From the Trading Desk
Unrest in the Middle East has caused crude oil to rally over 15% in the last five trading days. A coalition of ten countries led by Saudi Arabia has launched air strikes in Yemen against Shia Houthi rebels to “defend the legitimate government” of President Abdrabbuh Mansour Hadi. While Yemen is not a large oil producing country, the situation creates instability in the region as a whole. Shia-dominated Iran has already demanded that Sunni-ruled Saudi Arabia immediately halt the air strikes as it is a violation of Yemen’s sovereignty. The geopolitical instability in conjunction with crude oil running up has allowed gold to move higher this week and to break through previous psychological resistance at $1,200.
The combination of worse than expected US economic data and a broad US equity sell off has also helped buoy gold and silver over the past few days. New orders for durable goods fell by 1.40% in February m/m after an increase of 2.00% in January m/m. Gold has now traded higher in seven consecutive trading sessions and it appears that it is ready for a breather. Strong selling capped the market at $1,220 and gold has retreated to hanging just above $1,200. Silver has also retreated from its intraday highs and will look to hold above $17 as the session winds down.
My bullish stance on gold, silver and the miners was given a gift overnight with the Yemen situation mentioned above. In my opinion it was a good time to lighten up on the longs and hopefully you did so. All gold and silver did all day long was hit lower and lower prices and so did the mining ETFs. I said yesterday that gold may get to $1,225-$1,230 and while it still may do that, I would have to see it happen quickly. Still, reaching $1,220 wasn’t too bad of a move.
You might not have played a long in JDST at some point watching the price action but it wouldn’t have been that easy.
UWTI was up 25% pre-market and ended up 14.81% closing at 2.79. It has been up since the daily buy signal came in at 2.22. It would have been difficult to trade it or DWTI which tried to break out, but failed twice. On days where there is so much uncertainty, it is best to do a lot of watching. Which brings us to volatility plays.
After hitting a high of 14 a couple days ago, UVXY has had a nice run today but that might have been all it can muster. I would look to SVXY as long as their is no escalation of the situation in Yemen.
TNA opened down, fell lower and then turned green showing some strength for a rebound to continue. We were 8 points higher just a few days ago. Some are saying the market will continue to decline but this reversal to green today shows me that it still has some legs. If you were long TZA at 9.93 or 10.12 earlier in the week, then a move today to over 10.80 and then retreat may mean it’s time to sell. If you are going against the trend (long) then it makes more sense to lock in profit sooner.
RUSS gave us a move higher today with the turmoil going on in the Middle East. One could have jumped on it at the open and rode it up for a half a point as it lagged the rest of the market. From there it was flat the rest of the day. RUSS and RUSL have been trading up and down days with each other of late with neither one giving us a longer term trade. It will come at some point though.
The storage report for natural gas didn’t come in well for UGAZ today as it fell 6.67% to close at 2.38. DGAZ, which gave us a weekly buy signal at 6.66 closed at 7.41 and is still looking for a move past 7.68 and a possible run at 9.07. It may find resistance there at the 52 week high of 9.15.
ETF Research Trading Package
Along with the Mining Package below, we will be rolling out an ETF Trading Service soon that we are very excited about. Our goal is to help you make good decisions with the research we provide. This will be replacing the ETF data I have been providing for free the last 7 months here in the Current Thoughts section. We are sorry to have to do this but the time involved deserves some consideration as to preparation and naturally compensation. You’ll be happy to know that anyone that purchases the Mining Package will get this information for free for 6, 9 or 12 months depending on which Mining Package option they choose.
The ETF list will be expanded from the ETFs below to 30 and possibly more with the goal of helping you make good decisions in your investing each day where we typically see a 10% move in an ETF about every other day. What is important about this list of course is my continued analysis of what I see occurring to help you in this cause.
Details for the ETF Research Trading Service and sign up form can be found by clicking the link below.
Gold and Silver Stock Mining Package – Release date will be Friday 3/27/2015 TOMORROW– If you are signed up, look forward to an email announcement with the details then. If you haven’t signed up, please read below and sign up today.
The mining package that we will be offering has been waiting for a release at a time that I feel would coincide with my overall view of gold and silver prices reaching the lower targets I think they can fall too. I still think that lower low will come but I want you to be well prepared before choosing which companies to invest in based on the research this report provides.
Many so called experts last year in July thought the miners would take off and next thing you know they broke to lower lows. Some called this latest run up the final fall for the miners. It obviously hasn’t been and I know that’s frustrating for many who are long or have been long the miners for some time. There is a reason why I have been patient with the release of the mining package. There is also a reason why I chose the stocks I did and I’m excited about their potential. If you haven’t signed up, read the following and express your interest.
For those who haven’t signed up;
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 9 months. There will be various options to choose from that fits your personal objectives.
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 like Allied Nevada just did on March 10, 2015. 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.
If you are interested in this Gold and Silver Stock Mining Package let us know by clicking this link below and completing the form. Thank you.
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.