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Active Traders Report
for Gold, Silver, Oil & Nat Gas
by Chris Vermeulen
Precious metals like silver and gold
have pulled back to support levels and trending sideways. This week will be
interested as we watch prices bounce or breakdown. The energy sector looks be
breaking down with more power as the bullish percent index for energy stocks
dropped substantially last week.
Precious Metals Sector
The bullish percent index tells us
the percentage of gold stocks which currently have a point and figure buy
signal. Looking at the charts below it looks as though precious metals are
trading at support. I am inclined to think we will get a bounce this week for
gold and silver.
When this chart is trending up gold
bullion and gold stocks are in favor and rallying. This ratio is currently at a
support level which is pointing towards a bounce in the near term. This is a
weekly chart so we could be 1-2 weeks away before it shows up on the chart.
Hui Gold Stocks Index
This is an index of gold stocks. We
saw prices breakout and rally in May but now they are testing support. They
could go either way quickly from here.
Gold Price Action GLD Gold Fund
As you can see gold has pulled back
from resistance is now at a possible support level. From looking at the HUI:GLD
price performance and stochastic indicator at the bottom of the chart which is
now turning up, it points to higher prices for gold in the short term.
Silver Price Action SLV Fund
Silver is doing much the same as
gold. It has pulled back from resistance and is now looking for a bottom. Gold
and silver tend to rally and correct together so if gold starts to move higher
this week I expect silver to go with it.
The Energy Sector
The energy sector has been on fire
the past couple months. The bullish percent indicator has broken down sharply
and to confirm this we can look at the XLE energy ETF price performance
indicator at the bottom of the chart. We can see that our support trend line was
clearly broken last week. It looks like money is starting to rotate out of
Crude Oil Price Action USO Fund
USO has been taking a breather the
past two weeks. With last weeks price action I am starting to think a much
deeper correction could be just around the corner. I mentioned in a previous
report that we should be looking to take some profits on a break of the dotted
blue support trend line. That exit point was executed by many traders and
congrats to those who pulled the trigger. Taking profits/exiting trades is one
of the most difficult things to do, yet one of the most important parts of
We could see the price dip back down
towards the $33 level if the spec traders sell their oil positions.
Natural Gas Price Action UNG Fund
Natural gas is now becoming the next
commodity to watch. This is similar to the USO breakout earlier this year. The
chart price action and volume look the same. While UNG had a breakout and buy
signal last week, no position was taken because risk was over 12% which is very
high in my opinion.
My trading model has been fine tuned
to minimize risk to 3% and to provide the highest probability trade setups.
Dont ask me why but when trade setups carry more than 3% risk there is a higher
probability that the trade will not work anyways. So that is the main reason I
follow my trading model and rules so well.
Active Traders Conclusion:
We are currently waiting for
precious metals for find support. Whether it is at this level or lower I do not
know for sure. But either way there will not be a buy signal generated until
some type of support level has been found and momentum is trending up again.
As for the energy sector, we have
seen a massive run in oil prices. The rally looks a little long in the teeth and
the technical indicators are starting to breakdown. Natural gas looks exciting
and volume is picking up but I am staying clear of it for now. If the energy
sector continues to find selling pressure this week I figure it will hold Nat
Gas down as well.
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This article is
intended solely for information purposes. The opinions are those of the author
only. Please conduct further research and consult your financial advisor before
making any investment/trading decision. No responsibility can be accepted for
losses that may result as a consequence of trading on the basis of this