NEW YORK (TheGoldAndOilGuy.com) -- Over the past two months, the SPDR Gold (GLD) - Get SPDR Gold Shares Report exchange-traded fund and Apple (AAPL) - Get Apple Inc. Report have had a sizable bite taken out of their share prices.
Active traders along with the longer-term investors have had a wild ride this fall watching these investments slide to multi-month lows. The big question is when will gold and Apple shares bounce?
Here we are again with another election behind us and Barack Obama in the White House. Many think this means four years of the same thing -- printing, Inflation and higher stock prices.
Is this good or bad for Americans, or the world for that matter? I doubt it, but who really knows and who cares? There is nothing anyone can do about it now. So buckle up your seatbelt and focus on trading and investing with major trend both within the United States and abroad using exchange traded funds.
Currently, the broad stock market and commodities are in a full-blown bull market, so the focus should be to buy the dips until proven wrong. Below are some charts showing the important breakout levels for Apple, metals, oil and key indexes like the
Be aware that during pullbacks that last more than a month, which is the market has done, some of the biggest drops in price happen just before prices bottom. Scaling into positions is the key to minimal draw downs.
AAPL Stock Chart:
Shares of Apple clearly show the down channel that must be broken before investors start buying again. This stock seems to have big potential for $650 to be reached quickly. If Apple shares rise so will the overall stock market.
GLD Exchange-Traded Fund:
During August and September investors flooded the gold market in anticipation of QE3. Since then gold has been drifting lower with profit taking and because of some slowly strengthening U.S. economic numbers. Gold looks ready for a run to the $1,800 but may stabilize here for a few weeks first.
iShares Silver Trust Exchange Traded Fund (SLV) - Get iShares Silver Trust Report:
The price of silver moves similar to that of its big yellow sister, gold. While the charts look the same silver is highly volatile and can supercharge your portfolio when metals rally.
United States Oil Fund (USO) - Get United States Oil Fund LP Report:
Crude oil has been correcting for a couple months also and still has a lot of work to do before a new uptrend to be triggered. Currently oil is trading in the middle of its trading range, but once the price breaks above $93 per barrel a good investment fund would be USO.
iShares Russell 2000 Small Cap Index (IWM) - Get iShares Russell 2000 ETF Report:
Small-cap stocks typically lead the broad market in both directions. They are the first to rally and the first to rollover and sell off. The major indexes including the
Dow Jones Industrial Average
Standard & Poor's 500
plus the New York Stock Exchange have not formed clean chart patterns, which is why my focus is on the Russell 2000.
Small-cap stocks are now showing a rising relative strength compared to the S&P 500 large-cap stocks and this is very bullish for stocks in general. The best way to trade this index is through the exchange traded funds IWM and
Direxion Daily Small Cap Bull 3X Shares
Post-Election Trading Breakout Summary:
In short, history shows that equities tend to rally after an election. For a detailed outlook of how to trade stocks and indexes during the election cycles be sure to read my report
"The Election Cycle - What to Expect in Stocks & Bond Prices".
This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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.