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Gold, Silver & Oil
Special Trading Report
by Chris Vermeulen
Gold and silver have been making a
nice controlled pullback since their high in February. With precious metal
prices drifting lower making clean looking waves like these itís generally a
sign of profit taking before another move higher.
In my opinion the broad market is
over bought and has been for about 2 weeks. With most sectors Bullish Percent
Charts at levels of previous intermediate tops (4-6 week cycles) itís important
that we tighten our stops on current trades and be ready for playing the down
side for broad market equities.
When the board market starts to
slide I expect to see money move into gold, silver and precious metals stocks. I
do not think we will see a huge slide in prices for the DOW and SP500 but itís
very likely we could see prices pull back 10-15% from these current levels.
When people start to panic and worry
about prices dropping again, money will start to flow back into gold and silver.
Both of these metals are great to trade but I would like to note that silver is
not as widely owned as gold, so it tends to move a little more freely. When
money moves in, it surges higher and when money is pulled out of the metal it
drops like a rock. A great fund for trading a combination of these metals is the
CEF fund as it owns both gold and silver bullion (57% Gold, 39% Silver, 4%
Silver Bullion ETF (SLV)
Gold & Silver Trading Conclusion:
Trading these metals has been more
difficult the past few months due to volatility. It looks as though the markets
are starting to settle down. Currently gold and silver are trading in the mid to
upper area of their resistance trend lines which means buying at this level
carries much higher risk if the trade is to turn and go against you.
Knowing when to exit a trade your
trade is one of the most difficult tasks of trading and the part 97% of traders
do not do correctly. Protecting your money and or gains is critical. Many times
I will exit trades at break even and try again on another setup instead of
watching a small winning traded turn into a losing trade.
That being said those of you who are
buying at these levels be sure you know your exit points and stick to them. Iím
expecting a big move in gold and silver but it could go either way.
Special Oil Trading Report
The energy sector has been beaten
down hard over the past 8 months. Since November it looks like it has been
bouncing along the bottom with investors buying on the dips when dividends are
high and prices are dirt cheap for many solid companies.
I must point out that the broad
market and energy stocks look over bought and ready for a sharp pullback any day
now. But if oil breaks out above $55 and starts rallying higher energy stocks
will follow suit. Keeping our eye on crude oil prices is key here.
Oil Services Stocks Forming a
Rounded Bottom Pattern
Light Crude Oil Trading Chart
Weekly Reversal Signal
This Oil Fund has created an
intermediate buy signal as of Fridayís close. It appears the price action for
this fund is signaling a reversal. The long lower candle wick which was formed
two weeks ago touched our support trend line and rallied strong into the close.
Then last weeks move higher
completed the reversal candle. Risk for entering this trade is about 11% if you
set your stop below the support trend line. I only focus on the daily charts and
enter trades with 3% or less risk.
USO Crude Oil Trading ETF
Oil Trading Conclusion:
Oil and energy stocks look to be
forming a bottom which is a great sign for oil and other energy products like
Oil service stocks have been
climbing for several weeks and look ready for some type of pullback. It could be
a sideways move or a quick 2-3 day drop.
Crude oil prices continue to hold a
solid cup & handle pattern as we wait to see which way prices will breakout.
Waiting for a low risk setup in our trading funds is difficult but it must be
done to keep our risk: reward ratio in line.
I posted a weekly chart of the USO
Texas Oil fund because many you trade this. This weekly chart looks very bullish
because over the past two weeks we have had a reversal pattern form. This type
of setup is for longer term traders who carry more risk and provide more time
for trades to mature.
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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