Trading Ideas of the Day

The Next Few Weeks in Stocks & Commodities
Specialty: TRADING
Published: 10/8/2012
By Chris Vermeulen
Tickers mentioned: UUP, TLT, GLD, SLV, SPY

Chris Vermeulen of TheGoldAndOilGuy.com reviews 4-hour charts for metals, dollar, bonds, stocks, and energy to see what’s up ahead.

Over the past year we have had some really interesting things unfold in the market. Investing or even swing trading has been much more difficult because of all the wild economic data and daily headline news from all over the globe causing strong surges or sell offs almost every week.

For a while there you could not hold a position for more than a week without some type of news event moving the market enough to either push you deep in the money or get stopped out for a loss. This has unfortunately caused a lot of individuals to give up on trading which is not a good sign for the financial market as a whole.

The key to navigating stocks which everyone thinks are overbought is to trade small position sizes and focus on the shorter time frames like the 4 hour charts. This chart is my secret weapon and giving you both large price swings, which daily chart traders focus on while also showing clear intraday patterns to spot reversals or continuation patterns with precise entry/exit points.

While I could ramble on about why the stock market is primed for major long term growth from this point forward I will keep things short and simple with some 4 hour and daily charts for you to see what I see and what I am thinking should unfold moving forward.

Keep in mind, the most accurate trading opportunities that happen week after week are the quick shifts in sentiment which only last 2-5 days at most which is what most of my charts below are focusing on…

Dollar (UUP):
Dollar Index – 4 Hour Chart

chart
Click to Enlarge

This chart shows a mini Head & Shoulders reversal pattern and likely target over the next five sessions. The dollar index has been driving the market for the past couple years, so a lower dollar means higher stock and commodity prices.

Bonds (TLT):
Bond Futures – 4 Hour Chart

chart
Click to Enlarge

Money has been flowing into bonds for the past couple weeks with most traders and investors expecting a strong correction in stocks. As you can see the price of bonds hit resistance this week and as of Thursday has now started selling off. Money flowing out of this "Risk Off" asset means money will move to the "Risk On" investments like stocks and commodities.

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