Archive for January, 2011
Precious Metals and the Dollar’s Next Big Move Part II
We have seen some exciting moves in the market and with the market sentiment so bullish it should make for a sharp selloff in the coming weeks. Meaning everyone is overly bullish and owns a lot of stocks and commodities therefore the market should top and leave them holding the bag while the smart money runs for the door. The market will not bottom until all of these individuals holding the bag finally cannot take the pain of losing any more money and once we see them panic and sell them all at once only then will we be looking to go long again.
The past couple weeks I have been bombarded with emails asking if gold and silver have bottomed and if they should be buying more on these pullbacks. Those of you reading my work for the past few months know that my analysis clearly has shown how both gold and silver have been topping out. There have been strong distribution selling and price patterns on the charts are also clearly signaling a top was near.
A couple weeks ago I posted an important report covering gold, silver and the US Dollar and where the next big moves will be. Well it’s time for another update on Gold, Silver and the Dollar as they have come a long way from my last report.
Ok let’s move on to today’s charts…
Silver Daily Chart
Silver has formed a very nice looking top and it is now trading under its key moving averages. It is also currently testing a key resistance level after Friday’s bounce on the back of fears in Egypt. Unless something happens internationally I figure silver sill continue its trend down.
Gold Daily Chart
Gold futures are doing the same as its little sister (silver). I feel the general public is still very bullish on metals and before we see higher prices (new highs) the market will have to shake the majority out of their positions first. At this time gold looks like it should test the $1285 level. Depending on how long it takes to get there and the price action it forms in the following days that outlook could change but expect sellers to step in at the $1350-1355 area.
US Dollar 2 Hour Chart
The dollar has been grinding lower the past two weeks forming a falling wedge reversal pattern. It’s also important to note that on the daily chart the dollar tested a key support level last week. This should be an interesting week for the dollar and the rest of the market simple simply because when the dollar makes sharp movements it pushes the price of stocks and commodities around in a big way.
I am looking for a multi week rally in the dollar possibly longer but with small pauses or corrections along the way.
Pre-Week Metals and Dollar Trend Analysis:
In short, I feel gold and silver are nearing a short term resistance level and will find selling pressure in the coming days only to continue on their journey down for a few weeks. The dollar on the other hand broke out of its falling wedge on Friday and could have a strong rally for 2-3 days. I feel most traders and investors have been shorting the dollar for two weeks straight, so once they realize it’s going higher there will be a ton of short covering and the dollar should rip higher.
This shift in the Dollar from down to up has a direct effect on the SP500 and subscribers of my newsletter are going to take full advantage of these next big moves in the market. Just Click Here if you would like to get my daily newsletter and trading analysis and trade exactly what I am trading.
Chris Vermeulen
Amazon Plunges And Trade Triangles Save The Day
Amazon shares fall 9.5% and the company’s founder reduces his holdings.
Amazon.com (AMZN), which posted its quarterly earnings on Friday, disappointed many investors with slipping margins. The market reacted quite dramatically with shares of Amazon skidding downhill for a loss of 9.5%. MarketClub members did not have to sit through this downturn as we exited Amazon on January 21st, some five days before the report. How did we know the report was going to bad? The truth is we didn’t know, but our “Trade Triangle” technology recognized that something was amiss and alerted members who follow Amazon to exit pronto.
As the graph will show, we have had two trades since September 1st of last year and in both of these trades we were successful, giving us gains of $36.85 a share. Our long term indicator continues to be positive on Amazon, but for now intermediate term traders should be on the sidelines counting their money and waiting for a better opportunity to re-enter this stock.
Another worrying concern is what Bank of America/Merrill Lynch said today, “Owning the stock here requires trust and patience. We have seen Amazon go through investment cycles before and believe investment in growth is the right long term strategy for the Internet.”
Not exactly a ringing endorsement in my opinion.
Well, forget trust and patience. We prefer to trust our “Trade Triangle” technology as it has consistently proven to be successful. Our “Trade Triangles” produced just 2 trades in Amazon since 9/1/10. Producing a very respectable 47% return in just five months. If you’re not already a MarketClub member, you should seriously look into our “Trade Triangle” technology. It will help get you into the markets at the right time and out before everything starts to slide.
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