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Gold, Silver, Oil, and the Fear Index Trends


This week may provide some trading opportunities now that investors are giddy about stocks again.

This week may provide some trading opportunities for us if all goes well now that most traders and investors are all giddy about stocks again. Last week we saw money move out of bonds and into stocks, and the bullishness vibe in the air reminds me of many market peaks just before a 5%+ correction in stocks.

Depending how the S&P 500 unfolds, my firm may be going long or short equities, long precious metals, long bonds, and our iPath S&P 500 Short-term Futures ETN (VXX) trade may spike in our favor.

Last week's strong move down in bonds as the herd moved out of bonds and into stocks may be providing us an opportunity to catch a dip or bounce in the price of bonds. If the stock market sees strong selling this week, money will run back into bonds.

Looking at precious metals it looks as though gold, gold miners, and silver may still head lower this week. The charts are still bearish and pointing to another multipercent drop in value. Gold will look bullish around $1,600, Market Vectors Gold Miners ETF (GDX) around $48, and silver around $30, but we need to see one more wave of strong distribution selling for that to take place.

Crude oil has recovered nicely from its 5 wave correction, which shook us out of the trade for a profit. I still like the chart for higher prices, but with it trading at resistance and a high possibility of sellers stepping back in at this level, I am not getting involved here.

The S&P 500 made a new high last night but has run into sellers early this morning taking prices straight back down. The chart in pre-market looks as though we will see lower stock prices later today, and with any luck the fear index (^VIX) will continue to rise in our favor.

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Editor's Note: Chris Vermeulen offers more content at his site,
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No positions in stocks mentioned.

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