Mid Week Gold, Silver, Oil and Natural Gas Trading Report

Commodities so far this week have not changed much. But I can point out a few things for us to watch Thursday and Friday.

Precious Metals – Gold GLD fund – Silver SLV Fund – PM Stocks GDX Fund

We could start to see a shift between the price relationship between gold and the broad market. I pointed this out last week mentioning that gold and silver are starting to hold up in value while stocks sell off on big days. For example, Wednesday’s sell-off in equities did not have much effect on precious metals. This is what we want to see. It means money is moving out of stocks and into gold and silver bullion as a safe haven.

These three charts of GLD, SLV and GDX show Wednesday’s price action as gold and silver moved higher while precious metal stocks sold down with the rest of the market. This is generally a bearish indicator for gold and silver but because I am starting to see this happen more often and traders are ready for the market to top any day, I am seeing this as a bullish indicator. If the market starts to slide I have a feeling investors will be dumping a lot more money into gold and silver.

Energy – Oil USO Fund – Energy Stocks XLE Fund

We are seeing a similar pattern in the energy sector. Oil had a nice move higher today while energy stocks sold off. Stocks are starting to fall out of favor. That being said, I do think I have found an oil play which could rocket higher in the coming days a possible 10 bagger. I will be providing this information in my service Thursday or Friday this week.

Natural Gas – UNG Fund

Natural gas is still in a bear market and trading under a major resistance trend line. This commodity could go either way so I am going to wait for the odds to be more on my side before jumping on board with a long or a short trade.

Mid-Week Gold, Silver, Oil and Nat Gas Conclusion:

The market is starting to look and feel top heavy with many indicators and price action patterns giving cross signals. While the market could continue to rocket higher with new money getting dumped in from average investors because of solid 3^rd quarter earnings, we must be cautious by tightening our stops and take some profits off the table. Until we get a short term oversold market condition I am trading very conservatively.

Waiting for a good trade is crucial in trading. If you always want to trade and force positions when the market is choppy you end up with lower probability trades.

Disclaimer: I currently own GLD, SLV, USO and UNG funds.

Comments

[Chris B (Sl...:]

A market sell-off could well pull Gold and Silver prices down along with the rest of everything. This is likely to be a short term thing though with precious metals disconnecting from the falling markets and rising up far higher than they are now. Also as currencies devalue Oil and Gas will no doubt rise too. There is going to be a squeeze on Oil and Gas availability following the glut as companies cut back on production of these commodities. In the long term the lack of recent drilling and long time scales required to create new Oil and Gas supplies must mean far higher prices? I am Bullish on Stocks until the New Year, but it is clear they are starting to run into headwinds now. The fall may well be another big one as the realisation that the 'recovery' is far more muted than anticipated. 4th Quarter earnings may well be the clincher on this; we will have to wait and see on this one?

Oct 22 08:08 AM

[jerrydd:]

Can you say bubble?

Oct 22 10:58 AM

[bob dempsey:]

i am in the jewelery business and i have been hearing 1200 gold all year and watching the big companys and new yorkers wanting to buy gold if they want it that bad i want it enjoy your vidios have been watching gold miner stocks 3 to 4 dollars and like the debt free cash on side and financing if a co needs it to keep digging any takeovers you can see and will i lose money if rby uxg or ngd merge or bought out thanks bob

Oct 22 03:45 PM

[Frugal Joe:]

PMs have value as opposed to the fictitious earnings reports we have been seeing. When banks loaded with Billion sin bad loans are soaring, there is something wrong there. As one economist wrote last week...."it's a recovery built on quicksand."

Oct 22 07:32 PM

[Beach Bubba:]

This guy has nothing unique or worthwhile to say, except, "Buy my newsletter"...his clatter is all over the web....a waste of time. He is a has been before his time.

Oct 22 09:24 PM

[Spartacuss:]

Ultimately it is the Fed's game while we watch from the bleachers.

It was reported today that some sell off in treasuries is occurring. Does this signal the end of quantitive easing? So, we are left to guess and wrangle in the trenches. Seems sure though that holding cash is a losing bet; of course that's the way the Fed wants it. Spend...oh, please spend, as spending will raise our boat up high in the water. But spend on what? Equities are waaay over bought, which of course doesn't mean that the engorgement thereof will not continue. Unless a catalyst appears, and I think it will with commercial and home mortgage problems set to blow up in our faces again and then real profits by companies have yet to show up and how can they? I don't see consumerism on the rise, perhaps just not as rapidly declining, but not clearly rising.

Another small mote is the Yuan. Being debased also as other currencies debase to avoid an attack on their export trade. See, economies are like blobs of jello, you can poke and push, but you always wind up with what you started with; same shape and same size. You only get more jello when you make more of it and money is not jello, it is much more like a cattle prod...poke...push...d... and then when you take the prod away you discover that it is still the same blob, however you may have pushed to a new place...on the floor.

Drink heartily. The cup of hemlock rests there on your lips and thirst is aplenty.

Oct 23 06:30 AM

[apppro:]

Whatever the case above maybe, what seems to be the REAL ISSUE are those traders/traitors front running the prices of NG all over the place just to make this 5 minute profits. Fine, it's part of the markets, but geezzzzzz - why are examining ETF's for the actions of others.

This Yahoo comment thread pretty much sums up the idiocy/manipulation of our markets:
messages.finance.yahoo...

Oct 23 07:27 AM

[Hakim Cetin...:]

bobdempsey,

You need to learn to use punctuation. Your posting makes absolutely no sense to people who use the correct English language. This forum does not restrict one from writing more than 100 character postings.

Oct 23 01:33 PM