This page has been archived and commenting is disabled.
Guest Post: How to Find Low Risk SP500, Gold & Oil ETF Setups
Submitted by Chris Vermeulen of The Gold and Oil Guy
How to Find Low Risk SP500, Gold & Oil ETF Setups
As we all know there is an unlimited amount of ways to trade the financial markets. Each person sees the market in a different way, has different skill sets, trading experience and risk tolerance levels. While some individuals create and use complete systems to make money there are some very basic trading strategies which still work well and require nothing more than basic charting, patience and a little money management.
Let me explain:
SPY – SP500 Index Trading Fund
You can clearly see the longer term trend which is down (blue trendine). But from simply drawing a couple trendlines and looking at the MACD (momentum) indicator you can see there is a possible trend reversal taking place. So far the SPY has broken out of its down trendline with a 4 day pop, and it’s now pulled back down to test support. A close below the trend line or the 50MA would be the exit points if the market did start to go south.
The SP500 is still stuck under major resistance, its 200 day moving average. But is trading above key support levels (20MA, 50MA and Trendline). I can feel the tension in the market between traders and we are about to see a big move once a breakout to the upside or down side is established. At this time its best to be in cash or have a small position with a protective stop in place. Once a trend starts there should be some low risk entry points along the way. If we see a strong reversal to the upside On Monday or Tuesday I would expect big buyers would step in to catch this new trend up.
USO – Crude Oil Trading Fund
Oil has been trading in a large bearish pennant for the past 2 months and it is nearing the apex of this pattern. The longer term picture of oil is bearish but the most recent dotted trend line and the 20/50MA crossover is signaling some strength. Also the momentum for oil is positive and that helps support the price also. Again if this was to breakout to the upside I would wait for a low volume pullback to test the breakout level, then enter on a reversal back up.
Oil is one of the more challenging commodities to trade because it is affected by the US Dollar, Political Events, and Weather. In short, even if you had the analysis and timing correct there are other factors which move the price of oil on a regular basis that could quickly turn the trade against you. That being said, keep trades small when trading oil.
GLD – Gold ETF Trading Fund
Looking at the price of gold we can see the trend is still down along with the momentum. A breakout would be the first step towards a possible entry point but I prefer to wait for a pullback after the breakout has taken place. Once we get a test of support I look to enter a position once there is a strong reversal candle to the upside. From there I draw a new support trend line from the previous low and connect it to the new pivot low (bottom of reversal candle). That becomes my new protective stop.
Gold still has some work to do before I would even be interested in taking a long position for a swing trade. But on a short term time frame (intraday charts) gold looks to be forming a low risk setup which I hope unfolds for my subscribers this week.
How to Find Low Risk Trading Setups:
In short, trading can be complex, simple or somewhere in between. You can spend 14 hours or 20 minutes a day analyzing it depending on what investments you trade, whether you’re trading full time or just checking up on longer term investments.
This analysis and basic strategy shown above can be profitable if followed correctly and works for stocks, commodities and indexes. It’s just to show how simple one can swing trade the market using very basic analysis. Personally I use a much more complex strategy incorporating 15+ other data points which allows for precise entry and exit points.
If you would like to get my Low Risk Trading Signals visit my services at: www.TheGoldAndOilGuy.com – ETF Trading – Index, Sectors & Commodities
»
- 7788 reads
- Printer-friendly version
- Send to friend
- advertisements -
Hope and Changes, Bitchez!
GLD is the new OIL? Or is Mozilla fucking with me and refusing to show the OIL chart?
Thanks for the infomercial.
What's next, an article for the shamwow guy?
that's funny.
No shit. WTF is this crap? Tyler I hope you're getting some cash or pussy for allowing these posts. This is amateur level analysis!
It may look good on paper, but those investors who got stopped out 15 points lower on Proctor & Gamble on May 6th, might argue you point.
A close sell stop gtc is no guarantee you won't get gapped open and down huge.
Been there done that, have the coffee mug and the T-Shirt.
vix calls are always an option (pun intended).
How bout some charts on historic performance of your calls?
Maybe year by year since you've been throwing the bones.
Any bonds today?
Bonds of freedom
That's what I'm selling
Any bonds today?
Scrape up the most you can
Here comes the freedom man
Asking you to buy a share of freedom today
Any stamps today?
We'll be blessed
If we all invest
In the U.S.A.
Here comes the freedom man
Can't make tomorrow's plan
Not unless you buy a share of freedom today
GLD? Smart investors are now buying physical gold and standing for delivery per contract. India 'gold season' is beginning and the Chinese are increasing their buying.
The problem with very simplistic TA like this is that every armchair technician with a pulse thinks this way ergo it becomes the crowded trade and usually the wrong side. TA now requires layers upon layers , and in a choppy market such as this with pain thresholds and time horizons so low , you have to fade the obvious.
such a fluff piece.
loan me a couple of million, and i'll give it a try.
Fucking 20,50,200 SMA and a few trend lines and his analysis makes it on zh? Maybe we should all start writing posts. I use a few things like this... can I be a big shot poster too? Is ZH going commercial? I don't like this...
cramer says that a worse than expected jobs report can wipe out all gains.....
http://seekingalpha.com/article/217835-cramer-s-mad-money-kiss-your-gain...
can u guys tell me what numbers can we expect ....n what figure would atleast qualify as "worse than expected"....last time i heard that the labor department reported a figure of 411K( taking into account the census workers....) ..what can we expect now....
remember the JOBS report is on August 6th.....the day when the cardinal cross forms...
http://www.marketoracle.co.uk/Article21550.html
does tech analysis work in a HFT world? i doubt it. I've noticed that lately everyone is saying that gold will remain weak for a while, and will pick up after September. since too many technical analyists are saying this, means that the opposite will happen. the best strategy is to do the opposite of what seems obvious from graph analysis, do you all remember what happened in July with the head and shoulders formation on the S&P? everyone were saying that the market was now bearish because of that formation, and in fact when everyone see the same signal the opposite happens.
OH BOY! i just received in the mail a magazine from Lyxor the leading ETF manager in Europe, and the cover article says: "how to earn with ETFs when the stock market goes down". when you see magazine covers like this, it is a VERY stron bull signal!