From the Trading Desk
With the US out yesterday for Martin Luther King, Jr. Day, the markets were quiet and gold took a brief pause from its recent rally. That rally has resumed in full force today though and the yellow metal is pressing against $1,300 for the first time since August of 2014. Gold is still feeling the effects of last week’s news of the Swiss National Bank ending the CHF’s cap against the euro and the central bank deepening negative interest rates. Gold was given further legs overnight with the International Monetary Fund cutting forecasts for global growth. In the European sphere, there is also speculation that a Greek election this weekend may lead to the country’s exit from the currency bloc. The combination of all these events has led to gold regaining its safe haven status. Gold ETF demand last week surged by over 700,000 ounces which was the largest increase since October of 2012.
Like gold, silver has made impressive ground in 2015 and is up nearly 15% on the year so far. It had a strong close on Friday by breaking through a long term down trendline and has formed a double top yesterday and today at $18. Gold breaking above $1,300 decisively will translate to silver moving above $18. It would then project to its 200 day moving average at $18.41.
Silver arrows are now all green along with gold and GDX. Things looking up but I noticed all day long that gold struggled with $1,300 and silver with $18. The price action really didn’t get going until European markets opened and for U.S. traders there wasn’t any real price action worthy of a day trade. Are we reaching a top of some sorts? Maybe. If so, JDST moving above $7.48 would be the conservative trade, or if we gap down a higher high is playable.
For those who have been long the leveraged mining ETFs, keep in mind that these should be traded, not held for wealth, especially the likes of NUGT and JNUG or JDST. Many people don’t realize that the 52 week return for JDST is -74.26% as of Dec. 31, 2014 and -83.79% for JNUG. No, they do not work inverse of each other. For this reason one should never buy one to hedge the other and if they are bought, should not be held over weekends or longer than a few days.
DGAZ was up another 15% today and was trading 50 cents higher earlier in the day before giving some back. After Thursday’s Natural Gas report came out it has been the play, but with UGAZ hitting a 52 week low of $3.30 earlier today, it should be on your radar for a higher high trade which means a break of $3.76. It’s at $3.51 now. It looks like half the nation is having a warm spell and the other half a cold spell. Kind of a toss up in that regards, so look at whichever one hits a higher high to trade.
TNA was all over the place today. Up, then down, then up. I still lean long TNA and want to see 80 reached again. Volume is higher than normal showing some interest.
UWTI still trying to find a bottom. It didn’t break to a new 52 week low today. Volume was incredibly high. I lean long but with stops at around $2.70, 12 cents below the 52 week low. Not a lot of risk with it presently trading at $2.93.
RUSL under $17 again where in the mid $15’s it may be good for a trade. Preferably closer to $10.
‘A SHOT OF WHISKEY’
In the old west a .45 cartridge for a six-gun cost 12 cents, so did a glass of whiskey. If a cowhand was low on cash he would often give the bartender a cartridge in exchange for a drink. This became known as a “shot” of whiskey.
…and now you know!
Gold and Silver Stock Mining Package
We will be coming out with a mining package where we pick what we believe to be the best mining stocks to buy based on my research the last 8 months. We have been patient in releasing this because of the timing in purchasing these mining stocks can be tricky. We were one of the only one’s who recommended selling mining stocks in September of 2010 when the HUI was trading at 512.56. Much has transpired in the mining industry since that call with many companies disappearing or being taken over. Today many companies are struggling and if we do get a further pullback in the price of gold and silver, more companies will go bankrupt. Knowing which companies have the best opportunity moving forward will be key to you getting returns that we believe will be in the 100% to 500% range, and possibly much higher for some of the miners. This package will be released in the next few weeks and we will announce it on the site.
If you are interested in this Gold and Silver Stock Mining Package let us know by clicking this link below and completing the form.
Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
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.