• AGNC - Jan 24 201420140124
  • ALIAF - Mar 20 201420140320
  • ANV - Mar 05 201420140305
  • AUY - Aug 12 201420140812
  • CDE - Dec 19 201420141219
  • $CDNX - Apr 03 201420140403
  • CORN - Nov 17 201420141117
  • EGO - Jul 10 201420140710
  • GDX - Sep 08 201420140908
  • GDXJ - Jul 31 201420140731
  • GFI - Aug 28 201420140828
  • GLD - Dec 16 201420141216
  • $GOLD - Dec 16 201420141216
  • HL - Mar 06 201420140306
  • HMY - Mar 26 201420140326
  • KGC - Mar 06 201420140306
  • KOL - Sep 25 201420140925
  • NEM - Aug 29 201420140829
  • $Platinum - Nov 21 201420141121
  • PPLT - Nov 21 201420141121
  • SGG - Nov 21 201420141121
  • SIL - Jun 06 201420140606
  • $SILVER - Dec 16 201420141216
  • SLV - Dec 16 201420141216
  • WEAT - Sep 03 201420140903
  • XVX.TO - Apr 03 201420140403


Long-term Trades- Active

Long-term Trades are trade or investment ideas that have the potential for significant returns over a longer-term period, typically several months or more. This category of trade ideas might be useful for the longer-term swing trader or investor looking for investment ideas to supplement their existing portfolio and prefers a less active, more hands-off approach to investing.

Dec 192014
 

CDE (Coeur Mining Inc.) has broken above the neckline of the IHS pattern, triggering the alternative entry or an add-on to the initial position taken around 4.20 (bottom of the right shoulder). Targets have been added with T3 & T4 only potential, not official, long-term targets at this time, pending a breakout of gold above the downtrend line and how silver trades going forward.

The ultimate success or failure of this trade (although it is already up over 20% from entry) will ultimately depending on whether or not my primary bullish scenarios for gold & silver play out in the coming months. Therefore, the potential 3rd & 4th targets are for longer-term traders & investors with a bullish outlook on silver & gold that took CDE at the bottom of the left shoulder, possibly adding here on the breakout, while employing wider stops. The initial targets (T1 & T2) are for typical swing traders and have a decent shot of being hit even if gold and silver only move back up to the top of their recent trading ranges before reversing.

As always, the price targets are set slightly below the actual resistance levels in order to help assure a fill, should prices reverse just shy of resistance. T4 is aligned with both horizontal resistance as well as the approximate price measurement of the inverse head & shoulders pattern (IHS). Those who established a long position towards the bottom of the right shoulder might consider raising stops to the 4.60 level at this point. Previous & updated daily charts below.   click here to view the live, annotated chart of CDE

Dec 162014
 

I received the following question (late last night) regarding yesterday’s price action in precious metals & the CDE (Coeur Mining) trade idea, posted below:

Q: Wow, what a turnaround today. Was looking so strong in the early afternoon and they got dumped like all gold mining stocks. Curious as to your thoughts on it now.

A: My take is that the selling in the broad markets is starting to trigger forced selling/margin calls on both retail and the fully leveraged institutional traders which forces them to liquidate gold & silver (along with their long-side/bottom calling bets on crude). Hard to say how much more of that is left but my take remains that commodities and metals has a lot less downside at this point than do equities. I may be proved wrong but even if I’m right on the stocks down/commodities and metals up in 2015 call, just about everything gets sold during panic sell-offs. Therefore, it could get worse before it gets better in the metals & commodities although putting all that aside, CDE still looks fine from a longer-term technical perspective.

FWIW- I learned (the hard & costly way) years ago to keep my trading light during the month of December as trading volumes dry up which in turn opens the door to a few big “stop-clearing” counter-trend days in just about every asset class out there.

As long as gold remains above the 1180 (spot gold)/114.50ish (GLD-gold etf) levels I remain cautiously bullish on gold. Both yesterday & today (so far) have seen gold backtest that key support level following the recent fake-down (false breakdown) and break back above that level, which was defined by the mid & late 2013 lows as well as the early Oct 2014 reaction low (i.e.-triple-bottom). As previously stated, I view the fact that gold was able to reclaim the 1180 level as quite bullish (a bear-trap) although there is still quite a bit of work to be done in order to help solidify the longer-term bullish case for gold and with prices still precariously flirting with the 1180 level, it can (and most likely will) break either way sooner than later.

As per yesterday’s update on gold, I believe that the 1250 area is an important overhead resistance level, defined by both the downtrend line as well as horizontal resistance. Any solid & sustained break above that level would considerably strengthen the longer-term bullish case for gold while a break below the recent lows around 1130 would likely usher in a new wave of selling. Although my read on the charts is for an upside resolution of this recent trading range, trading is likely to continue to be difficult with large prices swings as gold chops around in what I refer to as “no-man’s land”, which is a battle ground between the bulls and the bears.

Silver has moved sharply lower over the last two days, moving back below both the 16.05 horizontal support/resistance level which it had just recently broken above, as well as the downtrend line (see previous daily chart or click the link to the live chart of $SILVER on the “Live Chart Links” sidebar). However, for now, both silver and gold are clearly in short-term uptrends which began with the Nov 5th lows (and uptrend simply being a series of higher highs & higher lows).

Again, I remain “cautiously” bullish on silver & gold at this time primary for a few reasons: 1) Both are still trading not far above multi-year lows within a larger downtrend. Despite the short-term uptrend, it is much too early to say with a high degree of confidence that the recent rise off the Nov 5th lows is anything more than a counter-trend bounce. 2) Both gold & silver have yet to take out their primary downtrend lines which are generated off their respective 2011 highs, i.e.- both silver & gold are trading below significant resistance. 3) Although my scenarios on the US Dollar, Euro, & Yen appear to be playing out as all three appear to have recently reversed trend, as with gold & silver, it is still too early to say with a fair degree of confidence that these are anything more than brief, counter-trend moves in these currencies.

Dec 122014
 
$GOLD daily Dec 12th

$GOLD daily Dec 12th

I’ve mapped out my preferred scenario in this updated daily chart of $GOLD (spot gold prices). My current expectation is for a reversal around 1250 followed by either a relatively shallow pullback (first set of arrows) or a deeper pullback to around the 1180 level before prices move higher to breakout above the downtrend line and move considerably higher. The latter scenario has the potential to form a very symmetrical Inverse Head & Shoulders Reversal Pattern which would project to around the 1340 level.

Of course I’m open to all possibilities, including both a more immediate breakout above the downtrend line (which aligns with my call for a near-term pullback in the $USD) as well as one more new low in gold before a more lasting bottom is in place. As such, this chart will be updated as any significant technical events develop.

click here to view the live, annotated daily chart of $GOLD

Nov 212014
 

PPLT (Physical Platinum Shares ETF) offers an objective long entry on this breakout above the bullish falling wedge pattern. T1 is the sole target at this time with additional targets likely to be added soon, depending on how the charts play out going forward. Suggested stop below 117.64 or higher if targeting only T1 although longer-term traders & investors might consider a scale-in strategy with higher price targets & wider stops.

With the $USD still in an uptrend and GLD currently still attempting to solidly take out the 115 level, more conservative traders & investors might opt to wait for those aforementioned events (dollar reversal & a confirmed GLD breakout) to occur before establishing a position. We’ve also yet to see a confirmed, end-of-day breakout in $PLAT (spot platinum prices) although keep in mind that the spot charts below are EOD (end-of-day) and reflect yesterday’s closing prices. Platinum futures are currently trading up nearly 2% so a close above the downtrend line on the daily spot chart below today is likely, barring a reversal into the close.

Daily chart of PPLT along with the daily & weekly charts of $PLAT (end-of-day spot platinum prices) below. Besides PPLT & futures, there are several other options for trading platinum although these are all thinly-traded ETFs: PGM, PTM, PLTM, LPLT, & SPPP. Click here for information on PPLT.

Nov 212014
 

SGG (Sugar ETF) will be added as an Active Long (swing) Trade & Long-term (investment) Trade here around the 41.45 level with a suggested stop slightly below the recent low of 39.55. Targets TBD. Daily chart of SGG and weekly chart of $SUGAR (spot sugar prices) below:

Nov 172014
 
CORN daily Nov 17th

CORN daily Nov 17th

As I’ve spend some time away from my desk over the last few weeks, there are quite a few trade ideas in need of updating. As most of these trade updates are not time sensitive, email notifications will not be sent out on the remainder of the updates.

CORN (Corn ETF) hit the second price target last week. Although the odds of a pullback and/or consolidation around this level are elevated, T3 remains the final target at this time. As prices are still trading in close proximity to the Consider booking partial or full profits and/or raising stops, depending on your trading plan. If holding out for T3, an objective stop would be below the 25 area (assuming an entry on the wedge breakout). Updated daily chart shown.

Sep 252014
 

KOL (Market Vectors Coal ETF) will be added as an AGGRESSIVE Long Trade & Long-Term Trade idea here around the 17.24 level. I’ve pointed out this long-term basing pattern in KOL recently and I’ve been following several of the individual coal stocks with interest lately, as they are in what looks to be the final stages of being “puked-up” by frustrated longs throwing in the towel and finally writing many of these companies off for good. I am fully aware of the environmental issues the coal industry faces and even some of the unique aspects within the US coal industry (e.g.- cleaner burning Appalachian coal vs. the “dirtier” but cheaper sulfur-laden Illinois basin coal). Here’s a link to an informative overview of the US coal industry for those who might be interested in this “catch a falling knife” trade.

Fundamentals aside, the technical case for an aggressive long entry here for either a bounce trade or very likely, a bottom in the coal stocks can be made from these two charts below. The first chart is a weekly chart of the Dow Jones US Coal Index, showing what appears to be an Inverse Head & Shoulders Pattern in the making. Keep in mind there is still quite a bit of work to be done on this pattern, first & most importantly would be to see prices reverse very soon in order to finish putting in a right shoulder (i.e. – a move back up towards the neckline of the pattern), while keeping the symmetry of the pattern intact.

Also included below is the daily chart for KOL, showing that prices are approaching the bottom of the 15+ month basing pattern while extremely oversold. Buying this support with the appropriate stops below seems like a very objective entry although keep in mind that many of the individual coal stocks in a virtual death spiral, under extreme distribution and in such instances, it is not uncommon to see a substantial but relatively brief overshoot of support. As such, my preference taking a position here as a potential long-term/bottoming play would be to use a stop criterion of three consecutive weekly closes below the 17.00 level. That should allow enough time for any temporary, momentum driven overshoot of support to regain the bottom of the long-term basing pattern, assuming that this is indeed a selling climax in the coal sector.

 

 click here for the live, annotated weekly chart of $DJUSCL       click here for the live, annotated daily chart of KOL 

I also have a short list of my favorite individual names in the coal sector which I might also add as official trade ideas soon. That list includes CLD, OXF, YZC* (a Chinese coal stock), WLT, NRP, ACI, &  BTU. I can not stress enough the risk involved in buying any of these individual coal stocks as most are still in free-fall and the risk of bankruptcy on any of these names in the near future is certainly a possibility. With coal still being the cheapest energy source and a presidential election coming up (lost coal jobs = lost votes, hence, I would expect some pandering/support to the US coal industry from both parties in the very near future), my guess is that even if the coal industry is going the way of the prehistoric plants & animals that created it, the extinction of the US coal industry isn’t going to happen overnight.

On a final note, my preference for positioning into the individual coal stocks as potential bottoming or even just “oversold bounce” trades is to use a shotgun style, scale-in approach: buying very small lots in each of the individual names above over the next several weeks, only bringing my exposure to the sector to a “full position” once we get some fairly decent evidence of a trend reversal. As always, DYODD and only consider trades that align with your own risk tolerance, objectives & trading style.

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