• AUY - Apr 16 201420140416
  • CDE - Jun 27 201420140627
  • $CDNX - Apr 03 201420140403
  • CORN - Jul 28 201420140728
  • EGO - Jan 16 201420140116
  • GDX - Jul 03 201420140703
  • GDXJ - Jun 24 201420140624
  • GLD - Jun 23 201420140623
  • $GOLD - Jun 23 201420140623
  • NEM - Mar 26 201420140326
  • NSL - Oct 02 201320131002
  • PWE - Mar 21 201420140321
  • $SILVER - Jun 19 201420140619
  • SLV - Jun 19 201420140619
  • TNK - Apr 23 201420140423
  • VHI - Jul 01 201420140701
  • XVX.TO - Apr 03 201420140403

Long-term Trades- Setups

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.

Jul 282014

CORN (Corn ETF) offers a somewhat aggressive entry here on the break above this 60 minute bullish falling wedge pattern. CORN will also offer a second objective entry or add-on to an existing position taken here if & when prices move solidly (5 cents+) above the top of the July 21st gap (26.67). I refer to this current entry as somewhat aggressive for two reasons: First, that July 21st sizable gap is not too far overhead. Gaps, particularly large gaps, often act as support & resistance, especially on the initial tests of those gaps following their creation. Therefore, taking a long-side breakout in relatively close proximity to resistance may limit the upside potential on this trade, should prices ultimately fail to surmount the 26.67 level.

The other reason that an entry here is somewhat aggressive is due to the fact that CORN might go on to backtest this 60 minute falling wedge at lower levels. As the weekly chart below highlights, $CORN (spot corn price) has been in a very powerful downtrend (actually, a third reason this is an aggressive entry) and is currently trading in what I call No-man’s Land, which is when a stock is trading in an area well above & well below any decent support and resistance levels. When trading these “catch a falling knife” trades, where a stock is in free-fall mode yet I believe a powerful trend reversal is imminent, I prefer the stock to be approaching a key support level on the weekly chart while setting up in a bullish chart formation on the daily and/or intraday charts. In the case of $CORN, the next solid support level (340ish) is about 8% below current levels.

With that being said, I still see enough potential for a possible trend reversal from current levels to initiate a starter position in CORN (CORN ETF). An ideal scenario in the upcoming days would be a gap above the top of the July 21st gap (26.67), to put in place an Island Cluster Reversal bottom, with the “island cluster” being the group of candlesticks that were formed over the last week or so. That would be a very bullish technical event & one in which I would bring CORN to a fully position. As of now, my plan is to establish a partial position on the breakout of this 60 minute falling wedge, adding if and only if price move above the top of that July 21st gap (by at least 5 cents, to help avoid a false breakout). I plan to use a stop below 25.60 in case $CORN does want to go on to test that 340 weekly support level.

CORN is being added a both a typically swing trade entry & setup as well as a Long-Term Trade Idea & Setup, as this trade is based largely off the weekly time frame and has the potential to morph into a long-term trend trade with additional targets likely to be added, should we get some decent technical evidence of a likely trend reversal in the upcoming weeks. Long-term traders & investors might consider a wider stop that that suggested above for typical swing traders. A stop somewhat below the 340 level on the $CORN weekly chart would still provide an attractive R/R if target the top of the R2 zone which comes in around 550.

Jul 032014
GDX 60 minute July 3rd

GDX 60 minute July 3rd

The divergences pointed out last week on GDX (Gold Miners EF) have continued to build with prices making a very marginal (1/2%) new high & breaking below this uptrend line today. With the marginal new high, I had adjusted the Fibonacci retracement levels with still come in virtually right with the S3 & S4 support levels.

Regardless of the continued likelihood of a pullback to one or more of these support levels, the intermediate & longer-term outlook for gold, silver & the associated mining stocks still looks very constructive IMO. As such, I have no desire to take a counter-trend trade (i.e.-short) the miners as I still would not be surprised to see the buyers overwhelm these short-term bearish divergences and today’s uptrend line breakdown. With that being said, I also continue to hold off adding back the exposure to the sector that I recent reduced, awaiting either a pullback to one or more of these downside support targets¬†-or- a solid & impulsive break above the recent trading range in both gold, silver & the mining stocks. Once again, longer-term traders and investors should not be overly concerned with the near-term outlook for the sector other than maybe strategically adding lots on a pre-determined scale in plan.

Jul 012014

As I had stated in this post last Wednesday, from the looks of the recent continued selling by the Foundation, it appears that the supply/demand equation may have reached an equilibrium point around the 5.00 level as the continued insider selling in recent sessions has been met with nearly an equal amount of buyers to soak up the supply.  With VHI (Valhi Inc) now up 36% since hitting a multi-year low of 4.98 the day before that statement was made, as well as looking at the massive volume on the steep price advance since then, I believe that the odds are now very good that VHI has seen what will likely prove to be a lasting bottom in the stock.

Continue reading »

Jun 272014
CDE daily June 27th

CDE daily June 27th

CDE (Coeur Mining) could offer an objective long entry on a break above the downtrend line although it may or may not need one more thrust back down inside the pattern. Although currently overbought with an RSI reading of 72.76, the stock made considerable gains after reaching that level in late 2013 following an oversold reading similar to the most recent one. If a breakout occurs soon, best to take only a partial position, adding on the next decent pullback assuming the charts still look constructive.

click here to view the live, annotated daily chart of CDE

Jun 242014

The first chart below is the 60 minute chart of GDX posted yesterday in which I listed my pullback targets. As GDX was still solidly entrenched in an uptrend at the time, I had placed the top of Fibonacci retracement at the top prices at that time, figuring that a near-term top wasn’t far away. As such, the key retracement levels that I am currently targeting, the 38.2% & 50% levels, came in just below horizontal support levels on that chart. Following the marginal new highs put in following today’s gap higher in GDX, I have adjusted the Fibs to reflect what I now feel more confident to be the near-term top in the gold miners that I was looking for and as you can see in the second chart below, today’s updated 60 minute GDX chart, those key Fib retracement levels of 38.25 & 50% now come in right at horizontal support levels, something that I look for to provide additional validation for a support level and/or price target. The third chart is a daily chart of GDXJ (Junior Gold Miners ETF) with some likely pullback targets, the first of which being Thursday’s gap which triggered the impulsive breakout above the primary downtrend just as with GDX, GLD, $GOLD, etc…

I wish that I could say that I had a strong preference for which support level is likely to be the final one hit, assuming of course that I’m even correct about a short-term top being put in place at this morning’s highs. I will say that I am leaning towards a pullback to the S3 level on GDX, which comes in around 24.80, but I wouldn’t be surprised to see GDX find support & go on to make new highs from any of these levels. Should GDX continue lower to find support at only the first or second support levels (S1 or S2) before moving sharply higher, that would indicate a very strong bid underneath the mining stocks and bode well for the intermediate outlook for the sector. As usually, my plan will be to gradually & systematically add back the exposure to the mining sector that I recently reduced as my profit targets were hit over the last week, focusing on the technicals of both the sectors (GDX, SIL, GDXJ, etc…), the metals (GLD, SLV, $GOLD, etc..) and of course, any specific individual mining stocks that I plan to trade or recycle back into after booking profits.


Jun 232014

With both $GOLD (spot gold prices) and GLD (Gold ETF) making very solid & impulsive breakouts above their primary downtrend lines on Thursday and prices still holding towards the high-end of Thursday’s breakout, the next long-term buy signal in gold has been all but confirmed. My longer-term swing target for $GOLD remains the 1525-1550 area although I don’t expect it to be a straight shot up. Both GLD & GDX have recently moved into overbought territory on the RSI on the daily time frames. As these daily charts of $GOLD & GDX show, all overbought readings in recent years were followed by substantial corrections in both gold & the gold mining stocks, although some of those corrections began weeks after the initial overbought reading. I will say, however, that my expectation this time around would be to see prices continue to move substantial higher, with only a relatively minor correction, at least for a few weeks, possibly months.

Of course that may or may not be the case but I figured that I would be remiss to not point out the pattern of previous corrections that followed such overbought conditions and I also wanted to share the fact that I am less concerned about the overbought conditions this time around based on the longer-term bullish technical posture of gold & the gold stocks. However, just because I don’t expect a very meaningful pullback does not mean that I think this is a very objective time to be initiating new exposure to the sector either. Not only are gold & the gold stocks overbought on the daily time frame but they are also very overbought on the short-term time frame & approaching resistance to boot (the previous T2 zone in which GDX hit & consolidated in from mid-Feb to mid-March). Just beyond that resistance zone, now labeled R1 zone, lies the reaction high from March 14th, then my 3rd & final target from the original long-term trade entry on GDX.


Zooming out to the weekly time frame on both Gold & GDX, nothing has changed for weeks now. Three weeks today, on June 2nd, Continue reading »

Jun 192014

Both GLD (Gold ETF) & SLV (Silver ETF) have made solid breakouts above their primary downtrend lines today. Although one could certainly wait to see if this breakout holds into the close today or tomorrow (a weekly close), this breakout provides the next buy signal for longer-term swing traders and investors.