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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
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  • Gold, Miners And SP500 Trends & Trading Signals

    Gold and gold miner stocks have underperformed in 2012 disappointing most traders. That being said it has traded in a large sideways range since September 2011 and remains stuck in this range as of this week. Investments trading sideways are not my preferred investment of choice because some commodities and stocks for that matter can trade sideways for years before making another bull market rally.

    That being said in the last six months gold has started to show life that a new bull market may be starting. 2013 is starting to look as though gold, silver and precious metals miners could lead the market higher if they can break out of their basing patterns. Until we get more bullish price action I am not planning to get long.

    Take a look at the gold ETF and Gold Miner charts:

    These daily charts show the trend (up/down) along with short term extreme overbought/oversold trading days. The key to long term success is to trade with the trend 90% of the time. Only years of experience will you know when it's ok to break the rules and even then the odds are stacked against you.

    Gold Weekly Chart:

    (click to enlarge)

    Gold GLD Daily Chart:

    (click to enlarge)

    Gold Miners GDX Daily Chart:

    (click to enlarge)

    SPY Stock Market Analysis:

    The last five years I have been fine tuning my SP500 index trading with the use of cycles, sentiment, volume, momentum and the volatility index. Until just recently some of the data I use for generating these extreme overbought/oversold conditions were only available after the market closed. This made the high volatile trading sessions difficult to truly know if an extreme level was reached during the trading session. The exciting news is that a new data feed and a top notch programmer is allowing me to turning this once manual calculation of 17 data points taking me an average of 25 minutes to figure out into a system that generates signals in real time complete with profit taking signals, tend direction and a protective stop which self-adjusts depending on the market volatility and cycle stages.

    Two other benefits are that during extremely high volatility levels and mixed cycles the system does not generate any signals. This allows us to avoid the large daily swings in price that typically shake even the most seasoned traders out of the market for repeated losing trades. Also during potential trend changes when cycles and volatility become choppy trading signals are not generated helping to avoid the volatility that takes place during reversals points when the bulls and bears are pushing each other around.

    Below is a very basic version of the trend and signals for the SP500 index as it does not show profit taking, trend reversal stops or protective stops for individual swing trades yet, but it's coming soon.

    (click to enlarge)

    Crude Oil Weekly Chart:

    Crude oil has been making a move higher in the past four weeks but it's now testing resistance and the chart shows a high volume doji candle. This is pointing to a pause or pullback in price should take place.

    (click to enlarge)

    Natural Gas Weekly Chart:

    Natural gas futures have been under pressure the past couple months but it may have put in a bottom last week. The daily and 60 minute charts show strong buyers stepping in here.

    (click to enlarge)

    Weekend Trading Conclusion:

    In short, gold and silver remain in a sideways/down trend on the daily chart. The weekly long term outlook is very bullish and once I start to see real buyers enter the market in terms of volume and price patterns I will start to accumulate a long position.

    The stock market overall remains in an uptrend. We are waiting for a pause or pullback before getting long the index. But that being said there are other sectors and commodities starting to look ripe for big moves. They are not there yet but getting closer each day.

    Keep in mind that stocks, commodities and trading in general go in waves. There are times when you are busy with trades popping up left right and center and there are times when setups just do not happen. On my free stock charts watch list in November and December I posted 16 stocks and ETF setups and only one stock went south which happened to be a short trade (count trend trade). You can view my watch list here for more info: https://stockcharts.com/public/1992897

    Crude oil is giving mixed signals and I am avoiding it until the daily chart gives us a bullish setup.

    Natural gas weekly chart looks bullish but the current price is now trading at resistance. It must break this level before a full reversal can be confirmed.

    If you would like to keep up to date on market trends and trade ideas be sure to join my newsletter at 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 13 11:11 PM | Link | Comment!
  • The Fiscal Pop-N-Drop For Equities – Look Out

    Today's gap higher in stocks has many investors feeling really good about but will this rally last?

    My to the point answer is "Yes" but there will be some bumps and navigating positions along the way.

    Looking at the charts below you will notice how stocks are trading up over 4% in two trading sessions and several indicators and technical resistance levels are now being tested. Naturally when several resistance levels across multiple time frames, cycles and indicators we must be open to the idea that stocks could pause or pullback for a few days before continuing higher.

    Here is a quick snapshot of charts I follow closely to help determine short term overbought and oversold market conditions.

    Momentum Extremes:

    This chart helps me know when stocks are overbought or oversold. This trend can be follows using the 30 or 60 minute charts helping you spot short term tops and bottoms.

    (click to enlarge)

    Stocks Trading Above 20 Day Moving Average:

    This chart helps me time swing trades which last for 1-3 weeks in length and I use the daily chart to spot these reversals and trends.

    (click to enlarge)

    Daily SP500 Index Chart:

    This chart shows the big gap in price, test of upper bollingerband, momentum and swing trading cycles topping and 12 buyers to ever one seller on the NYSE which tells me everyone is running to buy everything they can today and that is a contrarian signal.

    (click to enlarge)

    Trading Conclusion:

    This strong bounce which started on Monday from a very oversold market condition does look as though it has some power behind it. And over the next 1-3 days we could see prices grind higher until this momentum stalls out. Once that happens we should see most of the gap filled. This will provide us with a lower entry price and reduce our downside risk for index (SPY, IWM, QQQ), sector (XLK, XLU, XLY) and commodity ETFs (JO, KOL, JJC GLD, SLV, GDX).

    If you are a stock trader then be sure to checkout my partners stock trading website www.ActiveTradingPartners.com where his last two trades Dec 31 pocketed 12.3% with gold stocks ETF NUGT, and took more profits with PRLB Jan 2nd for a 9.2% gain.

    This type of bounce and momentum can lead to a running correction which makes it impossible for traders to by on a dip. A running correction is when prices slow chop higher in a narrow range for some time then explode higher continuing its rally. This is when you just need to jump in trades and chase prices higher but we will not do that until I see signs of a running correction.

    Today many of the major market moving stocks are testing resistance which means if they start to get sold the broad market will pullback with them.

    Follow All My Trades for 2013 - Start Today: http://www.thegoldandoilguy.com

    Chris Vermeulen

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

    Jan 02 12:48 PM | Link | Comment!
  • Copper ETFs And Copper Stocks About To Move Big

    With 2012 now behind us it's time to start looking for some new long term investments which have big potential gains in the new year. Copper is one metal that has caught my eye.

    The long term monthly chart of the copper ETF JJC shows a potential cup and handle pattern accompanied with bullish volume characteristics. Last year copper traded sideways in a narrowing range. This type of price action tends to bore traders and investors forcing them to look elsewhere for new to trades. The saying is "If the market doesn't shake you out, it will wait you out"

    You can see on the monthly chart that the interest in this commodity diminished. You can tell because of the sideways movement and declining volume. I like to focus on investments which are out of favor but are showing signs of another big trend starting. getting on the train before it leaves the station can make for a fun ride. I do post some of my trading ideas with my charts updating live each day here: https://stockcharts.com/public/1992897

    Take a look at the charts, analysis and my best copper stock setup below:

    JJC - Copper Total Return ETN Profile

    Description: The index includes the contract in the Dow Jones-UBS Commodity Index Total Return that relates to a single commodity, copper (currently the Copper High Grade futures contract traded on the COMEX).

    (click to enlarge)

    Copper Miner Stocks ETF COPX - Weekly Chart

    The COPX ETF holds a basket of copper mining stocks which is showing signs of a new trend starting. Take a look at the top holdings stocks and fund breakdown to get a feel for the exposure it provides.

    COPX Top Ten Holdings

    1. Inmet Mining Corporation (OTC:IEMMF): 6.62%
    2. KGHM Polska Miedz SA (KGH): 5.24%
    3. Xstrata PLC (XTA): 5.04%
    4. Grupo Mexico, S.A.B. de C.V. (GMEXICO B): 4.89%
    5. Jiangxi Copper Company Limited H Shares (00358): 4.83%
    6. HudBay Minerals, Inc. (NYSE:HBM): 4.82%
    7. Antofagasta PLC (ANTO): 4.78%
    8. Southern Copper Corporation (NYSE:SCCO): 4.75%
    9. Lundin Mining Corp (LUNMF): 4.55%
    10. Kazakhmys PLC (NYSEMKT:KAZ): 4.55%

    (click to enlarge)

    (click to enlarge)

    Best Copper Stock Setup - LUNMF

    After reviewing the main holdings in this fund I noticed one stock that looks ready to start a new bull market. OTCPK:LUNMF Lundin Mining. shares look to be building a Stage 1 base and could break out and start to rally any week. Keep in mind 3/4 stocks move with the broad market so we do want the major indexes to find a bottom or at least trade sideways if we want copper stocks to start their run.

    (click to enlarge)

    Copper Futures, ETF and Stock Trading Conclusion:

    Copper has lost its shine over the past 12 months but could start to make headline news in the near future. I like both COPX and LUNMF if we see further strength. If you would like to get more of these trading and investing ideas and alerts be sure to join my newsletter at: http://www.TheGoldAndOilGuy.com

    Chris Vermeulen

    Disclaimer:
    I currently do not own a position in these investment but plan on buying them in the near future. This material should not be considered investment advice. Chris Vermeulen is not a registered investment advisor. Under no circumstances should any content from this website, article, video, seminar or email from Chris Vermeulen (TheGoldAndOilGuy.com) be used or interpreted as a recommendation to buy or sell any type of security or commodity contract. This material is not a solicitation for a trading approach to financial markets. Any investment decisions must in all cases be made by the reader or by his or her registered investment advisor. This information is for educational purposes only.

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

    Dec 31 10:37 AM | Link | Comment!
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