Whelen Lights

Xle Signal

Markets Ready to Bounce and Go Higher!

Commodities & Stocks Ready to Bounce or Rally?

 

Commodities and stocks almost look ready for a rally or at least a relief bounce. The market is down over 5% and the normal pullback this year has been 4%. Using technical analysis and inter-market analysis we can see that the market is reaching extreme lows and this usually means we are only a couple days away from a rally.

 

I work with several market technicians as we all analyze the market a different way and share our work with each other to gain maximum insight on the broad market moves. We analyze momentum cycles, magnetic cycles, volatility levels, support & resistance levels, volume analysis and inter-market analysis.

 

Each of us has found a formula which works for our individual style of trading. And by combining our work we have found that we can collectively produce some very exciting trading signals for the broad market. We focus on leveraged index funds in order to take advantage of our insights. While nothing in trading is ever perfect, the analysis for timing the broad market is very exciting.

 

Here are some quick charts on where the market is trading.

 

US Dollar – Daily Dollar Price Chart

 

This chart is a no brainer. The trend is down and trading at resistance. If the US dollar reverses back down we will see stocks and commodities move higher.

 

VIX – Daily Volatility Index

 

Again, overall the trend is down and trading at resistance. As the saying goes "When the VIX is high its time to buy".  Just to be clear, the VIX is low compared to the previous highs set back in 2008 which was around the 80 level. But, if we want to keep things simple for the current trend then the VIX is high for our current market condition. The VIX moves in the opposite direction of the equities market.

 

DIA – Dow Jones Industrial Average ETF

 

Here is the Dow Jones Index ETF and it clearly shows that when investors are selling out of their positions and getting scared of a market collapse, volume rockets higher. When we see the price pullback to possible support levels and volume increases that is a time when we should be looking to scale into a long position for a bounce, such as now.

 

 XLE – Energy Sector ETF

You can see that the energy sector is very close to a support level and volume is high. With the US dollar about to reverse back down it will help boost this sector as it is tied in with commodity prices which rise with a falling dollar. I expect we will see a price gap lower and fill this area before moving higher.

 

 GLD – Gold ETF Fund & Silver

 This chart has not changed much from last weeks report. We are getting the drop as expected this week. We could see the gap fill from early October before gold stabilizes.

 

Silver is in the same situation. Gold and silver move in tandem so we are waiting for a bottom before looking for a low risk entry point.

 

 Commodity & Stocks Trading Conclusion:

 

To keep things short and to the point, I am seeing momentum cycle lows as of today, magnetic wave lows today, and most commodities and indexes trading at support. These observations, coupled with the US dollar at a possible resistance level and market volatility spiking to an extreme high, lead me think a bounce is in the cards.

 

The market has had an amazing rally so far this year and I feel that we will have a solid year end rally going into Christmas. That being said, the recent sharp correction could form an ABC retrace pattern which means we get a bounce in the next week or so, then one more multi day sell off which will scare even more bulls out of the market. I am going to be scaling out of this oversold play quickly to lock in some gains while allowing a smaller position to ride for larger gains. 

 

For my free trading reports visit my website: www.GoldAndOilGuy.com

 

 

 

 

 

About the Author

Chris Vermeulen
Contributing Writer
Chris Vermeulen is Founder of the popular trading site TheGoldAndOilGuy.com (http://www.thegoldandoilguy.com). There he shares his highly successful, low-risk trading method. Since 2001 Chris has been a leader in teaching others to skillfully trade in gold, oil, and silver. Subscribers to his service depend on Chris' uniquely consistent investment opportunities that carry exceptionally low risk and high return.

The Signal $9.99 The Signal

Signal $9.99 Signal

Cannondale X.L.E. 2 Bib Cycling Shorts $149.99 Cannondale X.L.E. 2 Bib Cycling Shorts. These cycling bib Cycling Shorts maximize comfort and performance over the long haul. Nitro fabric offers superior moisture management and delivers high compression to your hardworking muscles. X.L.E. chamois with multiple foam densities and perforated panels reduces chafing and boosts breathability. Elastic leg grippers with silicone logos feel great against your skin and won't ride up.

Cannondale X.L.E. 2 Short Sleeve Cycling Jersey $99.99 Cannondale X.L.E. 2 Short Sleeve Cycling Jersey. This pro-level cycling Cycling Jersey takes the heat before it even reaches your body. Double-knit X.L.E. fabric with UPF 40+ protects you from the sun's harmful rays, quickly transfers sweat away from your skin and circulates cool air to keep you dry. Form-fitted design moves with your body for enhanced aerodynamics. Three back pockets hold all the extras you'll need for your ride.

Signal The $16.69 Rated: RSynopsis: It’s New Year’s Eve in the city of Terminus and chaos is this year’s resolution. All forms of communication have been jammed by an enigmatic transmission that preys on fear and desire driving everyone in the city to murder and madness. In a place once marked by conformity but now sent into complete anarchy, the rebellious Ben must save the woman he loves from the bedlam in the streets as well as her crazed sadistic husband. But the only way he can tell who to trust or who has given in to violence is by uncovering the true nature of The Signal.

Signal Path $131.24 Signal Path

Sonar Signal $10 Sonar Signal

SOS Signal $10 SOS Signal

Love Signal $10 Love Signal

Busy Signal $10 Busy Signal

First Signal $7.49 First Signal

Foot Signal $11.49 Foot Signal

Threat Signal $12.49 Threat Signal

Smoke Signal $6.99 Smoke Signal

Loss Of Signal $34.99 Loss Of Signal

Signal Transduction $229 Signal Transduction