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ETF Research Trading Analysis for 8/19/2015
I don’t know if anyone has noticed this or not, but even with all the volatility we had this week, every single ETF that was listed on the sheet that was green on the weekly did well today but one, SVXY, the ETF that I showed the volatility in yesterday was down for the day.
For all trades labeled today I would still throw out caution and see if there are quick reversals. We had a typical up and down or down and up day for many and if you see the ETF is in mid-range, it becomes a more difficult trade at present and I would be more cautious or trade with smaller shares still. While you see some familiar faces on the sheet that have turned green, remember they also turned red not too long ago. That said, the green color represents trend and you can’t ignore a trend. You just need to know a trend reverses and take profit and keep stops.
We had 2 very good calls from yesterday, RUSS which broke out and EDZ. YANG kept going higher and got within $1 of the $105.90 mark I mentioned yesterday. It opened at 98 and we had a shot at profit there. DWTI also got within $9 of the $199 target from the call I made when it broke $160 as to the next level it could reach. ERY was up another 7.6% and the only tough trade was the higher high on the mining ETFs which I caught for a little profit today. All in all, considering it has been a tough week of trading, the trends are powerful when green and if we lean that way, we have a better chance at profit than not. I hope you were able to play some of these.
Technically, if I were managing my own fund, whenever an ETF hits green I would buy it until I either get stopped out or if turns red on the weekly. My stops would be a little wider than normal, and y\s, I will get stopped out of some trades, but the ETFs that get us 10%, 20%, 30% or much more make up for any of the ones we get stopped out of and lose a little on.
GOLD MINING RELATED ANALYSIS
Yesterday I said to look at the dollar and that it is do or die time for the mining ETFs. They opened higher which gave us some direction and the dollar took a hit falling from the 97 range to 96.43. This is what these mining ETFs needed as the last attempt higher I said was pathetic.
To see how tough it is to trade a volatile week, and I showed you the chart of SVXY yesterday, look at the chart of higher highs and lower lows you had to deal with in JNUG this week. I had said that market makers love to churn your accounts and that’s what they did.
We finally hit a higher high for the week but I will still throw caution out there because these have not hit green on the monthly yet. JDST, DSLV and DUST are still green on the monthly. I also want to throw in the fact that nothing has changed in my mind that we get lower lows in gold and silver, but for now, from a micro perspective, the higher high in gold should continue.
The data the Fed is seeing is still not good. The CPI report today doesn’t show their inflation target of 2% close to being hit and the 10 year treasury took a nosedive after the report. Remember, perception has it that higher rates is bad for gold and if the Fed isn’t going to raise rates, then this is why gold got a little bump after already being up for the day. The Fed knows they have a credibility issue and if they don’t get the stock market up and running now, the chances of a rate hike become slimmer. The bottom line is, look at the price action and trade the green trends long with your stops.
YANG as I said above got us within $1 of the 105.90 target. It then fell back to the 102 range by the close. Hopefully those that were in took some profit and kept moving their stops higher. YINN I would be a buyer over 25.08 now. Did you know that YANG, which has been on a nice run since 60 on June 10th, is still down 22% for the last calendar year? The next stop could be the 114.70/115.70 mark hit in March.
RUSS broke the 44.06 mark and you should have moved your stops to 42.62. Looks like we are getting the run I was talking about. We might see some temporary resistance or consolidation here, so be aware of it. 63 though is not out of the question.
DWTI and UWTI – there is a reason you don’t hold into reports any longs. DWTI opened at 170.49 up a bit before the report and jumped up to 175 after the report and kept on going to a high of 190.50. It closed at its highs and is now only 9 away from the 199 target from its high today. This was a big one day move of 13% and 21 points so a pullback can always come and it is presently down 95 cents after hours. I would go long if you have not got in for a scalp on a break of 190.50 or take UWTI on a break of 96 cents or 1 dollar if conservative. These reports just keep coming in worse and worse and there’s no stopping the bleeding for oil at present. As many know, this fits in with my deflationary scenario. Keep an eye on the dollar below 96 and see if we still get a bounce in oil for a trade.
Looks like ERY is the winner as it was still green on the monthly. I would go long at the open tomorrow per the rules.
UGAZ moved up and then to the lower lows but only by a few cents. The Thursday storage report will tell us if DGAZ becomes a play or if UGAZ can get a boost. I would only scalp UGAZ longs at present.
With all the volatility we got the direction today and it coincided with the green signals we have had most of the week, albeit off and on which is typical of Fed data release weeks.
EDZ got to 48.64 high today, close to the first target of 49.35 mentioned yesterday, closing up over 3%. Still have the goal of hitting 55.48 and 59 before possibly reversing or consolidating for a further break out to 96 if we simply capitulate.
SVXY didn’t get the news it wanted from the Fed and even before that opened down below the stop for anyone who was still in it. If anyone had the guts to buy the dip however, it went down to 89 and closed at 92.42. In fact, it hit a high of 94.71 before dipping to that price, a gain of 5 points from the bottom. It is down to 90.63 after hours and weak again, and if you went long I would keep ystop at 89.58.
TLT yesterday was back in buy the dip mode and it opened lower than yesterday’s close at 123.06 and closed at 124.76 It hit a higher high most of the day and ended up near the high of the day.
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
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