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Chris Vermeulen
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Chris Vermeulen the founder of 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:
    Protecting Yourself with GOLD, Oil and Index ETF's

    Chris-VIn 2009 I shared my big picture analysis, investment forecast and strategy in a book called "NEW WORLD ORDER ECONOMICS - What you can do to protect yourself". In January 2009 I forecasted that the Dow Jones Industrial Average was going to make a bottom within a couple months which it did. I also predicted the price of gold to start another major rally, and for crude oil to bottom and rally for years, which were also correct.

    You can call it luck, skill or a mix of both… but the truth is that the markets cannot be predicted with 100% certainty. With that said, the US stock market, gold and oil look to be setting up for their NEXT BIG multiyear moves.


    Gold and silver have a little trickier of a situation to navigate and invest for maximum returns over the next 2+ years.

    The most important thing to realize is that when a full blown bear market starts virtually all stocks and commodities drop including gold, silver and oil. Knowing that, investors must be aware that when the stock market starts its bear market the fear will rise and investors will inevitably sell their holdings and this means we could see gold and oil continue to fall much further from these levels before a true bottom is in place.

    Is this time different than the 2008/09 bear market? Yes, this time we have possible wars starting, oil pipelines overseas being cut off, counties and currencies failing and even negative bond yields in some parts of the world - it's a mess to say the least. There are a lot of things unfolding, most seem to be negative for the economy.

    The currency problems and possible war breakout will be bullish for gold and oil. So if a bear market starts in equities, and a war or currency fails gold and oil should rally while stocks fall.

    But if we don't have those sever crisis' then if gold and oil break below their critical support level which is the red line on the charts and a bear market in stocks start you do not want to be long stocks or commodities.

    I have drawn a line in the sand for gold at $1050. If this level is broken then $815 per/ounce is not out of the question. It seems everyone is bullish on precious metals and have been buying like crazy. But as I wrote in 2009 this bullish sentiment actually pointing to much lower prices if support is broken. GLD, GDX, GDXJ

    (click to enlarge)


    Click Here

    Below are some ETFs that can be used to take advantage of rising gold prices. While there are other funds that cover gold miners I feel they may not perform well during the equities bear market. Investing in physical gold is the best play at this stage of the game but when the equities bear market looks to be nearing an end, gold mining stocks will be the best place to be.

    gold etf fund alerts


    In this article we talked about gold and gold stocks which are showing signs of a major bottom being put in place this year. And in the next article PART 3 I will who you what to expect long term for crude oil, how we are up 28% in our short oil trade, and how you can play this multi-year cycle bottom when the time is right.

    In the meantime, be sure to join my Free Newsletter so that you receive PART 3 along with more trade

    Chris Vermeulen

    Mar 18 9:50 AM | Link | Comment!
  • Three Fear Resistant Commodities That Look Tasty

    On Friday, March 6 the US jobs report hit the wires. Equities were trading higher in premarket, and the previous session we had seen strong selloff followed by an equally strong high-volume rally. No one was expecting the massive selloff that was about to hit the stock market when the good jobs numbers were posted.

    Later that day after 6 1/2 hours of heavy volume selling in the stock market the closing bell rang. The big selloff pulled most stocks and commodities into an extremely oversold market condition. Traders were waiting all day for some type of bottom to be put in place so they can reenter a long position and day trade the rebound.

    But as we learned when the closing bell was ringing, there was no bottom and there was no bounds in equities. From looking at my trading platform dashboard virtually every stock sector country and commodity ETF was trading sharply lower.

    Only four things were green on my dashboard. The first one was the VIX which makes sense as people become fearful the sell stocks and the volatility index rises. But what was interesting was that the other three were food commodities.


    The first commodity trading higher was coffee. This makes sense because it was a stressful day and everyone was drinking coffee. The second was sugar. Obviously the majority of coffee drinkers enjoy sugar in their coffee.

    The last commodity which rallied late in the day was the ETF cow. COW is a livestock commodities fund. And so it seems after a long hard in the financial market we find comfort in a big juicy steak. Subscribers to my newsletter and I just happened to get long this fund recently. The chart from a technical stand point is very bullish. Symbols: COW, JO, SGG

    On a more serious side of things… though, the stock market is still in an uptrend. Today's news was a surprise and surprised data will always cause a severe reaction in the market. History has proven that news based selloffs tend to be a blip on the chart and market recovers within a couple days and the previous trend once again continues.

    After the weekend when the stock market reopens and traders had time to digest the news about the FED possibly raising rates if the economy continues to show strength it is going to be interesting to see how the market reacts. My guess is that we see higher prices early next week for US equities.


    Chris Vermeulen

    Tags: COW, JO, SGG, commodities
    Mar 09 11:02 AM | Link | Comment!
  • Best Opportunities Outside Of North America

    Investors tend to focus on investment opportunities that are well known and also those which have been headline news for several months. This allows the investor to become familiar with main stream news which eventually leads to a comfort level that makes them want to get involved with what is hot or not.

    While there is nothing wrong with this process it's widely known that self directed investors tend to get involved with these investments with their money on the wrong side of the market. Simply put, they buy at highs or sell at the lows.

    By the time an opportunity becomes headline news most of the opportunities have already made the bulk of their move. Investors buy into good news and sell or short sell investments which are having negative news and this lag time between the investor receiving the news, processing it for a few weeks, then taking action makes for poor entry and exits for their investments.

    As hard as it may seem, buying into investments that are getting a lot of negative news are likely going to be some of your best performing investments. For example getting long precious metals here is a tough pill to swallow, but there at least 10 gold stocks that look ready to make big moves.

    "Buy When Everyone Is Negative and Fearful,Sell When Everyone Is Positive"

    Recently I talked with Jim Goddard of HoweStreet about the best opportunities I see in the market and they all happened to be international investments. Feel free to listen to our thoughts about these opportunities:HoweStreet Story


    Best International Opportunities Explained Visually

    Finding low hanging fruit or stock markets that provide value is the key for investments you plan to hold for 1-3 years in length. The table below show the three countries with the lowest PE ratios and the best looking chart in terms of buying near long term support.


    Looking at the charts you will how each of these markets has been under heavy selling along with negative headline news. Know what we know, it is very likely most investors holding equities within these countries that are scared by the news have already sold their positions. Those who have not will likely continue to hold long term for prices to rise eventually (rsx, norw, grek, gdx, gdxj)

    (click to enlarge)

    What Should You Invest In Next?

    Investing is one part time, and one part timing. What I mean by that is if you have a long time 10+ years for an investment to mature you should be rewarded for holding and committing to that investment. But if you want real eye popping performance year after year it is important to try to time your entry and exits.

    Every year you should review their portfolio and rebalance. Shuffle funds out of mature markets and into ones which provide more value and have room to grow in excess of 30% or more. These ETF's I show are some of the investments I currently like.

    Slowly averaging in, meaning buying a small portion ever week or every month is the best way to get involved in long term investments. I do feel these county ETFs could make minor new lows before going higher but we never really know what an investment will do and when, which is why we need to slowly build positions when you know a particular market is ripe for the picking.


    Chris Vermeulen

    Mar 04 4:22 PM | Link | Comment!
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