Over the past few trading sessions, gold has vaulted as high as $1,263.90 (April futures), silver as high as $15.99 (March futures). On Friday, both gold and silver issued weekly buy signals.
This is very positive news for a first step confirmation of a new bull market in the precious metals. But they are not out of the woods yet.
To seal the fate on the bear market and to fully confirm a new bull market in precious metals, we need to see a MONTH-END close above $1,368.00 in gold.
Will we see it? It’s possible, but not until the following happens first: Because gold closed so far above the $1,187.50 weekly buy signal on Friday …
What is more likely – and indeed is already happening – is that gold will first retest that support level, then rally anew toward the $1,368 level to test the monthly buy signal at the end of this month. Ditto for silver’s course of action: A decline back to support, then a new rally higher.
All this of course is great news for UGLD and USLV, which are now showing open gains as of yesterday’s close of 33.42 and 33.23 percent respectively.
Yes, those gains were even higher at the peak of the rallies last week. But I’m not playing this move in the precious metals for a move in gold to the mid-$1,200s. I’m playing it for a test of the $1,368.00 level in gold, and roughly the $18 level in silver.
NOTE: If we can see gold and silver fall a bit more in the next two to three days, I may opt to add to these positions, perhaps even with call options.
Bottom line: Hold UGLD and USLV. But per the below instructions, now enter sell stops to protect your gains. Details in a minute.
Oil is doing its thing again, dipping back to the $28 level, then staging another rally. The Saudis and other OPEC members have apparently agreed to freeze production at current levels, which should prove bullish longer-term.
I stand by my forecast and my recommendations: Oil is headed much higher per this cycle forecast chart, repeated here.
The bullish fundamentals will fall into place. Hold UWTI and all oil related call option positions.
If not in UWTI or the UCO call options, you may purchase them now, at the market. Refer to the position table via the link below for specifics.
Stock market: Doing its thing whipping around, but overall headed lower. Hold UVXY with your protective sell stop in place at $33.58, good till cancelled.
New Trade:
Buy Call Options On UNG, The Natural Gas ETF.
Like oil, natural gas is poised to rally, timing-wise. And like oil, it’s been consolidating at or near record lows. However, my indicators are lining up for a large move higher in gas prices, just as they are in crude oil.
I also especially like the pattern now forming in the chart for natural gas, shown here.
My recommendation: Buy natural gas – but via call options on its most popular ETF, UNG.
The July 2016 UNG call options, strike price $8.00, are only one strike price out of the money, and have plenty of time to go. Best of all, they closed yesterday’s trading session at a mere $0.37 per call option, or just $37 per contract. Dirt cheap.
My recommendation is below, in the trade table. If you are not trading options, for whatever reason, please feel free to act on the alternative, the UNG ETF. Details also provided below.
So, for today …
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For all members 1. Who own UGLD and/or USLV: A. Place a good till canceled protective sell stop for ALL of your shares of UGLD at $8.88. B. Place a good till canceled protective sell stop for ALL of your shares of USLV at $11.32. 2. Using 2% of your trading funds, buy July 15, 2016 United States Natural Gas Fund call options, with a strike price of $8.00, symbol UNG160715C00008000, at $0.50 or better to open. This order is good till canceled. I am willing to pay up for this option to get in it. But do NOT pay more than the stated price above. Alternatively, using 2% of your funds for this service, buy shares in UNG at the market and place a good till canceled protective sell stop at $5.37. |
Best wishes and stay tuned …
Larry
