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Free Weekend Trading Analysis for Gold & Oil

Rising Commodities, Falling Stocks & Risk Reward Ratio

Trading Risk/Reward

The past few months have been absolutely crazy in the financial markets. Financial advisors and banks are taking a beating from both the market condition and clients as individuals around the world are losing 30+ of their investments. We have seen oil prices drop over $110 per barrel from the high (73% decline), and the US dollar tumbled down to 71 and rebounded to 88 (23% gain) all in the mater of months.

Risk Management is what is needed if we want to stay in the game over the long term. Follow strict risk/reward rules is a must so that we don’t not get caught chasing stocks and funds only to have them turn around on us a few days later.

Focusing on keeping risk low for potential trades is crucial for turning a profit over the long run. In short I look for a basket of indicators including candle patterns and volume to be in favor when buying or selling a stock or fund. When a fund generates a buy signal I wait for a low risk entry point near my support or resistance level depending if I am looking to go long or short. I need to see a perfect setup so that the odds are favoring my side. Only then will I take a stab at the market. The biggest issue with this is that I do miss a lot of good trades, but the key here is that most of my trades are profitable and that is what makes it so powerful. I would rather make 20 trades a year, than 150 trades and make the same profits.

This Weeks Analysis on Gold

Gold continued its push higher last week getting a lot of investors and traders all excited. The daily chart does look strong and it is currently on a buy signal. But buying at this level is much too high of a risk.  The price of gold is trading at the top of its 4 month trading range which previously led to a 20% selloff in bullion. Our support trend line is 10% away from the price of gold making it out of reach still. I trade reversals when risk is only 3% from my stop/support price.

Daily Gold GLD Chart


Gold Stocks

Gold stocks have been struggling to move higher and last Friday gold made a nice move higher while gold stocks sold down. My last article talked about how trading gold (GLD) may be a better investment then gold stocks right now simply because of the bearish broad market. The broad market looks like it’s about to make another leg lower and when the broad market sells off, it pulls all stocks with it. The daily chart of the HUI Gold Bugs Index shows precious metal stocks moving sideways while gold pushed higher. When gold stocks start to underperform the price of gold I tighten my stops and mentally prepare myself for gold to pull back. The smart money always seems to move in and out of stocks faster than the commodity which is a topic I mentioned in a previous report as well.

Gold Bugs Index Daily Chart

 

Crude Oil Analysis

Crude Oil has been under continuous selling pressure for the past 7 months and this is the first buy signal I have had for it since it topped back in July 2008. The weekly chart is very close to a buy signal. If you look at the weekly chart of USO crude oil fund you will see that volume has shot through the roof which generally indicates a turning point. Also the MACD indicator is about to cross which will put this fund on a buy signal if things go well all of next week. The support trend line is trending up slightly and the down trend line is holding the price inside a small triangle. If the price breaks out and all my indicators are putting the odds in favor of a long trade, then we will be looking for a buy point on the weekly chart in the next few weeks. The weekly trading signals are good for intermediate and long term traders.  

Crude Oil (USO) Weekly Trading Chart

Conclusion:

The broad markets continued to move lower last week as it remains in a long term bear market. For those looking to take advantage of gold, silver and oil movements I recommend sticking with the commodity funds as they can increase in value while the broad market is selling off. The daily chart of the hui gold bugs index shows this clearly as gold stocks in general are underperforming the price of gold right now. There is an opportunity for oil to make a move higher if things come together in the next couple of weeks but until then we will be patient and let the trade come to us.

If you have any questions please feel free to send me an email. My passion is to help others and for us all to make money together with little down side risk.

I look forward to hearing from you soon!

Chris Vermeulen

The Gold and Oil Guy

Chris Vermeulen

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Gold, Silver & Oil Newsletter Update Jan 25th

GOLD TRADING

April gold closed sharply higher on Friday and above December’s high crossing at 892.20 thereby renewing the rally off October’s low. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If April extends this week’s rally, October’s high crossing at 938.20 is the next upside target. Closes below the 10-day moving average crossing at 842.60 would confirm that a short-term top has been posted. First resistance is today’s high crossing at 905.50. Second resistance is October’s high crossing at 938.20. First support is today’s low crossing at 853.80. Second support is the 10-day moving average crossing at 842.60.

Gold Trading Signals – www.TheGoldAndOilGuy.com

SILVER TRADING

March silver closed higher on Friday and above the upper boundary of this fall’s trading range crossing at 11.770. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If March extends this week’s rally, the reaction high crossing at 12.430 is the next upside target. Closes below the 20-day moving average crossing at 10.047 would temper the near-term friendly outlook in the market. First resistance is today’s high crossing at 12.075. Second resistance is the reaction high crossing at 12.430. First support is the 20-day moving average crossing at 10.047. Second support is last Thursday’s low crossing at 10.320.  

CRUDE OIL TRADING

March crude oil closed higher on Friday and above the 20-day moving average crossing at 45.09 signaling that a short-term low has been posted. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near-term. If March extends today’s rally, this month’s high crossing at 54.74 is the next upside target. Closes below December’s low crossing at 38.00 would open the door for a possible test of psychological support crossing at 30.00 later this winter. First resistance is today’s high crossing at 47.00. Second
resistance is this month high crossing at 54.74. First support is Tuesday’s low crossing at 39.11. Second support is December’s low crossing at 38.00.

Gold Trading Signals – www.TheGoldAndOilGuy.com
Chris Vermeulen

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Monday Jan 12 – Precious Metals & Oil Update

Special Swing Trading Report on Gold, Silver & Oil – CLICK HERE

PRECIOUS METALS

February gold closed higher on Friday as it consolidated some of this week’s decline. The mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. If February extends this week’s decline, trendline support drawn off the November-December lows crossing near 804.60 is the next downside target. Closes above the 10-day moving average crossing at 865.50 would signal that a low has been posted. First resistance is last Monday’s high crossing at 892.00. Second resistance is October’s high crossing at 938.80. First
support is Wednesday’s low crossing at 836.00. Second support is trading line support crossing near 804.60.

March silver closed higher on Friday due to short covering as it consolidates above the 10-day moving average. The mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI are neutral to bearish signaling that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 10.908 are needed to confirm that a short-term top has been posted. If March extends the rally off October’s low, the reaction high crossing at 12.230 is the next upside target. First resistance is Monday’s high crossing at 11.770. Second resistance is the reaction high crossing at 12.230. First support is the 20-day moving average crossing at 10.908. Second support is Monday’s low crossing at 10.570. 

ENERGY MARKET
February crude oil closed lower on Friday as it extended Thursday’s breakout below the 10-day moving average crossing at 42.98. Today’s low-range close sets the stage for a steady opening on Monday. The door is open for additional weakness and a possible test of last week’s low. Closes below last Wednesday’s low crossing at 36.94 would temper the near-term friendly outlook in the market. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near-term. If February renews the rally off December’s low, the reaction high crossing at 52.95 is the next upside target. First resistance is the 20-day moving average crossing at 43.34. Second resistance is Tuesday’s high crossing at 50.47. First support is today’s low crossing at 39.38. Second support is last Wednesday’s low crossing at 36.94.

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Gold, Silver & Energy Commentary Update Wed Morning

PRECIOUS METALS 

February gold closed higher on Tuesday due to short covering as it consolidated some of Monday’s decline. The high-range close sets the stage for a steady to higher opening on Wednesday. Despite today’s rebound, stochastics and the RSI have turned bearish signaling that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 844.10 are needed to confirm that a top has been posted. If February extends this fall’s rally, October’s high crossing at 938.80 is the next upside target. First sesistance is last Monday’s high crossing at 892.00. Second resistance is October’s high crossing at 938.80. First support is the 20-day moving average crossing at 844.10. Second support is today’s low crossing at 838.80.

March silver posted an inside day with a higher close on Tuesday as it consolidates some of Monday’s decline. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off October’s low, the reaction high crossing at 12.230 is the next upside target. Closes below the 20-day moving average crossing at 10.735 are needed to confirm that a short-term top has been posted. First resistance is Monday’s high crossing at 11.770. Second resistance is the reaction high crossing at 12.230.
First support is the 10-day moving average crossing at 10.930. Second support is the 20-day moving average crossing at
10.735. 

ENERGY MARKETS 

February crude oil closed slightly lower on Tuesday due to light profit taking as it consolidated some of the rally off December’s low. Today’s mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If February extends this month’s rally, the reaction high crossing at 52.95 is the next upside target. Closes above the reaction high crossing at 52.95 are needed to confirm that a short-term low has been posted. Closes below last Wednesday’s low crossing at 36.94 would temper the near-term friendly outlook in
the market. First resistance is today’s high crossing at 50.47. Second resistance is the reaction high crossing at 52.95. First support is the 20-day moving average crossing at 43.96. Second support is the 10-day moving average crossing at 41.94.

Click Here to Read My Special Report: http://www.thegoldandoilguy.com/goldandoilnewsletterjan2.php 

Chris Vermeulen