NEW YORK ( TheGoldAndOilGuy.com) -- Over the past year we have had some really interesting things unfold in the market.Investing or even swing trading has been much more difficult because of the wild economic data and daily headline news from all over the globe causing strong surges or sell-offs almost every week. For a while there you could not hold a position for more than a week without some type of news event moving the market enough to either push you deep in the money or get stopped out for a loss. Unfortunately, this has caused a lot of individuals to give up on trading, which is not a good sign for the financial market as a whole. The key to navigating stocks that everyone thinks are overbought is to trade small position sizes and focus on the shorter timeframes such as the four-hour charts. This chart is my secret weapon, giving you both large price swings that daily chart traders focus on while also showing clear intraday patterns to spot reversals or continuation patterns with precise entry/exit points. While I could ramble on about why the stock market is primed for major long-term growth from this point forward, I will keep things short and simple with some four-hour and daily charts for you to see what I see and what I am thinking should unfold moving forward. Keep in mind, the most accurate trading opportunities that happen week after week are the quick shifts in sentiment that only last two to five days at most, the focus of most of the charts that follow.
Dollar Index -- Four-Hour ChartThis chart shows a mini "head and shoulders" reversal pattern and likely target over the next five sessions. The dollar index has been driving the market for the past couple years so a lower dollar means higher stock and commodity prices.
Bond Futures -- Four-Hour ChartMoney has been flowing into bonds for the past couple of weeks, with most traders and investors expecting a strong correction in stocks. As you can see, the price of bonds hit resistance this week and as of Thursday has started selling off. Money flowing out of this "Risk Off" asset means money will move to the "Risk On" investments such as stocks and commodities.
Gold Futures -- Daily ChartGold is stuck in both categories, in my opinion. It is a "Risk Off" safe haven when people are scared of falling stock prices, and it is also a "Risk On" speculative investment when people are feeling good about the market. Gold has been trading at key resistance for a couple weeks and looks as though it's starting its next rally.
Silver Futures -- Daily ChartSilver is in the same boat as gold though it carries much more volatility than gold. Expect 2% to 4% swings regularly and sloppy chart patterns in this metal.
S&P 500 Futures -- Daily ChartAs much as everyone hates to buy stocks up at these lofty prices, I think they are going to keep going up and they could do this for a long time yet. If the dollar index continues to break down then I expect the S%P 500 to rally another 3% from here (1500) in the next one to two weeks.
Crude Oil Futures -- Four-Hour ChartCrude oil has not had much attention from me in the past few months. While it has had big price action, many of those big days took place on news causing an instant price movement making this extra dangerous to trade. I continue to watch rather than get attached to it.