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Chris Vermeulen's  Instablog

Chris Vermeulen
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Chris Vermeulen the founder of AlgoTrades.net Algorithmic Trading Systems. This automated investing system is designed for individual investors and traders. He is also the editor of the TheGoldAndOilGuy newsletter which is designed for gold market traders providing quality ETF Trade Alerts,... More
My company:
AlgoTrades Algorithmic Trading Systems
My blog:
TheGoldAndOilGuy - Gold Market Traders
My book:
Technical Trading Mastery - 7 Steps To Win With Logic
View Chris Vermeulen's Instablogs on:
  • POMO Saves Equities Reversal With $5 Billion Injection

    This week I talked about how the uptrend is to be the focus of trading positions until a down trend is actually confirmed via price and volume action. The SP500 (SPY, DIA, QQQ, IWM) was very close to reversing down this week but with the POMO's scheduled largest injection of money for February of over $5 billion dollars sent stocks soaring jamming stocks back up into its uptrend.

    Take a look at the normal daily injections and then look at Feb 27th's….

    (click to enlarge)

    SP500 Futures 10 Minute Chart Zoomed Back 48 Hours…

    (click to enlarge)

    SP500 Trend - Green, Orange, Red candles indicate trend direction

    (click to enlarge)

    Short Term Trading Conclusion:

    Following the bigger underlying trend of the market along with the big money will keep you on the right side of the market more times than not. My trading strategy which is now programmed into my trading system clearly tells me the current market trend, entry signals, profit taking, stop adjustments and exit prices.

    Creating a proven trading strategy which works in all market conditions and having it programmed to do 95% of the analysis for you keep my trading emotions in check, saves me time and money and keeps things simple which is the key for long term success. So keep your eye on the POMO's injection schedule each month for days to focus on long day trades or entry points for swing trades.

    Receive Free Weekly Reports, Trading Tips and my Book: www.GoldAndOilGuy.com

    Chris Vermeulen

    Feb 28 11:08 AM | Link | Comment!
  • Gold And Silver Nearing MAJOR Long Term Support

    Gold and silver along with their related miners have been under a lot of selling pressure the last few months. Prices have fallen far enough to make most traders and investors start to panic and close out their long term positions which is a bullish signal in my opinion.

    My trading tactic for both swing trading and day trading thrive on entering and exiting positions when panic trading hits an investment. General rule of thumb is to buy when others are extremely fearful and cannot hold on to a losing position any longer. When they are selling I am usually slowly accumulating a long position.

    Looking at the charts below of gold and silver you can see the strong selling over the past two weeks. When you get drops this sharp investors tend to focus on their account statements watching the value drop at an accelerated rate to the point where they ignore the charts and just liquidate everything they have to preserve their capital. A few weeks ago I posted my outlook on precious metals which seems to be unfolding as expected: http://www.thegoldandoilguy.com/articles/precious-metals-miners-making-waves-and-new-trends/

    Gold Bullion Weekly Chart:

    The price and outlook of gold has not really changed much in the past year. It remains in a major bull market and has been taking a breather, nothing more. Stepping back and reviewing the weekly chart it's clear that gold is nearing long term support. With panic selling hitting the gold market and long term support only $20 - $30 dollars away this investment starts to look really tasty.

    But if price breaks below the $1540 level and closed down there on a weekly basis then all bets are off as this would trigger a wave of selling that would make the recent selling look insignificant. And the uptrend in gold would now be over. Gold can also be traded using GLD ETF.

    (click to enlarge)

    Silver Bullion Weekly Chart:

    Silver price is in the same boat as its big sister (Yellow Gold). Only difference is that silver has larger price swings of 2-3x more than gold. This is what attracts more traders and investors but unfortunately the masses do not know how to manage leveraged investments like this and end up losing their shirts.

    A breakdown below the $26.11 price would likely trigger a sharp drop back down to the $17.50 level so be careful… Silver can also be traded using SLV ETF.

    (click to enlarge)

    Gold Mining Stocks - Monthly Chart:

    If you wanna see a scary chart then look at what could happen or is happening to gold miner stocks. This very could be happening as we speak and why I have been pounding the table for months no to get long gold, silver or miners until we see complete panic selling or a bullish basing pattern form on the charts. We have not seen either of these things take place although panic selling is slowly ramping up this week.

    There will be some very frustrated gold bugs if they take another 33% hair cut in value… You can view some of my trading charts, setups and analysis free at my stockcharts.com list. Be sure to vote for me chartlist each day so I know its of value: https://stockcharts.com/public/1992897

    Gold and silver miners can be traded using GDX, GDXJ, SIL, or SIVR ETF's.

    (click to enlarge)

    Precious Metals Trend and Trading Conclusion:

    In short, the precious metal sector remains in a cyclical bull market. That being said and looking at the daily charts the prices have been consolidating and are in a down trend currently. Until we see some type of bottoming pattern or price action form it is best to sit on the side lines and watch the emotional traders get caught up and do the wrong thing.

    The next two weeks will be crucial for gold, silver and miner stocks. If metals cannot find support and close below the key support levels things could get really ugly fast. If you would like to receive my daily analysis and know what I am trading then check out my newsletter at: www.TheGoldAndOilGuy.com

    Chris Vermeulen

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in GLD over the next 72 hours.

    Feb 21 6:25 AM | Link | Comment!
  • Energy Stocks & Oil Special Trend Analysis Report

    Crude oil has been trading ways for the past year between the 2011 high and low. The trading range through 2012 has been contracting with a series of lower highs and higher lows. This pennant formation because it is taking place after an uptrend is a bullish pattern with $110 and possibly even $140+ per barrel in the next 6-18 months.

    If you look at the weekly investing chart of crude oil the key support and resistance levels area clearly marked. A breakout of the white pennant will trigger a move to the next support or resistance level. And judging from the positive economic numbers not only form the USA but globally the odds are increased for the $110+ price target to be reached sooner than later.

    Crude Oil Price Chart - Weekly Investing

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    Crude Oil Price Chart - Daily short term Analysis & Target

    If we zoom into the daily chart and analyze price and volume you will notice the $100 per barrel level is potentially only 2-3 days way… But keep in mind whole numbers (decade & Century Numbers) naturally act as support and resistance levels. So when the $100 century price is reached there will be a wave of sellers with fat thumbs who will slam the price back down to the $96 and possibly back down to the $92 level before oil continues higher. Can be followed with USO, UCO, SCO

    (click to enlarge)

    Utility Stocks - XLU - Weekly Investing Chart

    The utility sector has done well and continues to look very bullish for 2013. This high dividend paying sector is liked by many and the price action speaks for its self… Keep in mind you can view my actual watchlist of stock and ETFs I trade in real-time with my analysis free: https://stockcharts.com/public/1992897

    (click to enlarge)

    Energy Sector Weekly Investing Chart

    Energy stocks which can be followed using the XLE exchange traded fund (NYSEMKT:ETF) typically leads the price of oil. Looking at energy stocks we can see that they are outperforming the price of crude oil and on the verge of breaking out of a large Cup & Handle pattern. If so then $90 is the next stop but prices may go much higher in the long run.

    (click to enlarge)

    Energy Stocks and Crude Oil Conclusion:

    In short, crude oil is stuck in a large trading range much like gold and silver which I just wrote about here: http://www.thegoldandoilguy.com/articles/precious-metals-miners-making-waves-and-new-trends/

    Once a breakout takes place on either the white or yellow lines on the first crude oil weekly chart we should see oil, energy and utility stocks start making some big moves. Depending on the direction of the breakout (Up or Down) it must be played in that direction to generate substantial profits obviously.

    Get my daily analysis, updates and trade alerts here: www.TheGoldAndOilGuy.com

    Chris Vermeulen

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jan 28 9:23 AM | Link | Comment!
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