Which Shines More: Gold, Silver or Oil?

By: Chris Vermeulen | Sun, Jan 11, 2009
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Last week gold and silver remained in a trading range moving sideways, while crude oil had a large pullback on very heavy volume. Below are charts which will show where these commodities stand in relation to support and resistance as well as where we may be looking to go long in the near future.

Intermediate Trend of Gold - Weekly Outlook
Gold found support back in October and has since had a nice rally higher. The weekly chart shows this rally/bounce very clearly. Currently gold is trading at a resistance level, which is the downward trend line. Gold hit its head and has now started to move lower. The Stochastic indicator at the bottom of the chart is also indicating we are at a short term top. This is not a good time for longs to be entering or adding new positions of this metal. Waiting for a pullback and reversal would provide a much lower risk trade as well as more profit potential.

Intermediate Trend of Gold - Weekly Gold Trading Chart

Swing Trading Gold Trends - Daily Outlook
Swing trading gold provides excellent opportunities for making consistent gains trade after trade. The daily chart provides lots of high probability trades each year as we buy and sell during cycle's bottoms and tops. This daily chart of gold shows how it swings along with our current entry and exit points. By combining several indicators (Trend Lines, Equities, Bullion Ratio, MACD, and my Stochastic) and my simple to follow trading model, buy and sell signals are very clear to a trained eye.

Gold is currently moving sideways above our support trend line and I am expecting prices to dip lower and possibly generate another buy signal soon. We currently own 50% of our gold position as we booked a nice 15% profit on the first half and waiting to add to our position within the next week or two. There are several criteria, which must be met as we only want to enter gold trades when risk is under 3%.

Swing Trading Gold Trends - Daily Gold Trading Chart

Intermediate Trend of Silver - Weekly Outlook
Silver has been holding up very nicely over the past couple weeks and still looks like it may have a little more room to climb on the weekly chart to around the $12 level. What I am looking for is a pullback towards the support trend line and then we will use the daily silver trading chart to time our entry. Silver is currently floating in between support and resistance right now.

Intermediate Trend of Silver - Weekly Silver Trading Chart

Swing Trading Silver - Daily Outlook
Silver has been forming a nice looking wedge, which generally indicates prices should continue higher over the intermediate term. We would like to see silver continue sideways or pullback toward our support trend line before we putting money to work.

Swing Trading Silver - Daily Silver Trading Chart

Intermediate Trend of Crude Oil - Weekly Outlook
Crude oil over the past couple of weeks has become more volatile indicating a shift in momentum could be just around the corner, "Pardon the pun". We almost had a trend line break last week but prices sold into the close on Friday. Crude oil volume has shot through the roof over the past 6 weeks, which is important to note, as this looks like capitulation volume and buyers are trying to push sellers higher. The MACD is starting to look like it may cross soon, which indicates momentum is shifting towards the upside as well.

Intermediate Trend of Crude Oil - Weekly Crude Oil Trading Chart

Swing Trading Crude Oil - Daily Outlook
Swing trading oil provides huge opportunities and after such a long hard selloff it stands to have a big bounce or rally. Oil has broken it's down trend line and has since pulled back to the trend line, as it will now provide support. If prices can reverse in a controlled manor then we just may get a low risk entry point any day now. The MACD is showing bullish momentum and in a couple days the Stochastic should be near the bottom of its range. Waiting for a reversal candle is important before we put our money to work because technically oil is still is a very strong down trend.

Swing Trading Crude Oil - Daily Oil Trading Chart

Swing Trading Gold, Silver and Oil Conclusion:

Gold is currently trading at resistance and showing signs of short term weakness. We continue to hold our core position until we have a break of our support trend line. But if we get a reversal candle we will be looking to add to our position for another leg higher.

Silver looks to be holding up nicely but it's currently floating between support and resistance. Risk is much too high at this level and therefore we will wait.

Crude Oil looks like it could really pop, as it has been under heavy sell pressure for a long time. Not only that but because oil is in the new, and individuals around the world are now following it, it stands a chance for a really big bounce/ rally soon. The daily oil trading chart is telling us we could have a buy signal any day now if risk is under 3%.

If you would like to receive my free weekly Special Trading Reports please visit my website: www.TheGoldAndOilGuy.com.

 


 

Chris Vermeulen

Author: Chris Vermeulen

Chris Vermeulen
President of AlgoTrades Systems
www.TheGoldAndOilGuy.com

10126 Hwy 126 East, RR#2
Collingwood, ON, L9Y 3Z1

Chris Vermeulen

Chris Vermeulen, founder of AlgoTrades Systems., is an internationally recognized market technical analyst and trader. Involved in the markets since 1997.

Chris' mission is to help his clients boost their investment performance while reducing market exposure and portfolio volatility.

Chris is also the founder of TheGoldAndOilGuy.com, a financial education and investment newsletter service. Chris is responsible for market research and trade alerts for of its newsletter publication.

Through years of research, trading and helping thousands of individual investors around the world. He designed an automated algorithmic trading system for the S&P 500 index which solves his client's biggest problem related to investing in the stock market: the ability to profit in both a rising and falling market.

AlgoTrades' automated trading systems allows individuals to investing using either exchange traded funds or the ES mini futures contracts. It is supported by many leading brokerage firms including:

- Interactive Brokers
- Trade MONSTER
- MB Trading
- OEC OpenECry
- The Fox Group
- Dorman Trading
- Vision Financial

He is the author of the popular book "Technical Trading Mastery - 7 Steps To Win With Logic." He has also been featured on the cover of AmalgaTrader Magazine, Futures Magazine, Gold-Eagle, Safe Haven,The Street, Kitco, Financial Sense, Dick Davis Investment Digest and dozens of other financial websites. His list of personal and professional relationships approaches 25,000, people with whom he connects and shares is market insight with out of his passion for trading.

Chris is a graduate of Seneca College where he specialized in business operations management.

Chris enjoys boating, kiteboarding, mountain biking, fishing and has his ultralight pilots license. He resides in the Toronto area with his wife Kristen and two children.

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