Traders Report on Gold, Silver and Oil

By: Chris Vermeulen | Wed, Feb 25, 2009
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The past few days have been stressful, as I watched gold slowly work its way higher without a decent correction to take another position. Both gold and silver have been on a tear moving higher not allowing the more conservative trader like my self with a low risk setup and entry point. I am not a fan of chasing prices higher, as it generally leads to a quick loss when prices snap back and correct from an over bought state. This is what both gold and silver did today and I expect to see lower prices over the next week or so, depending on how fast they correct. Last Friday I mentioned the open interest on gold went down sharply, which told me that smart money was moving out of gold and that is always a RED FLAG. Let's take a look at the charts below because that's what trading is all about Price Action.

HUI Gold Bugs Chart - Monthly Long Term Trading

The monthly chart of the gold equities index shows a simple and clear picture.

Gold Equities from an Active Traders Point of View - HUI Daily Chart

Gold stocks had a very clean break down today from an ascending bull wedge. This is a great trade for highly speculative traders who want to catch quick short trades. Today's big move warrants an update tomorrow for gold stocks, which could provide a better entry point before prices continue to come in (decline in price). The reason I say this is highly speculative trade is because gold and gold stocks have been very strong and prices may just continue sideways as they coil up for another move higher. Always have protective stops in place.

Active Traders View on Trading the GLD Gold Fund - Daily Chart

Gold has been over bought since it reached $90 several weeks ago, at which point I was expecting a pullback to provide an entry point but then more bad news hit the wire sending another surge of gold buyers into the market pushing it higher with out correcting.

SLV Silver Weekly Chart - Trading Chart

The weekly chart shows as speculative trade, for shorting silver, which could correct back to the $11.50 - $12 range in the next couple weeks.

SLV Silver's Active Trader Point of View - Daily Chart

Silver has really performed well this year forming a mini parabolic spike, which generally leads to a sharp bank breaking correction, which silver is known for.

Crude Oil Long Term Trading Chart - Weekly USO Chart

Oil continues to be contained within the down trend line. With the poor economic outlook, demand for oil will be much lower thus the downward pressure continues.

Crude Oil Active Traders Point of View - Daily USO Chart

Daily crude oil trading fund could go either way here and if we are lucky it will generate a buy or sell signal soon. Waiting is painful but there must be clean entry and exit points with a trend before putting hard money to work.

Gold, Silver & Oil Trading Conclusion:

Gold and silver are looking toppy and ready for a correction. The charts above show where things should be headed over the next few weeks. I am bullish on gold long term but I don't think it's going to be as good as many are expecting. I have been watching the price action closely and if we do get a bottom soon in the markets, I think we are going to see money coming out of gold and silver and into the broad market, where there are huge opportunities floating around. Oil I think will have some great opportunities soon. I think it is starting to get exhausted, as most oil traders have lost their shirts and are tired of trying to pick a bottom. With any luck, we will see oil turn up in March. We continue to wait for low risk setups and enter when the water is clear.

If you would like to receive my 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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austrian-money-supply/