Watch Chris Vermeulen run through the markets in pre-market trading live and how he applies technical analysis to spot new trades, trends and market sentiment…
Learn More About Chris’ Technical Analysis Strategy
Archive for month: August, 2013
During the last couple weeks the SP500 index has been taking a beating leaving many traders left holding the bag at high prices.
Fortunately, I cover several different investments so we when one is not giving us a trade, another one should be.
Taking a look at the technical analyst trading charts below you will see how a simple reversal candle coupled with volume can generate low risk and highly effective trades that move in your favor quickly.
If you want to learn how to read and trade the charts like a pro, be sure to join my daily video analysis newsletter which is jam packed with trading education and tradable ideas each day.
Join Today! www.TheGoldAndOilGuy.com
It has been a bumpy ride for precious metal investors over the past couple of years and it unfortunately I do not think its over just yet.
The good news is that the bottom has likely been put in for gold, silver and gold miners BUT the recent rally in these metals and miner looks to be coming to an end. While we could see another pop in price over the next week or so the price, volume and momentum see to be stalling out.
What does this mean? It means we should expect short term weakness and lower prices over the next month or two.
Below are three charts I posted several months ago on my free stockcharts list. These forecast were based off simple technical analysis using cycles, Fibonacci and price patterns. As you can see we are not trading at my key pivot level which I expect selling pressure to start to increase and eventually overpower the buyers sending the prices lower.
Gold Trading Weekly Chart:
Here you can see that gold is technically in a bear market when viewing it on the weekly chart. If you were to pull up a daily chart you would likely notice how the price of gold is trading at a key resistance level on the chart and has reached its full flag measured move.
What does this mean? It means the odds are pointing to lower prices for gold in the next few weeks. Keep in mind though I do feel as though a major bottom has been put in place for the precious metals sector. So buyers are likely to step back in around the $1300 area.
Silver Trading Weekly Chart:
Silver has a little bit different looking chart but the same analysis applies here as it did in gold.
Gold Miners Trading Monthly Chart:
Gold miners may have bottomed on this monthly investing timeframe chart but the daily chart which you will see next clearly shows short term weakness has started.
Gold Miners Trading Daily Chart:
This daily chart really shows my thinking for miners and the overall precious metals sector as a whole. The recent weakness in gold miners to the down side point to distribution of shares. This is very negative for the price of physical gold and silver as gold mining stocks tend to lead physical metals.
The yellow box shows a possible major stage 1 basing pattern forming. If this is the case, then we will have a great opportunity in the coming months when the precious metals down trend completes a reversal and start heading higher.
How to Trade Precious Metals & Gold Miners Conclusion:
In short, I think that staying in cash or shorting metals is the play for the next couple weeks. After that anything can happen and until price breaks down or finally completes the basing pattern and confirms a market bottom I would be very cautious trading here.
In the last week members of my trading newsletter took profits on our short SP500 trade and we closed a long trade in natural gas for a quick 6.5% gain. Join our community of traders and have your money on the right side of the market!
Chris Vermeulen
www.GoldAndOilGuy.com
Find out what the SP500, Gold, Silver, Miners, Bonds, Oil and Nat Gas Are Setting Up For!