Well, here we are with only hours left before the year is over. Virtually every investment is up other than the dollar.
Not much has changed since my last
. But I have provided some interesting charts that show us what is possible in the coming weeks for the dollar, gold and natural gas.
The dollar has shown some strength in the past month. It was a no-brainer trade for 2009. You were either long gold or short the dollar.
The chart shows the key resistance levels for the U.S. Dollar Index.
I have a feeling we are going to see the dollar test the 80 to 81 levels before rolling over and heading south again.
If this happens then gold and silver will continue to pull back. I am actually hoping the dollar moves higher and gold drops back to test the $1,000 to $1,060 level. This would clear the way for gold and the dollar to continue with their longer-term trends with increased momentum (dollar collapses, gold goes parabolic).
The daily gold swing trading chart is really starting to look attractive for a buy signal.
What the dollar does in the coming days will set the tone for gold.
We could see gold start to rally on Thursday, or it will become volatile and start to sell off sharply in the coming days. Right now we have very light volume, so any moves or breakouts cannot be taken seriously or with a large position.
If the dollar starts to rally we could see the
SPDR Gold Shares
exchange-traded fund drop to the $97.50 to $103 level.
Here's a chart of the spot gold trend I have been daytrading over the holidays.
I provided the chart because starting in 2010, I will provide futures trading analysis and signals.
This may seem like I'm going against my No. 1 trading rule -- never trade against the trend -- but the trend changes depending on time frame and trading style. In short, gold reversed very strongly 18 days ago, just as we anticipated it would. The selling momentum was so strong it made for excellent gold futures daytrading setups which I took advantage of over the past 10 trading days.
The chart is of the 100-ounce gold GC Feb 10 futures contract, which I traded. The chart is shrunk down and doesn't show my setups. Nor does the chart look very sexy, but it clearly shows the direction of the trend and the big selling volume.
The table under the chart shows my recent trades. If you take a close look, all of the trades I made were short trades. Because the momentum and trend is down on this time frame I only traded perfect short setups -- profiting from gold as it loses value.
United States Natural Gas Fund
ETF appears to be trading at resistance and starting to roll over.
It did move above last week's high, which voids the reversal candle we had, or else it would have been a short setup for us. I don't chase a trade -- that's my No. 2 rule -- so I am waiting for a possible bounce here, test of resistance, then another reversal back down.
In short, we continue the waiting game for more setups in the coming weeks as volatility and volume creep back into the market. The dollar and gold are currently trading at pivot points and no one knows which way to play them.
Futures trading runs virtually 24 hours a day and has provided some excellent trading opportunities that I will be providing in the coming weeks for traders.
Natural gas is trading at pivot point and looking ready for another move down.
Crude oil and the broad market will top out in the next two to five days, but there is nothing worth putting any money on at this time.
Chris Vermeulen is Founder of the popular trading sites www.thegoldandoilguy.com and www.ActiveTradingPartners.com . There he shares his highly successful, low-risk trading method. Since 2001 Chris has been a leader in teaching others to skillfully trade in gold, silver, oil, and stocks in both bull and bear markets. Subscribers to his service depend on Chris' uniquely consistent investment opportunities that carry exceptionally low risk and high return.