The Gold & Silver Precious Metals Correction

It’s been an exciting week for traders as volatility levels are through the roof and the broad market is moving up and down like a yoyo. You cannot take your eyes off the screen if you have a large amount of money invested as you can quickly find yourself with a large profit or loss in the matter of minutes....

Although we have seen stocks jump around the past few days precious metals have held strong with very little volatility. This is because of the economic fears looming for the US and other countries of possible financial collapse. This fear is helping to boost gold and silver prices because they are seen as the safe haven. Also we are seeing money move in the US dollar because the country is still seen as a leader in many ways helping to boost the US dollar.

Below are a couple charts on Gold and Silver ETF’s showing the end of last years rally and the correction in prices which are now looking to setting up for another leg higher.

Gold Futures Price – 60 Minute Day Trading Chart

Gold has been showing some very bullish price action the past week forming several mini bull flags with confirming volume levels. I think we should see gold pop another $5-10 bucks in the very near future if not continue higher for several days.

SLV – Silver ETF Trading Vehicle – Daily Chart

Silver formed much of the same patterns as gold but with much more volatility. Also silver has yet to break the 2009 high which is surprising but with a large part of silver being use for industrial purposes it does make sense as the economy is not as strong as it was thought to be in 2009. Silver carries much more risk when trading because it has more random moves and increased volatility.

Mid-Week Precious Metals Trading Conclusion:

In short, gold and silver are in an uptrend and looking strong. Both are currently trading at short term resistance levels on the daily chart which has caused them to stop moving up today (Wednesday May 26th) but on an intraday basis they look solid and could break though these resistance levels.

That being said buying way up here adds a lot more risk because a good chunk of the move has already been made and if prices do roll over and start heading back down the next support level is several percentage points away for placing a protective stop with the proper amount of wiggle room.

If Trading Gold, Silver and Index Futures and ETFs interest you, check out Chris Vermeulen's trading services at The Gold and Oil Guy.com



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Crude Oil Technical Outlook For Thursday Morning

Crude oil's rebound from 64.24 extends further today and intraday bias is on the upside for stronger rise, possibly towards 61.8% retracement of 87.15 to 64.24 at 78.39. On the downside, though, break of 67.15 minor support will indicate that such recovery is completed and will flip bias back to the downside for retesting 64.24 low.

In the bigger picture, prior break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, decisive break of resistance at 78 level is needed to be indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Crude Oil, Natural Gas and U.S Dollar Commentary For Wednesday Evening

Crude oil closed higher due to short covering on Wednesday as it consolidated some of this month's decline. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If July extends this month's decline, last July's low crossing at 66.11 is the next downside target. Closes above the 20 day moving average crossing at 77.86 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 72.41. Second resistance is the 20 day moving average crossing at 77.86. First support is Tuesday's low crossing at 67.15. Second support is last July's low crossing at 66.11.

Natural gas closed higher due to short covering on Wednesday as it consolidated some of last week's decline. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. If July extends last week's decline, this month's low crossing at 3.971 is the next downside target. Closes above the 10 day moving average crossing at 4.267 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 4.267. Second resistance is this month's high crossing at 4.587. First support is Tuesday's low crossing at 4.036. Second support is this month's low crossing at 3.971.

The U.S. Dollar closed higher on Wednesday as it extended this week's rally. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are diverging but turning bullish again signaling that sideways to higher prices are possible near term. If June renews this year's rally, the 87% retracement level of 2009's decline on the weekly continuation chart crossing at 87.79 is the next upside target. Closes below the 20 day moving average crossing at 85.06 are needed to confirm that a short term top has been posted. First resistance is last Wednesday's high crossing at 87.63. Second resistance is weekly resistance crossing at 87.79. First support is last Friday's low crossing at 85.33. Second support is the 20 day moving average crossing at 85.06.

Gold closed higher on Wednesday and above the 10 day moving average crossing at 1206.10 confirming that a short term low has been posted. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near term. If June extends today's rally, this month's high crossing at 1249.70 is the next upside target. First resistance is today's high crossing at 1216.90. Second resistance is this month's high crossing at 1249.70. First support is last Friday's low crossing at 1166.00. Second support is the reaction low crossing at 1156.20.

New Video: We are Back in the Gold Market!

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MarketClub: We are Back in the Gold Market

From MarketClub's Adam Hewison......

After exiting all long positions at 1217.72 on 5/18, we reinstated long positions seven days later on 5/25 at 1196.57.

As many of you know who watch my videos, we use our weekly "Trade Triangles" for trend direction and our daily "Trade Triangles" for timing entry and exit points. It was those daily "Trade Triangles" that flashed a buy signal on 5/25.

Given the chaotic state of the world and all the cross currents that are running in the banking system, we would not be surprised to see gold once again climb up and challenge the $1,250 level. All of our "Trade Triangles" are green and 100% to the upside. This indicates that a strong trend is once again in place for the gold market.

The video is available for viewing now and there is no charge or registration requirement.

Gold traders are always a very vocal segment of the trading population and so we encourage you to let your voice be heard on our Trader's Blog.

Watch....We are Back in the Gold Market

All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub



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New Video: The Return of the Greek Drachma ... it's Coming

The reality is, the world is in a whole mess of debt and it's all coming due at the same time.

Make no mistake about it, the situation in Europe is dire. The problems with Greece are well known. The problems in Spain are growing, and the problems in Ireland and Portugal are about to rear their ugly heads.

We are not going to rhapsodize about the problems in Europe, they are well known and are manifesting themselves in the price action of the world markets, however, in this short video on the euro we want to show you how monthly charts and our "Trade Triangles" tell the story and show the trend very clearly. We also show you a simple method that you can use in your everyday trading to estimate how far a move can go.

My hope is that this new video will highlight some of the reasons why we believe we could be seeing some strong opportunities in this market.

Just click here to watch the video and as always it is available for viewing now and there is no charge or registration requirement. Please feel free to leave a comment and let us know what your thoughts are on the video and the future of the Euro.


Watch "The Return of the Greek Drachma ... it's Coming"


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Crude Oil Daily Technical Outlook Wednesday Morning

Yesterday's recovery suggests that consolidation from 64.24 is still in progress and intraday bias is turned neutral. While further rise cannot be ruled out, we'd expect strong resistance at 38.2% retracement of 87.15 to 64.24 at 72.99 to limit upside and bring fall resumption finally. Break of 64.24 should target 60 psychological level next, which is close to 50% retracement of 33.2 to 87.15 at 60.18.

In the bigger picture, the break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, break of resistance at 78 level is needed to be indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Oil Rises After Industry Report Shows U.S. Gasoline Supply Drop

Crude oil rose in New York after an industry-funded report showed a drop in U.S. gasoline stockpiles, renewing optimism of increasing fuel demand in the world’s largest crude consumer. Oil pared part of yesterday’s 2.1 percent decline after the American Petroleum Institute said gasoline supplies fell 3.19 million barrels last week. Crude has dropped 20 percent since reaching $87.15 a barrel on May 3, the highest intraday price in more than a year. U.S. equities erased losses in the final minutes of trading, with the Dow Jones Industrial Average closing 0.2 percent lower after plunging 292 points.

“The drop in the gasoline inventories has brought optimism back to the market,” said Serene Lim, an energy and commodity strategist with Australia & New Zealand Banking Group Ltd. “Crude prices have been oversold the past two weeks so that is opening up some buying opportunities.” Crude oil for July delivery rose as much as $1.38, or 2 percent, to $70.13 a barrel in electronic trading on the New York Mercantile Exchange, and traded at $69.27 at 2:03 p.m. Singapore time. Yesterday, the contract fell $1.46 to $68.75 after dropping as much as 4.4 percent.

“A drop in gasoline supplies almost always gives the energy markets reason to trade higher,” said Mike Sander, an investment adviser a Sander Capital Advisors in Seattle. “Oil is also up after the Dow Jones rallied in trading at the end of its session. With such a positive reversal, the price of oil received a boost”....Read the entire article.


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Video: Crude Oil Continues to Slide on Economic Worries

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Where is Crude Oil and Gold Headed on Wednesday?

CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil and gold are likely headed tomorrow.




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Crude Oil, Natural Gas, Gold and Dollar Commentary For Tuesday Evening

Crude oil closed lower on Tuesday as it extended this month's decline. A short covering rally tempered early losses and the mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If July extends this month's decline, last July's low crossing at 66.11 is the next downside target. Closes above the 20 day moving average crossing at 78.58 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 73.30. Second resistance is the 20 day moving average crossing at 78.58. First support is today's low crossing at 67.15. Second support is last July's low crossing at 66.11.

Natural gas closed higher due to short covering on Tuesday as it consolidated some of last week's decline. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If July extends last week's decline, this month's low crossing at 3.971 is the next downside target. Closes above the 10 day moving average crossing at 4.291 would temper the near term bearish outlook. First resistance is the 20 day moving average crossing at 4.229. Second resistance is the 10 day moving average crossing at 4.291. First support is today's low crossing at 4.036. Second support is this month's low crossing at 3.971.

The U.S. Dollar closed higher on Tuesday as it extended Monday's rally. However, profit taking tempered early session gains and the low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 84.83 are needed to confirm that a short term top has been posted. If June renews this year's rally, the 87% retracement level of 2009's decline on the weekly continuation chart crossing at 87.79 is the next upside target. First resistance is last Wednesday's high crossing at 87.63. Second resistance is weekly resistance crossing at 87.79. First support is last Friday's low crossing at 85.33. Second support is the 20 day moving average crossing at 84.83.

Gold closed higher due to short covering on Tuesday as it consolidated some of last week'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 signaling that sideways to lower prices are possible near term. If June extends last week's decline, the reaction low crossing at 1156.20 is the next downside target. Closes above the 10 day moving average crossing at 1209.10 would temper the near term bearish outlook. First resistance is the 20 day moving average crossing at 1198.40. Second resistance is the 10 day moving average crossing at 1209.10. First support is last Friday's low crossing at 1166.00. Second support is the reaction low crossing at 1156.20.

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