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Trading Blog

  • Trends are examined using chart analysis to determine price direction and strength of each sector. 

  • Trading opportunities are identified by using various charting indicators, including 12 Points Trend Strength indicator.  

  • Out of the 11 sectors we follow, the trader can usually find opportunities at any time.

Latest Posts

Posts with trade setups are based on probability factors and are posted for educational purposes. Make trades at your own discretion.
Posts with the latest updates are moved to the top of the list.

VNQ, Vanguard Real Estate ETF new downside targets

May 16: VNQ, Vanguard Real Estate ETF has triggered new downside targets according to Fibonacci extensions. The targets were triggered as the price went below the entry point at 68.96. The ultimate oscillator confirms price weakness. If the 100% target is reached, it means the price would drop in half from here.

Fidelity description of VNQ: “The investment seeks to provide a high level of income and moderate long-term capital appreciation by tracking the performance of the MSCI US Investable Market Real Estate 25/50 Index that measures the performance of publicly traded equity REITs and other real estate-related investments. The advisor attempts to track the index by investing all, or substantially all, of its assets-either directly or indirectly through a wholly owned subsidiary, which is itself a registered investment company-in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index. The fund is non-diversified.”

Silver Daily Chart Pattern Analysis

May 9: Since the precipitous drop down to $11.64, we have been watching for new trends to develop in silver. Demand for silver has a large industrial component, so it follows that with global industry in a slump that the price of silver would be subdued.

In the silver futures chart above we can see that the first useful fibonacci extension trade formed from the 11.64, 14.98, 13.90 pattern. This gives confidence that we can now search for more tradeable patterns to develop.

The one we are watching now is noted on the chart. There have been three attempts to cross the trigger point at 15.73 shown by the green line. On Friday the line was decisively exceeded with a close of 15.78.

On the negative side, the Ultimate Oscillator is still pointing downward. This is a warning that it could still be too soon to buy.

Intrepid traders could buy, but keep tight stops. See our article on methods for trading using fibonacci extensions.

We don’t like the risk with futures trading, so we prefer to use ETFs instead. SLV is very liquid for short term trading while PSLV is more secure for long term trades or investing in our opinion.

Silver: This Pullback “Always” Happens

April 21 AM: Once again we see silver having a pullback to or below the previous resistance point.  Bulls must be aware that silver “always” does this.   We are using a chart of SLV to show this current pullback.

These corrections can be deep and long lasting, or shallow and brief.  We suspect that this is collateral damage due to trader/fund distress over the collapse of crude oil.  Many market participants are facing margin calls and are forced to sell everything.

Crude Oil and ETFs: we are switching to USL

For our trend following tables we are discontinuing following USO and switching to USL.  USL is a rolling contract of the next 12 months of crude oil futures.  

The May contract for crude oil has collapsed to unprecedented minus figures.  They are paying people to take crude oil at the Cushing, Oklahoma hub.  This is due to decreased demand and lack of storage capacity.

The USO crude oil ETF is based on holdings of front month futures.  There is speculation now that June futures will also collapse, since it is doubtful that demand or storage capacity will change much before that contract expires also.  USO might not survive as a viable ETF.

It is worth noting that obviously there are many traders and funds that were exposed to crude oil and may have gone bust this week.  In that case it is often imperative that they exit all of their positions in everything in order to pay margins.  This could account for some of the sympathetic selloff in stocks, gold, and other commodities.

 

 

Gold Daily Chart with Andrew’s Pitchfork and fibonacci extensions

October 3: The tines of the fork act as magnets, attracting and repelling price.  Note how price followed the lower tine, then jumped to the middle tine, followed it for a while, then jumped to the upper tine and followed it for a while.  Now it has bounced off of the middle tine.

October 15 update: Gold returned to the center tine of this fork.

October 30: Chart was updated today with trend change trigger line added.  Price continues along the center line of the fork.

December 18:  Chart was updated today.  The bottom tine has been acting perfectly as support.

December 28 update:  Fibonacci extension targets have been added.  Upon a move past the green trigger line at 1520.93 the 50% target at 1595.65 and 100% target at 1745.10 become probable.  This is based on a low of 1267.3, high of 1566.20, and a low of 1446.20.

December 31 update:  The game is on.  Spot gold reached 1524.80 overnight, predicting a rise to 1595, then 1745 during the next few months.

January 8 update:  Spot gold went over $1600 overnight, which decisively crossed the 50% target.  This makes the 100% target at $1745 likely in the next few months. Normally we would expect a slow grind back and forth to stay above a big even number like $1600.  Trades based on this setup would raise stops to the green line trigger point now.  Selling half at the 50% level while raising stops would have been good money management in this case.

January 18 update:  There is a similarity between this chart and the charts of silver and mining share ETFs that offers encouragement to fibonacci extension traders.  If you look at the corrections from February 2019 to May 2019 and the correction from September 2019 to November 2019, these two corrections look similar in duration and depth.  So this proportionality gives added probability that the fibonacci targets listed above on December 28 are valid.   The same pattern can be used on silver and mining share ETFs at this time.

February 21 update:  The chart was updated today.  The identified patterns continue to hold nicely.

March 3:  The chart was updated today.  The fork pattern is holding well.  The fibonacci pattern identified on December 28 remains in effect, so $1745 is still in play.

March 14 update:  Price dropped below the fork, but the daily uptrend remains in place.  On the weekly chart there was an outside bar key reversal to the downside, which is bearish for the intermediate term outlook.  The monthly chart remains bullish.

April 13 update:  The Fibonacci extension forecast identified on December 28 above was completed today with a high on gold futures of $1752.  Although the price came close to breaking below the stop level of $1446, it stayed above it by $4.  The Andrew’s pitchfork pattern has still not been broken below the trend break trigger line.

Long Term Real Estate Chart

August 16, 2019: VNQ, is the Vanguard Real Estate ETF “tracking the performance of the MSCI US Investable Market Real Estate 25/50 Index that measures the performance of publicly traded equity REITs and other real estate-related investments.”
Make of it what you will. 2007 was considered by many at the time to be a real estate bubble.

Chart updated September 10.

March 21, 2020 update:  VNQ has fallen to 59.68.  We wouldn’t expect a booming real estate market any time soon.

Gold:Silver Ratio starting in 1980

The chart shows the historic gold/silver ratio from 1980.  The ratio was 16 in 1980.  The dotted line shows the median level of about 62, which at $1500 gold would mean $24 silver.  A ratio of 16 would mean $93 silver.

Silver seems unlikely to return to the historic 16 to 1 ratio now that governments are no longer drawing supply for minting silver coins intended for everyday use as money.  

Long term holders can use this chart to make allocation decisions on purchasing and selling gold or silver.

March 18 update:  The ratio today had a high of  131.41 which is a 5000 year record.

Gold, Silver, and Miners Posts

Stocks, Real Estate, Bonds, and Currency Posts

Crude Oil, Agriculture and Commodities Posts

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