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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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  • How I Called The Bottom In Natural Gas, Maybe For 2015

    Sunday afternoon on April 26, 2014, I wrote an article, click here, where I recommended buying natural gas futures, as well as the natural gas producers ETF (NYSEARCA:FCG) and especially UGAZ. Then on May 1, 2015, I wrote a follow-up article, recommending buying UGAZ on the next dip in natural gas prices. That dip occurred as expected, following the weekly inventory report announcement on Thursday, May 6, 2015. I bought June Natural Gas mini contracts from $2.755 down to $2.720. I took profits today on a fabulous break-out rally that occurred today. Here is a daily chart of June Natural Gas futures that is current to the time I wrote this article:

    (click to enlarge)

    Today June Natural Gas futures broke above the recent high of $2.824, confirming a bottom has formed. This could be "the" bottom of 2015". Thus all dips in UGAZ should be a buy and scaling in on all dips is advised. Here is a daily chart of UGAZ:

    (click to enlarge)

    Although it would have been better had you taken my advice and gotten long under $2, UGAZ can run significantly higher and should still be purchased on all dips. Scalping from the long side is advised. From the April 27th low of $1.74, to the May 4th high of $2.52 is a gain of 78 cents. If you add 78 cents to the May 7th low of $2.22, you get $3.00. Now I have a target of $3.00 in UGAZ, which could be met within the next week or so. Buying on dips every 10 to 20 cents lower to scale in buy and scalping from the long side should work out well. I like buying in the $2.40s and am hopeful the $2.22 support level will hold for now. One can also try buying on a further rally, but I favor trying to get in on dips. If you don't like trading a leveraged vehicle with slippage, a purchase of the natural gas producers, scaling in on dips, should also work out well. I will close with a chart of the natural gas producer ETF :

    (click to enlarge)

    If you buy a few shares of FCG at $11.50 and scale in buy every 25 cents lower, there should be 50 to 75 cent rallies to swing trade.

    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.

    Tags: FCG, UGAZ, DGAZ
    May 08 1:19 PM | Link | 4 Comments
  • Cycles Show Gold Bottoming Now, Or During May Or June 2015.....Or Not!

    In checking out articles today on kitco.com and elsewhere, I noticed that Avi Gilburt is holding out hope for a near-term bottom in gold, click here. Main Street Trading is also cautious, still waiting for gold to bottom, but realistic that a $50 drop might occur first, click here. Then to not help things much, Adam Button tells us how May and June are seasonally the worst months for a gold rally, click here. And if you have not had enough cycle analysis already, Fred Starkey tells us that the week starting May 18th should be a high mark for gold, which should then be followed by a drop and major low due the middle of June, click here.

    So if you clicked on all the article mentioned, you will probably be very confused by now. That is OK. It really does not matter if we have bottomed in gold, or we have more work to do. We are at the lower end of a trading range. Support will hold or it will not. If it holds you are getting long gold near the lows. The miners appeared to have already bottomed, which gives me hope that support will hold. Even if support holds we are vulnerable for a $50 drop to the lows, but that is fine. If they should make a marginal new low running stops, it should still be a false breakout down and quick short covering rally of over $100 off the lows in very short order. The bulls should almost want the bottom to be broken to get that massive short-covering rally that likely follows.

    But even if I am wrong and we end up falling $100 to $120 lower than current prices, we should quickly bounce back towards $1200 even if we are heading lower. Either way, the bulls should have no problem getting out at breakeven or with a nice profit. The risk to the downside is minimal, maybe $120, as I see it. The risk to the upside is limitless, and realistically we could see $200 to $300 to the upside without much difficulty. We are too extended in the current gold bear market to be bearish, both in time and in price.

    Scalping Mining ETFs From The Long Side Should Pay Off!

    As we weakened into the monthly employment report, which came out today, gold miners corrected lower, offering a great buying opportunity. During Stocktalk on Wednesday, May 6, 2015, I suggested buying some shares in the triple leveraged bullish gold mining ETF (NYSEARCA:JNUG), at $21.45 or better, with twice as many shares to be purchased on Thursday at $20.55, giving an average price of $20.85 if all shares filled. Here is the daily chart of JNUG:

    (click to enlarge)

    Wednesday's low was $20.88, but JNUG closed at $21.34. I bought in the $21.20s. On Thursday, I bought some JNUG in the premarket in the $20.40s, and added later more shares in the $20.20s and even caught some shares just under $20.00. With my average price of $20.55, I sold half my position when we rallied back to the $20.70s. In a different account I bought at $20.10 on the dip to the lows, for a quick scalp, but decided to hold when the nice bounce occurred. Then on a rally to $21.00, sold some more shares, and finally at $21.35 liquidated all shares in both accounts.

    When the employment report came out with a gain of 223,000 jobs for April (inline with expectations) but March was revised lower by 41,000 to a revised number of 85,000 jobs, the weak numbers caused gold to surge and JNUG to trade in the premarket as high as $22.35. But within about 10 minutes, a low price of $20.85 was scored. Then bouncing to $22.23, JNUG double bottomed just under $21.00, and now has a high of $22.39. I am now recommending buying JNUG at $21.50 and lower, and aggressively playing long around $20.00. JNUG should be a great long scalp for the time being.

    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.

    Tags: JNUG, NUGT, GDX, GDXJ
    May 08 12:38 PM | Link | 2 Comments
  • The Crude Oil Rally Is Just Getting Started, LOL!

    If you have been following my articles then you know how I was extremely lucky in being able to predict the very bottom in crude oil, a few days before it occurred. I also predicted where the first dip would stop and have remained extremely bullish during the entire ongoing rally. Well with this article today, I am stepping it up a notch!

    With Two Closes Above $60, June Crude Oil Should Now Move To $65 Almost Immediately, And $70 After That!

    (click to enlarge)

    The above daily chart of June Crude Oil is updated intraday and is not yet closed. I wanted to show how we are solidly above the critical $60 resistance for the second day in a row. It is apparent that we will close above $60 for two consecutive days, which opens the door to $65 (possibly by Friday of this week) and $70 (as early as next week). I cannot overemphasize how important this breakout in crude oil is. The action of the last couple days confirms that a bottom is indeed already in! We should not make a new low and will likely not trade under $50 again in 2015. At $60 per barrel, production was supposed to increase and keep a lid on prices. However, that lid has now been blown off and it warrants buying any and all dips in Crude Oil Futures, with the goal of taking profits at $65 and $70.

    In Stocktalk, as soon as we traded above $58, there were several followers who were wanting to take profits in their triple leveraged bullish crude oil ETN (NYSEARCA:UWTI) positions, and get short crude oil through the triple leveraged ETN (NYSEARCA:DWTI). They were convinced that $60 would be a significant resistance level. However, I warned traders to not be so quick to get short as there was no sign of a top. The sideways correction that lasted a couple weeks only saw a retracement of slightly over $2. That shallow correction was extremely bullish. It showed that longs were not getting out, but in fact were accumulating more contracts.

    Well, looking at the long-term chart of crude oil over the weekend, I got extremely bullish. Time did not permit me to get an article out until now, but I was going to predict that the $60 resistance level would be taken out this week. My bullishness was based on work I did looking at the monthly crude oil chart. We can take a look at the monthly continuation chart of crude oil now.

    Comparing Current Action To The Sell-off In 2008-2009, It Appears That The Current Crude Oil Rally Is Not About To Exhaust Itself; It Is In Fact Likely Just Beginning!

    In my previous articles, I mentioned how in late 2008, crude oil closed down for 7 consecutive months. Well in late 2014, we got a similar 7 month smack down! Well, previously, after getting the 7 down months that ended in January 2009, crude oil had 3 small up months from February to April 2009. Then the 4th month out of the hole, in May 2009, crude oil exploded. Comparing that action to the present, the recent 7 month smackdown also ended in the month of January, this time in 2015. Then we had 3 similar rally months from February to April 2015. I now expect that May 2015 will be quite similar to May 2009, where crude oil rallies over $15. That would bring the price up to the $75 mark by the end of the current month. To be conservative, I am only calling for a high of $70 in May 2015, although a higher mark is quite possible just based on the outstanding bullish momentum present in the market.

    Looking at the high of $81.99 scored in 2009, I would project a price of $85 to $87 as the high for crude oil in 2015. I could be totally wrong on my longer term projections, but the current short-term bull market action in crude oil is showing strength that is rarely ever seen. The underlying strength in this market cannot be questioned. I am recommending scalping UWTI from the long side for May and June of 2015. I may extend this recommendation later as more price action is seen. I don't expect to see corrections of more than a couple dollars, until we trade to $70.

    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.

    May 06 11:56 AM | Link | 4 Comments
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