By Chris Vermeulen
The gold futures chart allows for us to trade prices around the clock 23 hours a day. A lot of important price patterns are analyzed from the over night trading hours which helps to provide low risk and high probability setups for the GLD gold fund.

This hour chart shows about 3 times more trading data on gold than the GLD etf. Using this data we know if gold will be gapping higher or lower the next day and if the price is trading near a support or resistance level, etc… I focus on selling short gold at resistance levels in a down trend and buying dips during up trends.

The futures trading volume is very interesting to look at. The selling volume was more than twice what we are seeing for this bounce/rally. A low volume rally/bounce is not exactly what we want to see for a move higher. I have my doubts about this being THE NEXT LEG HIGHER, but let’s watch it unfold.

GLD Gold ETF Trading
Trading just the US market sessions does limit the trading opportunities. When commodity etf’s open each day they tend to gap up or down as the overnight trading move the price. To most traders GLD is an ugly looking chart because of its tendency to gap up and down each day. But when you focus on the gold futures charts for trend and price pattern analysis things become very clear.

Gold is moving higher currently and I am waiting for a low risk entry point before jumping on board. I don’t chase prices higher unless there is a lot of excitement in the air with lots of momentum to back up the higher risk play and, I do not feel this is a time to panic and buy gold.

SLV Silver Exchange Trade Fund
Silver has had a nice pop and I thing it will out perform gold when the time comes. But this upward slanted mega phone pattern is not what I like to trade. While it is still bullish, it’s close to a neutral pattern and breakdowns from this can be fast and painful if you do not have a protective stop in place.

It’s looking a little long in the teeth for this bounce so I am waiting to see what happens over the next few days.

Crude Oil USO Fund
Oil has had a great bounce off of a major support level back in December. Oil is now testing its October highs. It will take a few weeks for a new setup to form in oil as buying here carries about 15% downside risk.

Natural Gas UNG Fund
Last weekend I got together with my buddy who is a futures broker in Toronto. We spent a bunch of time going over some charts, swapping thoughts, ideas strategies etc…

Anyways he said a ton of people are opening futures accounts and wanting to trade natural gas. He said that is a suicidal thing to do and that almost everyone who opens an account to trade natural gas loses all their money within 3 months. Natural gas is one commodity you need to have a solid trading strategy along with strict risk and money management.

Natural gas on the UNG chart looks like a possible short play. But let’s wait and see how things unfold this week.

Gold, Silver, Oil & Nat Gas Trading Conclusion:
Trading and investing with technical analysis allows us to assess the current market volatility and trends. Understanding these things will help protect your hard earned money.

It looks like 2010 will be a fantastic year for trading! 

Courtesy: www.TheGoldAndOilGuy.com

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