Commodities Overtake Stocks and Bonds with Best Rally Since 2010!

Traders who follow the price of gold and silver, should keep an eye out on the U.S. dollar index. The dollar has been within a trading range for more than a year. During December of 2015, the dollar rose to test the highs at 100, however, since February of 2016, the dollar has been in a downtrend, as shown in the chart below.

The FED has reduced the expectations of a rate hike in 2016 from one full percentage point, in the beginning of the year, to a half percent and perhaps to none at all. However, my expectation is that the FED may have to start rolling back this increase before the end of 2016.

The bullishness in the dollar was sparked by expectations of a change in the monetary policy of the FED. Market participants believed that the Zero Interest Rate Policy, NIRP, would end and that the rates were on an upward trajectory.  However, world economic conditions have deteriorated since the beginning of 2016 and the ECB and BOJ both responded with Negative Interest Rates, NIRP and more QE. Consequently, the FED was forced to delay their rate hikes.

Last week’s shot term breakdown of the dollar, below the critical support of 93, was a bearish sign which can bring the dollar further down to the 86 levels. But the dollar posted a solid rally by the end of the week to regain that critical support level for the time being.

price of gold dollars

Although gold is a commodity, it is used as a hedge against ‘uncertainties’ and ‘crisis points’ which gives it a different edge. Gold, also behaves differently because of its’ usage as money, as ‘a store of value’, for many centuries for both individuals and countries.

Due to the ‘meaningless’ monetary policies of the various global Central Banks, gold will follow its’ unique behaviour. I have explained this earlier and my models have been very timely in forecasting the turning points.

Gold will have a one-way move higher with many corrective phases on its’ impulsive new uptrend, therefore, I always keep my subscribers immediately informed so as they know when to make the next profitable trades of both gold and silver. The next trade I feel is just around the corner.

Follow My ETF Trading Alerts and Analysis: www.TheGoldAndOilGuy.com

Chris Vermeulen

 

Price Of Gold Is Breaking Out But “Commercial Traders” On The Wrong Side?

Price of Gold: The activities of the ‘commercial traders’ in the COT data is closely watched by the market participants, as they are believed to be the smartest of the lot.  They take deliveries on their bets, unlike the speculators, who have no interest in taking a delivery.

If you have followed the ‘commercial traders’, without paying attention to my proprietary predictive trend and cycle analysis for the price of gold and silver, you would be sitting on large losses, due to their ‘short positions’ which mean they expect price to move lower.

The ‘commercial traders’ ‘short positions’ are currently at record levels which are more than twice of that as compared to last years’ readings. Since the beginning of the second half of February of 2016, the ‘commercials’ have been increasing their short positions during the time that gold was closer to $1220/oz.

Price Of Gold
Daily Price of Gold Chart and Analysis:

However, if you have followed my recommendation, you would have maintained that once the price of gold crossed the $1190/oz. levels, it was destined to go higher.

However, the head and shoulder formation which developed after gold broke above the $1190 resistance trend line I did feel it would correct for a few weeks.

Instead, the price of gold did not correct, rather it consolidated with this what looked to be a head and shoulders pattern then broke out to the upside and rallied. Once a bearish pattern fails, it becomes very bullish which is what has happened in this case. I was quick to alert my subscribers to buy as soon as the pattern was broken and turned bullish.

However, the current price of gold at $1300/ oz. could offer some resistance, but the resolution of the trend in due time is going to be very strong. The pattern target of the current move is $1350/oz.

priceofgold

What about the ‘poor man’s gold’, Silver? 

The chart indicates that in the last three weeks of April of 2016, the ‘commercial traders’ have added to their short positions continuously, however, they have been proven wrong once again with the breakout in silver returning 20% during the month of April of 2016.

Price Of Silver

 

Although we take note of the ‘commercial positions’, I strongly believe in my analytic models which have provided excellent returns, over many years.

Once above the $16/oz. levels, I have had no doubt that silver was ready for a sharp run-up. Therefore, I will be advising my private subscribers as to when to purchase silver, against the bias of the ‘commercial traders’ and I am confident that my subscribers will reap a windfall when the time is right.

 priceofsilver

Conclusion – Current Investment Strategy of the Mega-Rich

 

Do you really want to follow the ‘smart money’? Then follow the billionaires and the big banks as I have been doing.  Ray Dalio, the founder of Bridgewater Associates, manages the largest hedge fund, in the world. His fund manages over $160 billion in assets.  Today, his fund is bullish on gold.  He recently stated “if you don’t own gold there is no sensible reason other than you don’t know history or you don’t know the economics of it”.

Stanley Druckenmiller has been purchasing a large long-term position in gold.  He made an average of 30% of an annual return in his fund since 1986. So, what is he buying now?

He has an $880 million position in gold, right now. Do you think you should now be following the ‘really smart money’, today?

Follow the ‘smart money’! Gold is for the long-term investor, well looking forward 3-5 years at least.

Get My Daily Live Price of Gold Market Analysis, Forecast & Trade Alerts: www.TheGoldAndOilGuy.com

Chris Vermeulen

This ‘Counter Trend Rally’ is now completing!

Last Friday, April 29th, 2016, the U.S. Indexes were very bearish as price clearly broke below the 20 day moving average then rebounded back up to test that level and was rejected and sold into.

The chart below shows the market bullish and bearish momentum and price action. The momentum of these markets has now shifted away from being ‘bullish’. It is currently struggling to find support and hold up.  Do not expect new highs on the SPX and I feel its beginning its ‘bearish reversal’ (topping phase) before making a new leg down.

idealbounce

This ‘counter trend rally’ is now completing!

It is important to realize that all bear markets have strong rallies within them. In fact, some of the more powerful market rallies happen during bear markets, so what we have experienced this year is very normal.

With being that said, this bear market counter trend rally is running out of steam and is on the verge of a very strong wave of selling which will catch the majority of market participants off guard. Why? Because these super strong counter trend rallies actually convince the average investor that stocks are the place to be and will continue higher. These counter trend rallied get investors to buy up stocks at the ultimate worst possible time, just before prices collapse. We have seen this happen time and time again and this time is no different.

counterchart

Where Do We Put Our Money Then?

Gold prices have surged this year. Silver has lagged far behind but has recently rallied to make up for its underperformance this year. Silver, known as ‘poor man’s gold” and I feel will do exceptionally well in the coming year as it enters a new bull market.

I would expect sideways consolidation at this point for gold and silver before they continue up again, but they are definitely moving much higher the rest of this year.  Subscribers and I are long gold through an ETF and if this trade pans out in the coming weeks it could end up being a multi-year investment.

These ‘monetary metals’ are now ‘confirmed’ to keep rising as a safe haven and currency play by both investors and countries in my opinion.

The U.S. dollar has broken support in the last few days.  This is a primary driver causing gold and silver to begin these big moves up in the past week.

US Dollar Index Weekly Chart Below:

As you can see below, the dollar broke support early in the week, but has recovered nicely to get back above support for the time being.  I feel it’s just a matter of time before the dollar breaks down and collapses 10 – 15 cents. If this/when this happens precious metals should sky rocket!

usd-bounce

Market Trading Conclusion:

In short, the US large cap stock are in the very final stage of topping before share prices collapse and start a 8-16 month bear market. There will likely be some big event that triggers the selloff, the question is what and when?

There are going to be some great short term trades that could generate 50%, 100% or more within the next month which I have been following closely with subscribers of my ETF trading newsletter which you can be a part of. Join at: http://www.thegoldandoilguy.com/etf-trading-newsletter/

Chris Vermeulen

Is The Price Of Gold Going Ballistic?

This past Friday, April 29th, 2016, GOLD entered its “first phase” of its new long-term bull market. This has created a whole new world of opportunity, for my subscribers. The global Central Banks opened the floodgates encouraging us to go on a gold buying spree.

The Government Is Like an Unethical Banker Playing Monopoly

What the government has been doing and continue to do is such a joke. In Laymen’s terms, it’s like all of us playing the game Monopoly. We all start off with some money, slowly accumulate properties, rental income and build wealth, while closely managing our money and making sure we have enough cash on hand to buy more properties and/or pay rent and other fees as we move around the board. We are honest players paying our debts as required and expected.

Then there is the banker, who helps with the transactions of paying fees, rents, properties etc.

Unfortunately, the banker is also a player at the table (banker = Government). This banker always happens to be the worst/dumbest/unethical player one could ever be forced to play with.

READ FULL ARTICLE – CLICK HERE

The FED is Exporting Quantitative Easing!

The emergence of the “BLICS”, not BRICS, nations, has been a new proxy entity designed solely for exporting QE!

This undisclosed systemic risk is being spread to secondary nations without the benefit of any investor/trader knowledge through the Financial World.

Over $818 Billion in US treasury’s and swaps have taken place already.

READ FULL ARTICLE: CLICK HERE

Exclusive Precious Metals Report & Free Trading Magazine

The newest issue of TradersWorld magazine just came out which has some great articles in it. They wanted me to contribute some trading insight which I have. You can get this exclusive insight article on page 40: Metals & Miners Set To Explode

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The Next Technical Price Targets for Gold & Silver

I have pointed out earlier, gold is forming a possible short-term top. It is on the verge of completing a bearish ‘Head and Shoulder’ pattern. The pattern is confirmed if gold closes below $1220/oz. The downside pattern target for this setup is $1138/oz.

If gold starts to rally and breaks out to the upside, then we should see the $1396 level be reached based on technical analysis.

I will open a new long gold position when the time feels right. With technical analysis strongly suggesting gold and silver have bottomed, New breakouts to the upside in metals and mining stocks can be bought.

goldtargets

On the other hand, silver has formed an almost perfect cup and handle pattern and has broken out of it. It has reached its first target objective; chances are that silver will either consolidate or pullback after having met its target or move up to $18.70/oz. levels, which is the pattern target of the ‘Cup and Handle’ pattern formation. However, new buying is not advised at current levels due to a poor risk-reward ratio.

If you have not read the post about what the Silver COT data is warning us about be sure to read this short post: Click Here

silvertarget

If we take a look and monitor the gold/silver ratio closely, recently, the ratio had touched its resistance of the past 20 years. Every time the ratio has returned from the resistance, the minimum it has retraced is to the levels of 45.

There are no reasons to believe that it will be any different this time around. Hypothetically, if gold were to remain at $1236/oz. and if the ratio corrects to 45, silver will reach $27.5/oz., which is a 62% increase from current levels.

Hence, it is prudent to stay with silver for a better return compared to gold once price has a pause to regroup before the next rally.

ratiotarget

How to Trade Gold & Silver Conclusion:

Buying gold and silver offer different rate of returns to the investors. If an investor is able to time both the precious metals, then the total returns will be ‘astronomically high’ in the future.

My timing ‘cycles’ provide signals both for the short-term and the long-term. The price action of both gold and silver along with my cycles have been showing VERY strong “Cycle Skew”, which I explain in detail in my book “Technical Trading Mastery”. This cycle skew is telling us that precious metals are now in a strong uptrend and is another confirming indicator that support much higher prices long term.

During the first half of a bull market trading price patterns and upside breakouts tend to work very well. Because interest in the sector is growing and more buyers continue to enter that market, price pattern breakouts are the last chance to get a position before price has its next rally higher.

I will continue to inform my subscribers of new swing trades, and even more importantly the long-term investing Set-It-And-Forget-It ETF trades to ride out the new bull and bear markets for massive profits.

Keep following me to know more at: www.TheGoldAndOilGuy.com

Chris Vermeulen

 

 

Is silver a better bet than gold in the near future?

Last week, the beginning of April 18th, 2016, silver was on fire, rising sharply and forcing ‘Wall Street’ to take note of its move, though, many investors believe that gold and silver are one and the same, one can hold either in your portfolio and earn the same returns? the truth is far from that!

In reality, though both silver and gold are considered precious metals and over the long-term, they have a high degree of ‘correlation’ in their movements, but in the short-term, for the active investor, both offer opportunities at different times.

From the chart below, it is clear that once the bull market starts in precious metals, silver beats gold hands down. From 2005 to the highs in 2011, gold returned an impressive 350% returns, whereas, for the same period, silver recorded an astounding 700% return.

gvs

My subscribers are aware that we are extremely bullish on the precious metals over the next few years when the global economies enter ‘The Great Financial Reset’. Gold will be in a sustained bull market for years to come and will reach levels which now seem unbelievable.

History suggests that if gold witnesses a resounding bull market, silver will outperform it.

However, occasionally, investors will benefit if they trade in and out of both these markets. At times, holding silver is more profitable than gold and at other times, it is the other way around.

Consider this, if one would have bought gold, during the start of this year of 2016, one would have made an impressive 16% returns in the first two months’ as shown in the chart below. However, silver would have returned a 12% return for the same two-month period.

Since then, I raised a ‘red flag’ regarding a short-term top developing in gold and gold prices have been range-bound with a downward bias.

On the other hand, silver has taken off, on April 18th, 2016, netting an investor a 16% gain in this month, which beats most other asset classes, including gold.  Today, ‘Commercial Traders’, as determined by their large position, which we have not been this bearish on silver since 2008. This is when silver traded from $21 per ounce all the way down to $8 just before silver had a multi-year rally topping in 2011. They set a new record short position last week!

goldvssilver

Concluding Thoughts:

In a couple days, I will be posting the second half of this article here on this website to show you what exactly is likely to happen and when for both gold and silver. Trading and investing is not as simple a most think it is. Just because you or someone you follow is bullish on an investment does not mean it is a good buy or should be bought. Timing is everything in the markets and knowing when and where to buy and sell is the key to long-term success.

The big question you should be asking yourself is if precious metals are headed lower? This I will share with you in a couple days, stay tuned.

Get my analysis and trade ideas delivered to your inbox by visiting www.TheGoldAndOilGuy.com

Chris Vermeulen

Did “Keynesian Economic Theory” fail in the post-crisis years of 2008?

The ‘Great Recession’ of 2008 was brought about by reckless lending. The aftermath left the credit market in an extreme tight squeeze whereby corporations were frightened and hesitant to spend. Cost cutting led to massive layoffs leaving people with no money, therefore, ‘aggregate demand’ dropped!  Economists, led by the then FED Chairman Ben Bernanke, believed that the solution to this problem lay in generating demand by using the ‘easy monetary policy’ as propagated by the ‘Keynesian Theory’.

READ FULL ARTICLE: http://cnafinance.com/did-keynesian-economic-theory-fail-in-the-post-crisis-years-of-2008/8922