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Distribution selling in stocks while gold shines
Fri, 28 Jan 2011 20:10:15 +0000by admin
Today the dollar is breaking to the upside and with the broad market trading at resistance (SP500) it has caused a very sharp sell off today which is still unfolding.
During market tops and bottoms investments tend to go every which way as fear and greed hit the market and everyone just buying and selling what they think is the right thing to do at the time. This causes mixed signals which is why gold is rallying with the dollar in a big way and bond prices are rising.
This is an emotional day for traders and investors around the world and we can see it in the selling of the SP500 today. I know many of you started taking small short positions the past couple days and this morning from my short term analysis and it is paying off now. That being said the market internals are showing short term oversold conditions and both the SP500 and Dow are still in an uptrend but showing distribution selling. Last January we had this same price action and the very next day the market bounced straight back up to the highs. While I am bearish on the market, I do think a bounce is very likely and I expect the pomo to try and help the market later today so it's not such a blood bath today for stocks… only time will tell.
Below is chart with what I am seeing and thinking..
Chris Vermeulen
www.TheGoldAndOilGuy.com
How to Find Low Risk SP500, Gold & Oil ETF Setups
Sun, 01 Aug 2010 18:54:57 +0000by admin
As we all know there is an unlimited amount of ways to trade the financial markets. Each person sees the market in a different way, has different skill sets, trading experience and risk tolerance levels. While some individuals create and use complete systems to make money there are some very basic trading strategies which still work well and require nothing more than basic charting, patience and a little money management.
Let me explain:
SPY - SP500 Index Trading Fund
You can clearly see the longer term trend which is down (blue trendine). But from simply drawing a couple trendlines and looking at the MACD (momentum) indicator you can see there is a possible trend reversal taking place. So far the SPY has broken out of its down trendline with a 4 day pop, and it's now pulled back down to test support. A close below the trend line or the 50MA would be the exit points if the market did start to go south.
The SP500 is still stuck under major resistance, its 200 day moving average. But is trading above key support levels (20MA, 50MA and Trendline). I can feel the tension in the market between traders and we are about to see a big move once a breakout to the upside or down side is established. At this time its best to be in cash or have a small position with a protective stop in place. Once a trend starts there should be some low risk entry points along the way. If we see a strong reversal to the upside On Monday or Tuesday I would expect big buyers would step in to catch this new trend up.
GLD - Gold ETF Trading Fund
Looking at the price of gold we can see the trend is still down along with the momentum. A breakout would be the first step towards a possible entry point but I prefer to wait for a pullback after the breakout has taken place. Once we get a test of support I look to enter a position once there is a strong reversal candle to the upside. From there I draw a new support trend line from the previous low and connect it to the new pivot low (bottom of reversal candle). That becomes my new protective stop.
Gold still has some work to do before I would even be interested in taking a long position for a swing trade. But on a short term time frame (intraday charts) gold looks to be forming a low risk setup which I hope unfolds for my subscribers this week.
USO - Crude Oil Trading Fund
Oil has been trading in a large bearish pennant for the past 2 months and it is nearing the apex of this pattern. The longer term picture of oil is bearish but the most recent dotted trend line and the 20/50MA crossover is signaling some strength. Also the momentum for oil is positive and that helps support the price also. Again if this was to breakout to the upside I would wait for a low volume pullback to test the breakout level, then enter on a reversal back up.
Oil is one of the more challenging commodities to trade because it is affected by the US Dollar, Political Events, and Weather. In short, even if you had the analysis and timing correct there are other factors which move the price of oil on a regular basis that could quickly turn the trade against you. That being said, keep trades small when trading oil.
How to Find Low Risk Trading Setups:
In short, trading can be complex, simple or somewhere in between. You can spend 14 hours or 20 minutes a day analyzing it depending on what investments you trade, whether you're trading full time or just checking up on longer term investments.
This analysis and basic strategy shown above can be profitable if followed correctly and works for stocks, commodities and indexes. It's just to show how simple one can swing trade the market using very basic analysis. Personally I use a much more complex strategy incorporating 15+ other data points which allows for precise entry and exit points.
If you would like to Get My Low Risk Trading Signals visit my services at:
www.TheGoldAndOilGuy.com - ETF Trading - Index, Sectors & Commodities
www.FuturesTradingSignals.com - Futures & ETF Trading - Index & Commodities
Chris Vermeulen
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Is Gold About To Rocket and SP500 Tank Video
Sat, 10 Jul 2010 23:42:38 +0000by admin
Last week we saw stocks move sharply higher as traders started to cover their short position which added fuel to an already oversold market ready to bounce. Overall volume was not that strong on the move up which is a bearish sign. On Friday afternoon we saw the SP500 continue to move into the $1075 resistance level on very light volume. This indicates to me that buyers are not willing to pay these higher prices because the market has moved up so quickly and the fact that it's trading at a resistance level.
I feel the market will gap higher on Monday just like we say on June 20/21 deep into a resistance level and the big money will short the pop sending it sharply lower.
Gold looks to be shifting its momentum from a down trend to an uptrend. It's forming a reverse head & shoulders pattern which is shown in the video posted below.
Here is My Technical Trading Report Video Covering:
- Gold
- US Dollar
- SP500
- Market Internals
- On Balance Volume
iPhone/iPad Video Format: Click Here
Weekend Conclusion:
In short is looks as thought the market is at a critical pivot point. We could see prices stall out here and continue the down trend or see strong buying step in sending prices higher in the equities market. We need to wait and see what type of price action unfolds in the coming days.
If you would like to receive my trading alerts and education checkout my service at www.FuturesTradingSignals.com or my swing trading service at www.TheGoldAndOilGuy.com
Chris Vermeulen
Dollar, Gold, Oil and the SP500's Mid-Week Trading Video
Thu, 24 Jun 2010 01:02:34 +0000by admin
It's been a crazy week for gold, oil and the SP500 again…. Since the market top in April we have seen large moves almost EVERY day in the market. I would say this is one of the toughest times for traders as you must be very quick to enter and exit if you want to lock in any profits. Good news is that things should start to smooth out in the next week or so if stock kick into rally mode.
Below is a quick video I did for you showing how I see the market, what I think is about to do and what to be aware of. I recommend you Gold Bugs skip over this report because on Sunday I wrote about how gold kept making new highs this year and how prices were about to drop again. And it was only a few minutes after I sent that report out before the emails started to flood my inbox from individuals around the world telling me how wrong I was saying gold is about to sell off. I knew gold was a crowded trade but not to the point that people are willing to fight you just because you mention its looking ready for a correction…. Which is actually a good thing for gold to do right now….
To be honest I'm still in aw about how mean and rude some people can be when all I am trying to do is help educate and help everyone see the market from a technical point of view without any bias… Thank goodness I'm a positive thinker and find most things funny or can put a positive spin on things like seeing gold drop $35 so far this week ?
Anyway… here is my video recap of this weeks price action.
Video Recap for those who don't want to watch the full 8 minutes:
- Gold still looks bullish, but on the edge of a Very Sharp Correction
- Oil looks about ready to make a run higher
- US Dollar looks to be forming a Head & Shoulders Reversal pattern
- SP500 is at a critical point Rally or Crash
- If the US Dollar drops it should trigger higher gold, oil and stocks
- We are entering earning season and stocks tend to rally into the news
Click To View Video:
Chris Vermeulen
www.FuturesTradingSignals.com
www.TheGoldAndOilGuy.com
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