Aug 222014
 
VHI 2-day Aug 22nd

VHI 2-day Aug 22nd

The VHI (Valhi Inc) long trade has now hit the second price target, T2 at 7.72, for a gain of 40.4%. Consider booking partial or full profits and/or raising stops, depending on your trading plan. As mentioned earlier, this recent move higher has been confirmed on volume with this most recent sharp move on increased volume actually starting the day before this bullish article from Zachs Equity Research was published. T4 remains the final target for now but again, consider at least raising stops to protect profits if holding out for T3 and/or T4. Longer-term traders might consider a stop below the lows put in earlier this month while more active traders might prefer more aggressive stops.

This 4-year, 2-day period chart shows the track record on VHI with 3 out of the 4 trades (including this one) being successful and all three producing gains well into the double-digits. The first short trade in early 2012 hit the 3rd & final target for a 41.3% gain in less than 3 months and reversed sharply upon reaching the final target level. The second & last trade on VHI, also a short trade, was initiated in early 2013 and hit the second target (T2) for a 19.7% gain and continued to fall about a third of the way to T3 before reversing.  In late May, VHI was added as a speculative/aggressive long trade which was stopped out in June. VHI was once again added as an aggressive long entry on the breakout above 5.50 in late June and still looks promising from a longer-term perspective although the stock is quite overbought at this time.

Aug 222014
 
SLV 60 minute Aug 22nd

SLV 60 minute Aug 22nd

With SLV (Silver ETF) having pulled back to nearly the 78.6% Fibonacci retracement level, a break above this bullish falling wedge/contracting channel would likely signal the end of the near-term downtrend in silver prices. The white horizontal lines mark a few of the near-term targets.

Should prices continue much lower, SLV may test the critical 17.75ish support level that marks the mid-2013 & mid-2014 double bottom lows. Any break & sustained move below that level would have longer-term bearish implications for SLV. By sustained, I am referring to anything other than a relatively brief & shallow break below that support level which could serve as a bear-trap/flush-out move assuming prices were to regain the 17.75ish level shortly afterwards (a bullish event).

As of now, I favor a reversal in both GLD & SLV from at or near current levels but remain open to all possibilities as the precious metals are in a somewhat precarious technical position at this time.

Aug 222014
 

After falling mere pennies shy of T2 back on July 7th, VHI is once again making a run at that resistance/target level, coming within 4 cents of T2 earlier today while trading volumes have been increasing lately (a bullish sign). A solid break and close above T2 would open the door for a move to the 3rd & possibly the 4th & final target soon.

There really aren’t many new developments to report on the markets or with the Long Trade ideas other than the fact that I plan to move to the PWE long trade to the Completed Trades category as it had exceeded its previously suggested stop (both a solid move & close below 7.40) the day after the last update on Aug 4th. All trade ideas, winners or losers, are updated when removed for archiving purposes but I need to post the PWE trade removal under a separately tagged post for categorical purposes (email notifications will not be sent as that will be an administrative & not a time-sensitive post). There are also several Active Short Trades that I plan to remove as they have either exceeded a suggested stop or no longer look compelling from an R/R perspective. Those closed trades will be sent out in a single post with any relevant notes on the individual trades & an email notification will be sent when posted.

GLD 4 hour Aug 22nd

GLD 4 hour Aug 22nd

Other than the trade updates, I’m still watching GLD closely and so far, so good as GLD has found support just above the bottom of the symmetrical triangle pattern & the horizontal support zone posted on the 4-hour chart yesterday. My expectation remains that the near-term downtrend in gold prices will reverse soon with a resumption of the intermediate-term uptrend but we’ll most likely have to wait until next week to see if that is the case. As mentioned in last Thursday’s market update, my primary focus & positioning at this time is long gold & the mining sector in anticipation for the next major leg up (although I will start taking defensive measures/reducing my holdings should gold prices break the aforementioned support levels). Although I’m also positioned long with several other individual stocks and ETF, such as select commodity related ETFs,  my overall positioning remains net short with a overweight on the regional bank sector & select financial stocks but as also mentioned in last Thursday’s market update, I do not plan to any more short exposure until/unless prices move back below the upper-most resistance levels (now support) covered in that post. Feel free to contact me if you have any questions regarding any of the Active Trades or Setups listed on the site at this time.

Aug 212014
 
GLD 4 hour Aug 21st

GLD 4 hour Aug 21st

GLD (Gold ETF) has been consolidating within this large symmetrical triangle & is poised to gap towards the bottom of the pattern (along with horizontal support) today. A daily close below the triangle might open the door for a test of the mid & late 2013 lows in GLD. If this intersecting horizontal + trendline support level around the 122.80-123 area is taken out (a daily close below), the next decent support level before a test of the mid & late 2013 lows comes in around 119.40. I favor a bounce off the 123 level but will not be adding any more exposure to gold or the mining sector should prices move below the triangle pattern.

Aug 192014
 

This video covers the three primary themes that have largely guided my investment & trade idea selection for 2014 & will likely do so for remainder of the year and into 2015. This video is longer than usual so for those wishing to skip ahead to a particular section, the following topics are covered in this order:

  1. A general overview of the three main themes for 2014: Bullish gold, silver & the associated mining stocks with the mining sector significantly outperforming US equities YTD; A more significant correction in US likely before year-end; New bull markets may be close at hand with select commodities such as coal, rare earth stocks, and certain agriculture commodities.
  2. An overview of gold & the precious metals mining sector including YTD performance statistics.
  3. An overview of the US equity markets.
  4. A look at some of the more promising commodities for the remainder of 2014 & likely into 2015 including the outlook for DBA (agricultural commodities ETF), wheat, corn, the coal sector and aluminum (as an example of a commodity sector poised for a correction and why I continue prefer a very selective vs. broad-based approach to commodities as with equities in general).

 

Aug 192014
 
ANR daily Aug 19th

ANR daily Aug 19th

ANR (Alpha Natural Resources) has reached the first profit target, T1 at 4.08, for a 13.3% profit. ANR was added directly as an Active Long Trade just over a week ago and has moved up sharply since, allowing the opportunity to either book quick profits here (full or partial) or raise stops to protect profits, for those holding out for the next target. T2 (4.70) remains the final target at this time although additional targets may be added to the ANR trade depending on how the coal stocks trade going forward (see Thurday’s post on ANR for the notes & charts of the coal sector).

I just completed a comprehensive video that covers my three main themes for 2014 & likely heading into 2015 including the gold & silver mining sector, an overview of the US equity markets, and select commodities including the agricultural and the coal sector. The video is currently being processed & uploaded and should be published within the next 30 minutes although I also have a technician en route to repair some issues with my internet connection that could take me off-line for a while today in which case the video will be posted later this afternoon.

FYI- In addition to ANR hitting the first target today, another coal stock trade setup, ACI (Arch Coal) has triggered an entry today. Click here to view the previous notes & live chart on ACI.

Aug 152014
 

I didn’t hit me until I saw the Russian/Ukraine-induced reversal in GLD a few minutes ago when I checked the 60 minute chart on GLD that I had mistakenly listed the support on GLD which gold was likely to find support at earlier today. In the post that I drafted shortly before the open today I had mistakenly referred to the 124.40 support level in GLD as the 125.40 support level. I had been watching gold futures and the streaming intraday chart of GLD (shown below) and in a rush to try and get that post out as close to opening bell as possible, as I was expecting a likely reversal off the 124.40 area, I had mistakenly referred to it as 125.40 and also mistakenly added that level to the updated 60 minute chart even though GLD was trading about $1 below that level at the time as shown here in the intraday chart.

 

Obviously the reports of an incident with that Russian convoy in the Ukraine that hit the headlines around the time GLD bottomed today at 124.42 certainly gave some tailwinds to the bounce off that level today. Call it lucky timing or the charts playing out (or a little of both) but so far, we are now looking at a successful backfill of that large Aug 6th gap that took GLD clearly out of that 60-120 minute bullish falling wedge pattern. From here, a break above the recent highs of 126.81 would be the next buy signal in GLD while a break below the 124.40 support and especially the 123 support level be bearish.

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