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Precious Metals, Oil & Nat Gas Trend Charts

Oct 18, 2009
Commodities continue to climb with several commodities making new highs for the year. The equities market continues to push higher with 3rd quarter earnings coming in better than expected. This good news has aroused more investors to put what’s left of their money back into the market which has been the fuel for this recent rally in stocks.

Here is my concern:
The market continued to make a new yearly high last week, company earning are better than expected and more retail investors (average working people) are dumping their money back into the market again because EVERY thing is going up in value and all they need to do is buy something. When it’s this easy to make money in the investment/trading world something drastic usually happens not long thereafter.

Here are a few charts for this week in precious metals and energy.

Precious Metal Stocks – Gold Bugs Trend
Gold stocks have performed well in the recent couple weeks. I figure we will see some sideways price action before another leg higher. The question is how far will this pullback go?

As you can see there are two trend lines which make for solid support levels. I will be looking for a low risk setup around those levels.

HowToTradeGoldStocks

HowToTradeGoldStocks

Precious Metal GLD Gold Fund
Gold had a great pop higher the first week of October but now it looks ready for some sideways chop. I tend to look at precious metal stocks as a leading indicator for trading gold so before we put more money to work in GLD I want a buy signal for gold stocks also.

HowToTradeGLDETF

HowToTradeGLDETF

Precious Metal SLV Silver Fund
Silver SLV and gold GLD generally move together with silver being the more volatile of the two on a percentage basis. As you can see from the chart below the support trend lines are much father away from the current price. If you don’t want to give back too much of your gain then raising your stops is a safe call. But if you get taken out of your position you should be looking to get back in at a lower price on the first sign of a bounce/reversal to the upside.

HowToTradeSLVETF

HowToTradeSLVETF

Energy Stocks – XLE Energy Fund
It does not matter which sector or commodity I am following it is important to analyze the stocks for that sector or commodity. These are as close as you can get to a leading indicator for possible trade setups.

In my opinion, it looks like energy stocks are about to have a pullback. The trend is still up, so I am not looking to short, rather I am tightening my stops to lock in some profits if we get a sharp pullback. Then I will be entering long again on the first sign up a reversal back up.

HowToTradeXLEETF

HowToTradeXLEETF

Energy USO Oil Fund
Oil had a great run last week and from the simple analysis above (energy stocks) I have a feeling we could see a quick one day sell off. This is common with USO and buying at the close after a long high volume sell off can provide an excellent trading opportunity.

HowToTradeUSOETF

HowToTradeUSOETF

Energy UNG Natural Gas Fund
Natural gas continues in a bear market rally as it tests our resistance trend line on Friday. I do feel that gas has bottomed and we will see much higher prices in the future. That being said, I still think we need some time for this commodity to bottom (form a base).

Depending on the price action of natural gas this week, we may have a low risk entry point with my trading model. I will keep members posted.

HowToTradeUNGETF

HowToTradeUNGETF

Precious Metals & Energy Trading Conclusion:
In short, I feel the market is ready for a multi month correction, but with solid 3rd quarter earnings, new money is being dumped into stocks and commodities as investor confidence rises. This is extending the rally making it even more over bought in my opinion.

That being said, I will not be shorting the market or stocks anytime soon. This market can continue higher because average investors are putting their money back into the market. If the market does actually top in the coming weeks, there will be plenty of time to short the market using leveraged ETFs. I am still long the market and applying tight stops to my positions.

If you would like to receive my free weekly trading reports please join my free newsletter at: www.GoldAndOilGuy.com

Chris Vermeulen

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Mid-Week GLD, SLV, UNG & USO Trading Charts

Commodities and stocks have been on fire the past two weeks and I think it just may be time for things to take a breather. While I continue to stay long, taking some money off the table to lock in profits is a safe play.

Just from a quick glance at the charts we can tell the odds are pointing to some type of pause or pullback in the coming days. I figure any day now we could see some profit taking.

Gold ETF Trading – GLD

The Gold ETF is one of my favorite trading vehicles. Using simple trend lines and looking at the recent price action you can see that the price of gold is looking ready for a pullback. Buying at this level is chasing and that generally means you buy at the high and panic out at the low.

How to Trade Gold GLD

How to Trade Gold GLD

Silver ETF Trading – SLV

The Silver ETF looks to be in the same boat as gold. I expect to see some sideways price action or a pullback.

How to Trade Silver SLV ETF

How to Trade Silver SLV ETF


Natural Gas ETF Trading – UNG

The Natural Gas ETF sure has given everyone a wild ride in the past 6 months. The bear market is still in place which can be seen on the daily chart. So far this week the price has broken down and trading at the $11 support level. This fund could generate a buy or sell signal with my trading model in the coming days so I am waiting for a clear entry and exit point before jumping on the gas wagon.

How to Trade Natural Gas UNG ETF

How to Trade Natural Gas UNG ETF

Crude Oil ETF Trading – USO

The Crude Oil ETF has broken above its resistance trend line this week but still struggling to move above the August high. Volume is declining while the price rises which is a bearish indicator. USO looks ready for some type of a pullback as it digests this breakout before moving higher.

How to Trade Crude Oil USO ETF

How to Trade Crude Oil USO ETF

Mid-Week GLD, SLV, UNG, USO ETF Trading Report

What does the general public hear and think about the stock market?
From recent emails, local financial news shows, family, friends etc… all I am hearing is how strong the market is. Indexes are making new yearly highs and company earnings are better than expected this quarter. Sounds like all we need to do is buy and life will be great!

Well in my opinion the market is the perfect tool for misguiding and frustrating the general public. All my indicators are telling me we need more of a correction before rallying much higher. The market (smart money) generally anticipates good and bad news several weeks if not a month in advance. So the question is:

Are company earnings already priced into the market?

Is all this positive market coverage getting the general public to buy up here at this possible market top?

The answer is, only time will tell. No one knows for sure what the market is going to do but short term moves can be predicted with relatively high accuracy.

Don’t get me wrong, I am still bullish on the market but with all this good news becoming public information you have to wonder what is next. I am still long the market but trimming my positions to lock in profits and still stay in the game.

If you would like to receive my free weekly trading analysis please visit my trading websites:
www.TheGoldAndOilGuy.com
www.ActiveTradingPartners.com

Chris Vermeulen

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Small Cap Stock Trading Service – ActiveTradingPartners

Hey Everyone,

I just wanted to mention the exclusive stock trading service David Banister and I launched in July. ActiveTradingPartners.com not only has an incredible track record of extremely high annualized gains on our Alerted Trade positions to Partners, but a very good track record of knowing when to Hold, Add, or Sell those same positions, as well as timely market commentary. Riding a stock or ETF to maximum gains is a difficult challenge, and ATP has successfully achieved this over and over again. Many services brag about how great they are at picking stocks or entering trades, but very few follow through with on-going advisories on those same positions, with sell advice at the right time, or with advice on whether to hold those positions through volatility.

Recently, before the recent market correction, ATP advised our Partners to close out of several of our very profitable positions completely. Below are a few samples:

VICL- Closed at $5.10, it dropped to $3.90 shortly thereafter.

SPPI- Closed at $7.15, it dropped to $6.27

CRXX- Closed at $1.80, it dropped to $1.27

JAZZ- Closed at $8.88, it dropped to $7.38

All of the above positions were recommended at much lower prices, and we trimmed profits at higher prices before closing them out. The last thing you want is to give back all your gains in the market.

Here is what some of our “Partners” in the service are saying recently:

Dave, I have not had the pleasure of talking/ meeting with you but just wanted to say how pleased I have been with the service thus far, Chris has been a good trading friend over the years and I am glad that he told me about this , I have probably made enough to pay for three years already.
Shaun Mahoney

We really appreciate the updates and information you supply on your site and your scorecard especially when the markets begins to worry us. When the market tries to shake us out, you provide a timely article to keep us on track. We are very pleased with the outcome of our trades since joining your service.

Thanks again for your constant support.
R.J and C.J–  Husband and Wife

“Hi Dave,
Just a quick note. Thanks so much for frequent updates and commentary. I have just finished first month as a partner. I have averaged over 15% returns even with losing one ATP pick as it got stopped out. Much of my portfolio was underwater when I joined up. I am turning things around as I am able and looking forward to big gains down the road. Very happy with the service. Thanks!”
Chris Webb, Wolfville, Nova Scotia

“Unbelievable. You guys are great. Keep up the good work and I will get you more subscribers. I am not kidding.”
Thorsten Bredberg

“To date this is the best financial service that I have ever subscribed to!”
Colleen Bowersock

“THANK YOU for the commentary on the various trading opportunities. I have made enough to fund the monthly costs of ATP for the next ten years. People at the office just do not understand why I am always smiling!!! Keep up the good work and I hope you enjoyed your vacation.”
Michael Swanberg

Learn more today at www.ActiveTradingPartners.com while we still have a few “Partner” positions available. The service is exclusive to only 200 subscribers.

Chris Vermeulen
www.ActiveTradingPartners.com
www.TheGoldAndOilGuy.com

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Dow Jones Commodity Index Fund Trading Opportunity

Dow Jones Commodity Index Fund – This index tracks the entire commodity market as a whole. Over the past two years we have seen commodities drop in value substantially. The good news is that we could be seeing prices rise going forward from here.

2009 has been a fantastic year for trading commodities with the market bottoming and starting to move higher. This commodity index clearly shows a Cup & Handle pattern and is looking ready to breakout in the coming weeks. The C & H pattern is the best chart formation we could get. Breakouts from these patterns generally provide a rally which can last months at a time.

Let’s take a look at what kind of opportunity looks to be just around the corner.

Dow Jones Commodity Index Chart – Weekly
Commodities appear to have bottomed and are getting squeezed into the apex of the bullish wedge. This index could easily rally to the 180 level which is about 35-40% Gain.

Dow Jones Commodity Index Chart

Dow Jones Commodity Index Chart

DJP iPath Commodity Index Fund – Weekly
After reviewing several different commodity index funds I like the characteristics for DJP the most. There is enough volume traded which makes for a smooth trading fund on an intraday basis when looking at the 10 minute chart. Several other funds were choppy and thinly traded.

This is Exciting – Everyone knows how most commodity funds vary from the underlying commodity price, well this fund trades identical to the index. What does this mean? It means we can trade the DJP commodity index fund for short term and long term positions because there isn’t any price decay over time.

iPath DJP Dow Jones - UBS Commodity Total Return Fund

iPath DJP Dow Jones - UBS Commodity Total Return Fund

Performance Chart of Commodity Index & Fund
This chart goes back almost 2 years. As you can see the % change for the index and the fund are virtually identical. We do not need to worry about Contango with this fund.

Dow Jones Commodity Index and Fund Comparison

Dow Jones Commodity Index and Fund Comparison

Major Commodities Breaking Out or Bottoming
Gold, Crude Oil and Natural Gas are highly traded commodities and will play a large role in the direction of the commodity index.

Gold is breaking out to a new high – Bullish

Gold Commodity

Gold Commodity

Crude Oil is consolidating in a bullish wedge – Bullish

Crude Oil Commodity

Crude Oil Commodity


Natural Gas is trying to bottom and should move higher into the winter – Bullish

Natural Gas Commidity

Natural Gas Commidity

Dow Jones Commodity Index Trading Conclusion:
Money has been moving into the commodity sector since March of this year. As a technical trader this opportunity jumps out at me. I wanted to share it with fellow traders because this could be once of the easiest trades of the year if the index breaks out in the coming weeks.

If you would like to receive my Free Weekly Trading Newsletter please visit my website: www.GoldAndOilGuy.com

Chris Vermeulen

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Oil, Gas, Silver Gold – Getting Ready for Next Rally

Commodities have and continue to be a fantastic trading vehicle for those who can stomach volatility. After last year’s market crash most commodities pulled back to normal if not lower than normal trading ranges. This allowed us to enter the market at 10+ year lows for natural gas.

If we look at the weekly chart for gold, silver, oil, natural gas and the CRB commodity index we can see that commodities in general look ready to skyrocket higher approximately 34% on average in the next 4-12 months.

Take a looks at this chart of gold. While this chart shows the basic technical analysis of the price of gold you can see the completion of the Cup & Handle pattern which is VERY BULLISH. Also you can see gold broke to a new high. While I don’t like to trade new highs it’s hard not to want to buy into this breakout. Most traders should be long gold already, but if you are not, you have a couple of options. Buy into this breakout with a tight stop or wait for a pullback and buy on a test of the breakout. Personally I am waiting for a pullback (test of breakout) before I add more to my position.

Trade Spot Gold

Trade Spot Gold

Silver has been strong but has not held up its value as well as its big sister (gold). As you can see silver must break through two more major resistance levels before making a new multi year high. Overall silver still looks strong and I will be waiting for a low risk setup for us to add more to our positions.

Trade Spot Silver

Trade Spot Silver

Crude Oil looks like a perfect Cup & Handle pattern and I am now looking for a low risk entry point which should form before we get a breakout it to the up side. I can see oil quickly moving to the $100 per barrel level once we get a breakout.

Trade Crude Oil

Trade Crude Oil

Natural Gas had a perfect shakeout in August and many aggressive traders who follow these reports followed my lead and bought natural gas around $2.90 (10 year lows). This was the move I wrote about for nearly 3 months as we waited for it to unfold. Down side risk was around 15% so it was not my signature low risk setup but this rally has been exciting. Currently natural gas is trading at resistance and taking some money off the table is a great play here. You will never go broke taking profits.

Trade Natural Gas

Trade Natural Gas

The CRB Index looks very similar to crude oil. Overall commodities look to be in the final stages of basing (bottoming) and from simple technical analysis the next more could be around 30-34%.

CRB Index

CRB Index

Commodity Trading Conclusion:
Overall commodities look like a great buy. We are seeing precious metals moving up strongly and gold making a new high which is very exciting as our golden rock stock plays push higher and our commodity ETF play continue higher as well.

Energy is a mixed bag. Oil looks bullish and ready for a nice rally, while natural gas looks a little top heavy as it trades just under resistance.

We continue to stay in the market and are waiting for another round of low risk setups which could happen in the next few days if we get favorable price action. Remember to move your stops up to lock in gains. There is nothing worse than giving back a large portion of your profits when you don’t need to.

If you would like to receive my free weekly trading reports please fill out this form:
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Chris Vermeulen

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HUI, GLD, SLV, USO, UNG, SPY Trading Charts

The market continues to whipsaw traders out of positions as volatility rises. I have put together a few charts to show you where each of our commodities are trading along with the SPX (SP500 index).

My Gold Stock Breakout Model – Monthly Chart
I use this chart to keep my big picture trades on the right side of gold. I found that gold stocks tend to lead the price of gold so watching this gold stock index on the monthly, weekly and daily charts can provide me with short term tops and bottoms for trading gold bullion, GLD or DGP exchange traded funds.

The monthly chart clearly shows the rally in stocks has now sold back down to my resistance trend line. If we do not get a rally this week in gold stocks, then I think we could see gold trade sideways or down for several months.

HUI Gold Stock Newsletter

HUI Gold Stock Newsletter

GLD Gold ETF Trading Fund – Newsletter
The daily gold bullion fund shows the recent price action and what I think could happen in the coming weeks. In the past couple days gold has moved to a short term support level where I think we could see buyers step in.

We took some profits near the high and continue to hold a core position until we have another technical breakdown or new setup to add more to the position again.

GLD Gold ETF Trading Newsletter

GLD Gold ETF Trading Newsletter

SLV Silver ETF Trading Fund – Newsletter
Silver is in the same boat as gold. We have taken some profits and are still holding a core position with protective stops in place just incase the market does head lower from here.

Silver SLV ETF Trading Newsletter

Silver SLV ETF Trading Newsletter

USO Crude Oil Trading Fund – Newsletter
Crude oil started to bleed lower last week as the price sliced through the multi month support trend line. Volume shot up as stop orders get triggered on the way down. We finally have a move outside of the pennant formation that has been in place for several months. Now we can start looking for a low risk setup for trading crude oil again.

Crude Oil USO Trading Newsletter

Crude Oil USO Trading Newsletter

UNG Natural Gas Trading Fund – Newsletter
Natural gas has really come back to life. I mentioned on September 2nd that natural gas (UNG) looked like a buy between $9 – $9.50 and it has now rallied 25% since that point. But stepping back and looking at the chart we can see resistance is hovering over head between the $12 – $12.25.

I may send out a setup for a short play if we get one but I feel the heavy sell off in August was the final wave down, flushing out traders. Speculative traders seem to have moved into natural gas and I think they will continue to buy it for some time. Pullbacks will be sharp but most likely followed with more buying as we enter the cooler months of the year.

Natural Gas UNG Trading Newsletter

Natural Gas UNG Trading Newsletter

SPX Index Trading – Active Trading Partners
I thought that I would show a quick picture of the SPX because it shows the psychology of traders and how it repeats it’s self over and over. The black and green waves are virtually the same patterns.

I feel as though the market is ready for a larger pullback than what we had in June/July but my focus will be to buy in the oversold dips and lighten my positions in overbought conditions (scaling in and out of positions) until the trend confirms it has reversed.

SPX SP500 Trading Newsletter

SPX SP500 Trading Newsletter

My Market Trading Newsletter Conclusion:
Gold stocks are pulling back and precious metals continue to move with the overall market action. I do feel that gold and silver will break this relationship and start to move higher in the coming months but until that happens I remain cautious with my positions tightening my stops.

Crude oil is starting to come alive and I am now looking for some low risk setups for energy related funds. Last week’s technical breakdown could provide us with a big move in the coming months.

Natural Gas continues to hold up but is now trading near resistance. Depending how many spec traders there are still lingering around (as most lost their shirts in the recent months), will dictate how much higher natural gas will move. The 25-30% rally in the past month has been very powerful and this could be just the beginning. I am now waiting for another setup that could be a long or a short trade depending on what happens next.

If you would like to get my Bi-Weekly Trading Reports via email please visit my websites at: www.TheGoldAndOilGuy.com for commodities and www.ActiveTradingPartners.com for Stock Trading.

I hope everyone had a great weekend!
Chris Vermeulen

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DIA, UUP, GLD, SLV & XLE Funds Shift Momentum?

Today we had a reversal day for the broad market, us dollar, precious metals and oil. The market is over extended. We have seen the market rally 20% since the July low.

Inter-market analysis is important to understand because everything is related in some way. The next month will be very interesting with the US dollar trying to rally, which will put pressure on precious metals, stocks and commodities.

DIA ETF – Dow Industrial Fund
Stocks look to have formed a similar pattern as the March rally this year. The market has the same feel and price action that we saw during the June high, which is telling me we should move stops up to protect profits. Wednesday the market had an intraday reversal and that is a sign of weakness. The past four trading day’s is the same as the July bottom (multiple Doji Candles). Doji candles indicate a possible reversal.

DIA ETF Trading Newsletter

DIA ETF Trading Newsletter

Broad Market Volatility Index
Here is a weekly volatility chart that shows we are at a long term support level. The saying is, buy when the VIX is high, sell when the VIX is low. Just to be clear, I am not saying sell everything. I am just pointing out that the market is ready for a multi week correction. I am tightening my stops and limiting my position size for new log positions.

VIX Volatility Index Trading

VIX Volatility Index Trading

UUP ETF – US Dollar Intraday Price Action
The dollar sold down Wednesday, then rallied very strong into the close, indicating a shift in momentum. The dollar has been trending down for several months and ready for a bounce.

UUP US Dollar Trading Fund

UUP US Dollar Trading Fund


Precious Metals Under Pressure
Below is a chart of Gold and Silver showing the weakness on Wednesday and the sharp sell off late in the session, when the US dollar started to rally.

Precious Metals Trading Newsletter

Precious Metals Trading Newsletter

XLE Energy ETF – Intraday Chart
Energy sector moved down in the morning and managed to wiggle its way back to positive territory late in the day, but when the US dollar rallied, crude oil and the energy sector sold off sharply.

XLE Energy Trading Newsletter

XLE Energy Trading Newsletter

Inter-Market Analysis Conclusion:
In my opinion things look to be setup for a multi week shift in momentum. It looks like the US Dollar will bounce putting pressure on precious metals, stocks, and commodities like crude oil.

Stocks look ready to correct and a bounce in the dollar will trigger the correction.

Gold is at a major resistance level, and taking a breather at this level would be normal price action. Gold has also been trading in sync with stocks, so this relationship is most likely still in place. If stocks move down, so will gold.

Crude oil is having a tough time moving higher and with Wednesday’s higher than expected oil inventory levels, there will be more down side pressure.

Currently we have several profitable position and we will be tightening our stops and looking for new opportunities in the coming days.

If you would like to receive my Free Weekly Trading Reports for ETF’s or Stock Trading Reports please visit my websites: www.GoldAndOilGuy.com and www.ActiveTradingPartner.com

Chris Vermeulen

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ETF Trading for GLD, SLV, UNG, USO Funds

Commodity ETF trading charts allow us to track and trade the underlying commodities with ease. I have provided a few daily charts to show were current commodity prices and chart pattern are at.

GLD Gold ETF Trading – Daily Chart
As you can see from the chart below GLD had a nice 4 day rally breaking out of a longer term pattern (weekly chart – pennant pattern). This bullish action triggered several different types of traders/investors to buy into the move including us. After taking some short term profits we continue to hold a core position with a stop in place to lock in more profit if we see the GLD ETF move lower from here.

Interest for GLD is decreasing which you can see from the volume divergence on the chart. This is a bearish sign, but we remain long until the price action tells us to get out and wait for a new short term trade.

GLD ETF Trading Newsletter

GLD ETF Trading Newsletter

SLV Silver ETF Trading – Daily Chart
SLV ETF has been trending upwards for about a month and is now trading in the middle of its trend channel. We could see silver trade sideway or down for a couple days as the price consolidates. We continue to hold a core position and wait for a technical breakdown to lock in more profit, or have other possible low risk setups to add more to our position.

SLV ETF Trading Newsletter

SLV ETF Trading Newsletter

UNG ETF Trading – Daily Chart
The UNG etf looks like it may be ready for a pullback and shorting this fund or buying a nat gas bear fund could be a good trade in the coming days. Notice the two price moves lower back in May & July. They were both followed by two bounces before making another leg lower. UNG could easily move up to $12.50 level but a technical breakdown will trigger speculative sellers. Shorting a fund like this which has terrible contango can actually help improve your returns. I will post an update for members if we have a short play on it later this week.

UNg ETF Trading Newsletter

UNg ETF Trading Newsletter

USO ETF Trading – Daily Chart
USO etf trading has been slow in the past couple months because of the sideways price action. With any luck we may get a low risk buy signal before the longer term (weekly Chart – Pennant Pattern) breakout, which will trigger speculative traders to buy oil again. I continue to follow this fund for potential buy signals for my clients.

USO ET Trading Newsletter

USO ET Trading Newsletter

USO, UNG, SLV and GLD ETF Trading Conclusion:
GLD traders should be ready to take profits if we see a continued move lower below our blue trend channel. I am always sure I do not take a loss on a trade once it becomes profitable by 2% or more and this is the key to consistent gains.

SLV ETF traders have been rewarded nicely in the past couple weeks. The price of silver has more room to fall before breaking down or bouncing so wait for one or the other before jumping. Following a trading model allows you to make consistent returns and catch large rallies over time for much larger gains. But you must follow the charts with a technical eye and discipline.

UNG traders had a very nice 25% rally from the perfect waterfall sell off a few weeks back. The price is now getting close to a resistance level so tighten your stops to lock in maximum gains before the price rolls over. I may have a short play for this commodity if we get a proper setup.

USO crude oil traders have been twiddling their thumbs as they wait for a breakdown or new rally higher. This chart pattern looks similar to the GLD breakout we had so oil could put in a much larger percent move than GLD with any luck in the coming months.

In short we continue to hold our positions and ride the market with protective stops in place. Lest see what happens this week.

If you would like to receive my Free Weekly Trading Reports via email please enter your email address on my website: www.GoldAndOilGuy.com or Stock Trading Reports at www.ActiveTradingPartner.com

Chris Vermeulen

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Gold Stocks on a Daily, Weekly & Monthly Buy Signal – Video

Gold is back in the spot light as it flirts with the $1000 per ounce level. This closely watched commodity looks as thought it will rocket higher because of the multiple trading time frames indicating breakouts.

I mainly focus is on trading the daily chart but I always refer back to the longer time frames which are the weekly and monthly charts. Knowing the momentum and trend on these long term trading charts allow me to identify the strength of the rallies and sell offs on the daily chart. I use this analysis for determining how large of a position to take, and where to place profit targets and stop loss levels.

Trading gold stocks does provide explosive opportunities when the price of gold moves. The past couple years I have only been focusing on trading gold to the long side because the overall long term trend is up. Trading with the longer term trend always improves the odds of winning the trade. I will short GLD or GDX funds for an intraday trade using my simple Kitco gold overlay Day Trading Strategy. I have posted this strategy a couple of times on the internet, if you want to read more about it.

Below is my analysis explaining the price action of gold stocks on the daily, weekly and monthly charts. I also a listed the US and Canadian funds which I trade.

HUI Gold Stocks Index – Daily Chart – Short Term
The daily chart of the HUI clearly shows buy and sell signals, which were generated in the past 2 months. Using resistance trend lines for breakout levels is very important. I also use pivot lows to draw and connect my support trend lines, which allow me to calculate down side risk and buy signals. The recent breakout is very strong and that is because the weekly and monthly charts are showing a breakout to the upside triggering longer term traders/investors to buy.

Daily chart buy and sell signals are for short term trades which last between 2-20 trading days. My focus is to lock in 1-5% gains but in a strong trend I can pocket 10-20% return in a short period of time.

Gold Stocks Newsletter

Gold Stocks Newsletter

HUI Gold Stocks Index – Weekly Chart – Intermediate Term
Weekly chart patterns and breakouts provide a much larger move in general so watching this chart is crucial for long term success. Following the weekly chart goes for trading every investment vehicle whether you are trading stocks, futures, FOREX etc…

This chart generated a buy signal in December of 2008, which we took advantage of. And just 2 weeks ago it gave us another buy signal. Again using my simple trading strategy which involves trend lines and the MACD momentum indicator, we are able to establish clear buy and sell signals.

Gold Stocks Trading

Gold Stocks Trading

HUI Gold Stocks Index – Monthly Chart – Long Term
Long term investors will use the monthly chart for timing their buy and sell signals because once the momentum has shifted direction it tends to last for several months if not years. I do not focus on trading these long term signals but I use them to help me know the momentum (power) of the next possible breakout. This also helps me in deciding whether to scale out on rallies with some of my position locking in some profit and buying back on dips, while leaving a core position incase the price continues to rally.

The monthly chart of the HUI shows a breakout this month and if the price can hold until Oct we will have a complete long term buy signal. I use the MACD for momentum and the HUI:GLD ratio to confirm the breakout which puts the odds more in my favor.

Gold Stocks Newsletter

Gold Stocks Newsletter

Precious Metals Funds for Trading Gold and Silver Moves – Daily Chart
Here is a list of the precious metals funds I trade on a regular basis. I trade both US and Canadian funds. Because I am based in Canada I focus on Canadian gold stocks and gold funds when there are intermediate/long term signals which I trade in my retirement account.

The funds I trade are GLD (gold bullion), GDX (gold miner stocks), SLV (Silver Bullion), XGD.TO (Canadian Gold Stocks), CEF/A.TO (Canadian Gold & Silver Bullion). If you look at a comparison chart you will see some funds provide much larger moves than others. In general I like to own a bullion fund and a precious metal stock fund so that I get the best of both worlds.

Gold Trading Investments GLD, SLV, HUI, GDX

Gold Trading Investments GLD, SLV, HUI, GDX

My Gold Stocks Newsletter Trading Conclusion:
In short, Gold and gold stocks are on fire. The next 13 trading days are very important for gold as it battles to breakout above the $1000 – $1033 level which is the 2008 high. With gold trading at this MAJOR resistance level also known as a “Pivot Point”, the risk level is higher for traders. The odds are pointing to higher prices but we must recognize that price action becomes volatile and fast moving. We could see the price breakout and rally to the $1500 level within months which is what are currently positioned for. But we must realize that gold could create a double top and sell off very quickly which is why we have stops in place to protect us.

So those of you who are long be sure to lock in some profit and be ready for some wild price action in the coming weeks.

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Chris Vermeulen