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Current Thoughts On Gold, Silver And That Market Fall

By Doug EberhardtCommoditiesMay 18, 2017 01:29AM ET
www.investing.com/analysis/current-thoughts-on-gold,-silver-and-market-fall-5-17-2017-200189844
Current Thoughts On Gold, Silver And That Market Fall
By Doug Eberhardt   |  May 18, 2017 01:29AM ET
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I wanted to send tonight’s report out because it gives you insight into what’s going on in the markets, especially on a day that saw the markets fall the most since September of 2016.

In last nights Current Thoughts and even on Twitter yesterday, I asked the question; “Are we setting up for that market fall?” Today we got our answer. Gold took off with silver and there was some good short term profit to be made.

The key was a lower dollar but also a lower USD/JPY (Dollar and Yen). Nothing goes straight up so expect a little pullback in metals in the next 48 hours and another buying opportunity.

This is what I sent out tonight. It will give you good insight into what’s going on in the markets, especially with precious metals right now. When I write my books they are about awareness. Warren Buffet has a following because he is good at what he does. It didn’t happen because he sat on his hands and waited for people to find him, so forgive me for some self promotion now and then. Heck, I don’t even advertise but do have many referrals which I am grateful for.

I just want to bring awareness that you may not possess because we really aren’t taught much about investing.

Current Positions and Today’s Trades (One’s highlighted in yellow we are still long)

Great day. Not much to say but I do go into good details below so make sure you read everything tonight. Thanks for all the great feedback today.

ETF Symbol
ETF Symbol

Economic Data For Tomorrow

Philly Fed and Initial Jobless Claims tomorrow. Nat Gas Storage at 10:30. ECB President Draghi speaking and one Fed member in the afternoon. God help the market if we get bad data.

Economic Calendar
Economic Calendar

Stock Market I feel pretty good about my read of the market yesterday. I know I am not perfect but I have written more about a negative market than positive market the last week or so. Here is what I wrote yesterday.

It is more and more difficult for me to go against the new green weekly’s as I know they can be very powerful. But today I did just because I thought I saw some weakness. It seemed like all day the market wanted to move lower and for that matter gold higher but there were forces at work that wouldn’t let those two things happen. What those forces are I couldn’t tell you, but the fact is the dollar is heading lower and now it looks like the USD/JPY is heading lower also. This should hurt the market and help metals. Also, ProShares Ultra VIX Short-Term Futures (NYSE:UVXY) may take over for the daily trade instead of ProShares Short VIX Short-Term Futures (NYSE:SVXY), but let’s not jump the gun here.

Today I could have been more aggressive on UVXY and other short the market ETFs. There were plenty I could have called. If we are ready to tank, there is plenty of profit ahead too. I am a believer in the trends and we are just now getting some green weekly’s on the ETFs that are short the market. How long has it been? A long time. I do think if this is just the beginning, we can get more out of these but with the new way we handle green ETFs, the longer they are on the nightly report, the more we will concentrate on them on up days. So our goal is to make the first trades long and profit nicely, and lock in some of that profit, then add on days when they are UP or POSITIVE. We have the established trend behind us. Buying the dip can also work, but sometimes we get complete reversals, so why buy into weakness? Buy into strength. Also, retail mom and pop have no clue what’s going on. They will ride the market forever. They are not traders. Their brokers don’t know anything but “buy and hold” and let me collect my quarterly fee. They get paid for what? for doing as good as the market does? Anyone can buy an Index fund and fire their broker if that’s the case. Remember, they used to be called stock brokers. Now they are just fee collectors. There are some who are good but most just work on wining and dining their clients and getting assets under management. Those are the one’s who missed the 2008 financial crisis. We don’t care what the market does. It’s a new way of trading and one that allows you to take control of your wealth with some Trading Rules to follow. One good day doesn’t give you the right to relax. There is still homework to do each morning before the market begins and data to follow. But most importantly, lock in that profit when it hits your goals. We did well with that today overall. How did the mom and pop retail market do? Probably not well. Foreign Markets

I did ignore the Foreign markets today as there are no green weekly’s and I didn’t see any pop up over 3%. We should keep an eye on BZQ, YANG (YINN just turned red on weekly) and RUSS though. All 3 should follow the U.S. lower. And also, I think YANG is overdue for a bigger pop.

Interest Rates

Direxion Daily 20+ Year Treasury Bull 3X Shares (NYSE:TMF) is back to a buy I think. The more we tank the more money will run to treasuries. Lots of it.

Energy

Switching gears to VelocityShares 3x Long Natural Gas linked to S&P GSCI Natural Gas Excess Return (NYSE:UGAZ) now from VelocityShares 3x Inverse Natural Gas linked to S&P GSCI Natural Gas Excess Return (NYSE:DGAZ). Keep an eye on it tomorrow. No trades till after the storage data tomorrow please.

Oil data came in worse than expected from what I saw but UWT shot up higher. Glad it was’t the only thing we were watching today or it might have got us into trouble. We might have to lean towards DWT at this point but let the market price tell us tomorrow what to do.

Precious Metals and Mining Stocks

Yesterday I said; “Still need some weakness in the overall markets and if we get that gold should have a good ride up for us.” We got what we wanted today and profited. Now we need to catch our breath I think. I don’t like putting trades on the last 1.5 hours of the day and I didn’t want to get whipsawed out with another trade in JNUG. Gold and silver had pulled back but I did see that the USD/JPY started to fall again and Direxion Daily Junior Gold Miners Bull 3X Shares (NYSE:JNUG)/Direxion Daily Gold Miners Bull 3X Shares (NYSE:NUGT) moved up. I do think we will be at lower lows in the next 48 hours so please be careful on longs here. From an insider perspective, no, the phone wasn’t ringing off the hook today for my gold sales business. Far from it. Many investors are still in the buy the dip mode but we haven’t had this big of a market smack down since September of 2016. That speaks volumes to me of how overpriced this market is and how if everyone wants out, the market can fall quickly. Is a 1987 type of event around the corner? We’ll have to wait for China to show some real weakness but we should be leery of such. Haven’t heard the term “circuit breakers” in a long time, but think we will sometime this year.

Hot Corner (the biggest movers – 3% or more – or new ETFs that are green on the weekly – those in bold are consecutive days in the Hot Corner):

UVXY, SOXS, LABD, TZA, SQQQ, FAZ, BZQ, JNUG, UGLD, SDOW, TMF, NUGT, Direxion Daily Russia Bear 3X Shares (NYSE:RUSS), Direxion Daily FTSE CHINA Bear 3x Shares (NYSE:YANG), DRIP, (New green weekly’s for TZA, FAZ and SDOW).

Yesterday I said “Keep an eye on Direxion Daily Semiconductor Bear 3X Shares (NYSE:SOXS) tomorrow if SOXL opens lower.” I hope you did as it was up 12.65% today.

Cold Corner (the biggest moved lower 3% or more that are green on the weekly and or weekly/monthly or turned red on the weekly – those in bold are consecutive days in the Cold Corner):

SVXY, SOXL, BRZU. LABU, TNA, ProShares UltraPro QQQ (NASDAQ:TQQQ), FAS, JDST, DGLD, RUSL, UDOW, DUST, TMV, YINN, GUSH (TQQQ – finally, UDOW, SVXY and YINN turned red on the weekly today.

Green Weekly’s

These are the ETFs that have turned green on the weekly and the dates they turned green. This is used for tracking your percentage gains so you know when to take profit for each ETF per the Trading Rules profit taking guidelines. It is also used for tracking the percentage from high to keep a stop on remaining shares. These green weekly’s work as you can see from the %Gain/Loss tables. You won’t get the exact high with your trade but you will also be out before typically well before they start to fall again. Your best way to profit with the service is stick with the green weekly trend and take profit while using a trailing stop on remaining shares. Also, if these green ETFs are up for the day at the open, they offer the best scalping opportunities. I am always fine tuning this section so if there is confusion at all, email me and be specific and I’ll be happy address.

I know I have said this many times but it is worth repeating; If you stick with the green weekly trades your odds of profit increase as there is more risk with the day trades. I call the day trades with the intent of catching some runners, so will get a few 1% stop outs but eventually catch the 5% to 10% or more runners. The important part of the list below is that the longer the ETF stays on the list (the one’s at the top of the list by Entry Date) the more likely it is to turn red on the weekly and the opposite ETF comes into play as a long. You’ll notice in the last column on the right it says “Current percentage from high.” This is your normal stop out for any ETF where I don’t specifically call it per the Trading Rules which lists the trailing stops for each ETF. It is a Trailing Stop percentage from the high and I have noticed the pattern that the closer it gets to 5% the sooner the ETF turns red on the weekly.

ETF Symbol 2
ETF Symbol 2

Bid
Bid

Disclosure:

Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with capital you can’t afford to lose. This is neither a solicitation nor an offer to Purchase/Sell futures or options. No representation is being made that any account will or is likely to achieve gains or losses similar to those discussed in this outlook. The past track record of any trading system or methodology is not necessarily indicative of future results.

All trades, patterns, charts, systems, etc. discussed in this outlook and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author.

Current Thoughts On Gold, Silver And That Market Fall
 

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Current Thoughts On Gold, Silver And That Market Fall

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