Gold, Silver, Oil & Nat Gas Technical Trading Setups

July 27, 2009

Commodities are trying to hold their ground and could go either way quickly. There is a lot of chatter going on about gold and silver. I am hearing extreme theories from everyone I talk with. Generally when I see the market get jumpy we tend to see volatility increase which translates into sharp rallies or sell offs.

My finger is on the trigger for Gold

Below are two charts of gold (GLD fund). The first one is what I would like to see before we have a low risk setup. This chart will not only lower the overall risk but increase the odds that the rally will provide more profit. Buying after a pullback actually helps to lower the down side risk because many sellers have been flushed out.

The chart below shows what could very likely happen tomorrow. If prices move higher and the intraday price action generates a low risk entry point I will be sending out an alert. This type of setup has a lower win rate but many times the rallies from these are quick and powerful. Locking in a profit is crucial when trading steeper trend line rallies.

My finger is on the trigger for Silver

Silver has already started to move to the upside but the intraday price action did not generate a low risk buy signal. It was very close on Friday but not enough. This chart below shows what I would like to see happen to silver.

The Silver chart below is currently trying to start a new rally higher and just may happen on Monday. I will be sending out an alert if we get the proper price action tomorrow.

Crude Oil

Crude oil has had a solid rally higher and is now trading at both Trend line resistance and price level resistance. Currently we are not near a setup.

Natural Gas

Natural gas had my attention several weeks ago but is now an underdog. We need more time for this commodity to bottom before we can get anything good from it.

Technical Trading Conclusion

Overall commodities have made up some lost ground in the past couple weeks, but are now trading at short term resistance levels. What does that mean? Well the odds are in favor that we will see some profit taking pulling prices down a little and allowing for a low risk setup before taking another run higher.

Gold and Silver could be exciting tomorrow depending on the intraday price action. I will keep members posted as the day unfolds.

 

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Chris Vermeulen, founder of AlgoTrades Systems., is an internationally recognized market technical analyst and trader. Involved in the markets since 1997.  Chris’ mission is to help his clients boost their investment performance while reducing market exposure and portfolio volatility. Chris is also the founder of TheGoldAndOilGuy.com, a financial education and investment newsletter service. Chris is responsible for market research and trade alerts for of its newsletter publication. Through years of research, trading and helping thousands of individual investors around the world. He designed an automated algorithmic trading system for the S&P500 index, which solves his client’s biggest problem related to investing in the stock market: the ability to profit in both a rising and falling market. He is the author of the popular book “Technical Trading Mastery – 7 Steps To Win With Logic”. He has also been featured on the cover of AmalgaTrader Magazine, Futures Magazine, Gold-Eagle, Safe Haven,The Street, Kitco, Financial Sense, Dick Davis Investment Digest and dozens of other financial websites. Chris is a graduate of Seneca College where he specialized in business operations management.

During 1500s the Spaniards had taken 16,000,000 kilograms of silver from Peru.