Gold & Commodities

The Gold & Commodities category is a sub-section of General Market Analysis that includes charts and commentary associated with precious & industrial metals such as gold, silver, and copper as well as various commodities such as oil, gas, wheat, corn, etc…

Jul 252014
WEAT daily July 25th

WEAT daily July 25th

WEAT (Wheat ETF) will trigger a long entry on a break above this steep downtrend line. For a large part, commodities have been my bread & butter so far this year (pun intended) with a long-side trade on WEAT earlier this year (not posted on the site) following the break above that previous downtrend line as well some very lucrative trades in the miners, catching the bulk of both of the major rips in the gold & silver mining stocks this year (which are once again starting to look interesting as the pullback/consolidation that I was looking for to help work off off the recent divergences & overbought conditions may be complete…more on the miners soon).  Copper, including the Copper ETF, JJC, may also be setting up for a nice long-side swing trade (thanks for bringing that to my attention B.G.) in addition to some other commodities as well.

Stops on WEAT should be dependent on one’s preferred price target(s) although a relatively tight stop, should WEAT breakout soon, could be placed slightly below the recent lows. There’s also a good chance that I may adjust the price targets depending on the chart of $WHEAT (spot wheat prices). Additional profit targets may be added as well.

click here to view the live, annotated chart of WEAT

Jul 182014

Those who checked the links to the recently posted 60 minute live chart of the SPY & QQQ might have noticed some resistance levels that I added earlier today. With this being an OpEx day (options expiration), I typically don’t place much consideration into what the market does as OpEx days are often driven more by position squaring due to all of the expiring options than by the true underlying forces of supply & demand. Regardless, I figured that I would go ahead & point out those resistance levels out as prices are current challenging them at this time. We’ve also seen prices on the SPY regain the wedge today, something that definitely warrants monitoring into next week as if we don’t see prices move back below the wedge by early next week, along with a break of the support level that the Q’s bounced off of yesterday, then the odds that the markets will take out the recent highs will rise sharply.

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Jul 152014

Market commentary & new trade ideas continue to be on the light side as the risk/reward on both the long & short side for just about all sectors remains unfavorable at this time. Regarding the US broad markets, both the SPY & QQQ continue to grind higher while the divergences that I’ve been pointing out for weeks now only continue to build, thereby increasing the chances of a correction and long-side breakouts failing. The live charts for most of the US broad indices (SPX, NDX, COMP & RUT) have all been updated although little has changed recently other than the possibility of a double-top pattern formation developing on the $RUT (Russell 2000 Small Cap Index).

The divergences & near-term overbought conditions in the gold & silver mining stocks has begun to play out with GDX & SIL already down nearly 7% since the peak on Thursday morning & GDXJ (junior gold miners ETF) down over 9% since then. Based on my interpretation of the charts, I still favor additional downside in mining sector in the coming days, possibly weeks and have listed an updated pullback target range on the 60 minute GDX chart above.

Jul 102014
EGO stock chart

EGO Third Price Target Hit

The EGO (Eldorado Gold) Long-Term Trade idea hit the third profit target (T3) yesterday, as well as today, for a 36% gain from entry. As discussed in the mining sector video posted earlier today, the odds for a pullback in the mining stocks are quite elevated at this time and that holds true for EGO as well.

Not only are reactions off the price target levels typical in general but EGO is also coming off overbought levels (on the daily RSI) not seen since the stock peaked in Sept 2012 as highlighted on the left of this updated daily chart. I don’t expect anything remotely close to the 46% plunge in the stock that immediately followed that previous similar overbought condition, as that one had occurred during the early stages of the recent bear market in the mining sector whereas this time around, the stock is most likely in the early stages of a new bull market.

I’ve also added an very steep uptrend line on which prices current sit precariously on top of. Any solid break or daily close below that trendline would likely spark a correction which could provide another objective entry in the near future.  T5 remains the final long-term target at this time but again, the odds of at least a decent correction before EGO gets there is quite elevated at this time. Additional details on this trade, including the longer-term bullish case, can be viewed in the Gold & Silver Trade Ideas video posted on June 13th.

Click here to view the live, annotated chart of EGO.

Jul 102014

The first part of this video covers the both the near-term & long-term outlook for gold & the mining sector. A case is made that although the intermediate & longer-term outlook is still bullish, the mining sector is overbought while at resistance, thereby elevating the odds for a near-term pullback in the sector at this time or at the very least, careful consideration should be made before adding new exposure to the sector at this time despite the recent bullish price action. At the end of the video, we take a quick look at the charts of a few of the largest components of the GDX (gold mining ETF): GG, ABX, NEM, SLW, & FNV.

Jul 102014

I’ve received a few inquires as to my thoughts on the mining stocks recently and although I posted my thoughts on the sector in this post just yesterday, things move fast in the market & that holds especially true for the mining stocks when the sector is hot as it has been lately.  First off, I want to clarify or expand on yesterday’s statement that I my plan was to wait until either my pullback targets were hit OR both the metals & the miners clearly broke out of their recent trading ranges. The key word in that statement, which may be subject to various interpretations, is clearly Continue reading »

Jul 092014

SSRI SIlver Standard Resources) has hit the final target, T3 at 9.18 (recently trading as high as 9.19 so far today) giving this trade a 42.3% gain since entry just over one month ago. Typical swing traders should consider booking full profits while longer-term traders or investors should at least raise stops if planing to hold out for additional gains.

While I remain longer-term bullish on the mining sector, this most recent trade on SSRI was based off the 60 minute time frame with T3 list as my final target as, although the stock may certainly continue to climb, the near-term R/R for typical swing traders is no longer favorable to remaining long at this time. With that being said, SSRI may be added back as another swing trade or possibly a Long-Term Trade idea in the near future should another objective entry in this silver mining stock develop in the coming days, weeks or months. Previous & updated 60 minute charts below: