The Gold ETF Trader

Is $1300 Gold Right Around the Corner?

2013-05-17T12:57:00.003-07:00

The price of gold plummeted this week with losses of over 5% as investors jumped out of this once precious metal and into U.S. and Japanese stocks. If gold closes where it is currently trading at $1,363 on the spot market, it will represent a new low weekly close for the year. Such a close would indicate further downside pressure for this metal. Technically, we cannot rule out a test of the $1300 level.

If June gold extends this month's decline, April's low crossing at 1321.50 is the next downside target. Closes above the 20 day moving average crossing at 1440.00 are needed to confirm that a short term top has been posted.

Going into Fridays session first resistance was the 20 day moving average crossing at 1440.00. Second resistance is May's high crossing at 1487.20. First support is Thursday's low crossing at 1368.00. Second support is April's low crossing at 1321.50.

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How to Spot & Time Stock Market Tops

2013-05-16T05:25:00.001-07:00

Since the middle of April everyone and including their grandmother seems to have been building a short position in the equities market and we know picking tops or bottoms fighting the major underlying trend is risky business but most individuals cannot resist.

The rush one gets trying to pick a major top or bottom is flat out exciting and that is what makes it so darn addicting and irresistible. If you have ever nailed a market top or bottom then you know just how much money can be made. That one big win naturally draws you back to keep doing it much like how a casino works. The chemicals released in the brain during these extremely exciting times are strong enough that even the most focused traders fall victim to breaking rules and trying these type of bets/trades.

So if are going to try to pick a top you better be sure the charts and odds are leaning in your favor as much as possible before starting to build a position.

Below are a few charts with my analysis and thoughts overlaid showing you some of the things I look at when thinking about a counter trend trade like picking a top within a bull market.

Utility Stocks vs SP500 Index Daily Performance Chart:

The SPY and XLU performance chart below clearly shows how the majority of traders move out of the slow moving defensive stocks (utilities – XLU) and starts to put their money into more risky stocks. This helps boost the broad market. I see the same thing in bonds and gold this month which is a sign that a market top is nearing.

That being said when a market tops it is generally a process which takes time. Most traders think tops area one day event but most of the times it takes weeks to unfold as the upward momentum slows and the big smart money players slowly hand off their long positions to the greedy emotion drove traders.

Look at the chart below and notice the first red box during September and October. As you can see it took nearly 6 weeks for that top to form before actually falling off. That same thing could easily happen again this time, though I do feel it will be more violent this time around.

SPY ETF Trading Chart Shows Instability and Resistance:

Using simple trend line analysis we see the equities market is trading at resistance and sideways or lower prices are more likely in the next week or two.

Stocks Trading Above 150 Day Moving Average Chart:

This chart because it’s based on a very long term moving average (150sma) is a slow mover and does not work well for timing traded. But with that said it does clearly warn you when stocks are getting a little overpriced and sellers could start at any time.

General rule is not to invest money on the long side when this chart is above the 75% level. Rather wait for a pullback below it.

Stocks Trading Above 20 Day Moving Average Chart:

This chart is based on the 20 day moving average which moves quickly. Because it reacts quicker to recent price action it can be a great help in timing an entry point for a market top or bottom. It does not pin point the day/top it does give you a one or two week window of when price should start to correct.

How to Spot and Time Stock Market Tops Conclusion:

As we all know or will soon find out, trading is one of the toughest businesses or and one of the most expensive hobbies that one will try to master. Hence the 95-99% failure rate of individuals who try to understand how the market functions, position management, how to control their own emotions and to create/follow a winning strategy.

With over 8000 public traded stocks, exchange traded funds, options, bonds, commodities, futures, forex, currencies etc… to pick from its easy to get overwhelmed and just start doing more or less random trades without a proven, documented rule based strategy. This type of trading results in frustration, loss of money and the eventual closure of a trading account. During this process most individuals will also lose friends, family and in many cased self-confidence.

So the next time you think about betting against the trend to pick a top or a bottom you better make darn sure you have waited well beyond the first day you feel like the market is topping out. Stocks trading over the 150 and 20 day moving averages should be in the upper reversal zones and money should be flowing out of bonds and other safe haven/defensive stocks to fuel the last rally/surge higher in the broad market.

Also I would like to note that I do follow the index futures and volume very closely on both the intraday and daily charts. This is where the big money does a lot of trading. Knowing when futures contracts are being sold or bought with heavy volume is very important data in helping time tops and bottoms more accurately. And the more experience you have in trading also plays a large part in your success in trading tops and bottoms.

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Gold still has downward pressure to look forward to.....right?

2013-05-14T06:55:00.001-07:00

Outside of a late week Currencies surge, there were very few fireworks to report in last week’s business. This week however, may be a different story.

Thursday and Friday of last week provided some decent movement in the Dollar and Euro, but it appeared things began in the Japanese Yen, then spilled over. Throughout the last several weeks, there have been multiple attempts to push the Yen to new lows for the year, but it always seemed that somehow the plan was foiled. After the selling pressure triggered stop-orders below support, all other Currencies had to react. There was a firm rebound in the US Dollar and an inverse move in the Euro Currency. Surprisingly, the swings in the Currencies had very little impact on outside markets. In fact, most other sectors of the markets were rather stale and choppy. A Treasury Bond auction had some impact on the 30 year bonds and 10 year Notes, but there was little else in the week that provided any excitement. The same goes for the Gold Futures. Normally, traders would use the direction the Dollar or the Stock Indexes as a guide for what to expect in the Metals, but those former relationships are no longer in play on a day to day basis.

This week, there are a few decent reports in the US and Europe that should provide some decent movement. In the United States, Retail Sales, CPI, PPI, Empire State Manufacturing, and Philly Fed reports will be worth watching. In Europe, traders will be following economic data out of Germany along with European GDP figures to provide sustained market direction in at least the Currency sector, but I am unsure whether or not it will carry over into the Metals.

The Weekly Chart of June Gold shows the Futures prices consolidating around $1425. I still believe that Gold Futures may have some further pressure ahead while the US stock indexes remain stable and strong. One thing that will be interesting to watch would be if the Gold Futures ever return to being a “flight to safety” vehicle if the stock market corrects. I will keep a tight watch on that former relationship as the stock market continues its questionable rally into uncharted territory.

Posted courtesy of our trading partner Adam Hewsion at INO.Com

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Correction near but Bull Market has LONG waves to Go!

2013-05-13T05:34:00.000-07:00

Are you using Elliot Wave theory in your trading? Today David Banister of Market Trend Forecast is laying out the Elliot formations in detail. Do yourself a favor and take a few minutes to make sure you are looking at this market through his eyes. Can any of us call the pull back exactly and reliably? No, of course not. But we should all be taking this into consideration.

The SP 500 has been on a tear as we all know especially since the SP 500 bottomed at 1343 several months ago. My work centers around forecasting using Elliott Wave Theory along with other technical indicators. This helps with projecting the short, intermediate, and longer term paths in the stock market and also precious metals. This larger picture Bull Cycle started in March of 2009 interestingly after an exact 61.8% Fibonacci retracement of the entire move from 1974 to 2000 lows to highs. At 666, we had completed a major cycle bottom with about 9 years of movement to retrace 26 years of overall bull cycle. That was a major set of 3 waves (Corrective patterns in Elliott Wave Theory) from the 2000 highs to 2002-3 lows, then 2007 highs to 2009 lows. Once that completed its work, we were free to have a huge new bull market cycle off extreme sentiment and generational lows.

It’s important to understand where we were at in March of 2009 just as much as it is today with the market at all time highs. Is this the time to bail out of stocks or do we have a lot more upside yet to go? Our short answer is there is quite a bit more upside left in the indexes, but there are multiple patterns that must take place along the way. We will try to lay those out for you here as best we can.

Elliott Wave theory in general calls for 5 full wave cycles in a Bull pattern, with 1, 3, and 5 bullish and 2 and 4 corrective. We are currently in what is often the most bullish of all the patterns, a 3rd of a 3rd of a 3rd. In English, we are in Primary wave 3 of this bull cycle which will be 5 total primary waves. We are in Major wave 3 of that Primary 3, and in the Intermediate wave 3 of Major wave 3. That is why the market continues its relentless climb. This primary wave 3 still has lots of work to do because Major wave 3 still has a 4th wave down and a 5th wave up to finish, then we need a major 4, then a major 5.

That will complete primary wave 3. This will then be followed by a Primary wave 4 cycle correction that probably lasts several months, and then a Primary wave 5 cycle to finish this part of the bull market from March 2009 generational lows… and all of that work is going to take time. Once that entire process from March 2009 has completed, then we should see a much deeper and uglier correction pattern, but we think that is at least 12 months or more away.

What everyone wants to know then is where are we at right now and what are some likely areas for pivot highs and lows ahead? We should complete this 3rd of a 3rd of a 3rd here shortly and have a wave 4 correction working off what will likely be almost 300 points of upside from SP 500 1343. We could see as much as 90-120 points of correction in the major index once this wave completes. Loosely we see 1528-1534 as a possible top and if not then maybe another 30 or so points above that maximum into early June. This should then trigger that 90-120 point correction, and then be followed by yet another run to highs.

We could go on but then we will lose our readers here for sure, and as it is… this is all projections and postulations, so it’s best to keep the forecast to the next many weeks or few months. Below is a chart we have put together showing the structure of Major wave 3 of Primary 3 since the 1343 lows. Once that Major wave 3 tops out (see the blue 3) then we will have Major 4, then Major 5 to complete Primary wave 3 since the 1074 SP 500 lows. Whew!

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How to Trade Gold, Silver & Precious Metal Miners....It's not that Difficult!

2013-05-08T20:42:00.000-07:00

How to trade Gold and other precious metals related investments is not that complex. But you must be willing to wait for price to provide low risk entry points before getting involved. Precious metals are like any other investment in respect to trading and investing in them. There are times when you should be long, times to be in cash and times to be short (benefit from falling prices).

Since 2011 when gold and silver started another major bull market correction the best position has been to move to cash or sell/write options against your positions to protect your investment until the next trend resumes.

If you take a look at the chart below of gold you will notice that in 2008 we had a similar breakdown in price which purged the market of investors who where long gold. And if you compare the last two breakdowns they look very much the same. If price holds true then much higher prices are likely to unfold at the end of 2013.

The key here is for the price to move and hold above the major resistance line. If it can do that then we are looking at a possible breakout to $2600 – $3500 gold. With that being said gold and silver may just be starting a bear market. Depending what the price of gold does when my resistance level is touched, my outlook may change from bullish to bearish.

Also with last weeks economic numbers getting better in the USA I do have concerns that gold may be starting a bear market but we will not know for several more months yet.

How to Trade Gold Daily Technical Chart:

Major technical damage has been done to the chart of gold. This can be seen as bullish or bearish price action but until price and volume pattern unfolds which puts the odds on the bullish or bearish side I remain neutral.

How to Trade Silver Daily Technical Chart:

Silver is in the same position as gold. The question is if this is a shakeout or breakdown......

How to Trade Gold Mining Stocks Monthly Chart:

Gold mining stocks broke down a couple months ago and continue to sell off. If precious metals continue to move lower then mining stocks will continue their journey down. The chart below made in February and it has in most part played out as expected. While I do not try to pick bottoms (catch falling knives) I do like to watch for them so I am prepared for a new position when the time and chart become bullish.

How to Trade Gold, Silver and Mining Stocks Conclusion:

In short, precious metals continue to be in a down trend. While they look to be trying to bottom it is important to remember that the largest moves take place in the last 10% of a trend. So we may be close to a bottom but there could be sharply lower prices yet.

The time will come when another major buy or short signal forms and when it does we will be getting involved. The exciting part is that it could be just around the corner.

If you want to keep current and take advantage of the next major move be sure to join our free newsletter here.... Gold, Silver, & Mining Stock Trade Setups

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Are you ready? Gold Traders and Investors Better Get Ready To Rumble!

2013-04-30T08:19:00.000-07:00

We have talked about how gold, silver and gold mining stocks have been flying under the media radar for over a year and that they were not catching the attention of traders, investors and the public anymore. I also said it would take some sharp price action (breakdown or rally) for it to be front and center again on TV, Radio and Newspapers.

But since gold has plummeted 17.5% dropping from $1600 down to $1320 per ounce with silver and gold stocks falling also they are now headline news once again. This move has caused some serious damage to the charts when looking at it from a technical analysis point of view. Below are some basic analysis points that show a new swing trading entry point.

The Technical Traders Chart Analysis

Broken Support – Once a support level has been broken it becomes resistance. Gold is trading under a major resistance level.

Momentum Bursts - Since the April 15th low, gold has been setting up for another short selling entry point. Remember the market tends to move in bursts of three, seven or ten days then price reverses direction or pauses. It has now been 10 days.

Moving Average Resistance – Gold has worked its way up to the 20 day moving average which can act as resistance.

Bearish Inside Bars – This type of chart pattern points to lower prices. When there is a big down day followed by 3, 7 or 10 up days inside the price action of the down bar we can typically expect another sharp drop which tests the recent lows as shown with the arrow on the chart.

Gold Short Selling Conclusion:

In short, gold is setting up for a low risk entry point that should allow us to profit from lower gold prices. Using an inverse ETF like DZZ or even the gold mining stock inverse ETF DUST could be played. These funds go up in value as the price of gold falls.

While I expect gold to pullback, I do not think it will make another leg lower. Instead, a test of the recent low or pierce of the low by a few bucks then reverse and start building a bullish basing pattern before going higher.

From our trading partner Chris Vermeulen.

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Bullet Proof Trading.....The Roadmap to Consistent Monthly Income

2013-04-28T09:39:00.002-07:00

Doc Severson just posted a report called "The NEW Road map to Consistent Monthly Income" where he exposes the real truth on diversification and why even some of the best trading strategies are under performing.

Click here to get this special report "The NEW Roadmap to Consistent Monthly Income"

And you'll be surprised because this has nothing to do with any other trading system you've seen advertised or the talking heads on CNBC, Bloomberg or Fox Business suggesting. Yet, it's so important that it should be kept on the desk of every trader in the world. And that's probably what you'll do since you can download this 60 minute presentation that includes a 14 page financial blueprint to access and use at anytime.

If you've been struggling with making money and just want to find a simpler way to manage your accounts and draw a regular paycheck you need to watch this video now. Doc's road map is broken down into a 4 step process that can almost bullet proof your income from ever getting slammed by the market again.

"The NEW Road map to Consistent Monthly Income"

After watching the presentation please feel free to leave a comment and let us [and our readers] know what you really think about Doc's new system. And since you can put this method right to work...no matter what the size of account is....we'll see you in the markets next week.

The Gold ETF Trader

Are you trading with us....or against us?

2013-04-25T21:57:00.000-07:00

Our trading partner Doc Severson is giving away one of his favorite options trading strategies. He just released a few copies of this new & revised version of The Iron Condor Trading Strategy as a way to restore hope to struggling traders. This is not a promotional tease, it's a 100% fully disclosed options trading strategy.

Having looked at the new version myself I can tell you that you are going to want to reference this material over and over so be sure to save it to your computer while the link is still live.

With it's limited availability you'll want to click here to Download Your FREE Iron Condor Trading Strategy PDF file right away.

Doc offers a really unique perspective on options trading and chances are this will be the first time you've ever seen a trading strategy like this before. This system is so simple that you'll be able to go into the markets and trade it right away. This strategy is detailed in an easy to understand training video and blueprint with no strings attached.

Now you decide, are you trading with us or against us?

See you in the markets,
The Gold ETF Trader Trader

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Doc Severson Updates and Releases New Version of OptionsMD

2013-04-23T12:44:00.002-07:00

Doc Severson at Trading Concepts as opened enrollment in the latest version of the OptionsMD Trading Program. And it was worth the wait.

*   Find out the 5 everyday mistakes financial ‘Gurus’ are teaching you that could actually STOP you from ever becoming financially independent.

*   Why being ‘wrong’ is one of my best kept secrets for making money....and how you can do it too.

*   Why even the pros get trapped in the same suckers’ game they surprisingly try to get you stuck in.

And he may not give this one away again so don’t miss out on this.

Just click here and watch "The Alternate Road to Investing" and get started with the new MD Options release.

Don't miss Doc's daily trades, sign up today!

Gold Chart of The Week for April 22nd - 26th

2013-04-22T14:25:00.001-07:00

Without any big news to play off of, most markets begin the week a bit flat. Traders this morning are trying to decide whether the only standout rally in the Gold is here to stay, or if it is an early stop hunt to begin the week. We won’t soon forget the Sunday overnight in the Metals last week when Gold continued a drop that we have not seen in over thirty years. So who can blame anyone for being once bitten, twice shy?

A scan across the board does not reveal much except for a majority of the market sectors making an effort to retrace the price action we experienced a week ago. Korea has been rather silent, the tragedy in Boston is seemingly on the mend, and the parade of FED Member interviews is slowly coming to a close. In the absence of these headlines, we will likely go back to trading the actual reports that are scheduled this week.

In the US, the stock indexes will pay close attention to the continuation of Q1 reported earnings, and may set its sights on the GDP report at the end of the week. Europe reports numbers early on Tuesday and Wednesday, while Great Britain and Japan will take center stage on Thursday reporting GDP and Interest Rates, respectively.

The Weekly Chart on Gold futures shows how critical prices between $1425 and $1500 are for the June Futures. On the lower end $1425 is where the 200 day moving average resides. As we move $25 higher, we run into the trendline that once underpinned the price of Gold, and will probably now provide overhead resistance on the way up. And lastly, a rally to $1500 or better will likely convince traders that last weeks drubbing was all she wrote for a while.

Posted courtesy of our trading partners at INO.com

Don't miss John Carters next webinar this Wednesday....Click here to sign up!

New Swing Trading Options Strategies for Commodity Traders

2013-04-20T11:45:00.004-07:00

Whether you are trading crude oil, equities, currencies or gold it's time to take advantage of another great free webinar with our very own John Carter Wednesday, April 24th at 8 p.m. est

Click here to sign up for the "Swing Trading Strategies for Options Traders"

Here's what John will be teaching in the webinar, completely free of charge

What are the best swing trading setups?
What technical analysis indicators should I use?
What foundational analysis techniques should I use?
What criteria to look for when choosing a stock to swing trade
When the best times are to place your swing trades
...and much much more.

Simply visit this link, fill in your email address and click on the submit button. And you will automatically be registered for the webinar on Wednesday.

See you Wednesday night!

Last Minute Notice: Free Training TODAY

2013-04-18T10:09:00.000-07:00

Commodity prices have been taking a beating and there is no better time to make sure you have all the tools to understand how to play both sides of this market.

Are you prepared to deal with this kind of volatility?

This afternoon our trading partners at Premier Trader University are hosting a free webinar that will give you the edge you need for these kind of big moves in commodities, equities and currencies. Best of all is the free training course that all attendees receive just for coming to one of todays free webinars.

That's right, you get this course FREE just for attending (download link will be given out on both webinars)

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See you at the webinar and we'll see you in the markets!
Ray C. Parrish
The Gold ETF Trader

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The Gold Meltdown – What Happened?

2013-04-16T05:55:00.003-07:00

In today’s Trade School video, we’re going to be looking into what caused the recent meltdown in gold prices. How could gold drop so precipitously in such a short time, given what’s going on in the world? Did it have anything to do with the ETF GLD or was a country forced to sell its precious metals to satisfy creditors?

We will share with you how you could have systematically made money in gold using our Trade Triangle technology, which has produced some very positive results over the years.

Since 1975, there have been 13 bear markets with an average drop around 14%. This would put gold below the $1,300 level, around $1,280.

In this short 4 minute video on gold, we will illustrate the importance of having a solid game plan and a market proven approach. We will go through each trade in gold and share with you the results of using our Trade Triangle approach from the beginning of the year.

This approach is not for everyone, but we think you will agree that the results certainly speak for themselves.

For more information on the tools we use in this video just click here to > visit The MarketClub

Friday’s Precious Metals Melt-Down….. How to Manage It!

2013-04-15T05:31:00.003-07:00

Friday’s Precious Metals Meltdown is an understatement. I love seeing all this fear in the market and panic selling volume jump through the roof. This is or is the “start” of the washout bottom in metals I have been talking about for a few months. Critical support levels have been broken on gold, silver and miner stocks today. This is running the stops juicing up the sell side volume.

This size of a move WILL trigger a wave of margin calls come the end of the session and it could start another strong wave of selling into the closing bell. While I like this prices for both gold and silver, I know this could be just the start of more selling. I sound like a broken record but I am not trying to catch a falling knife unless it looks like a perfect setup. I still feel we could get another 1-3 days of selling or chop down here before things go higher so I will just watch the gold and bugs get stepped on again.

The last day of the week is always the most important for long term trends and investors. Friday was wild and may have triggered a massive wave of selling which could be really good for those who know how to take advantage of it.

Chris Vermeulen

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Are you afraid of the high pressure and heavy risk in scalping?

2013-04-09T22:51:00.003-07:00

If you are then you and I have a lot in common, I just got tired of living my life that way. Most traders I talk to tell me they to have grown tired of the high pressure and heavy risk associated with scalping. And most times, the profit is just not worth it.

But there's a group of traders that the commodity traders are talking about on Facebook that have truly mastered the art of scalping. And they are making these trades and profits without all of the stress that goes along with scalp trading.

You may recognize these traders. These are the same traders that brought you the free Trend Jumper trading system that everyone is talking about on the social media networks..

Click here to watch this video lesson now

Please feel free to leave a comment and let us know what you think of the video.

The Long and Winding Gold....Bull Cycle about to Begin

2013-04-06T07:49:00.004-07:00

The dramatic 2-3 day take down in Gold Spot pricing action smells and looks like capitulation to us at The Market Trend Forecast. We have been calling this entire 19-20 month consolidation period as a Primary wave 4 correction pattern, though complicated for sure. It has had multiple false rallies and buy and sell signals the entire time. With that said, the pattern is set up for final 5th wave decline which we are seeing now at the beginning of April.

Traditionally, Gold tends to meander or be weak in April anyways on a seasonal basis. This sets Gold up to rally in May into July with another soft patch, followed by a fall rally. However, our technical analysis is predicated on our Elliott Wave analysis, which says this entire 20 month correction is a “Double Three” correction pattern. Essentially its two ABC patterns with an “X” Wave rally in the middle to really confuse everyone.

The X wave took Gold to 1800 last fall before dumping all the Bulls off and eventually working its way down to the 1540’s levels we see today. This last leg down is a 5 wave decline and you know you’re at the bottom of wave 5 when everyone throws in the towel, the Gold stocks trade at multi year lows and relative valuation extremes. We also have insiders buying 7 to 1 over sellers according to Ink Research in the Gold stock sector. Stocks are valued at $923 per ounce equivalent even though Gold is trading north of $1,500 per ounce still.

We say bring it on and are actively accumulating selected Gold stocks with production profiles and growth metrics that are attractive.

See the Gold Elliott Wave analysis chart we sent to our paying subscribers a few days ago to forewarn of one more leg down. The next rally should be a doozy and have very few people on board. We would simply caution that a drop below $1523 spot pricing could lead to a blast down to the 1440-1460 areas, but its unlikely in our current views.

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Gold vs. S&P 500 – Where is the Value?

2013-03-29T14:06:00.001-07:00

This past week we received the final 4th Quarter GDP number which came in at 0.39%. The total 4th Quarter growth was terrible, plain and simple. Based on the performance in the equity markets that we have seen thus far in the 1st Quarter of 2013 investors would expect strong GDP growth. However, the only thing spurring stock market growth is the constant humming of Ben Bernanke’s printing press.

The real economy and the stock market are no longer strongly correlated. Essentially, they are meaningless. How do you evaluate risk when Treasury linked interest rates are artificially being held down by the Federal Reserve? How do you evaluate earnings growth estimates when most government based statistics are manipulated or “smoothed” to perfection?

My final argument to anyone who is a true believer that the stock market is representative of the economy is a very simple premise. If the stock market is the economy, how does the stock market evaluate small business earnings growth when most small businesses are not publicly traded? It is a simple question, but I have yet to find a sell side analyst that can work around it with facts......Read More.

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The Stock Market Trend & Hot Sector ETF’s

2013-03-14T08:28:00.002-07:00

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

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

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

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

Recent trends and signals for the SP500 Index Daily Chart:

Trading With the Trend – The Sweet Spots

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

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

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

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

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

Mid-Week Trend Conclusion:

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

Chris Vermeulen

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Silver Miners, Gold Miners and the Price Of Gold

2013-03-11T05:57:00.001-07:00

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

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

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

Gold Weekly Chart:

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

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

Gold & Silver Miners VS Gold Bullion Performance:

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

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

Gold Miners Bullish Percent Index:

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

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

Weekend Precious Metals Trading Conclusion:

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

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

Chris Vermeulen

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

2013-03-08T16:54:00.001-07:00

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

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

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

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

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

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

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

* His favorite options trading strategy for generating income

* Trading Setups with a probability of 75%

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

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

Gold, Silver and Miners Remain Junk Grade Investments

2013-02-28T19:51:00.003-07:00

Since silver and gold topped in 2011 investors have been struggling with these positions hoping this cyclical bull market for metals continues. The simple truth is no one knows for sure if prices will continue and make new highs and those who say its a for sure thing we all know deep down is full of bull crap.

All investments move in cycles, waves or trends which ever you want to call it. The market has 4 simple yet distinct stages each require a completely different skill set and trading tactics to navigate.

Stage 1 – After a period of decline a stock consolidates at a contracted price range as buyers step into the market and fight for control over the exhausted sellers. Price action is neutral as sellers exit their positions and buyers begin to accumulate the stock.

Stage 2 – Upon gaining control of price movement, buyers overwhelm sellers and a stock enters a period of higher highs and higher lows. A bull market begins and the path of least resistance is higher. Traders should aggressively trade the long side, taking advantage of any pullback or dips in the stock’s price.

Stage 3 – After a prolonged increase in share price the buyers now become exhausted and the sellers again move in. This period of consolidation and distribution produces neutral price action and precedes a decline in the stock’s price.

Stage 4 – When the lows of Stage 3 are breached a stock enters a decline as sellers overwhelm buyers. A pattern of lower highs and lower lows emerges as a stock enters a bear market. A well positioned trader would be aggressively trading the short side and taking advantage of the often quick declines in the stock’s price. More times than not all of stage 2 gains are given back in a short period of time.

Now that you know the stages and what it looks like its time to review the gold, silver and miners charts.

Gold Chart – Weekly

Gold has been in a bull market for several years but is starting to show its age in terms of the size of the price patterns, volume levels and extreme bullish sentiment. Back in 2011 a week before price topped we exited precious metals because the short term charts and volume levels were warning of a sharp drop. Since then I have not done many trades in either gold or silver because I do not like shorting in bull markets. Waiting for a bullish setup/price pattern before getting involved is my focus.

Gold has pulled back with a bullish 5 wave correction the last 5 months and at key support. While the long term charts are pointing to higher gold prices you must be aware that if gold and silver start to breakdown things will likely get ugly quickly. To be honest I do not care which way it goes, I just want it to either rally from support here and make new highs or breakdown and crash. Both will be very profitable if traded properly.

Silver Chart – Weekly

Silver has a very similar chart to that of its big sister (yellow gold). This shiny metal has the energy of a 3 year old making it a very volatile investment. I have touched on the topic of gold and silver being so called safe havens and if you have been reading my work for a while you know that any investment that can move 18-45% in value within 1 month is NOT a safe haven.

While it has done well in the past decade and boosted a lot of retirement accounts the day will come with these things collapse and most people holding them will give back most if not all the gains they had simply because people get attached to large positions and most do not know when to just exit a position.

Gold Miners Chart – Monthly

This chart gives me cold sweats because I know how many people own gold mining stocks and I know how fast these things can move. If the price closed below the green support line the bottom could fall out and be very painful for those who get paralyzed by denial and do nothing but watch their accounts lose value week after week.

Precious Metals Investing Conclusion:

In short, this report is to show you the very basics of how investments move in stages. It is also to show a warning that precious metals are technically very close to a major breakdown which the big money players are watching closely. This thinly traded sector can move extremely fast when everyone rushes for the door.

Do not get me wrong, I am not saying a crash is about to happen, actually it’s the opposite. All I am doing is planning the idea in your subconscious so that if prices continue to move lower you will remember that these price levels and take action with your investments. Remember, you can always buy the investment back at any time again if the outlook changes in a week, month or year.

Just click here to get My FREE Weekly Gold, Silver and Mining Reports and Trade with the Stages

Chris Vermeulen

Gold, Copper, and Crude Oil Forecasted the Recent Selloff in the S&P 500

2013-02-27T12:47:00.003-07:00

Nobody better in the industry at understanding herd mentality then the staff at The Technical Traders. And of course they have been telling us it would be like this.....you just have to know which herd to watch and when.....

For the past several weeks, everywhere I looked all I could find was bullish articles. After the fiscal cliff was patched at the last second, prices surged into the 2013 and have since climbed higher all the way into late February.

I warned members of my service that this runaway move to the upside which was characterized by a slow grinding move higher on excessively low volume and low volatility would eventually end violently. I do not have a crystal ball, this is just based on my experience as a trader over the years.

Unfortunately when markets run higher for a long period of time and just keep grinding shorts what typically follows is a violent selloff. I warned members that when the selloff showed up, it was likely that weeks of positive returns would be destroyed in a matter of days.

The price action in the S&P 500 Index since February 20th has erased most of the gains that were created in the entire month of February already and lower prices are possible, if not likely. However, there are opportunities to learn from this recent price action.

There were several warning signs over the past few weeks that were indicating that a risk-off type of environment was around the corner. As a trader, I am constantly monitoring the price action in a variety of futures contracts in equities, currencies, metals, energy, and agriculture to name a few.

Besides looking for trading opportunities, it is important to monitor the price action in commodities even if you only trade equities. In many cases, commodity volatility will occur immediately prior to equity volatility. Ultimately the recent rally was no different.

As an example, metals were showing major weakness overall with both gold and silver selling off violently. However, what caught my eye even further was the dramatic selloff in copper futures which is shown below.

Copper Futures Daily Chart

As can be seen above, copper futures had rallied along with equities since the lows back in November. However, prices peaked in copper at the beginning of February and a move lower from 3.7845 on 02/04 down to recent lows around 3.5195 on 02/25 resulted in roughly a 7% decline in copper prices over a 3 week period.

As stated above, commodity volatility often precedes equity volatility. As can be seen above, copper futures appear to be reversing during the action today and many times commodities will bottom ahead of equities.

I want to be clear in stating that equities will not necessarily mirror the action in commodities or copper specifically, but some major volatility was seen in several commodity contracts besides just metals. Oil futures were also coming under selling pressure as well.

Crude Oil Futures Daily Chart

As can be seen above, oil futures topped right at the end of January and then sold off briefly only to selloff sharply lower a few weeks later. Oil futures gave back roughly 6% – 7% as well which is quite similar to copper’s recent correction. I have simply highlighted some key support / resistance levels on the oil futures chart for future reference and for possible price targets.

In equity terms, since February 20th the S&P 500 futures have sold off from a high of around 1,529 to Monday’s low of 1481.75. Thus far we are seeing a move lower of about 3.10% since 02/20 in the S&P 500 E-Mini futures contract. While I am not calling for perfect correlation with commodities, I do believe that a 5% correction here not only makes sense, but actually would be healthy for equities.

S&P 500 E-Mini Futures Daily Chart

If we assume the S&P 500 E-Mini contracts were to lose 5% from their recent highs, the price that would correspond with that type of move would be around 1,453.

As shown above, while 1,453 does represent a consolidation zone in the S&P 500 which occurred in the beginning of January of 2013, there is a major support level that corresponds with the 1,460 – 1,470 price range.

I am expecting to see the S&P 500 test the 1,460 – 1,470 price range in the futures contract, however the outcome at that support level will be important for future price action. If that level holds, I think we likely reverse and move higher and we could even take out recent highs potentially. In contrast, if we see a major breakdown below 1,460 I believe things could get interesting quickly for the bears.

I am watching the price action today closely as I am interested in what kind of retracement we will get based on yesterday’s large bullish engulfing candlestick on the daily chart of the S&P 500 futures.

Ultimately if the retracement remains below the .500 Fibonacci Retracement area into the bell we could see some stronger selling pressure setting in later this week. The Fibonacci retracement of the 02/25 candlestick can be seen below.

S&P 500 E-Mini Futures Hourly Chart

So far today we have not been able to crack the 0.382 Fibonacci retracement area. This is generally considered a relatively weak retracement and can precede a strong reversal which in this case would be to the downside in coming days.

It is always possible to see strength on Wednesday and a move up to the .500 retracement level. As long as price stays under the .500 Fibonacci retracement level, I think the bears will remain in control in the short-term. However, should we see the highs from 02/25 taken out in the near term the bulls will be in complete control again.

Right now I think it is early to be getting long unless a trader is looking to scale in on the way down. I think the more logical price level to watch carefully is down around 1,460 – 1,470 on the S&P 500. If that level is tested, the resulting price action will be critical in shaping the intermediate and long-term price action in the broad equity indexes.

If you have to trade, keep position sizes small and define your risk. Risk is elevated at this time.

If you would like to get our detailed trading videos each week and know what is just around the corner test out here:

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Chris Vermeulen & JW Jones
The "Traders Video Playbook"

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Question & Answer Per Your Request

2013-02-25T22:48:00.002-07:00

I just received an email from trading legend, Todd Mitchell, that his PowerStock Mentoring Program is filling up.

That's pretty remarkable considering he just started accepting new students last week. But questions remain and he fired up his computer camera with his partners Doc and Dave, and answered all your questions.

I'm not sure if it's Todd's 100%, one year Performance Guarantee, the fact you get ALL of his highly coveted stock trading strategies, or that he's making himself personally available to you. Including giving them his cell phone number. I think that's what has so many traders excited.

Either way, I'm sure it's only a matter of a couple of days before the entire course is sold out. But before you enroll in PowerStock Trading, click here to check out this 5 minute video he just created.

It's answers the 3 most popular questions about the course and how you can personally get in contact with Todd for additional questions.

Watch the 5 Minute Question & Answer Video Here

GOLD Should be Completing a Cyclical Low in February

2013-02-22T22:08:00.002-07:00

David A. Banister of Market Trend Forecast has been our go to trader when it comes to gold. Here's what he says about the bottoming process in gold.....

Over the past 5 calendar years we have seen GOLD either complete an intermediate cyclical top or bottom in each February. My forecast was for February of 2013 to be no different and for Gold and Silver to make trough lows this month. With that said, I did not expect the drop in GOLD to go much below $1,620 per ounce at worst, but in fact it has. Where does that leave us now on the technical patterns and crowd behavioral views?

First let’s examine the last 5 years and you can see how I noted tops and bottoms in the chart below

That brings us forward to todays $1,573 spot pricing and trying to determine where the next move will go. To help with that end, some of our work centers on Elliott Wave Theory, along with fundamentals and traditional technical patterns of course.

In this case, the recent action around Gold has been very difficult to ascertain, and I will be the first to admit as much. With that said, one pattern we can surmise is a rare pattern Elliott termed the “Double Three” pattern. Essentially you have two ABC type moves, and in the middle what is dubbed an “X” wave, which breaks up the ABC’s on each end of the pattern.

That brings us forward to todays $1,573 spot pricing and trying to determine where the next move will go. To help with that end, some of our work centers on Elliott Wave Theory, along with fundamentals and traditional technical patterns of course. In this case, the recent action around Gold has been very difficult to ascertain, and I will be the first to admit as much. With that said, one pattern we can surmise is a rare pattern Elliott termed the “Double Three” pattern.

Essentially you have two ABC type moves, and in the middle what is dubbed an “X” wave, which breaks up the ABC’s on each end of the pattern. For sure, if we add in traditional technical indicators along with sentiment, we can see very oversold levels coupled with the potential Double Three pattern and probably start getting long here for a trade back to the 1650’s as possible....

Obviously this chart shows oversold readings in the lower right corner using the CCI indicator. That said we would like to see 1550 hold on a weekly closing basis to remain optimistic for a strong rebound.

Consider our free weekly reports or a 33% discount, just click here and go to Market Trend Forecast

Gold and Silver Nearing MAJOR Long Term Support

2013-02-21T06:25:00.003-07:00

Gold and silver along with their related miners have been under a lot of selling pressure the last few months. Prices have fallen far enough to make most traders and investors start to panic and close out their long term positions which is a bullish signal in my opinion.

My trading tactic for both swing trading and day trading thrive on entering and exiting positions when panic trading hits an investment. General rule of thumb is to buy when others are extremely fearful and cannot hold on to a losing position any longer. When they are selling I am usually slowly accumulating a long position.

Looking at the charts below of gold and silver you can see the strong selling over the past two weeks. When you get drops this sharp investors tend to focus on their account statements watching the value drop at an accelerated rate to the point where they ignore the charts and just liquidate everything they have to preserve their capital.

Gold Bullion Weekly Chart:

The price and outlook of gold has not really changed much in the past year. It remains in a major bull market and has been taking a breather, nothing more. Stepping back and reviewing the weekly chart it’s clear that gold is nearing long term support. With panic selling hitting the gold market and long term support only $20 - $30 dollars away this investment starts to look really tasty.

But if price breaks below the $1540 level and closed down there on a weekly basis then all bets are off as this would trigger a wave of selling that would make the recent selling look insignificant. And the uptrend in gold would now be over.

Silver Bullion Weekly Chart:

Silver price is in the same boat as its big sister (Yellow Gold). Only difference is that silver has larger price swings of 2-3x more than gold. This is what attracts more traders and investors but unfortunately the masses do not know how to manage leveraged investments like this and end up losing their shirts. A breakdown below the $26.11 price would likely trigger a sharp drop back down to the $17.50 level so be careful.

Gold Mining Stocks – Monthly Chart:

If you wanna see a scary chart then look at what could happen or is happening to gold miner stocks. This very could be happening as we speak and why I have been pounding the table for months no to get long gold, silver or miners until we see complete panic selling or a bullish basing pattern form on the charts. We have not seen either of these things take place although panic selling is slowly ramping up this week.

There will be some very frustrated gold bugs if they take another 33% hair cut in value.

Precious Metals Trend and Trading Conclusion:

In short, the precious metal sector remains in a cyclical bull market. That being said and looking at the daily charts the prices have been consolidating and are in a down trend currently. Until we see some type of bottoming pattern or price action form it is best to sit on the side lines and watch the emotional traders get caught up and do the wrong thing.

The next two weeks will be crucial for gold, silver and miner stocks. If metals cannot find support and close below the key support levels things could get really ugly fast. If you would like to receive my daily analysis and know what I am trading then check out my newsletter at The Gold& Oil Guy.com

Chris Vermeulen

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