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Robert Edwards
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Contrarian daytrading technician who specializes in locating high probability short term trades while predicting price movement directions with over 85% accuracy. Most of my trading involves either extremely short term micro scalping of stocks or commodities (using 1 minute bar charts), or swing... More
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  • Like Buying Dips In Gold And IAG For At Least Another Week

    For a nice description of the current technical picture of both gold and silver, click on the article by Michael Noonan article found here. The author is looking for a possible several week correction. However, I do not believe that gold has necessarily topped quite yet. I have a proprietary "count" system that uses cycles and my system tells me gold should remain perky for another week at least. My analysis is in agreement with I agree with Main Street Trading Advisors, who is also indicating possible further strength in gold for at least another week, click here. Here is a daily chart of June Gold:

    When you get seven straight up days off a low, it is always a remarkable move, it tells you that the market was extremely bearish and a short-covering rally was due. We have now popped virtually $80 off the recent low and could consolidate for a day or two. However, I would look for $1190 and $1180 to be excellent support, should we retrace a bit more. I would then expect to see a retest of the highs in June Gold of at least $1220 and possibly $1236 to $1240 or higher, before rolling over. I am lightly long over the weekend and will be continuing to scalp from the long side.

    Because we are still in a bottoming process, despite the recent strength, I have not been playing the triple leveraged gold mining ETFs, and instead have been recommending buying Iamgold (NYSE:IAG). Here is a daily chart of IAG:

    (click to enlarge)

    On the recent dip below $2.20 support, I bought IAG at $2.18, $2.08, $1.94, $1.84 and $1.76, with my average price being just under $2.00. I liquidated 40% of my position at $2.02 when we rallied to $2.03 on March 12th. I then bought heavily on the dip back to $1.81 on March 18th. On Wednesday, March 25th, when IAG rallied just above $2.20, I liquidated all my remaining shares at $2.20, so even my highest shares purchased at $2.18, were profitable. I have since not bought anything back but will be buying again on any dips below $2.00. With Friday's close at $2.02, I would not mind buying at $1.97 and adding every 5 cents lower. I do not anticipate falling below $1.80 but if we should take a quick dip lower, I will be backing up the truck (if you know what I mean!). I still anticipate a move to $4 and eventually $5 and higher in IAG, but that move may not come until the 1st quarter of 2016. However, I know of no better speculative stock to buy right now on dips, than IAG. My timing in this stock has been perfection. That could always change but for now, I have its number and so I am going to keep playing it! Scale in buy and then on rallies, scale out selling. You won't suffer the slippage you have in JNUG or NUGT. You will have staying power if it takes a bit longer than expected for gold to bottom. If gold ever does bottom, and surely it will sooner than later, and trades back to $1900 or higher, IAG could be back in the teens if not the twenties! This stock has potential to be a 5 to 10 bagger in the next 2-3 years, IMHO. In 2011 this stock triple topped in the $22 to $22.52 area, and I expect to see that high taken out when gold eventually trades to $2,000 and above!

    Disclaimer:

    The thoughts and opinions in this article, along with all Stocktalk posts made by Robert Edwards, are my own. I am merely giving my interpretation of market moves as I see them. I am sharing what I am doing in my own trading. Sometimes I am correct, while other times I am wrong. They are not trading recommendations, but just another opinion that one may consider as one does their own due diligence.

    Mar 28 2:10 PM | Link | Comment!
  • Where Are Natural Gas And Crude Oil Going Now?

    Natural Gas

    In my last article, click here, I was looking for a short-term top in natural gas around March 19th and it came in on March 18th and then began falling hard on March 19th and has continued to slowly weaken as time goes on. I had previously looked for an April bottom in natural gas and found an article by Main Street Trading that agreed with my analysis, but added the March 19th top to the scenario. Well, Main Street Trading has now posted an article giving there latest thoughts found here. In the article, Main Street Trading first covers Crude Oil and then gives their latest thoughts on Natural Gas. They indicate that unless natural gas can move back above the March 18th high of $2.949, then it will continue to weaken and the bottom is not in. Here is a daily chart of May Natural Gas:

    On Friday May Natural Gas finally took out the February low by a couple cents. This projects a move to lower levels. However, just as natural gas tried to bottom in January around the $2.80 level and finally fell to the mid $2.60s before finding support (a drop of 15 cents), May Natural Gas could now drop a similar amount and find support at $2.50. Into that support area I plan to be slowly buying some futures contracts but will buy the June contract to that I have plenty of time to allow natural gas to find its Spring bottom. When I get some indication that we have reached a temporary bottom, which I project should come in around $2.50, I will likely buy some shares in the triple leveraged natural gas ETN (NYSEARCA:UGAZ).

    Crude Oil

    In my last article, I also called for a temporary bottom in crude oil, which I was lucky enough to hit right on the money. Crude Oil has since rallied an impressive $8 off the bottom, however, it is has significant resistance at the 55 day moving average of $52.25 as indicated in the Main Street Trading article, and again at $55. Here is a look at the daily chart of May Crude Oil:

    On Friday, there was significant profit-taking on the recent May Crude Oil longs and also traders who had covered their short positions decided to get short again above $50. However, I prefer scalping from the long side of Crude Oil right now and prefer buying the energy ETFs on further weakness. I anticipate $47 in May Crude should now provide significant support and will look to begin buying some futures contracts in that area. I will gradually scale in my buys. For those who don't trade futures, the energy ETFs should provide excellent value on any further weakness. I agree with Main Street Trading that one needs to buy into the current dip. I expect to be buying some May Crude by Tuesday.

    Disclaimer:

    The thoughts and opinions in this article, along with all Stocktalk posts made by Robert Edwards, are my own. I am merely giving my interpretation of market moves as I see them. I am sharing what I am doing in my own trading. Sometimes I am correct, while other times I am wrong. They are not trading recommendations, but just another opinion that one may consider as one does their own due diligence.

    Mar 28 12:54 PM | Link | 1 Comment
  • Update On Natural Gas, Crude Oil & Gold

    This is an update on my last article written on March 14th found here. In that article I mentioned how there were exciting trading prospects in three particular markets and I was sure correct. It has been exciting and we have hardly gotten started. I will cover each market now, starting with natural gas.

    Natural Gas Is Working On Forming A Short Term Top

    (click to enlarge)

    The above chart is the daily chart of April Natural Gas, updated through the present time when I am writing this article. In my last article, I was calling for a March 19th top. Well, we did indeed rally into Thursday, but the actual high came on Wednesday at $2.935. On Thursday with the inventory report coming out, it was mostly a downer. However, today, Friday, we are rallying back towards $2.90. I am still looking for a high into the current time frame in natural gas, but feel that natural gas, crude oil and gold are all somewhat tied together as they all jockey against the action of the U.S. Dollar. Natural gas is popping today along with crude oil and since crude oil could snap back a bit further off the low, I cannot rule out a further rally in natural gas, towards the $3.00 to $3.10 level. I am still looking for a top in the next couple days in any regards, and am then looking for a 4 week selloff to test the old lows and possibly make a marginal new low.

    April Crude Oil Stopped Dropping When It Hit $42.03

    In my last article, I mentioned that if you were less anxious to get long April Crude Oil (which turned out to really be catching the proverbial falling knife) to wait to buy the energy ETFs when April Crude Oil hit $40 to $42. Well, we stopped at $42.03, missing the top of my target range by just 3 cents. We then rallied on the Wednesday Fed announcement, consolidated lower yesterday, and today we rallied back up quite nicely, taking out Wednesday's high in the process. Here is a daily chart of April Crude Oil which is current to the time I am writing this article:

    (click to enlarge)

    I just saw a headline where Dennis Gartman is calling for $10 crude oil. Well, he might eventually be right but I seriously doubt it. In the short term however, we are now looking like we are trying to form a short term bottom and could easily rally back to the $48 to $50 area if not higher. Don't listen to the hype, just follow the chart action. Watch the news on CNBC but have the volume muted. Follow the price action as the price action is the real "tell". What I see from the charts, makes me quite confident in repeating that $40 to $42 is strong support in April Crude Oil, and as we move forward trading May Crude Oil etc., we should continue to hold support there. If the $40 price level is broken, do not bet on a move under $35 and we may not take out $37 on the low end. Regarding the bearish fundamentals, the "market" already knows all about that and is pricing in all that bad news. We won't run out of storage room and at some point the supply/demand imbalance will even out on its own, thanks to these low prices. If you wait until the fundamental picture improves to buy, you will have missed the bottom and will be buying at much higher prices with risk of getting caught in a pullback. I repeat my suggestion that at $45 and lower in April Crude Oil, it is a great spot to be buying Crude Oil as well as the energy ETFs. Now we can turn to my favorite: gold!

    The Fed Induced Gold Rally Could Take Gold To $1200 to $1220

    (click to enlarge)

    The above April Gold Chart includes the current price action up to the time I am writing this article. After we got the pop on Wednesday when the Fed appeared quite dovish and pushed back expectations of a rate hike from June to September (or sometime in 2016 LOL), gold surged higher. We were saved from having to drop down into the abyss at $1100 or a bit lower......for now anyway. When we made that surge to $1175.10 on Wednesday, I posted on Stocktalk that we should correct down to the $1155 to $1160 level where one could get long. Well, we dipped on Thursday to $1158.60, and I was able to buy several contracts from the $1163s down to the $1159s. I correctly predicted that Thursday would be a consolidation day and that Friday would be a surge higher. Bingo! Higher prices on Friday. A key resistance level previously noted, was $1180 to $1184 in April Crude Oil. Today's high so far is $1183.70 and we are holding now right above $1180. What was a ceiling ($1180) later becomes the floor, as you move up the price elevator towards $1200 to $1220. Yes, we could easily rally that high before rolling over to retest the lows. I am continuing to play the long side as we test the resistance levels of $1184, $1190 to $1194, $1200 and eventually $1220. You can follow me during the day as I make comments on a Stocktalk thread.

    Although we are now above $1180 in April Gold and that should now be support, we are still vulnerable for retracements to $1175 and even down to $1170. However, for now the US Dollar had priced in an imminent interest rate increase. Now that the date has apparently been pushed back, thanks to the weakness in the economy and lowering of inflation expectations, the US Dollar needs to adjust to a lower level, allowing for commodities to correct higher, moving off their lows. I am still calling for a commodity bottom in April, but am enjoying the current kickback to the upside. I love it when the bears have to scramble to cover their shorts!

    Disclaimer:

    The thoughts and opinions in this article, along with all Stocktalk posts made by Robert Edwards, are my own. I am merely giving my interpretation of market moves as I see them. I am sharing what I am doing in my own trading. Sometimes I am correct, while other times I am wrong. They are not trading recommendations, but just another opinion that one may consider as one does their own due diligence.

    Mar 20 11:51 AM | Link | 9 Comments
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