Commodity ETF

GLD Looks like a Buy above 151

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The GLD ETF looks like a buy above 151.  The gold price has been quietly consolidating in sideways fashion the last month or so and all things considered has not undergone significant price destruction. The GLD appears to be in a coiled state right now and ideally would start to lift off tomorrow out of … Read more

SLV Obeys Top Resistance Channel Line

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The SLV looks like it has obeyed the top channel broadening wedge resistance line and has since strongly reacted down off of it on very heavy volume.

This top channel line was known in existence for a long time and was pointed out here many times at BestOnlineTrades.com.  There was a chance that the SLV could trade to an extreme above 47 for a blow off move above the top channel line but now we see that this was not meant to be.

Now the SLV finds itself trading below the bottom broadening wedge boundary line and ideally will find a way to bounce back up into the broadening wedge.

There should be some type of ‘automatic rally’ from either the current price range or a little bit lower from here that could last for several days.  These almost always occur because of the previous strong momentum.  But it can be an art, not a science in pin pointing the exact low before it actually occurs.

Ideally a gap down opening tomorrow would serve as the panic low and mark the low and then the SLV could trade higher from there.

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BestOnlineTrades Nails the Turn in the SLV ETF

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I sent out an email to BestOnlineTrades Letter Subscribers (the green form at the top of this site) yesterday on how I thought that the SLV was a short term long setup and buy for 1 to several days based on the recent 1 day washout.

I wrote in the BestOnlineTrades Letter yesterday:

Yesterday I did a post that the SLV was ‘topping’.  My main point was that it was likely a very short term top.  But in the near term I think there is a minor long trade developing in the SLV slightly under the 44 level.  43.67 is the exact number that I think could be a great short term buy. So near the close today if the SLV is between 43.50 and 44 I would rate it as a short term buy, with a possible 1 to several day up move, and this up move could eventually exceed the 47 level by a small margin.

and then went on:

My main reasoning here is the speed with which RSI (relative strength index) has become oversold back down to the 70 level.  During extreme momentum runs, a quick RSI crash to 70 range again is usually a good short term buy point again. However, it should be noted that these types of drops DO start to setup the possibility of a bearish divergence and eventual more important top.

Today the iShares Silver Trust (ETF) SLV blasted higher almost 7% in one day.  The strategy of identifying extreme momentum stocks and then watching the daily RSI blast down to oversold 70 range in one day is usually an ideal long setup and today was not exception.  This may be one of the most highly probable trades in existence today.  It is essentially an automatic rally and heavy short covering the day after a previous big drop that went counter to extreme upside momentum.

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Silver ETF May Have Topped Today

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I think it is possible the SLV ETF may have topped today.  If not today then it has a high probability of topping tomorrow if it happens to trade between 47 and 50 range.  Anything between 47 and 50 tomorrow, if it occurs, would be ideal selling juncture if entry was much lower.  That is … Read more

Silver ETF SLV Deep Into RSI Powerzone

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The SLV ETF continues to trade in near vertical fashion well into the RSI ‘powerzone’.  RSI is near the 83 range and the SLV still pushes higher.  Anytime the RSI is so ‘high’ there is always the risk of a very sharp downward pullback.  So it is a bit of an art to figure out when something is close to topping out.

My take is that SLV is not currently topped out quite yet.  It think it still has another 1 to 3 weeks of juice left in it.

Having said that if I was in SLV from the lows, I would be looking to scale out when/if the SLV gets near the 47 range.  There is a possibility that the SLV will blast above the 50 range first for a brief period and only thereafter start a sharp correction down back under 50.  This would be similar to what occurred with the gold price at 850.

But the 47 range is where I see top channel resistance start to come in and max resistance is near the 50 range.

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SLV ETF Continues to Power Higher along with Gold

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Both silver and gold continue to blast higher.  I think it is an important point to observe that gold and silver are pushing major new highs while the stock market seems to be drifting a bit.  For the first time in a long time I am maybe starting to wonder if we will see them decouple here.  In other words, see gold and silver start to feed off of paper equity market weakness.

I wrote about the SLV trading in an expanding wedge formation and a low volume retest situation near the 36 range.  This has since led to a huge upside move.  Initially I talked about how SLV could hit the 40 to 42 range.  It could be that there is room up to the 45 range now.  The SLV is currently trading very strong in the RSI power zone and I suspect will continue to do so for a bit longer.

The metals really are the real bull market and this fact is likely to remain true for many years.

slv20110408

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Gold is a Great Trend Buy Right Now

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Today the Gold price finally got the job done.  The GLD was flirting with new all time highs for a whole month and teasing both the bears and the bulls.  With today’s very clear sign of strength, the GLD ETF and the DGP ETF is a very clear trend buy right now for more upside in the months ahead.  This is about as low a risk trend buy as you will see in any market.  Day’s like today are the kinds of days traders wait a long time for.  They provide very little doubt about what the next trend will be and are a huge clue and ‘cheat sheet’ for traders.

Before today, I think still one could have made some bearish arguments for gold, but today’s move decisively puts the daily MACD and the WEEKLY MACD in buy trend mode and I expect plenty of upside from here.

Pretty much the same can be said of the GDX mining ETF.

BestOnlineTrades.com has been talking about how Silver has been leading the markets to new all time highs, then gold was in second place and the Russell 2000 third and the sp500 maybe last.  Silver continues to move higher after the successful very low volume retest about a week ago.  This was a key sign that the silver market was not ready to fall apart despite all the top picking attempts.

I really hate to overplay the ‘Marty Armstrong June 13, 2011’ 8.6 year turning point but once again I find myself thinking about this key date as we see the gold price blast higher today to a new life time high breakout.

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GLD ETF Pulls a Rabbit Out of the Hat

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The gold price managed to pull a rabbit out of the hat today and blast higher, which structured the weekly MACD into bullish crossover mode.  As of yesterday there was a risk that the GLD ETF would not be able to achieve a bullish weekly crossover and that instead we would see a ‘bear kiss’ of the weekly trend which would have put the gold price at risk of a possible break down.

Instead this ‘miracle worker’ of a commodity busted higher today and now situates the gold price in a stance for a new life time high type breakout which could be quite dramatic.  I should say though that every time I have expected or anticipated the gold price to somehow shoot up 100 dollars in a day, it has ALWAYS disappointed me and instead trickled up like molasses keeping under the radar of almost every market watcher.

The weekly chart of the GLD is indicating that the breakout should occur during the next two weeks assuming upward momentum holds on the current up trend line.

gld20110331

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Is the SLV ETF Still a Good Long From Here

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A comment poster wrote me and asked me if I thought the SLV ETF was a good long from the 37 level.  My response would be that one should be keenly aware that the SLV has already made a huge move from early February 2011 up until the present time frame.  Early February 2011 was the ‘easy buy’.

Now the SLV is in a more mature advance stage and I think if one is going to go long from here it should be more a shorter term swing trade long position with a tightly controlled stop.

Why? Because even though momentum still looks quite strong, the chances for more technical selling coming in more heavily are more likely during this stage.  So if one gets too complacent, there is the risk of getting caught in a big profit taking wave.

So, I would say that if I were to go long the SLV from here I would try to do it from 37 or slightly under and then set a protective stop loss at 35.70.  That would put the stop loss right under the recent break out area.  Assuming an entry at 37 and then assuming the stop loss gets hit the same day or next day it would equate to a loss of 3.51%.

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No Top in Silver Yet

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The silver SLV ETF continues to trade in a very strong manner.  The SLV ETF recently appears to have completed a classic Wyckoff retest on dramatically lower volume of the recent support range.  This is a very bullish sign and is not a time to think about shorting the SLV ETF in my opinion.

The recent retest of support was on 60% LESS volume and shows that the silver bears do not currently have the firing power to push this ETF down in magnitude.  The absolute worst time to short any security is on a dramatically low volume retest of a recent break out area.

I suspect we will see a further short squeeze in the days ahead that should put the SLV near the 40 range.  The silver ETF seems to be leading all markets higher.  It has gold and the stock market on a leash and may pull them higher the next couple of weeks.

Looking at the chart below one can clearly see that we recently did a retest of the important support range on 60% less volume. 

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