use by 2035 compared to 10% in 2008. But fossil fuels will still be the world's dominant source, accounting for about 78% of the world's energy use in 2035.

The EIA said it expects oil prices to remain high, reaching $125 per barrel in 2035, but added that consumption of oil will still grow during that period.

The EIA also predicts that petroleum prices are "very sensitive to both supply and demand conditions" and that prices could fall to $50 per barrel or approach $200 per barrel, depending in part of the rate of economic growth in developing countries.

The EIA report projects changes in world energy markets between 2008 and 2035. It doesn't take into account the potential impacts of policy changes that have not yet been implemented.

One area that will be particularly sensitive to policy actions: competition between coal, natural gas, and renewable sources to meet electricity demand, said Howard Gruenspecht, the acting EIA administrator, during a speech at the Center for Strategic and International Studies.

The report projects, absent policy changes, tremendous growth in coal consumption by China and to a lesser extent India and other developing countries. That growth is a key driver of a projected increase in worldwide carbon dioxide emissions, which EIA predicted would jump about 43% between 2008 and 2035. China's carbon emissions were somewhat higher than those of the U.S. in 2008, but are projected to be "more than twice as high" as U.S. emissions by 2035, Gruenspecht said.

Natural gas consumption was projected to grow at a faster rate than any other type of fossil fuel, thanks in part to increased supply from the U.S. and elsewhere. Consumption will grow from 111 trillion cubic feet in 2008 to 169 trillion cubic feet in 2035, the report predicted.

Use of nuclear power increases slightly in the EIA projections, but "the full extent of the withdrawal of government support for nuclear power is uncertain" in the wake of the Fukushima Daiichi crisis in Japan, Gruenspecht said.

Gruenspecht said that due to budget cuts impacting the EIA, the outlook report might not be released next year. "That's a little bit of question mark in the present resource environment."


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Phil Flynn: Can't Get Away From Greece

Global oil markets are falling as the Greece problem continues to weigh on market sentiment. Market odds put a Greek default at 98% and rising. The Wall Street Journal reported, "In Greece, the cabinet of Prime Minister George Papandreou met on Sunday to discuss growing concerns over the nation's ability to meet its fiscal targets. The so called "troika" of international lenders the International Monetary Fund, the European Central Bank and the European Commission are withholding the next disbursement of aid to Greece until the government comes up with a credible plan to meet its deficit-reduction commitments."


In a sharply worded statement released after the cabinet meeting Sunday, Finance Minister Evangelos Venizelos said the government takes full responsibility for the implementation of the agreed program, but also warned that Greece shouldn't be the "scapegoat" used by European institutions to hide their inability to manage the euro-zone crisis." So take that and please write me a check! The Greek government knows that it is going to be very messy for the Euro Zone if they are allowed to fail so at some point they may just tell Europe to either come up with more cash or face the consequences that will come when Greek goes belly up.....Read the entire article.


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