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Getting Coal in Your Stocking May Be Exactly What You Want

Chris Vermeulen – www.TheGoldAndOilGuy.com

We all want new and exciting electronic gizmos and gadgets for the holiday season. Unfortunately they have the tendency to lose almost all their value within weeks because of newer versions etc… but what if you just got a lump of dirty old coal in your stocking, how would you feel?

The only individuals who would appreciate a dirty gift like that would be those forward looking investors who see major opportunities before they become the next big movers and headline news.

Knowing how to spot Stage 1 patterns is one of the most important bits of information you need to know as an investor. This one pattern is how I found RIMM which now up 100% in the past 30 days, ANR up 30% in two weeks, FSLR up 20% in 20 days and the list goes one. My main focus is on ETFs because of lower risk they provide but very powerful when applied to individual stocks.

Coal and coal stocks have been out of favor for almost two years now. But these unwanted and hated shares may soon be owned by the masses, or at least by traders and investors. A few weeks ago to I talked about the four stages all investments go through and which patters you must be able to spot in order to make huge money investing while having very limited downside risk.

You can read about them here where I used Apple and Research In Motion shares as my example: http://www.thegoldandoilguy.com/articles/collapse-of-apple-rise-of-the-blackberries-stock-market-cycle/

In summary, Trade with the BIG BOARD and only focusing on buying stocks, ETFs etc… as they are coming out of a Stage 1 Accumulation Basing Pattern. This puts the odds greatly in your favor for not only winning the majority of your trades but to generate above average returns.

 

The BIG BOARD – NYSE – Weekly Major Stock Market Trend

The New York Stock Exchange is the big board. This chart formed a reversal candle last week which points to lower prices. Its likely we see a 1-2 week dip before buyers step back in. Until then individual stocks should pause or form mini bull flags until the sellers are finished and buyers step back into risk on assets (equities).

NYSEWeekly

 

Coal Sector ETF Showing Stage 1 Basing Pattern

Coal stocks have been bouncing bottom for some time and if you did not review the Stages Report using the link above then do so now so you know what to expect in detail.

KOL coal exchange traded fund is a basket of coal companies and is starting to show signs of a new bull market. A breakout and close above $26.00 should trigger strong buying with the potential of a 21% gain before it hits my first price target. This could go way past that but one target at a time folks.

Naturally I would like to see a bull flag or pause in KOL over the next couple weeks, then look to get long using the pivot low of that pause/bull flag as my protective stop. I’m not jumping in here as the broad market looks ready to correct and ¾ stocks follow the big board which will pull KOL down.

KOLBase

 

ANR – My Top Coal Stock Pick

I pointed out ANR at $7.50 at the beginning of December to followers as it was the best looking coal stock I could find. The two key indicators “Price” and “Volume” were clearly pointing to higher prices and the potential gain even if it was just played up to the Stage 1 Resistance Level still netted a 30% move. Crazy part is that there is the potential for a 100% rally to my first price target. Follow my free ideas here live: https://stockcharts.com/public/1992897

ANRCoal

 

You want Gizmos or Coal in You’re Stocking???

In short, I really like the coal sector for the first quarter of 2013. I’m not too worried about the fiscal cliff as it’s not the end of the world and the US along with most other countries are all bankrupt together in my opinion. New rules and ideas will be implemented and life and business will continue… I am not to worried.

I am expecting stocks to continue sideways or higher into May at which time a serious correction could take place. But not to worry as we take things one week at time and will be adjusting my outlook accordingly.

Get My Trade Ideas & Alerts Delivered To Your Inbox: www.TheGoldAndOilGuy.com

Chris Vermeulen

July23Cycles

Financial Market Forecast is Looking Bleak

Good Morning!
I hope you had a great summer weekend.

This week could be a huge one for stocks and commodities. This morning the dollar index is taking another run at our weekly chart resistance level. If it can break out and start to rally this week then a possible 4-6 week sell off in stocks and commodities may be just starting.

Watch the morning video or at least the last 4 minutes where I cover  the SP500 intraday and daily chart which shows the main cycles and what we should be expecting within the coming days and weeks.

Pre- Market Analysis Points:
–    Dollar index is making new highs this morning and if it can hold up into the close today then I would expect it to keep running higher for a few weeks.
–    Oils has pulled back 5% from its high last Thursday and is now testing support and starting to bounce.
–    Natural gas is holding up well after Friday’s strong rally to new highs. It may be forming a bearish pattern with the three sharp surges to new highs pattern which I explain in the video.
–    Gold and silver trader trading down 1+% and are likely to find a little support today as they test support levels. They are at risk of a major breakdown but currently they are still holding up.
–    Bonds are reaching new highs this morning but looking ready for a 1-3 day pause. They are a little overbought.
–    SP500 charts have been the most interesting the past couple months which is why I keep focusing on it.

If you did not read my special report and wave counts then do so here: http://www.thegoldandoilguy.com/articles/put-your-seatbelts-on-its-about-to-get-bumpy/


Watch Video Now:
http://www.thetechnicaltraders.com/ETF-trading-videos/
The video clearly explains where the market seems to be trading in terms of cycles and what we should expect this week and in the coming month.

Chris Vermeulen

SP1

Put Your Seatbelts On, It’s About To Get Bumpy!

It was just about a year ago today when the S&P was sitting at fresh highs and everyone was enjoying a rather upbeat summer.  It was a nice summer, the markets were calm, and there was a surreal sense of optimism.  Then, in the matter of a few days, things got real ugly, real quickly.

Well, it doesn’t seem like too much has changed since then.  We’ve had mixed earnings reports, ever-evolving worries in Europe, and the always looming fiscal mess in the U.S.  Once again, are we in the calm before the storm?

It looks like things in Europe may start to heat up again.  Riots turned violent again in Spain as protestors took to the street over austerity measures.  With seemingly no resolution, a sinking tourism industry in the PIGS, and a typically hot summer August on its way, all signs point to further turmoil.

Technically, we’re currently seeing a number of bearish indicators setting up in the S&P and other markets.  First, on the weekly chart of the SP500 Futures we can see what appears to be a bear flag formation developing.  Note the recent rise in price since the beginning of June on decreasing volume.

Weekly SP500 Futures Chart Patterns

 

Daily Chart Elliott Wave Count For SP500

A second look at the S&P daily illustrates a down trend and 5 wave count bounce in the market, both are currently pointing to lower prices.

  • Completion of two intermediate cycles within longer term 5 wave pattern
  • Downwards wave one from April until beginning of June followed by wave 2 correction from June until present.

The wave two correction typically proceeds the longest wave, wave three, which is pointing towards a large move down (Note that in the first shorter term cycle the downwards wave three was the longest by far.  We expect the same to be repeated in the longer term cycle.)

Elliott Wave Theory Chart Pattern Trading

 

SP500 BIG PICTURE Wave Count

A look at the longer term view once again using the weekly chart, again supports our argument for a major correction.  We have just completed a 5 wave pattern since the 2009 lows, and it is looking more like a big pull back is due. Remember most major trends end after the fifth wave.

Stock Market Elliott Wave Count Chart Pattern Trading

 

Copper Weekly Chart Patterns

If we take a look at the copper ETF, “JJC”, we are provided with further justification.  Copper is often referred to as “Dr.Copper” due to its industrial application and is known to be a leading indicator for equity markets.  Copper has significantly underperformed equity markets and is likely leading the next move down.  A look at the weekly chart which points to a rather dismal outlook.  There is a major head and shoulder patterns developing.

Copper Chart Pattern Trading

 

Major Market Pattern Analysis Conclusion:

Last summer turn into a bloodbath with nothing but red candlesticks taking stocks and commodities sharply lower. If you haven’t already, it’s time to lock in some profits.  Short, intermediate, and long term cycles are pointing down, and the increasingly bearish technical developments cannot be ignored.  We’ll be looking at entering multiple shorts potentially in the very near future once/if setups present themselves.  Buckle up and stay tune for more…

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Chris Vermeulen