Archive

Posts Tagged ‘spy’

Hidden Government Program: “Office Of Population Affairs”

August 6th, 2014

Population-Control-Public-Domain-300x300Michael Snyder: Did you know that the federal government has an “Office of Population Affairs”?  I didn’t realize this either until someone sent me a link to their website.  The Office of Population Affairs operates under the umbrella of the Department of Health & Human Services, Read more…

Defense, Government, Healthcare, Politics, World News

The Government Trolls The Internet?

July 17th, 2014

Troll-Warning-Photo-by-Gil-300x300Michael Snyder: We have all run into them.  All over the Internet, there are horrible trolls that seem to delight in making life miserable for other people.  But the worst trolls of all are the government trolls. Read more…

Defense, Europe, Government, Technology

4 Financial Resolutions for 2013

January 2nd, 2013

This is the time of year for making New Year’s resolutions. And I have four that are guaranteed to make your portfolio bigger, fatter and wider a year from Read more…

Uncategorized

Why This Earnings Season Could Be A Game Changer (C, KO, IBM, INDEXSP:.INX, SPY)

October 18th, 2012

Mike Burnick: Earnings season always adds an extra dose of volatility to the markets. But as third-quarter profit reports begin coming in fast and furious this week there is a lot more riding on results than usual. Read more…

Earnings, ETF, Markets

European Default Inevitable — Sell Your Gold?

October 7th, 2011

In the prequel to this article (European Default Inevitable — Sell Your Gold?), I discussed the fact that safe-haven-seeking investors could be in for a surprise when they run to buy gold after a Greek default and find huge sellers in Read more…

ETF, Mutual Fund, Uncategorized

The Stocks & Commodity Technical trading Outlook Part I

June 13th, 2011

The coming summer should be exciting for traders! While summer trading generally tends to be slow, this one could be different. A large number of other professional traders I talk with are all feeling the tension building in the market. We all think some big movements are just around the corner and the big question is which way are things going to move?

Depending on your trading style you may be viewing the recent market action as the beginning stages of a bear market (major sell off). A bear market is not necessarily impossible as the U.S. Economy is showing the beginning signs of weakness. The fact that stocks have moved lower for almost 6 weeks straight is a recent reminder that we may not be out of the woods just yet. The recent price action and negative sentiment has been harsh enough to make 99% of traders bearish.

In contrast, some traders may be seeing this market as an oversold dip preparing for a bounce/rally in the bull market which we have been in since 2009. Some traders may see this as a buying opportunity because you are a contrarian. Most contrarians generally want to do the opposite of the masses (herd) who are merely trading purely out of emotional sentiment.

I myself have mixed thoughts on the market at this point in time. I’m not a big picture (long trend forecasting) kind of guy but my trading partner David Banister is great at it. Rather I am a shorter term trader catching extreme sentiment shifts in the market with trades lasting 3-60 days in length. So looking forward 2-5 days I feel as though stocks and commodities are going to bottom and start to head higher for a 2-6% bounce. At that point we need to regroup and analyze how the market got there… Was the buying coming from the herd, institutions, or was it just a short covering rally? Additionally, where are the key resistance levels and did we break through any?

During extreme sentiment shifts in the market we tend to see investments fall out of sync with each other for a few days. I feel the attention will be on stocks and we get a bounce this week. I am expecting commodities to trade relatively flat during the same time period.

OK let’s take a quick look at the charts…

Dollar Index 4 Hour Candles
I feel as though the US Dollar is trying to bottom. It is very possible that we test the May low at which point I would expect another strong bounce and possible multi-month rally. So if the dollar drops to the May lows then we should see higher stocks and commodities, but once the dollar firms up and heads higher it will be game over for risk assets.

Crude Oil Chart – Daily
Oil took a swan dive in early May and has yet to show any signs of moving higher. Actually crude oil is looking more and more bearish as time goes by.

Silver 4 Hour Chart
Silver has formed much of the same pattern that oil has. On a technical basis its pointing to sharply lower prices still. The fact that silver bullion went from an investment to a speculative trading instrument within the past 8 months makes me think it could test the $25 area. The one thing to remember here is that silver is still overall in a bull market. This is a 50/50 guess in my opinion as it nears the apex of this pennant pattern.

Gold 4 Hour Chart
Gold has held up much better than other metals and commodities and I feel that is because it’s still seen at the REAL safe haven. But reviewing the chart Im starting to see bearish price action beginning to take place.

SP500 Futures – 10 Minute Chart Going Back 8 Days
Last week the SP500 continued to show signs of weakness. Any bounce in the market was on light volume and that is because the sellers took a break and let all the small traders buy the market back up. But once the market moved up enough then sellers jumped back in and unloaded their shares.
Last Thursday I sent out an update to members pointing out that lower prices were to be expected. I came to this conclusion because of many data points. Looking at the chart you can see sellers are clearly in control. The SP500 bounces high enough that it reached a key resistance levels going back 5 days. Also the 200 period moving average was at that level. To top that off my sentiment reading for the herd mentality was at a point which sellers like to start dumping their shares again.

Weekly Market Trading Conclusion:
In short, I am getting more bullish for a bounce as the market falls. But once we are into day 3 or 4 of a bounce we must be ready to take profits and/or look for a possible short setup.

Get my free weekly reports here: http://www.thegoldandoilguy.com/trade-money-emotions.php

Chris Vermeulen

Read more here:
The Stocks & Commodity Technical trading Outlook Part I




Chris Vermeulen is a full time daytrader and swing trader specializing in trading (NYSE:GLD), (NYSE:GDX), XGD.TO, (NYSE:SLV) and (NYSE:USO). I provide my trading charts, market insight and trading signals to members of my newsletter service. If you have any questions feel free to send me an email: Chris@TheGoldAndOilGuy.com This article is intended solely for information purposes. The opinions are those of the author only. Please conduct further research and consult your financial advisor before making any investment/trading decision. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Commodities, ETF

3 Ways to Protect Yourself from a Stock Market Sell-Off

June 7th, 2011

3 Ways to Protect Yourself from a Stock Market Sell-Off

The S&P 500 Index has been up nearly 92% since March 6, 2009. This impressive run has many market participants cheering for the rally to continue indefinitely. But as exciting as it may be to reference that 92% return, it is not very important, except for investors who bought into the market on March 6, 2009. Most investors were invested in the market before that day and many had ridden the entire wave down from the October 2007 highs. To date, these investors have recovered a significant portion of their losses, but are still far from whole.

Optimism regarding the global economic recovery has waned recently, as statistics in a variety of areas have worsened, helping to push stock markets lower. Unemployment has increased to 9.1%. Housing data is consistently bad, as the inventory of unsold homes and pending foreclosures fails to diminish. Home prices in some parts of the country are back to levels last seen in the year 2000, causing many Americans to feel less wealthy overall.

The Federal Reserve has stated it will let “QE2,” the practice of buying U.S. Treasury bonds to add liquidity to the money supply and credit markets, end in June and has no plans for QE3. QE1 and QE2 have been critically important in helping the economy recover. Meanwhile China's economy, one of the key drivers in the global economic recovery and the second largest economy in the world, has been slowing down. We are quite dependant on China, not just as a trading partner, but also as a lender, through their purchases of U.S. Treasury bonds. Simply put, China's money has helped fuel our recovery.

We can hold on to optimism, but the pragmatic view is that we may have already seen the peak in this economic recovery and in the stock market. The S&P 500 topped most recently on April 29, 2010 with a high close of 1,363.61 and has pulled back 3.7% since then to the June 6, 2011 close of 1,286.17. This brings the index back to levels first attained in January and February, conceding much of the year-to-date gains.

Without a catalyst to improve the economy and send markets higher, it is prudent for investors to position for a correction, and a potentially sustained one at that. Market participants are not gun-shy these days, so additional poor economic data could send more money to the sidelines to sit out a sell-off and wait for measurable improvements in the economy.

Does this mean you should sell your stock market holdings? Maybe, but not necessarily… What this does mean is you need to protect your gains and preserve capital in case a more protracted retracement does occur.

Consider these three exchange-traded funds (ETFs):

ETF, Uncategorized

Market Sentiment and Volume Reach Extreme Panic Levels

June 2nd, 2011

It was a crazy session as the stock market slid over 2% on heavy volume. This type of price action means fear has taken control of masses and they are unloading (selling their stocks) in anticipation of much lower prices.
Trading off extreme levels of fear can be very rewarding if done right. That’s because fear is the most powerful reaction we as humans have and it’s somewhat predictable. Fear can make people do crazy and or stupid things and it’s these extreme reaction which investors do in the market that lead to great trading opportunities. Buying into fear and selling into greed is what I focus on.

Gold and Silver Showing Greed and Fear
For example, if we take a look at the 4 hour chart of gold and silver you will see how investments which have a large amount of speculation like Silver move the opposite to what other related investments like gold are doing.

The first chart which is gold, shows how today’s fear had investors moving into this shiny safe haven. Silver on the other hand has been the investment of choice for every Tom, Dick and Harry trying to play the popular headline investment. So on a day like today when prices start to slide in the stock market these speculative holders of silver get scared and dump (sell) their position in stocks and silver. The problem with silver is that the market is still small and its does not take many people hitting the sell button to send it 5% lower which is what took place today. This is one sign which is telling me traders are getting scared of a market selloff.

Evidence #2 Showing Signs Of Fear
These data points below clearly show sellers were in control today. I like to look at the NYSE because it holds all the big brand name stocks which the masses like to buy when they feel lucky. So when I see this many traders selling and so few buying I know the masses are dumping shares and going to a cash.

The NASDAQ had 10 shares being sold to every one share being bought which is half the fear level of what the NYSE and that makes good sense. The NASDAQ has many smaller companies which the masses just don’t know about or own so there was not as much selling taking place on that exchange. So brand name stocks getting dumped all at once is another sign of extreme fear hitting the market.

Evidence #3 Showing Signs Of Fear
This chart below provides the momentum of the market. I think of it as the rubber band effect. If the market selling momentum is strong enough then it pulls this indicator down to a level which it cannot go much further before it gives way and moves back a neutral or positive extreme level. This little hidden gem of an indicator can help time entry and exit points with ease once you understand it. Currently its telling us that a pause or bounce is likely to happen tomorrow.

Evidence #4 Showing Signs of Fear and an Oversold Market Condition
Take a look at the 10 minute SPY (SP500) chart below. Simple visual analysis shows that today’s strong selling which has brought the market down into a support zone should provide a pause or a bounce very soon. The question is how big will the bounce or rally be?

Given all the confirming is looking ready for a bounce and I feel we could be nearing not a bounce but an intermediate bottom and higher prices going forward. But if we break strongly below this support level then all bets are off and much lower prices should occur.

Mid-Week Trading Conclusion:
In short, today’s sharp move lower has put the market in a short term oversold condition. Meaning, a bounce is very likely to take place within the next 1-3 sessions. With the masses selling all their positions in stocks and commodities it generally takes 1-3 days after a day like this for the selling pressure to dissipate and for value buyers to step back into the market providing support.

I think both stocks and commodities will strengthen in the next few days and we will see if the market can get some traction and start a new rally. But until everyone has sold out of the market giving their shares to the big money (smart money) at a sharp discount I feel we have a rough road ahead.

Get these trading reports free each week here: http://www.thegoldandoilguy.com/trade-money-emotions.php

Chris Vermeulen

Read more here:
Market Sentiment and Volume Reach Extreme Panic Levels




Chris Vermeulen is a full time daytrader and swing trader specializing in trading (NYSE:GLD), (NYSE:GDX), XGD.TO, (NYSE:SLV) and (NYSE:USO). I provide my trading charts, market insight and trading signals to members of my newsletter service. If you have any questions feel free to send me an email: Chris@TheGoldAndOilGuy.com This article is intended solely for information purposes. The opinions are those of the author only. Please conduct further research and consult your financial advisor before making any investment/trading decision. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Commodities, ETF

Market Sentiment and Volume Reach Extreme Panic Levels

June 2nd, 2011

It was a crazy session as the stock market slid over 2% on heavy volume. This type of price action means fear has taken control of masses and they are unloading (selling their stocks) in anticipation of much lower prices.
Trading off extreme levels of fear can be very rewarding if done right. That’s because fear is the most powerful reaction we as humans have and it’s somewhat predictable. Fear can make people do crazy and or stupid things and it’s these extreme reaction which investors do in the market that lead to great trading opportunities. Buying into fear and selling into greed is what I focus on.

Gold and Silver Showing Greed and Fear
For example, if we take a look at the 4 hour chart of gold and silver you will see how investments which have a large amount of speculation like Silver move the opposite to what other related investments like gold are doing.

The first chart which is gold, shows how today’s fear had investors moving into this shiny safe haven. Silver on the other hand has been the investment of choice for every Tom, Dick and Harry trying to play the popular headline investment. So on a day like today when prices start to slide in the stock market these speculative holders of silver get scared and dump (sell) their position in stocks and silver. The problem with silver is that the market is still small and its does not take many people hitting the sell button to send it 5% lower which is what took place today. This is one sign which is telling me traders are getting scared of a market selloff.

Evidence #2 Showing Signs Of Fear
These data points below clearly show sellers were in control today. I like to look at the NYSE because it holds all the big brand name stocks which the masses like to buy when they feel lucky. So when I see this many traders selling and so few buying I know the masses are dumping shares and going to a cash.

The NASDAQ had 10 shares being sold to every one share being bought which is half the fear level of what the NYSE and that makes good sense. The NASDAQ has many smaller companies which the masses just don’t know about or own so there was not as much selling taking place on that exchange. So brand name stocks getting dumped all at once is another sign of extreme fear hitting the market.

Evidence #3 Showing Signs Of Fear
This chart below provides the momentum of the market. I think of it as the rubber band effect. If the market selling momentum is strong enough then it pulls this indicator down to a level which it cannot go much further before it gives way and moves back a neutral or positive extreme level. This little hidden gem of an indicator can help time entry and exit points with ease once you understand it. Currently its telling us that a pause or bounce is likely to happen tomorrow.

Evidence #4 Showing Signs of Fear and an Oversold Market Condition
Take a look at the 10 minute SPY (SP500) chart below. Simple visual analysis shows that today’s strong selling which has brought the market down into a support zone should provide a pause or a bounce very soon. The question is how big will the bounce or rally be?

Given all the confirming is looking ready for a bounce and I feel we could be nearing not a bounce but an intermediate bottom and higher prices going forward. But if we break strongly below this support level then all bets are off and much lower prices should occur.

Mid-Week Trading Conclusion:
In short, today’s sharp move lower has put the market in a short term oversold condition. Meaning, a bounce is very likely to take place within the next 1-3 sessions. With the masses selling all their positions in stocks and commodities it generally takes 1-3 days after a day like this for the selling pressure to dissipate and for value buyers to step back into the market providing support.

I think both stocks and commodities will strengthen in the next few days and we will see if the market can get some traction and start a new rally. But until everyone has sold out of the market giving their shares to the big money (smart money) at a sharp discount I feel we have a rough road ahead.

Get these trading reports free each week here: http://www.thegoldandoilguy.com/trade-money-emotions.php

Chris Vermeulen

Read more here:
Market Sentiment and Volume Reach Extreme Panic Levels




Chris Vermeulen is a full time daytrader and swing trader specializing in trading (NYSE:GLD), (NYSE:GDX), XGD.TO, (NYSE:SLV) and (NYSE:USO). I provide my trading charts, market insight and trading signals to members of my newsletter service. If you have any questions feel free to send me an email: Chris@TheGoldAndOilGuy.com This article is intended solely for information purposes. The opinions are those of the author only. Please conduct further research and consult your financial advisor before making any investment/trading decision. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Commodities, ETF

Stepping Inside the Recent Intraday Bullish Volume Flow into Stocks

May 26th, 2011

If you’re an intraday trader of stock market index futures or ETFs, you probably noticed visible surges of buy/bullish volume into these funds today and Wednesday.

Let’s zoom-in on this bullish volume action and put it in context of the critical higher timeframe support level at 1,300 in the S&P 500.

First, the SPY ETF Intraday:

The chart above is the 4-min (to show more bars than the typical 5-min) view of the intraday SPY (S&P 500 ETF) from Wednesday the 25th to Thursday May 26th.

I’ve highlighted periods of unusual surges in bullish/buy volume which has corresponded in all cases with sharp impulse rallies in the fund price.

This picture is similar in the other index ETFs – DIA (Dow Jones), QQQ (NASDAQ) and IWM (Russell 2000) – but is more evident in the SPY chart.

What the bullish volume action suggests is that large-scale funds are either scaling into positions or are removing hedges, or bears are taking profits/scaling out as the market pushes into the critical support level near 1,300 (in the S&P 500).

As long as this bullish activity continues, it suggests stock prices will rally higher off this inflection pivot.

Why might 1,300 be a very important “Make or Break” level for the market?

Let’s take a look at the basic Weekly Chart of the S&P 500:

The rising 20 week EMA rests currently at 1,309.65 – two insignificant points under the recent weekly low at 1,311.

When you combine the bullish surge in volume this week with the major inflection point of the 20w EMA – combined with the psychological “Round Number” at 1,300 – we have odds shifting back to the bullish camp in the evolving market structure.

Of course, a firm breakdown under 1,300 will send many of these buyers scrambling for the “sell/exit” button, but that hasn’t happened yet.

Instead, we’re seeing buyers put risk back on the table, as evidenced by the buy-volume inflows intraday as price tests this dual-confluence, critical inflection point in the index.

Based on these two simple facts, the market is back in the domain of the bulls unless proven otherwise with a breakdown under 1,300.

In other words, it’s once again the bulls’ game to lose.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

Corey’s new book The Complete Trading Course (Wiley Finance) is now available!

Read more here:
Stepping Inside the Recent Intraday Bullish Volume Flow into Stocks

ETF, Uncategorized

Stepping Inside the Recent Intraday Bullish Volume Flow into Stocks

May 26th, 2011

If you’re an intraday trader of stock market index futures or ETFs, you probably noticed visible surges of buy/bullish volume into these funds today and Wednesday.

Let’s zoom-in on this bullish volume action and put it in context of the critical higher timeframe support level at 1,300 in the S&P 500.

First, the SPY ETF Intraday:

The chart above is the 4-min (to show more bars than the typical 5-min) view of the intraday SPY (S&P 500 ETF) from Wednesday the 25th to Thursday May 26th.

I’ve highlighted periods of unusual surges in bullish/buy volume which has corresponded in all cases with sharp impulse rallies in the fund price.

This picture is similar in the other index ETFs – DIA (Dow Jones), QQQ (NASDAQ) and IWM (Russell 2000) – but is more evident in the SPY chart.

What the bullish volume action suggests is that large-scale funds are either scaling into positions or are removing hedges, or bears are taking profits/scaling out as the market pushes into the critical support level near 1,300 (in the S&P 500).

As long as this bullish activity continues, it suggests stock prices will rally higher off this inflection pivot.

Why might 1,300 be a very important “Make or Break” level for the market?

Let’s take a look at the basic Weekly Chart of the S&P 500:

The rising 20 week EMA rests currently at 1,309.65 – two insignificant points under the recent weekly low at 1,311.

When you combine the bullish surge in volume this week with the major inflection point of the 20w EMA – combined with the psychological “Round Number” at 1,300 – we have odds shifting back to the bullish camp in the evolving market structure.

Of course, a firm breakdown under 1,300 will send many of these buyers scrambling for the “sell/exit” button, but that hasn’t happened yet.

Instead, we’re seeing buyers put risk back on the table, as evidenced by the buy-volume inflows intraday as price tests this dual-confluence, critical inflection point in the index.

Based on these two simple facts, the market is back in the domain of the bulls unless proven otherwise with a breakdown under 1,300.

In other words, it’s once again the bulls’ game to lose.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

Corey’s new book The Complete Trading Course (Wiley Finance) is now available!

Read more here:
Stepping Inside the Recent Intraday Bullish Volume Flow into Stocks

ETF, Uncategorized

Market Sentiment Reaching Extreme Levels for Gold & SP500

May 12th, 2011

This week we are seeing fear across the board from traders and investors as they dump their long positions is stocks and commodities. Just in the past two trading sessions alone we have seen extreme overbought conditions and extreme oversold conditions which generally mean another big move is brewing…

Fear (panic selling) has very distinct characteristics when looking at the intraday charts and we are seeing those price and volume patterns forming now. When waves of buying and panic selling start to take place back to back, I start to prepare for a trading setup which should form within a couple of trading sessions.

Keep in mind that fear is a much more powerful force in the market and once extreme levels are reached, we typically tend to see continued selling for 1-3 more days afterwards. This is the reason I tend to scale into oversold market conditions as I can potentially enter at lower prices within the next couple of sessions to build a position with a reduced cost basis.

SPY 10 Minute Chart of My Market Sentiment Readings
Panic selling, coupled with oversold NYSE market conditions and fearful options traders makes for an extreme reading in stock prices.

GLD 10 Minute Chart of My Market Sentiment Readings
Sentiment readings many times carry over into the precious metals sector and can be used as a gauge also for tightening stops, adding to long positions etc..

Mid-Week Market Trading Update:
In short, I feel the market is at a major tipping point along with the US Dollar. It is just a matter of time before we get another low risk setup and take a position for the next move in either direction.

Get My Weekly Reports Free Here: http://www.thegoldandoilguy.com/trade-money-emotions.php

Chris Vermeulen

Read more here:
Market Sentiment Reaching Extreme Levels for Gold & SP500




Chris Vermeulen is a full time daytrader and swing trader specializing in trading (NYSE:GLD), (NYSE:GDX), XGD.TO, (NYSE:SLV) and (NYSE:USO). I provide my trading charts, market insight and trading signals to members of my newsletter service. If you have any questions feel free to send me an email: Chris@TheGoldAndOilGuy.com This article is intended solely for information purposes. The opinions are those of the author only. Please conduct further research and consult your financial advisor before making any investment/trading decision. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Commodities, OPTIONS

How to Use the Weiss Sovereign Debt Ratings to Protect Your Wealth and Profit

May 11th, 2011

A country’s overall financial health impacts a lot more than its government bonds. It can also help determine the flow of money into that nation’s stocks and currency. So you can use the Weiss Sovereign Debt Ratings to help guide your investment decisions. Just register — ratings are free!

China is a prime example. Some readers have questioned why we give it an A rating despite its politics. But the fact is, politics have not interfered with China’s success for over two decades, and until it does, we see no reason to downgrade it.

Also look at the difference between Sweden (B+) and the U.S. (C). Sweden grew at a 7.3 percent year-over-year rate in the fourth quarter, the fastest since at least 1970. The U.S., on the other hand, has been growing much more slowly — 2.3 percent in the most recent quarter. Meanwhile, Sweden’s central bank hasn’t taken the rise in inflation lying down the way the U.S. Fed has. Instead, it has raised interest rates six times since last July.

Result? The Swedish krona jumped 36 percent in value over the past 12 months while the U.S. Dollar Index tanked 18 percent. That’s a huge divergence — and you didn’t even need a highly leveraged currency trading account to profit from it.

You could have simply bought the CurrencyShares Swedish Krona Trust (FXS) and the PowerShares DB US Dollar Index Bearish Fund (UDN). Total combined profit, including slight variance on the ETFs versus the underlying currencies? 56 percent in a year!

What if you wanted to buy stocks instead of currencies, using the Weiss sovereign ratings as a guide? That can work too! Malaysia is rated A-, for instance. If you had bought the iShares MSCI Malaysia Index Fund (EWM) roughly a year ago, you’d have a profit of 27 percent. That beats the pants off the 12.5 percent return of the SPDR S&P 500 Trust (SPY).

So does the 27 percent return of the iShares MSCI Switzerland Index Fund (EWL) and the 53 percent return of the iShares MSCI Thailand Investment Market Index Fund (THD). (Switzerland is rated A-, while Thailand merits an A.)

Naturally, the Weiss Sovereign Debt Ratings are not a sure-fire guarantee of success. Other factors can affect the value of global currencies, bonds, and stocks. But as these examples demonstrate, they are a valuable addition to your toolbox — and mine!

You can also check out my Safe Money Report to get more information. 

Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike

Commodities, ETF, Mutual Fund, OPTIONS, Uncategorized

Where will Silver, Oil and the SP500 Bottom?

May 9th, 2011

The price action in precious metals and oil this past week has been breathtaking. The last time we have seen this much volatility in commodity prices was amidst the financial crisis in 2008 and the early part of 2009. Does this mean we are at the brink and risk assets are going to decline precipitously? Obviously that question cannot be answered with any certainty, but the underlying price action in the S&P 500 has been relatively strong compared to gold, silver, and oil.

Talking heads everywhere are predicting the commodity bubble has burst and pointing fingers at excessive speculation in silver and oil. Margin requirement changes in silver futures have been fingered as the primary catalyst for the nasty sell off. Silver had gotten way ahead of itself in terms of price and parabolic moves higher are usually followed by parabolic moves lower. For silver buyers on Friday, April 29 a painful lesson has been learned as their investment has declined more than 30% in 5 days.

It doesn’t take a genius to realize that we are going to bounce higher at some point. With a sell off of this magnitude it would not be shocking to see at least a 50% retracement of the entire move in coming weeks. It is also possible that this is a buying opportunity for precious metals and oil. It is too early to be certain, but a bounce next week is likely as silver went from being severely overbought to severely oversold on the daily chart in one week. The chart below illustrates the 50% retracement and the RSI reading for silver futures:

In the month of April OptionsTradingSignals members were able to capitalize on rising silver prices to close a trade that produced an 18% return in less than 5 days using a double calendar spread in order to produce outsized profits based on maximum risk. Members regularly receive trade alerts focusing on gold and silver using ETF’s GLD & SLV which have extremely liquid options.

While silver prices have been absolutely crushed, gold prices have held up a bit better. In fact, in this selloff gold has been less volatile in terms of intraday percentage price movement and has not suffered from near the losses that we have witnessed in silver. The gold futures chart below illustrates key price levels:

Members of the OTS service received a trade alert on April 6th for a calendar spread that was converted to a vertical spread. When the vertical spread was closed on April 26th the members realized a gain close to 56% based on the maximum risk of the trade.

Recently we have received some poor economic data which has put a drag on equities the past few weeks. This morning we are seeing a strong bounce in the S&P 500 futures and if we have another light volume Friday prices tend to drift higher throughout the trading day. The S&P 500 futures spiked to around 1,370 on the news of Osama Bin Laden’s death and then sold off from that point. The chart below illustrates the S&P 500 futures rally and subsequent sell off highlighting current key price levels:

Members of OptionsTradingSignals received a trade alert on April 12th to put on a call vertical spread to capitalize on rising prices. On April 21st partial profits were taken and eventually stop orders closed out the position on May 4th locking in a total gain of around 32% for the trade based on maximum risk.

Oil prices have sold off sharply, albeit not as sharp as the downside move in silver recently from a percentage standpoint, but a significant amount of the risk premium has come out of oil prices. I continue to believe that oil prices over the long term have only one direction to go based on tightening supply / demand going forward and lower production levels in the future. Similar to silver, a .500 retracement of the entire recent move is rather likely in coming weeks. The daily chart below illustrates key price levels in oil futures:

I continue to believe that oil prices are going to work higher over the longer term for a variety of reasons, but a drop in gasoline prices would not hurt U.S. Consumers and the domestic economy. Higher oil and gasoline prices weigh on the U.S. Economy heavily so this sudden decline in price is beneficial to most Americans which could juice consumption if prices stay lower for a longer period of time.

Overall, price action in the commodity space has been extremely volatile the past week with silver and oil really getting hammered lower. Gold and the S&P 500 held up a bit better and it would not be shocking to see the S&P 500 put on a rally from here if oil prices stabilize. However, if the U.S. Dollar continues its recent rally it will force the commodity space as well as equities lower. The daily chart of the U.S. Dollar Index futures is shown below:

In closing, I am expecting a bounce in coming days and a .382 or .500 retracement of the entire move in gold, silver, and oil would make sense so I would not be too aggressive shorting. However, I would not necessarily be an aggressive buyer either. It is going to take time for market participants to digest the recent moves. In weeks ahead it will be more apparent what price action is likely to do and I would be shocked if we did not see a few low risk, high probability trades setting up.

Speaking of low risk, high probability trades, the month of April was the best performance for the OptionsTradingSignals service so far year to date. Seven total trades were opened and six trades have been closed with sizable profits. Recent returns included an 18% return in SLV, a 56% return on a GLD trade, 32% return on an SPY call vertical spread, a 12% return on a RUT Calendar spread, and a 37% return on an AMZN calendar spread. The total cumulative return in April was 155%.

Assuming a trader had a $10,000 account and risked a maximum of $1,000 per trade, the gross gains would have been well over $1,400 in April alone. The overall service is up over 15% year to date handily beating the S&P 500 return while assuming less risk. Take advantage of the special offer going on now where new members get 3 months for the price of one!

Get JW Jones’ Weekly Reports Free Here: http://www.optionstradingsignals.com/profitable-options-solutions.php

By: JW Jones
Co-Author: Chris Vermeulen

Read more here:
Where will Silver, Oil and the SP500 Bottom?




Chris Vermeulen is a full time daytrader and swing trader specializing in trading (NYSE:GLD), (NYSE:GDX), XGD.TO, (NYSE:SLV) and (NYSE:USO). I provide my trading charts, market insight and trading signals to members of my newsletter service. If you have any questions feel free to send me an email: Chris@TheGoldAndOilGuy.com This article is intended solely for information purposes. The opinions are those of the author only. Please conduct further research and consult your financial advisor before making any investment/trading decision. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Commodities, ETF, OPTIONS

Where will Silver, Oil and the SP500 Bottom?

May 9th, 2011

The price action in precious metals and oil this past week has been breathtaking. The last time we have seen this much volatility in commodity prices was amidst the financial crisis in 2008 and the early part of 2009. Does this mean we are at the brink and risk assets are going to decline precipitously? Obviously that question cannot be answered with any certainty, but the underlying price action in the S&P 500 has been relatively strong compared to gold, silver, and oil.

Talking heads everywhere are predicting the commodity bubble has burst and pointing fingers at excessive speculation in silver and oil. Margin requirement changes in silver futures have been fingered as the primary catalyst for the nasty sell off. Silver had gotten way ahead of itself in terms of price and parabolic moves higher are usually followed by parabolic moves lower. For silver buyers on Friday, April 29 a painful lesson has been learned as their investment has declined more than 30% in 5 days.

It doesn’t take a genius to realize that we are going to bounce higher at some point. With a sell off of this magnitude it would not be shocking to see at least a 50% retracement of the entire move in coming weeks. It is also possible that this is a buying opportunity for precious metals and oil. It is too early to be certain, but a bounce next week is likely as silver went from being severely overbought to severely oversold on the daily chart in one week. The chart below illustrates the 50% retracement and the RSI reading for silver futures:

In the month of April OptionsTradingSignals members were able to capitalize on rising silver prices to close a trade that produced an 18% return in less than 5 days using a double calendar spread in order to produce outsized profits based on maximum risk. Members regularly receive trade alerts focusing on gold and silver using ETF’s GLD & SLV which have extremely liquid options.

While silver prices have been absolutely crushed, gold prices have held up a bit better. In fact, in this selloff gold has been less volatile in terms of intraday percentage price movement and has not suffered from near the losses that we have witnessed in silver. The gold futures chart below illustrates key price levels:

Members of the OTS service received a trade alert on April 6th for a calendar spread that was converted to a vertical spread. When the vertical spread was closed on April 26th the members realized a gain close to 56% based on the maximum risk of the trade.

Recently we have received some poor economic data which has put a drag on equities the past few weeks. This morning we are seeing a strong bounce in the S&P 500 futures and if we have another light volume Friday prices tend to drift higher throughout the trading day. The S&P 500 futures spiked to around 1,370 on the news of Osama Bin Laden’s death and then sold off from that point. The chart below illustrates the S&P 500 futures rally and subsequent sell off highlighting current key price levels:

Members of OptionsTradingSignals received a trade alert on April 12th to put on a call vertical spread to capitalize on rising prices. On April 21st partial profits were taken and eventually stop orders closed out the position on May 4th locking in a total gain of around 32% for the trade based on maximum risk.

Oil prices have sold off sharply, albeit not as sharp as the downside move in silver recently from a percentage standpoint, but a significant amount of the risk premium has come out of oil prices. I continue to believe that oil prices over the long term have only one direction to go based on tightening supply / demand going forward and lower production levels in the future. Similar to silver, a .500 retracement of the entire recent move is rather likely in coming weeks. The daily chart below illustrates key price levels in oil futures:

I continue to believe that oil prices are going to work higher over the longer term for a variety of reasons, but a drop in gasoline prices would not hurt U.S. Consumers and the domestic economy. Higher oil and gasoline prices weigh on the U.S. Economy heavily so this sudden decline in price is beneficial to most Americans which could juice consumption if prices stay lower for a longer period of time.

Overall, price action in the commodity space has been extremely volatile the past week with silver and oil really getting hammered lower. Gold and the S&P 500 held up a bit better and it would not be shocking to see the S&P 500 put on a rally from here if oil prices stabilize. However, if the U.S. Dollar continues its recent rally it will force the commodity space as well as equities lower. The daily chart of the U.S. Dollar Index futures is shown below:

In closing, I am expecting a bounce in coming days and a .382 or .500 retracement of the entire move in gold, silver, and oil would make sense so I would not be too aggressive shorting. However, I would not necessarily be an aggressive buyer either. It is going to take time for market participants to digest the recent moves. In weeks ahead it will be more apparent what price action is likely to do and I would be shocked if we did not see a few low risk, high probability trades setting up.

Speaking of low risk, high probability trades, the month of April was the best performance for the OptionsTradingSignals service so far year to date. Seven total trades were opened and six trades have been closed with sizable profits. Recent returns included an 18% return in SLV, a 56% return on a GLD trade, 32% return on an SPY call vertical spread, a 12% return on a RUT Calendar spread, and a 37% return on an AMZN calendar spread. The total cumulative return in April was 155%.

Assuming a trader had a $10,000 account and risked a maximum of $1,000 per trade, the gross gains would have been well over $1,400 in April alone. The overall service is up over 15% year to date handily beating the S&P 500 return while assuming less risk. Take advantage of the special offer going on now where new members get 3 months for the price of one!

Get JW Jones’ Weekly Reports Free Here: http://www.optionstradingsignals.com/profitable-options-solutions.php

By: JW Jones
Co-Author: Chris Vermeulen

Read more here:
Where will Silver, Oil and the SP500 Bottom?




Chris Vermeulen is a full time daytrader and swing trader specializing in trading (NYSE:GLD), (NYSE:GDX), XGD.TO, (NYSE:SLV) and (NYSE:USO). I provide my trading charts, market insight and trading signals to members of my newsletter service. If you have any questions feel free to send me an email: Chris@TheGoldAndOilGuy.com This article is intended solely for information purposes. The opinions are those of the author only. Please conduct further research and consult your financial advisor before making any investment/trading decision. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Commodities, ETF, OPTIONS

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