Over the past couple of months, gold and silver have been uneventful. In this report I have posted weekly charts to show the larger trend of gold and silver. Also I have provided small charts of the US and Canadian gold stock funds GDX and XGD.

Because this report has weekly charts, which are a slow and dull time frame to follow, I have added another one of my Kitco Spot Gold Overlay trades, which is a short day trade to liven things up.

GLD ETF – Gold Bullion Price Action – Weekly Chart
I spoke with a few members last week, who wanted me to change my analysis for gold, which I agree with. So I would like to address this now to keep everyone on the same path.

In previous reports I have pointed out the reverse head & shoulders pattern in this weekly chart below. But to be honest, it is not a reverse head & shoulders, which everyone is saying it to be.

Why is gold not in a reverse H & S pattern? Because a reverse H & S pattern is just that, it means the price will reverse from the previous trend. A reverse H & S happens after a downtrend, which forms a bottom and the trend is not moving higher.

Gold has been moving higher, which you can see in 2007 and this large pattern is more like a Cup & Handle pattern – extremely bullish.

SLV ETF – Silver Bullion Price Action – Weekly Chart
Silver is trading a little different than gold. As you can see the price is trading much lower than the 2008 high. There are also two small patterns forming, which are a small head and shoulders top or a bullish pennant.

Last Friday we saw gold and silver prices jump, but until we get a low risk entry point, I continue to watch these commodities move inside their large weekly price patterns.

US & Canadian Gold Stock Funds
These small charts show how bullish the price action is this year for gold stocks. But the exciting part, which is tough to see here, is that the Canadian fund is starting to show bullish price action. When both the US and Canadian gold funds are moving together, it means there will most likely be some tradable moves in the near future. Let’s keep focused and ready to take action in the coming weeks, as these bull flags near the end of their cycle.

Day Trading Spot Gold – Day Trading GLD ETF
I will keep this short because I have written about this once before and below is the link to read my gold trading strategy in detail.

Day trading spot gold using the real-time kitco overlay chart is what I use to identify a possible day trade. The shaded box below shows a simple waterfall sell off and when I see that price action, I will generally take a position the next day around that time for a short trade in GLD.

I did not think to save this kitco chart until the following day so the waterfall price action was miniaturized because of Fridays rally. Also I would like to note this waterfall pattern happened 3 times in a row last week and I took advantage of them.

My Basic Strategy
Gold tends to move similar to what it did the previous day and traders know this, which is why the patterns starts 5-30 minutes earlier the following day, as we anticipate the move. Moves tend to repeat for up to 3 days. So you identify a sizable move and take action on it the following two days, as long as the rest of the day trades similar to the previous days. I like to scale into positions and once I see it going my way I add one final position to increase my exposure.

I am sure some of you are wondering how I traded GLD at 8am ET?
I trade with an online broker that allows me to trade pre-market and post market hours. Not very often these setups happen before 9:30am ET but last week it did.

Important note:
Once you see the price of gold making opposite moves of the previous day, minimize your position or don’t take the trade. As you can see in this chart below, the red line is starting to move the opposite way of the previous day (baby blue line) and later in the afternoon it was completely the opposite. This is a warning that there is a shift in the buyers/sellers and you can see the next day prices spiked higher in the opposite direction.

Read my previous Gold Day Trading Guide:
http://www.thegoldandoilguy.com/articles/spot-gold-price-charts/

Technical Gold Trading Conclusion:
Overall precious metals are trending sideways in their bullish patterns and we are waiting for some low risk entry points.

During slow trading times, which we are currently in, I like to look for other profitable positions to satisfy my need to trade. As a full time trader, it is important to have a few styles of trading, which allow you to profit in any market condition. My main focus is on the commodity ETF’s, with low risk setups, but I also day trade GLD when opportunities arise and I also trade extremely over bought/oversold index plays using the leveraged ETF’s and focusing on my Active Trading Partners stocks trades, which provides profitable trades week after week. Combining these trading styles allow me to pull money from the market week after week without forcing any positions. I just let perfect setups unfold and I take advantage of them.

Soon I will be providing these gold day trades and index trades for members, which I think is very exciting. If you would like to receive my free weekly trading reports please visit my website at: www.GoldAndOilGuy.com

I didn’t believe it either until I saw the proof with my own eyes…Click here for the full report

Genius chess player with a certified I.Q. of 157 unveils his ’sneaky’ (and 100% legal) trading system which can…

… secure net profits up to $1250
… not in days or weeks
… but just 59 minutes or less

Click here for the full report

In this weekly S&P 500 that we have shown before with both the 75 and 100-week EMA. This only shows the 100-week, as it should be resistance around 10,074. On the the higher-level Fibonacci noted at 61.8% we have a turquoise extension of that line over to support on the left. If this rally continues and is really energetic, and of course if it moves above the 50% retrace, than eventually the 1226 target would be in play.

The Mess That Greenspan Made

This mostly glowing commentary in the current issue of The Economist about the recent success of one of their own – the renomination of helicopter Ben last week – contains the following news about the central bank’s slide in opinion polls.

Professional economists have applauded Mr Bernanke’s actions, but the public has not. The Fed’s approval rating stands at just 30%, lower than any other federal agency and down from 53% in 2003, according to Gallup. Partly this is because the economy has faced a devastating recession that the Fed was meant to prevent. But it also reflects discomfort with the Fed’s meddling in private markets.

Central bankers expect to be unpopular, but the Fed is uniquely vulnerable now. A bill in Congress would subject its most sensitive decisions to legislators’ scrutiny, while the administration has proposed expanding its regulatory oversight to contain future crises. This has thrust Mr Bernanke into the political arena: he appears to be at odds with Tim Geithner, the treasury secretary and a former colleague at the Fed, over his proposal to strip the central bank of its consumer-protection duties. Just one senator voted against his confirmation in 2006; between 10 and 25 from both parties may this time, though that will not deny him confirmation.

Those confirmation hearings may prove to be quite exciting after all, particularly after the recent court decision to allow Bloomberg’s Freedom of Information Act request to move forward and the expected passage of the Audit the Fed bill in the House of Representatives.

This week’s cartoon:

Read more…

By signing up for one of the government’s “deals,” a potential short seller now has no good choices and is therefore effectively barred from selling short. A prudent investor who wants to own the safest debt may likewise be barred from buying T-bills if he participates in a government-regulated, company retirement plan. Should he buy the only money fund available and cross his fingers? Government rules often force people into bad decisions. In this case, the “good deal” the government engineered for your retirement is a trap that prohibits you—at the most important time in modern history—from buying the safest debt instruments and from making money in a bear market….

Irony attends both financial markets and government plans. Put them together—as we have witnessed throughout the financial crisis so far—and you get Kafka.

Read More

The Mess That Greenspan Made

In this Chart of the Day from the folks at ClusterStock, some badly needed context is added to this week’s reports of “soaring” new home sales, reports that have caused market participants to become even giddier than usual in recent days.
Interestingly, if you go back a couple years to the height of the housing boom, you’ll find that these two sets of numbers are about reversed – around 100,000 new home sales per month and just a fraction of that number in foreclosure actions.

Crude oil gained for a second day as the dollar lost value against the euro, increasing commodities’ appeal for investors, and advancing equities boosted confidence that the global economy will rebound and revive fuel demand. Oil rose as much as 1.3 percent in New York as the euro strengthened against the dollar, making oil more attractive as a currency hedge. The MSCI World Index of stocks headed for a seventh weekly increase.
“A breakout to the upside in the euro and the stock market could equal a breakout to new territory in oil,” said Jim Ritterbusch, president of Ritterbusch & Associates, a Galena, Illinois, consultant. “We’re at a critical juncture”…..Complete Story

AC Investor

Chart courtesy of www.stockcharts.com ( click to enlarge )

Other Stocks to Watch :

Capstone Turbine Corporation – CPST ( Bearish Two Crows Pattern )
Sirius XM Radio Inc. – SIRI ( White Spinning Top )
Alcatel-Lucent – ALU ( Bullish Hammer Pattern )
DryShips Inc. – DRYS ( Bullish Engulfing )
Microsoft Corporation – MSFT ( Bullish Engulfing )
Pfizer Inc. – PFE ( Bullish Engulfing )
JPMorgan Chase & Co. – JPM ( Bullish Engulfing )
Alcoa Inc. – AA ( Bullish Engulfing )
Verizon Communications Inc. – VZ ( Bearish Engulfing )
Vantage Drilling Company – VTG ( Bearish Engulfing )
CVS Caremark Corporation – CVS ( Bearish Engulfing )
The Southern Company – SO ( Bearish Engulfing )

I didn’t believe it either until I saw the proof with my own eyes… Click here for the full report Genius chess player with a certified I.Q. of 157 unveils his ‘sneaky’ (and 100% legal) trading system which can… … secure net profits up to $1250 … not in days or weeks … but just 59 minutes or less Click here for the full report