Reaching Extreme Levels for Bonds, Gold, Silver, SP500, and Oil

By: Chris Vermeulen | Mon, Jun 4, 2012
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Pre-Market Analysis Points:



Those of you short the SP500 with me should tighten your stops in case there is a sharp rebound in the market. The position is up over 9.5% in less than 5 days and I want to lock in a good chunk of that with a stop at this morning's high in the market or your low for your inverse fund depending on what you are trading

After Friday's weakness in stocks and commodities we continue to see that fear and selling pressure carry over into this week. European markets are trading lower by 1 - 2% and I fell the US market will naturally want to follow them down. Currently the US market is only down 0.5% so it is possible we see another 1 - 1.5% drop within the next 24 hours.

JP Morgan and Facebook continue to make new lows and that is putting some drag on the market. I think the biggest drag at the moment are the transportation stocks with that sector down over 2.2% today because of the weakening economic outlook from last week's terrible data out of the United States.

The selling taking place does look and feel as though there is power behind as investors around the globe are slowly moving to cash and hedge funds will be forced to liquidate positions to pay back their clients. Both of these things have a grinding effect and may last for a week or longer with any bounce getting sold into.

Gold and silver are starting to pullback a little and I will keep an eye on the price and volume in case it gives us a signal as to what is next.

Below is a chart of what I feel may take place at any time now so you are mentally prepared.

SPY Chart


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Chris Vermeulen

Author: Chris Vermeulen

Chris Vermeulen
President of AlgoTrades Systems

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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, 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.

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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.

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