Gold, Miners and S&P 500 Trends and Trading Signals

BY Chris Vermeulen, Contributor | 01/14/13 - 10:45 AM EST

Stock quotes in this article: SPY, GDX, GLD

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NEW YORK (TheStreet) -- Gold and gold miner stocks have underperformed in 2012 disappointing most traders. That being said it has traded in a large sideways range since September 2011 and remains stuck in this range as of this week. Investments trading sideways are not my preferred investment of choice because some commodities and stocks for that matter can trade sideways for years before making another bull market rally.

That being said in the last six months gold has started to show life that a new bull market may be starting. The new year is starting to look as though gold, silver and precious metals miners could lead the market higher if they can break out of their basing patterns. Until we get more bullish price action I am not planning to get long.

Gold ETF and Gold Miner Charts

These daily charts show the trend (up/down) along with short term extreme overbought/oversold trading days. The key to long term success is to trade with the trend 90% of the time. Only after years of experience will you know when it's ok to break the rules and even then the odds are stacked against you.

Gold Weekly Chart

Gold Daily Chart

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