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Gold, Silver, and Precious Metal Miners: New Bull Markets Forming?

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Gold and silver remain in a downtrend and crude oil is giving mixed signals, but the stock market overall remains in an uptrend.

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S&P 500 (INDEXSP:.INX) Stock Market Analysis

Over the last five years I have been fine-tuning my S&P 500 index trading with the use of cycles, sentiment, volume, momentum, and the volatility index. Until just recently some of the data I use for generating these extreme overbought/oversold conditions were only available after the market closed. This made it difficult to truly know if an extreme level was reached during a highly-volatile trading session. The exciting news is that a new data feed and a top notch programmer is allowing me to turn this once-manual calculation of 17 data points (which took me an average of 25 minutes to figure out) into a system that generates signals in real time complete with profit taking signals, trend direction, and a protective stop which self-adjusts depending on the market volatility and cycle stages.

Two other benefits include the fact that during extremely high volatility levels and mixed cycles the system does not generate any signals. This avoids the large daily swings in price that typically shake even the most seasoned traders out of the market for repeated losing trades. As well, during potential trend changes when cycles and volatility become choppy, trading signals are not generated; this helps avoid the volatility that takes place during reversal points when the bulls and bears are pushing each other around.

Below is a very basic version of the trend and signals for the S&P 500 Index as it does not show profit taking, trend reversal stops, or protective stops for individual swing trades yet, but it's coming soon.



Crude Oil Weekly Chart

Crude oil has been making a move higher over the past four weeks, but it's now testing resistance. The chart shows a high volume doji candle. This is pointing to a pause or pullback in price.



Natural Gas Weekly Chart

Natural gas futures have been under pressure the past couple months, but may have put in a bottom last week. The daily and 60-minute charts show strong buyers stepping in here.



Weekend Trading Conclusion

In short, gold and silver remain in a sideways/down trend on the daily chart. The weekly long term outlook is very bullish, and once I start to see real buyers enter the market in terms of volume and price patterns, I will start to accumulate a long position.

The stock market overall remains in an uptrend. I am waiting for a pause ro pullback before getting long the index. But that being said, there are other sectors and commodities starting to look ripe for big moves. They are not there yet, but are getting closer each day.

Keep in mind that stocks, commodities, and trading in general go in waves. There are times when you are busy with trades popping up left right and center and there are times when setups just do not happen.

Crude oil is giving mixed signals and I am avoiding it until the daily chart gives us a bullish setup.

Natural gas weekly chart looks bullish, but the current price is now trading at resistance. It must break this level before a full reversal can be confirmed.

Editor's Note: Chris Vermeulen offers more content at his sites, TheGoldAndOilGuy.com and Traders Video Playbook.
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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