Gold Trends, Hot Commodities and the Major Indexes ... - Money Talks

Gold Trends, Hot Commodities and the Major Indexes - Trade the Trend! Written by Chris Vermeulen Monday, 21 December 2009 07:23

Ed Note: Chris Vermulen saw the correction in Gold coming in the posting " Exhaustion - a breather is due " commenting "Don’t get me wrong, I don’t think gold is going to crash, I just think we could get a 10% correction before moving much higher". Full article HERE.

Gold Trends, Hot Commodities and the Major Indexes, Trade the Trend! Gold has been leading the market for almost a year. Last week gold and gold stocks were trading at support looking ready to bottom but as you will see in my charts below, both broke support on heavy volume. With gold now under performing the stocks market, I get the feeling we could see the broad market top. Topping is a process and after this strong climb I figure it will be choppy (tough to trade). Much like the price action on the Dow and S&P500 the past month, but this time it will be on a larger scale. From a technical stand point the major indexes are trading at a key resistance zone from Oct 2008. This has been an amazing year for trading but I think the time has come for a correction or another melt down depending on how you view the US economy. It does not really matter which happens as we can play both directions. As far as the fundamentals go, well the US economy in my opinion is scary. All I know is that if the markets start to melt down everyone better make BIG money on the way down because a severe correction will cripple the county as millions more will become unemployed. I am concerned that current recession may turn into a depression. ‘If’ we get another stock market meltdown, literally every asset class will go down with it. The only difference I think will be the trend of gold. Everyone has started to buy gold or at least thought about buying some. ‘If’ a meltdown occurs I think gold will go down in price at first with everything else, but if we are headed for another market collapse EVERYONE will turn to gold as the safe haven, triggering a massive parabolic spike straight up which could last years. Enough of this negative talk, Lets take a look at the short term gold trends.

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Gold Trend – Daily & 60 Minute Chart The trend of gold broke down from the red rising channel a couple weeks back as expected. We were taking profits at the $115 level. The more recent price action shows two technical breakdowns on the daily chart and the small 60 minute overlaid chart. The daily breakdown crashed through our support trend line and the 60 minute chart shows the breakdown below the previous low. The price is currently trading at resistance and the odds now favor lower prices.

Silver Trend – Daily Chart Silver is trading at support and has yet to break the previous low. I think we will see this happen in the next few days.

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Crude Oil Trend – Daily Chart Oil support like was with had this $35.75 a tight aIwhich scale great stop. and Ichart in setup pointed sold over at last 2-3 out first week days on target the with in case of daily many $37prices chart for readers alast dip 3.5% week. lower profiting profit. as When Many the from buying selling the of us oversold dissipates. into stillsellers an hold oversold bounce awere core Average off position setup price out. The 60 minute shows this play and how the price popped once the cleared

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