More excellent VPA lessons in this week’s webinar during the US session as David and I focus on commodities, indices and stocks, and in this session we start with gold, which had one of its best days for many weeks, with the two drivers of USD weakness and a flight to safe haven, all helping to propel the precious metal away from the drop zone below the $1200 per our region, if albeit only a temporary respite. The safe haven flows were as a result of the uncertainty in Europe and in particular the Italian budget, but as always, this looks likely to be resolved and such flows then reversing just as fast. All of this was beautifully displayed on the renko optimizer for NinjaTrader, along with the other Quantum Trading indicators for NinjaTrader, and also confirmed on the intraday time based charts. Whilst the longer term picture for gold remains bearish, this was a day for the intra gold bugs to make money with volume price analysis confirming the initial rally and the consequent congestion and reversal off the highs.
Other commodities also benefited from the US dollar weakness with oil continuing to rise and with reduced volumes overhead on the volume point of control, we may see the price of oil continue higher and on towards $80 per barrel and beyond. The monthly chart for oil is a classic one revealing as it does the typical extended accumulation phase as the big operators move to buy and absorb all the selling pressure over several months, before developing the bullish trend away from this phase of price action. This is the Wyckoffian cycle of accumulation and distribution which occurs in all time frames and in all markets, and a perfect example on the long term oil chart.
Finally we took a look at a couple of stocks with GE gapping up on the news of the resignation of its CEO, but continuing to remain bearish and another was RES in the oil and gas sector, which was showing an excellent breakout from recent congestion and an opportunity to develop into a bullish trend higher. And of course not forgetting the major indices with the YM in particular breaking out into a new high in the daily chart.