Search Precious Metal, Mining
and Financial News
Mid-Week Charts For
Gold, Silver & Oil
by Chris Vermeulen
So far this week has been very tame
as traders are sit on the side lines, waiting to see which way everything will
go. I have posted a few charts so we can keep tabs on where gold, silver and oil
are currently trading as we go into the second half of the trading week.
The HUI/Gold ratio
This ratio shows the performance of
gold stocks compared to the price of gold. When this chart is moving higher then
gold stocks are moving up in price faster than gold.
This chart is starting to show some
life again after breaking out and then testing the breakout level with a bounce.
Another great indicator is the
Bullish Percent Index for the gold miners which turned up today indicating gold
stocks are starting to have money put back into them. This is a bullish
indicator for the price of gold.
Gold Bugs Index
This chart tracks a large basket of
gold stocks. I like to follow this chart closely as it has provided me with buy
signals for gold up to 4 days in advance. This is because gold stocks generally
lead the price of gold.
Currently the hui is testing support
and trying to move above the 200 day moving average. We will watch and see what
happens and hope we get a buy signal and setup this week.
The Price Of Gold (GLD ETF)
Gold continues to hover at the 200
day moving average. Volume has been light the past few sessions as traders wait
for some type of rally or breakdown before they put money to work.
I have been getting a tone of emails
about this chart because everyone says itís a Head & Shoulders pattern not an
I completely agree with the head and
shoulders pattern but the fact that gold is in a bull market I like to think of
it as an ABC or bull flag. Not to mention I think more people are bearish on
gold at this level and everyone is seeing the head and shoulders reversal
pattern which fuels my continuation pattern even more.
It does not matter which way gold
goes, all I am saying is that you must be ready for when the next move happens.
I have a feeling we will see prices move quickly.
The Silver Point Of View
Silver has made a huge move during
the first 2 months of this year but is now pulling back and flagging similar to
the price of gold. Silver is a fast mover and we will keep our eye on this fund
for a buy signal and setup in the coming days.
The Oil Point Of View
While this is not crude oil, it is a
fund which follows crude oil to some extent. You can see prices have been
trapped in this wedge/bull flag. Declining volume indicating this is just a
pause before another leg higher. Many of us are long USO from a buy signal &
Setup back in February and have locked in some nice profits already. The balance
of our trade has a stop at break even currently.
Short Term Trading Conclusion:
I think the broad market is over
bought at this level and we are due for a sizable pullback any day now. If we
see this, then Gold should move higher and becoming the safe haven once again.
And I would think silver will follow.
Oil on the other hand is a little
different. In the old days when oil went up the markets would go down and vise
versa. Now it almost seems like oil moves based on what the broad market is
If the broad market loses value, oil
seems to go down with it because the crumbling economy cannot handle any more
blood shed and will not support high oil prices. So things are completely
different for oil traders. Until the financial system is put back together, a
lot of investment vehicles are not trading the way they should be making it much
more difficult for participants.
We will continue to watch these
commodities and only trade them when we have signals and low risk setups.
If you would like to receive my
trading reports please visit my website:
Vermeulen is Founder of the popular trading site
There he shares his highly successful, low-risk trading method. For 6 years
Chris has been a leader in teaching others to skillfully trade in gold, oil, and
silver in both bull and bear markets. Subscribers to his service depend on
Chris' uniquely consistent investment opportunities that carry exceptionally low
risk and high return. Reach Chris at: Chris [at] theGoldAndOilGuy [dot] com
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