Last week ended on a positive note, with stocks and commodities pushing higher into Friday's close. The market overall is looking very unstable here, so I expect there to be big price moves this week.
On the following pages we'll look at charts of the
SPDR Gold Shares
iShares Silver Trust
United States Natural Gas
United States Oil
exchange-traded funds. These will give you a feel for the trend and a sense of the prices we may see this week.
DIAMONDS Trust Daily and 60-Minute Charts
, along with the other stock market indices, has formed a bear flag that can be seen on the daily and 60-minute intraday charts above. This price pattern is a negative one and points to lower prices in the coming week.
If we get one more thrust down I figure it will spook the rest of the weak hands. That would create a setup for a very nice multiweek rally. If this flag turns into a rally, however, then we will simply wait for a pullback and buy when there is a low-risk setup.
SPDR Gold Shares Daily Chart
Gold has been doing much the same as the stock indices. Prices could rise for another day or two as it tests our blue resistance level before heading lower.
iShares Silver Trust Daily Chart
Silver has formed an interesting pattern the past few months and has now broken down. Silver's chart continues to look weak as it drifts up to test resistance with a bear flag pattern that points to lower prices in the coming days, much the same as gold.
United States Natural Gas Daily Chart
Sorry for all the lines on this chart. It looks like a mess, I know, but it does show a possible trend change in United States Natural Gas.
The trend has been down for more than a year, but now it looks as though it's forming a reverse head-and-shoulders pattern and a possible bull flag. These two patterns point to much higher prices in the coming months.
Natural gas seasonally rallies from mid-February into mid-April. So this could be something we could catch for a multimonth play. I may provide a stock to trade this rally in gas in addition to the ETF in the coming days or weeks.
United States Oil Daily Chart
Crude oil has been selling down very strongly for the past six weeks, but it is now trading at a key pivot point. Oil looks as though it's trying to bottom here, and in the next one to two weeks I think the energy sector will provide some great trades.
The stock market and metals either bottomed last week or they have another leg down. If the latter is the case, I expect that to happen this week. The charts are pointing to lower prices still. If the market does rally then we will simply watch it and buy the pullback in one or two weeks once there is a low-risk setup.
I hope everyone had a great weekend and. My daughter Mirabelle was born on Valentine's Day, and everyone is healthy and happy!
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At the time of publication, Vermeulen had no positions in securities mentioned.
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.