By Chris Vermeulen, The Gold and Oil Guy

NEW YORK ( TheStreet) -- Three weeks ago on Feb. 5, we saw an extremely high level of fear in the market, with selling vs. buying volume at a 9:1 ratio. In 2009, this extreme level of fear occurred at the bottom of each significant pullback.

Since this panic-selling low in February 2010, we have seen stocks and commodities work their way higher, which we expected. Overall, the broad market looks as though it's trying to make a move higher.

Below are some ETF charts of gold, silver, oil and the major indexes.

Gold ETF: Daily

Gold led the market higher in 2009 and also led the market lower in December of 2009. It looks as though gold could be starting a new trend higher.

You can see the clean breakout of the down channel and then a test of the channel at support. This type of price action also forms an inverse head & shoulders pattern, for those who like trading patterns. This is very bullish price action.

Silver ETF: Daily

Silver has much of the same chart features as gold, but is slightly skewed. This is not particularly surprising though, as silver virtually always behaves with less defined chart patterns, due to its characteristically funky price action.

USO Oil Fund: Daily

As with gold and silver, oil's trading chart also has formed a pivot low, but the trend line is much steeper than what I am looking for. I prefer a flatter trend line, as price growth is more sustainable.

As you can see in on the USO chart, back in December, price rallied at almost the same angle as is currently the case, and then notice what happened. Once the momentum died out, the price dropped straight back down. I call steep trends like this a Parabolic Rally. Scroll up and look at the first chart (GLD) and observe the parabolic rally going into December. It too suffered a sharp drop straight back down when momentum died out.

Stock Indexes: S&P 500, Dow Jones, Russell 2000

Last week the market sold down the first half of the week, then bounced back up, forming a possible pivot low. The daily chart for these indexes looks virtually the same as the GLD, SLV and USO charts above for the past five trading sessions. But, one little thing has me concerned. ...

When looking at the 5-minute intraday charts (posted below) you can see at the very last minute before the market closed that huge selling volume flooded the ETFs. The market ended up losing all of its gain for the day.

With any luck, this was just end-of-the-month hedge, mutual fund, etc., portfolio rebalancing. But I am somewhat concerned that more of this selling could step back into the market Monday or Tuesday.

Conclusion: Overall, last week started on a negative note but ended strong after forming a reversal pattern.

It looks as though stocks and commodities have formed an ABC retrace pattern and are now ready to move higher.

How much higher, you ask?

Well, I believe 2010 is going to be a traders market. I envision an eight to 12-month sideways consolidation (large bull flag) forming. If this materializes, buying on oversold dips, as we did on Feb. 5, and scaling out on strength at resistance levels will be our goal in the coming months.

A bunch of 4%-8% trades is what I'm figuring, but with leveraged ETFs, we can double and triple those types of returns. Now that is something to anticipate with delighted optimism!

-- Written by Chris Vermeulen, The Gold and Oil Guy

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Chris Vermeulen is founder of the popular trading sites and 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.

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