• 252 days Will The ECB Continue To Hike Rates?
  • 252 days Forbes: Aramco Remains Largest Company In The Middle East
  • 254 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 653 days Could Crypto Overtake Traditional Investment?
  • 658 days Americans Still Quitting Jobs At Record Pace
  • 660 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 663 days Is The Dollar Too Strong?
  • 663 days Big Tech Disappoints Investors on Earnings Calls
  • 664 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 666 days China Is Quietly Trying To Distance Itself From Russia
  • 666 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 670 days Crypto Investors Won Big In 2021
  • 670 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 671 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 674 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 674 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 677 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 678 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 678 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 680 days Are NFTs About To Take Over Gaming?
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

Lending: The Good, Bad, And Ugly

Lending: The Good, Bad, And Ugly

Aristotle said, “The most hated…

  1. Home
  2. Markets
  3. Other

'Tis the Season to Trade the Seasonal Charts, Dow, Gold, Silver, Oil and Gas

The market has had a fantastic week so far for stocks and precious metals. The financial and energy sector are underperforming which is a concern, but we continue to hold our positions and will wait until a reversal to lock in our gains.

Things seem to be lining up for stocks and precious metals to take a breather, which is in line with the Dow Jones Seasonal chart below.

Let's take a look...

Dow Jones ETF

You can see from looking at the chart the repeated pattern of price rallies, leading to exhaustion and a test of support, followed by another repeat of the pattern. It looks as if the broad market is setup for a test of support which could happen within 2-4 days. Then as we near the holiday prices will start to drift higher. This pattern occurs more often than not as seen on the Dow Jones Seasonal chart below.

Dow Jones Seasonal Trends

This chart clearly shows weakness in the first half of December and continued strength moving forward. This has not really happened in the past two years which means we are overdue for continued strength.

That being said, the previous two years were bear markets and we are now in a bull market. So the tendency is for buying to continue into year end.

GLD ETF Fund

Gold continues to push higher surprising many of us. It seems as though money is rushing into metals and buyers are not particularly concern about price. While this is great for short term traders and those of us in the trade, we must remember that the faster things go up, the quicker they correct.

Don't get me wrong, I don't think gold is going to crash, I just think we could get a 10% correction before moving much higher. Gold is also trading near the upper end of the trend channel and could have a 2-4 day consolidation with the broad market before pushing much higher.

SLV Exchange Traded Fund

Silver has been underperforming yellow gold but is still a solid investment. It is also trading near the upper end of the trend channel and could have a 2-4 day consolidation with the broad market.

USO & UNG Funds

Oil continues to flag from its breakout back in October. This is a bullish pattern. Last Friday we saw oil open much lower then rally back into the trend channel. This is called an outside day and many times this happens to stocks and commodities as it shakes out the weak traders before starting another rally higher. We will keep a close eye for any low risk entry point.

Natural Gas had a nice rally last week which I mentioned looks a lot like a short covering rally. The price action this week suggests it was and has now made a new low. Today on CNBC it was reported that a new source of natural gas has been discovered. This resource is 20 times larger than the biggest source in the US. Enough gas to last the US over 100 years. This added to the selling on both natural gas and oil today.

Trading Conclusion:

Precious metals continue to perform well and it's important to note that PM stocks are now moving higher with gold. They have been lagging for some time but are on fire again. Great to see!

The Dow Jones index and several others look ready for a breather. The timing of these overbought charts bodes well for the seasonal December pause before the holiday rally. Time will tell.

Energy and financials are both underperforming the market and without their participation we will not see the indexes move much higher.

Continue to hold precious metals positions but be ready to lock in profits if we see the market reverse sharply. I am watching energy for a play but no setups at this time.

Check out my Free ETF Trading Newsletter

 

Back to homepage

Leave a comment

Leave a comment