TheGoldAndOilGuy's blog

The charts below quickly give you a visual as to where each commodity is trading in relation to intermediate and short term support and resistance levels, chart patterns and trend lines.

Quick Over View

The technical outlook on the silver market does not look all that strong when looking from a distance.  I like to keep eye on the longer term trend lines for possible support and resistance levels which are easily missed if you only follow the daily charts.

Gold, Silver and Oil breaks out to new multi week highs and shows signs of more strength to come. The charts below show both weekly and daily trading analysis pointing to higher prices for these commodities.

Weekly Gold ETF Trading

What a crazy day. The Fed’s announced plans to buy long-term Treasury bonds and increase its purchases of mortgage backed securities today sending everything higher except the US dollar which plummeted nearly 3% Wednesday.

Gold bullion and Crude Oil are both setting up for a rally higher if they continue to complete the breakouts. Oil looks like the best trade from a quick glance with huge profit potential but its important not to under estimate gold bullion as it can generate big moves even though is has already made a nice rally this year.

Gold and gold stocks have had a nice controlled correction over the past 9 days. We look to be nearing the bottom of the bull trend channel, which could be a great buy point. If gold has a reversal around this level, then it would make for a low risk buy signal. But there is one issue, which really concerns me, which I will explain later.

Light Sweet Crude Oil has been killing traders for months, as the price keeps bleeding lower week after week, sucking bottom pickers dry. After 8 months there seems to be light at the end of the tunnel for the oil bulls.

The past 6 months have been every interesting, as the financial markets try to find a bottom while banks go bankrupt and more and more investment scandals continue to pop up on the radar destroying investor’s life savings literally over night. It still sounds crazy, when I hear banks are going bankrupt and it just goes to show anything can happen.

Gold and gold equities have performed well over the past two months climbing in value as the broad market drifts sideways waiting for buyers or sellers to step up to the plate. I am hearing traders in a panic saying they think gold is going to start moving $100 per day and are jumping on the band wagon, and that gold’s going to $3500 per ounce soon.

Last week was exciting as the broad market dipped back down to test Hogan’s Bottom again.  The market found support and posted a nice two day rally on increased volume as buyers stepped back into the market. The two biggest sectors were financials and homebuilders posting solid gains for the week.

Trading Risk/Reward

The past few months have been absolutely crazy in the financial markets. Financial advisors and banks are taking a beating from both the market condition and clients as individuals around the world are losing 30+ of their investments.

Broad Market Trading Analysis

Last week the broad market slide lower on heavy volume as the DOW tries to hold the 8000 level. If this support level is broken then we could see another leg lower with the DOW sliding down to the 6500 level.

While gold was extremely popular the past few years, I think it’s safe to say crude oil is unbeatable for popularity, as it’s a resource which almost everyone uses on a daily basis and it affects all of us in the wallet when oil prices rise as fuel, shipping costs and petroleum products start to cost more and more.

I find from time and time that gold stocks tend to lead the price of gold during extreme times and as I mentioned in last weeks report the HUI index has warned us up to 7 days in advance, before gold made sizable drop. Well this week is a perfect example in my opinion.

Last week gold and silver remained in a trading range moving sideways, while crude oil had a large pullback on very heavy volume. Below are charts which will show where these commodities stand in relation to support and resistance as well as where we may be looking to go long in the near future.