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How to be Disciplined Trading Gold with Cycles Analysis

Trading can be a lot of fun and profitable or a nightmare and very costly. It really just comes down to understanding the key areas, which will make or break your trading.

I have received a few emails asking me to explain more about how I stay disciplined, making sure my emotions don’t get the better of me. Some questions asked are:
How do I pick a trading strategy, which will work for me?
What reading material and habits do I recommend for keeping focused?
What are some of my experiences?

I will cover all this for you below because trading discipline and managing emotions is by far the most important and difficult aspect of trading.

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How do I pick a trading strategy, which will work for me?

Your strategy should be inline with your abilities to read the market also focuses on a time frame, which suits the time you have available to trade each day, week or month. In other words, you should not be trading ETF options if you cannot profit from trading ETF’s without leverage. Also if you don’t understand how options work in depth, then you need to spend some time learning about this type of trading vehicle before you ever place a trade using options. Simply put, if you don’t understand everything about what you are trading, then you will eventually give all your money to the market, leaving you with an empty account, decreased trading confidence and a frustration.

The point I am trying to make here is that you should focus on trading the types of vehicles where you understand the daily price action, how to trade that investment, what makes it move, is there leverage, and what time frame you should focus on, so that it works with your schedule. If you can only look at the charts at night, after the markets close, then you should not be focusing on day trading. So pick something you like, understand or want to trade and learn everything about it. Then find a trading system or create one yourself, which is profitable using the time frame and risk tolerance that fit your personality.

Over the years my trading strategy changed, as will yours. The more time you spend trading, the better you will become the more you will find yourself trading more of one type of investment that consistently makes you money. When I started trading back in the late 90’s I focused on stocks, but as time went on, my strategy evolved and now my main focus is on trading indexes and gold with a hybrid intra-day and swing trading strategy that I created. My focus is on ETF’s, because you can select different levels of risk/reward with the 1,2 or 3x leveraged funds. While ETF’s are fantastic to trade, they do have some limitations. Because the indexes and gold trade 24/7, you are limited to only regular market hours, 9:30am – 4pm ET. That leads me to the topic of Futures and CFD trading.

Depending on the type of trade and time of day a setup occurs, I will jump from ETF’s to futures or CFD’s. Let me explain, if there is a setup early in the morning before the regular market opens, or after the close late in the evening, then I trade futures or CFD’s because it allows me to trade 24/7 catching moves which would not even be seen by most North American traders. There are not a lot of these trades per year but enough to make it worth trading.

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What are some of my experiences?

In short, virtually every trader will eventually reach the tipping point. What I mean here is you will either lose enough money and/or become so frustrated that you will debate whether or not you should continue trading.

I reached this level many years ago and I still remember it crystal clear. I lost most of the money in my account, almost every trade was going against me and I had never been so frustrated and upset in my life. I’m sure many of you know what I am talking about… Unfortunately trading does break a lot of people down financial and emotionally, causing them to give up. But others reach this point and realize that if they can be wrong all the time, then someone who knows what they are doing should be making good money and that they just need to learn what they are doing.

This is the point at which you decide whether to give up a life long dream of trading full time to go back to your day job or you step back to re-evaluate your situation and seek profession help. All successful traders have or had a mentor at one point in their life and it does not matter which career you are in, learning from someone who knows how to do what you want is the fastest and most effective way to learn.

Those who decide to continue and take things serious shift their mind set from Trying To Trade to Learning To Trade. It is at this point, where trading becomes fun and profitable again. My point here is that trading is not something you can learn quickly on your own. You should get help from someone who is successfully doing exactly what you want to be doing, then shadow their every move and seek mentoring from them. This usually costs more than say just buying a book or mini e-course. There is no comparison between what you get out of them or obtaining practical experience. This is what I provide at FuturesTradingSignals.com

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What reading, and habits do I recommend for staying disciplined?

There is no easy answer, as everyone absorbs information differently. Some prefer reading and studying charts, listening to audio, watching videos and some prefer or need live mentoring and real-time examples.

I learned charting from the well known annalist, John Murphy, through his book “Technical Analysis of the Financial Markets”. This is a massive book with over 500 pages explaining technical analysis. This book is a lot to digest, but there is a lot of great free information online, which will allow you to read about the basics of trading including: chart patterns, volume, candle sticks, support & resistance levels and trend lines. Once you understand these key concepts and are able to read the charts, then you are literally ready to start paper trading and applying or creating a trading strategy, which manages entry, exits, scale out prices, and manages your money.

As most of you know, I am a very patient trader waiting for risk setups in the investments, which I understand best and have consistently traded for many years. Because of my strict trading setups and rules, which I have set for myself, it does cut down on the amount of trades the market provides. My focus is on low risk, high probability setups, which I completely understand, and that’s all I trade. This trading strategy works on any time frame allowing me to use it for day trading and swing trading.

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The question everyone wants to know is how to stay so disciplined and keep emotions from taking over?

This takes me back to the Tipping Point mentioned earlier. I always ask myself if the trade meets my setup criterion, which is a simple yes or no answer because my setup criteria is clear in my head. Either it has the characteristics I am looking for or it does not. Sometimes the setups are very close and I will admit it is very tempting to take the trade, but I always step back (walk away from the computer) to clear the emotions flying around in my head and ask myself, do I want to break a rule, which almost broke me financially and emotionally once before? The answer is always No. So I pass on the trade and wait for another one to unfold.

When I was first learning to day trade, I quickly learned that I did not have to take every setup that looked like it had potential. I realized that no matter what condition the market was in, there would always be another trade just around the corner, so its not a big deal. I admit, I hate to see an investment make a large move without me like this 7 day rally in gold happening right now, because my setup criteria was not met. But I know there will be many more trades through the year in gold and other investments, which will provide me with great returns. People who think they need and must catch ever big move in the market in order to make big money on yearly basis, are looking that things completely backwards. It only takes 5-10 good trades per year to out perform the market so I don’t understand people when they panic about every zig and zag the market makes.

Ok, lets take a look at the gold chart, which I have overlaid with two cycles, which I use to help time gold.

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9 Day Gold Cycle

The daily chart of gold below has my 9-day cycle overlaid. You can see how this cycle relates to the price movements of gold. After the recent low cycle, we saw gold continue to move higher and this is because the trend of gold turned up in March and the long term cycle is also moving up at the same time. These two bullish forces can over power the short term 9-day cycle at times.

That being said, the 9-day cycle will be topping in 2 days (Tuesday) and that should put some selling pressure on gold. I expect to see a pullback or consolidation (sideways movement) in the coming week.

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29 Day Gold Cycle

This cycle allows us to see the big picture and underlying trend for gold. This larger more powerful cycle of gold will top in one day (Monday) and that should put a damper on this rally. You can see how I think gold will play out from the lines on the chart.

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Combined Cycles on Gold

This chart clearly shows how both cycles will top this week which should put some selling pressure on gold and silver and one of the reasons I have not chased the price of gold higher buying in a panic.

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Gold Trading Discipline Conclusion:

In short, trading discipline is something you can become educated about from books, but the only way to actually take control of your trading, is to be honest with your self. Think of it this way, every time you break a trading rule, you are setting yourself up for failure. Do you really want to sabotage the most important person in your life, which you will have to live with every day (You)? If you cannot trust yourself from sabotaging and lying to your self, what type of person would you be? Do you want to lose money by taking positions, which are proven not to work and cost you money in the long run? Of course you don’t!

So the next time you see a trade, which is close to your setup but no exactly what you are looking for, just walk away and wait for the next one.

As for the current price of gold, I think we are about to see lower prices, or at least a pause, which will last for 5-15 days.

If you would like to Receive My ETF Trading Signals please check out my service: www.TheGoldAndOilGuy.com

Chris Vermeulen

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Gold & Index Day Trading Analysis Video

Friday April 9th

It’s been a relatively slow day in the market as Fridays usually are. I am most likely sounding like a broken record about gold and the indexes but I will show you again just to make sure that everyone’s on the same page for the upcoming correction.

In short, major indexes and metals are way overbought and ready for a pullback which will most likely be sharp. I feel a 3-5% correction is just around the corner. Both the broad market and precious metals are about to have their cycles turn align and top out. Meaning a wave of selling is likely to hit the market.

Adding more fuel to the selling is the fact that earning season is about to start and I do not think it matters what the news for the market will sell into it. Everyone thinks stocks are doing well which is why we have seen the strong rally the past 2 months. This is the typical buy on rumor sell on news which we saw last January on the good earning numbers. But if the news is bad, then I figure people will sell that news also.

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Daily Gold Cycles Trading Chart


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Day Trading ES Mini Futures Video

Here is a short video showing members of my new service FuturesTradingSignals.com what I feel the market will be doing for the day and over the next few days as I show live ES Mini Futures Charts.

Click to View Video: http://www.thegoldandoilguy.com/articles/day-trading-es-mini-futures-video/

Unfortunately we did not catch the recent rally. The market was giving off a very mixed signal at the time of the reversal and I wanted to wait for a pullback after the breakout which has yet to happen. I do think its just around the corner though.

It is important to realize that trading is not about catching every move the market flashing in front of us which will make us consistently profitable in the long term. Instead it’s the trader who knows what they are looking for (trade setups & risk levels) and have the discipline to follow a technically proven strategy and system which will build wealth over time. There will always be another opportunity just around the corner.

If you are interested in Receiving My Day Trading & Swing Signals while becoming a part of a close community of like minded traders please check out my service: www.FuturesTradingSignals.com

Chris Vermeulen

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Technical Setups on Gold, Silver, Oil & Natural Gas ETF’s

April 7th 2010
This week has been playing out as expected with prices grinding their way higher and lots of sharp intraday sell offs and rallies which is indicative of a market getting toppy.

Seems like the masses feel as though they are getting left behind which is why we are starting to see the panic buying in the market (new money buying at these lofty overbought prices).

Each time there is a new intraday or daily high on the major indexes there is a renewed bullishness created as breakout traders and novice traders buy into the market hoping for the next surge in price. It is these volume surges of new money entering the market which the big guys (smart money) are selling into. You can see it clear as day light on the intraday charts as new money gets sucked into the market new high and then 2 minutes later larger waves of selling hit the bids. I did explain and show a chart of how this looks to members of the FuturesTradingSignals.com today.

We have some very exciting times ahead and it’s just a matter of letting the market unfold over time as we take advantage of these carefully measured low risk setups.

On to the charts….

GLD ETF Trading – Gold Exchange Trading Fund

You can see how this chart has evolved from pattern to pattern as it bottomed over time.

Today we had a breakout and I expect to see a pullback which is normal when prices gap up and breakout of a pattern. An entry point would be considered on a pullback if the proper criteria are met.

ETF Trading Newsletter

SLV ETF Trading – Exchange Traded Fund

Silver has always been much more volatile than gold which is why the pullback early this year was so strong and why the recent rally has also covered so much ground. As you can see silver has broke out above resistance but is now looking overbought. A pullback in precious metals is expected, or a pause at least.

SLV ETF Trader Newsletter

USO Crude Oil Fund

Oil has made a nice move higher the past week but I feel it will pullback also in the coming days for a breather. There are a couple sizable gaps to fill all the way back down to $40.50.

USO Fund Trading Newsletter

UNG Natural Gas Fund

This natural gas chart looks very interesting. In the chart I am comparing the 2009 low to today’s price action.

From looking at the chart, natural gas is way oversold and in dire need of a relief rally. As you can see the sharp rallies which occurred just before both the 2009 and the current possible bottom look identical. This type of price action is very common to see.

Let me explain: When an investment is this over sold, meaning it has sold lower for weeks if not months, then there is a large growing number of traders looking to pick a bottom. Once these traders see prices start to move higher they all jump in thinking its “The Bottom”. Some times it is but more times than not it’s just a suckers rally.

General rule is, if everyone can see it, then its most likely not going to happen.. this is also part of the reason the major indexes keep going up. It looks like a great short and a tone of traders are in cash waiting to take advantage of the drop. But the market will keep pushing higher until fear its not going to pullback. That’s when the new money buys back in fueling the GRIND higher.

Anyways, so after all the bottom pickers jump on the train and there are not any more buyers and the price tends to drift lower scaring these traders back out of the position. Eventually a new low is made and everyone is shaken out of the investment. The crazy part is that just as they get out, the price usually turns around and does exactly what they new was going to happen –Go Up.

Most traders have the direction correct, it’s just their timing is off. My general rule is when I see something I wait another bar, sometimes I keep saying that to my self after each new bar until I am confident in the predicted move or price I can get into the position at.

UNG Fund Trader Newsletter

Mid-Week Trading Conclusion:

In short, the bull market continues to grind its way higher. Unfortunately we cannot do much until there is some type of correction because buying way up here after a 2 month rally is outside of my comfort zone.

I foresee a 3-5% correction starting any day now so I am keeping my gunpowder dry.

Check out my ETF Trading Signals at www.TheGoldAndOilGuy.com

Chris Vermeulen

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What to Expect in April for Stocks & Precious Metals

I hope everyone had a great weekend and Easter Holiday!

This is quick update as its Easter Sunday and it’s a time to relax with the family 🙂

Below are two charts and my thoughts on what I am looking for in the coming days and weeks.

Gold Exchange Traded Fund – Daily Chart
As you can see the price action of gold has been trading within a few patterns the past couple months. First we saw a nice ABC Retrace correction and now it looks like a possible reverse Head & Shoulders or Wedge pattern is forming.

All three of these patterns are bullish but resistance must be overcome before I will start putting my money to work.

NYSE & NASDAQ Indexes – Daily Charts
We saw the broad market trade sideways for the majority of the week. As usual we had a pre-holiday pop in prices with the week closing slightly positive for stocks. These gains are generally given back the following week as volume picks back up.

The one thing that has me scratching my head is that the major indexes like SP500, Dow, NASDAQ and Russell 2000, all stayed below their previous weeks high. But the NYSE as shown below as the top chart clearly broke out to a new high.

I look at the NYSE as leading indicator and this makes me think we could see stocks grind higher right into earning season. All we can do at this point is wait for more data points on the chart and continue analyzing the market one day at a time.

Weekend Trading Conclusion:
As I mentioned last week, the market is over extended as we enter earning season. The market is in the same situation as we saw going into the January earning season.

I do not think we will have a huge pullback but I think a 3-5% correction is likely in the coming days or week. Once we get a pullback we should see support around the 30 or 50 day moving averages and then see the market head toward new highs once again.

The precious metals sector is getting a lot of attention because of the whistle blower on JP Morgan stating that metals are seriously manipulated with a huge amount of short positions still in place. I think this could be helping this sector and I hope we get a low risk setup in the coming week or two.

If you would like to Receive My ETF Trading Signals please visit my website at http://www.thegoldandoilguy.com/specialoffer/signup.html

Chris Vermeulen

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Gold & Indexes Melt Up Into Earnings?

Gold and the stock market continue to trade within a tight range this week. While the long term trend for both stocks and metals are up, and the charts look bullish I am not buying at this level because the market is over bought.

Chasing prices higher especially after a run this large is not the right move in my opinion. I did mention last week that we could see stocks continue to grind higher going into earning season which is about 2 weeks away still. I think that could happen, and if the same thing happens which we saw last January with great earnings (which I think we will see again) then watch out for another drop.

In short, if earning are good which they have been and everyone is expecting the same this April, then the typical Buy on Rumor (pre-earnings rally) which is what we have now, and Sell on the Good News in April then all the suckers thinking the market should rally will provide some liquidity for the smart money to sell at a premium.

That being said, if the earning are not good, then people will sell on that news also because the market is just waiting for news to sell… It’s the exact same situation as last time, that’s how I am feeling about it.

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Trading Bottoms in the Broad Market

The past few months I have been really focusing on buying dips in the broad market after I see a mini 3 wave correction. I use a mix between price patterns, volume, market sentiment, and market internals and of course years of watching how the market moves and evolves during times of economic expansion and contractions. This is represented on the chart below as the purple line.

This chart below shows one of my custom indicators which have successfully timed intermediate market bottoms 1-2 days before everything started to rally higher. This is one of the reasons we bought into the selling on Feb 5th and again on Feb 25th using ETF’s.

Because this is a new etf trading strategy and type of trading signal to be used in a bull market I still have to fin tune it a little more because I want to be sure we don’t get shaken out of positions to early which is what happened to a couple ETF’s we got into Feb 5th.

What happened was were buying when EVERYONE was bearish and panicking out of positions making it an extremely emotional time for traders and myself to buy into the market. This is not an easy task… I still have trouble pulling the trigger on these days and some times I just sit back in my chair and with one quick poke from my finger I hit the enter button to buy. My heart pounding just from that… but add few thousand followers on the pile relying on quality analysis and you start to understand what im going though. Not to mention the hundreds of emails with people telling me the market is about to crash, we should be shorting etc…
Crazy times for sure 🙂

Anyways, I will be provided these new signals for subscribers which is very exciting. Because my focus is on managing risk and keeping it as low as possible this will be a learning curve as I apply it to the service and set protective stops which is very difficult to do during a time of high volatility in the market. We can see the market move 2-4% in one day during these times so if we are trading the TNA 3x leveraged Russell2000 fund we could see our position drop 12% in one day. Bigger risk, bigger rewards as they say.

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GLD Gold ETF – Daily Chart

Gold and silver are currently trading in limbo at the moment. It’s tough to say what’s going to happen here which is why I continue to wait for something with a high probability of winning before putting any money to work.

The daily chart clearly shows a multi month bull flag, ABC retrace, Reverse Head & Shoulders, and wedge. All of which are very bullish. It’s just a waiting game as I do not jump the gun on any move because the market has the tendency to catch everyone off guard and I don’t want to be one of them. Been there, done that to many times….

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Mid-Week ETF Trading Signals Conclusion:

Keeping things short and simple, I think the stock market is in a major bull market. I am not buying anything until we get a pullback of some type. If the market unfolds properly we could have a great shorting opportunity (profit from a falling market) happening any day now, so that is my main focus at this time.

If you would like to Receive My ETF Trading Signals please join my newsletter at: http://www.thegoldandoilguy.com/specialoffer/signup.html

Chris Vermeulen

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How to Find Market Tops for Gold & Dow

March 28th 2010
Last week the general market continued to grind its way higher for yet another week. Overall I feel the market is very much over bought. We all know the market can stay in extreme overbought levels for extended periods of time making it very difficult to pick tops.

This is the reason I do not try to pick tops, but rather wait for a top to form before putting my money to work. While a bottom can be made in 1 day, tops tend to take days and some times months to complete.

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A few things really stood out to me when looking back on last week’s price action.

1. Gold (GLD Fund) was only up 0.29% for the week while the gold mining stocks (GDX Fund) was down over 3.5%. This strong divergence really has me concerned about the price of gold in the near term. Gold stocks generally lead gold and if they are down 10x more than gold last week, we better watch out…
2. The US Dollar broke out and started to rally posting a gain of 1% for the week. It is definitely weird to see gold move higher when the US dollar is rising…

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Gold GLD Daily Chart

Gold has been trading sideways/down since December. I see this large 5 month pullback as a bull flag and expect to see much higher prices for gold long term. But I don’t count my eggs before they hatch, so I continue to focus on the daily and intraday chart patterns for low risk trading opportunities.

Friday we saw gold close very strong for the day. It looks very much like a reversal candle but with the price trading under the mini head & shoulders neck line and with the US Dollar in rally mode again, I don’t think the stars are aligned enough for me to put money to work just yet.

Gold is currently trading in a major congestion zone. Until there is a breakout of this zone, I think setups will not be very accurate.
Gold ETF Trading Newsletter

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Dow Jones Industrial Average vs. NYSE New Highs Divergence – JANUARY

This chart shows the January 2010 peak in the stock market. As you can see prices became choppy with strong up and down movements before we saw the sharp drop.

Also note the NYSE new highs line. As the market became choppy new highs began to drop quickly. This indicated the market internals were weakening and led to an 8% drop over the next couple weeks.
Stock Market Top Signal

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Dow Jones Industrial Average vs. NYSE New Highs Divergence – MARCH

This chart in my opinion looks much the same as January. You can see the Reversal candle from the February lows and the strong rally to the current price, as of Friday.

Notice how the market is getting choppy. Also last Thursday the Dow gave us a reversal candle. But this time the reversal candle is to the down side.

Also note the NYSE New Highs line. It has dropped sharply indicating the market internals are weakening once again.

This is what trading is all about… finding things that are out of whack and waiting for a low risk setup in order to make a profit.
Stock Market Top Training

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Weekend Trading Conclusion:

In short, the stock market is over bought and about to roll over. I do understand that this grind higher could last another week or so, which is why I am focusing on short/quick intraday movements like Friday’s SP500 Intraday Low Risk Setup, and not buying etf funds to hold for a few weeks. Most of you know I do not chase prices higher simply because down side risk increased when buying into an over extended rally.

I feel gold, silver and oil will move together and at this time, I don’t like their charts for trading. With any luck we could get some setups this week, but not counting anything just yet.

If you would like to receive my Real-Time Low Risk ETF Trading Signals please checkout my website: www.TheGoldAndOilGuy.com

Chris Vermeulen

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SP500 & Dow Intraday Charts & Futures Prices at Their Best

March 26, 2010
The market gapped higher this morning after yesterdays heavy selling. At this time the market (metals and indexes) are trading at resistance on light volume. This tells me people are a little spooked from yesterday and just do not want to buy at these lofty prices.

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Stock Market Training Education

I am trying to provide you with more insight and trading tips/education because I know many of you enjoy it. So here is something some of you may find interesting…

Over the years I have found several things which happen repeatedly in the market. I always found it interesting that in an uptrend the market/commodity or stock tends to gap lower at the open the next day. And during a down trend the market tends to gap higher at the open.

Why is this? I don’t know for sure… but my thoughts are that the smart money (big guys & professional traders) manipulate the market using futures to artificially lower prices so they can buy more the at lower prices before everyone else jumps in. It’s similar but in the reverse during a bear market. Prices gap up so they can short more shares at a higher price before everyone starts selling again pushing prices lower.

I could be way off here as this is my personal opinion but I see it happen all the time… so whether I am right or wrong in my theory the fact is this price action happens.

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Take a look at the SP500 & Dow Jones Futures Charts:

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Market Gap Trading Conclusion:

In short, the market gapped up today (not good)…
I see the dollar is now trading at a short term support level and metals are trading at resistance. So maybe something will come out of this for a short play…

I hope this short reports was of use for getting a feel of how the market moves and what I am looking for in low risk setups.

Have a great weekend everyone. I don’t see anything tradable other than this intraday low risk setup which just broke down as I write this sentence,  fun stuff…

Be sure to get notified about my new day and swing trading service I am launching April 6th by entering your email address in the form below:

Chris Vermeulen
www.TheTechnicalTraders.com

Disclaimer: I am currently short SP500

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Sure Looks Like A Top? VIX, NYSE, DOW & GOLD

I think many of you will find this article interesting as I show several different indicators which point to an imminent correction for stocks and precious metals.

Last Wednesday’s report I showed how the current price of the index was almost identical to the January peak from where prices dropped nearly 10%. The report was called “28 Day Sector Rotation, Commodity & Index”. We did get the first sign of toppy market last Friday with the sharp one day sell off as I expected.

Today, one week later we are now that much closer to a 3-8% drop which is shown in the charts below. It’s important to remember that bottoms tend to happen quickly while a market topping is more of a process which is why so many people take big losses trying tip a top.

The market will continue to move up even when it is way overbought. It’s only when extreme levels are reached that tops can try to be played.

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The Volatility Index – Measures Fear & Complacency in the Market

While the VIX is not something I follow on a daily basis it is important to keep an eye on it. When extreme low levels are reached we know the market (John Dow traders) are feeling confident and buying up everything they can get their hands on.

I like to trade with the trend but when extreme levels are reached I start looking for a low risk setup to the short side (profit in a falling market) using leveraged ETFs.

As you can see from the chart of the VIX and SP500 below, each time the VIX tested the support level the market made a top. Again the VIX is not a great timing tool but it helps me decide which trading strategy I should focus on (swing or day trading) and if I should be looking to buy or selling the market.

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NYSE New Highs-Lows Index

If a chart is worth a thousand words then this chart is worth 2000. It cannot get any simpler that the NYSE new high-low index.

The green line is the SP500 index which is straight forward. The Red line is the number of stocks on the NYSE which have reached a new high.

How strong is the market if is keeps going up while the underlying stocks are getting weaker? Something has got to give and it will most likely be to the down side.

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Dow Jones Industrial Average – Daily Trend Chart

This chart adds another layer of clarity. You can see what happened last January when everyone was buying stocks thinking life is good, trading is easy. As my trading buddy David Banister from ActiveTradingPartners.com always says “Buy when the Cry, Sell when they Yell”and that’s what I am looking to do.

Today the Russell 2000 index (small cap stocks) sold down very hard. These stocks tend to lead the market both up and down. So the red flag is up and I am just waiting for the market to show me its hand so we can catch the next big move.

Coles Notes on Chart:
• Market is over bought and in dire need of a pullback
• The length of this steady rally is much longer than a normal rally
• The rate as which prices are rising is much to steep to be maintained
• The market is trading at the parallel trend line
• VIX is tell us people are buying and not worrying about any possible drop
• NYSE divergence is screaming Overbought…

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GLD Gold Fund Trading

Gold is still in a major bull market but the recent price action from Dec up until now has been down as gold consolidates the large rally from 2009.

Looking at the chart below you can see the mini Head & Shoulders pattern. The neckline has now been broken and prices are falling. I almost had a buy signal for gold two days ago with the small move up and the candle closing above the previous days high. But because the price was still under the neckline (resistance) I decided to stand aside and live another day.

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Mid-Week Gold Newsletter Conclusion:

In short, the market looks very strong but from a technical point of view it’s about to die of exhaustion in my opinion.

Gold, silver and oil I figure will move together which is sideways or down.

I am keeping a very close eye on things hoping prices unfold in a manor which will allow us to spot a low risk setup in the coming days as I would like to catch this drop if it happen. With any luck we could make 10-15% within a couple days using a leveraged ETF.

If you would like to get my Real-Time ETF Trading Signals please check out my website: www.TheGoldAndOilGuy.com

Get my FREE Weekly Reports:

Chris Vermeulen

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How to Day Trade Spot Gold Futures with Accuracy

Day Trading Spot Gold Futures is a touchy subject among traders. You either hate it and think it cannot be day traded for consistent gains or your love it finding its movements very accurate. As most of you know I love trading gold 🙂

I get my fair share of emails from individuals who think trading gold is a complete scam because of manipulation and crazy price action and I completely agree with this group of people. But the entire market is manipulated… so we all just have to deal with it or stop trading and I am not going to do that.

My focus is on price action and volume allowing me to think with a level head and manage my money one candle stick bar at a time.

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Spot Gold Futures Day Trade Video

So here is a short video covering a recent day trade for spot gold futures. Notice in the video I use the gold futures chart for analyzing the market and how I traded with CFD’s during the late night.

The reason I traded CFD’s is simply because you can trade any size position with CFD’s big or small and I like small positions during overnight trades when I am sleeping. Also you get crazy 100-200x leverage trading CFD’s. So I can risk a very small amount of money but have big potential if a trade goes in my favor so for this small move in gold I was able to capture the gains with little risk.

It is important to note that when I have a buy or sell signal in gold, silver, oil, the indexes etc… any related investment can be traded. For example if I have a buy signal for gold the you can trade gold futures, gold CFD’s, gold ETF’s etc…. they all move together at the same time. You pick which investment you are comfortable wil.

Anyways, day trading spot gold is my sweet spot (Pardon the pun) in the market and with my new trader service launching April 6th were I provide every trade I do whether its an ETF, Futures or CFD play members will be able to trade directly beside me in the chatroom which has a live audio squawk box. The service will be very educational as you not only see what and when im trading but can ask me questions and read my weekly educational trading reports explaining closed out trades.

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Link to article if you cannot view it: Click Here

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Gold Trading Conclusion:

I hope this short video helps you understand that taking every trade the market seems to be giving you does not always need to be taken. The average trader thinks that I am extremely aggressive as I day trade, swing trade and do so some long term dividend plays etc… but really I would consider myself VERY CONSERVATIVE.

I pass on about 70% of the setups I see and wait for something that has ALL the stars aligned before putting my money to work. The market is designed to chew up and spit out gamblers before they even know what hit them. And this is why I site back and watch the blood bath on a daily basis only sticking my hand in when it looks clear.

You will not see me bet the house on any given trade. All I am looking for is a low risk setup. If there is an edge I will take the opportunity to make money whether it’s a quick $50 or a $1500 a day trade setup.

If you would like to receive my Free Weekly ETF Trading Report to your inbox please visit my website: www.GoldAndOilGuy.com

Get Notified about my New Trading Service”

Chris Vermeulen

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Weekly Gold, Silver, Oil & Natural Gas Analysis

March 21, 2010
Last week was nothing special as stock market continued to drift higher on light volume and the Volatility Index (VIX) reaching a new multi year low. This mix of higher prices on light volume, multi year lows in the VIX and an overbought market paints a clear picture to a market technician – Be Ready for a Pullback!

Last Wednesday I sent out a report covering sector rotation comparing the price performance of these sectors from the January peak with last weeks price action. It was very interesting and it pointed to a sharp sell off Thursday or Friday

Here is last Wednesday’s report if you are interested: http://www.thegoldandoilguy.com/articles/28-day-sector-rotation-commodity-index-update/

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GLD Gold ETF Daily & 60 Minute Chart

Last week gold gap higher then traded sideways for a few days. I will admit it was very tempting to buy into the move but I stuck with my trading strategy which is to not chase moves which gap in my direction.

Gaps are known to get filled about 70% of the time. What that means in this situation is that the price will most likely sell back down to fill that gap before trying to move higher.

All that said the problem I see now on the daily chart is the possibility of the mini Head & Shoulders pattern breaking down. If gold moves any lower then I would expect a sharp pullback. The measured move would equal a pullback to the $104 area on the GLD chart and the $1070 level for spot gold.

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SLV Silver ETF Trading Chart

The silver chart looks much different than gold’s but in reality they are trading in a similar situation. If silver moves any lower then sellers will flood the market and take the price down to the next support level. But if we get a bounce then it should surge and rally almost a $1 per ounce from this point.

Only time will tell as we let this trade unfold with a stop at $16.52.

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Natural Gas – Weekly Trading Chart

Natural gas has been selling down for almost 2 months. The chart is starting to show a possible buy point if all goes well in the next few weeks.

What I like about this chart is that we saw a break of a support level and heavy selling which tells me the general herd is getting shaken of their long positions. This extended sell off is now entering a support zone and could provide us with a low risk setup in the next 2-3 weeks.

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Crude Oil – Weekly Trading Chart

Oil is trading similar to gold and silver. It is trading at a key pivot point and could go either way quickly. I will be keeping my eye on the daily and 60 minute charts for a possible low risk entry point.

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Weekend Stock & Commodity Trading Conclusion:

In short, the overall market is trading at level were there is not much to we can do. Day traders are able to take advantage of this price action but not swing traders.

I feel the major indexes have another 1-2 down day left in them before a bounce, but it’s more difficult to gauge the momentum with a cool down period in the middle of it all (the weekend).

The market is on the edge of some exciting moves as I can feel something brewing. With any luck there could be some great opportunities in the coming days.

If you would like to receive my Free Weekly Trading Reports checkout my website: www.GoldAndOilGuy.com

Chris Vermeulen