Precious metals are the place to be!

The following comments were sent to Myra P. Saefong, Financial Writer for Marketwatch. com, at 9:02 AM, CST:
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The year 2005 has provided us with some great markets and some great trends to trade. The Precious metals certainly rank at or near the top of that list. I believe that "we ain't seen nothin' yet". This year has just been a warmup for 2006. The Perfect (Financial) Storm is about to come raining down on us and the Precious metals will be the place to be in the coming year. Record high debt levels, both public and private, a housing debacle that is currently underway, the return of "Stagflation", and a sharply lower stock market will turn the Precious metals sharply higher and possibly to new all-time highs. I'm sorry to have to be such a "Grinch" on the last trading day of the year but I have to tell it as I see it. America's standard of living has been artificially supported for way too long and this has allowed the average consumer to spend like there's no tomorrow, using their homes like ATM machines. When the speculative froth begins to evaporate (it already has in some areas) the result is going to be too much for the economy to stand. We've been living high on the hog for too long and we're about to experience the flip side of our largesse. Markets go up and markets go down. Hold on to your Gold, Silver, Platinum, Palladium and Copper. These are the markets that will pay huge rewards and keep you out of harm's way in 2006.

Happy New Year!

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Precious metals brighten!

With traders back from the Holiday break, it's looking more and more like the end of the year is going to be a good time for the Precious metals complex. Gold, having held support at the 50-day MA, is now attempting to close back above the 20-day MA at $510.40. Should this occur, expect a sharp rally as we head into week's end.

Silver's technical picture is even brighter as it closed just above its 20-day MA on Friday and only needs to close above the 12/19 high of $8.75 to provide the fuel necessary for its own year-end rally. Silver may just take the lead in powering the metals to a strong weekly close.

Copper becomes more "precious" every day and remains the most resilient and determined market in the entire metals complex. I've said previously that there's no ceiling to this market as the trend in Copper continues to advance. Friday's breakout to new contract highs was a very good sign that $2.50, basis the January contract, is the next target. I certainly wouldn't bet against it.


Dale F. Doelling
Chief Market Technician
Trends In Commodities

My apologies

I must offer my apology for not having updated the weblog recently. Due to circumstances beyond my control, I have been unable to keep up with my regular posts. I have added this item to my New Year's resolutions so, hopefully, I'll be more consistent in the New Year.

The following comments were transmitted to Myra Saefong, Financial Writer at Marketwatch.com, this morning at 8:11 AM EST.

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The daily chart on Gold is almost identical to the daily chart on the Dollar/Yen as both have taken a pounding the last 3 days. Obviously, traders are watching the $500 level very closely as Gold continues its decline. The Gold market is well known for these sharp retracements and it was just a matter of time before traders pounced on the opportunity to ambush the markets again. With volatility now reaching extreme levels I'm expecting the markets to quiet down somewhat as we head into the New Year. With the FEB GOLD contract testing the 20-day MA this morning we'll have to see how the market reacts to this first area of support. If Gold manages to hold here, then the market could just turn and make new highs before the year ends. Although the Precious metals markets have managed to come well off their extremely overbought condition, Gold could pull the entire metals complex lower if it manages to log consecutive closes below the $500 mark. If that were to happen, we could be in for an ugly end to, what so far has been, a stellar year for these markets.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

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Copper breaks $2.00!

The DEC Copper contract finally broke and closed above that magical $2.00 level yesterday. Here are my comments that were transmitted to Myra P. Saefong, Financial Writer for Marketwatch.com. this morning:

Tuesday's Metals Comments:

With a slew of economic data set for release this morning traders may see volatility rise dramatically as some key resistance levels are being tested in the Precious metals markets. DEC GOLD broke through the $500 mark in overnight trading only to get a nosebleed and turn lower. This may only be a temporary setback on this first attempt to close above key resistance but traders will be watching the numbers set for release at 8:30 EST to determine which side of the market they want to be on for the short-term. While the short-term ride may get a little bumpy there's no denying that the Precious metals complex remains in a long-term bull market and significantly higher prices are on the horizon.

Silver has one last hurdle to overcome before it kicks into high gear and sprints to the $10.00 level. Once the weekly chart resistance at $8.50 is cleared this market could explode to the upside. I have been extremely bullish on this market as it has lagged Gold's performance for quite some time. The tide may have turned and I look for Silver to make up ground quickly.

Copper is now in never, never land as it reacts to prices above the $2.00 mark. As I've been saying for what seems like forever, this market was destined to crack $2.00 and, now that it has accomplished this feat, it will be interesting to see whether the trend in Copper can continue as it has for the last 4 years. The trend is your friend until it comes to an end. For now, there seems to be no end to the major trend in Copper.


Dale F. Doelling
Chief Market Technician
Trends In Commodities

Comments on the Copper market

These comments were emailed to Myra P. Saefong, Financial Writer for Marketwatch.com, at 7:44 AM EST.

Last week, the DEC GOLD contract got a bit oversold and the market logged a string of advances in spite of the Dollar strength. But the market continues to struggle with overhead resistance as well as the Dollar's strength and, so far, has been unable to close above the $470 barrier. The daily chart suggest that the market is entering a fifth wave down which would eventually put the market somewhere south of the previous low at 456.10. Once this occurs, traders will have another tremendous buying opportunity as we head towards the New Year.

Silver continues to show resilience as it attempts to play "catch-up" with the Gold market. I'm not expecting anything spectacular from this market until Gold finally washes out and begins to rally but a retest of the $7.95 area is possible in the interim.

The trend in Copper remains positive as this market continues its march towards major psychological resistance at $2.00. Support lies just below the $1.86 level and, at least for now, the market doesn't look to be in any danger of testing that area of support. Should Copper break and close above $2.00, it would likely push prices to new highs and, in the process, bury those who are betting against this market.

Dale F. Doelling
Chief Market Techncian
Trends In Commodities


I just received this email from Myra asking for my comments.

Chinese copper trader vanishes after $800M short sale: Times By Ciara LinnaneNEW YORK (MarketWatch) -- A Chinese copper dealer has disappeared after selling an estimated $800 million of copper short, expecting the price to fall, the Times of London reported. Instead, the copper price has surged, setting a record $1.921 a pound on Monday. The Chinese State Reserve Bureau, where Liu Qibing worked, said the trader is on leave and that it had no knowledge of his dealing, the Times said. Concerns about the size of Liu's bet and his disappearance have raised concerns that the copper market is set for a trading scandal similar to the 1996 case in which a Japanese trader lost $2.6 billion for Sumitomo Corp.

My immediate response, with tongue planted firmly in cheek, is that this guy obviously has not been reading my comments on Copper. My only question is "How did this moron get put in a position to take such a position in the first place?" If anyone can give me a logical answer I'm all ears!

In case you're interested, it was the TREND FOLLOWERS who were BUYING while this guy was SELLING.

DOW Update

I remain SHORT 60 $5 DOW Futures contracts at the open today. I have placed to Day orders for my account as I am still trying to pare back my exposure even though I am extremely bearish on the Stock Index futures. My new Day orders are as follows:

BUY 10 $5 DOW futures at 10537
BUY 10 $5 DOW futures at 10527

This would leave me SHORT 40 contracts and allow me a little more flexibility in my trades as we move forward.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Thursday's Metals comments

The following Precious metals comments were transmitted to Myra P. Saefong, Financial Writer for Marketwatch.com, at 7:40 AM EST


Thursday's Metals comments

DEC GOLD is seeing some follow through from yesterday's rally but there's major trendline resistance which lies just above the current price that the market will have to overcome to turn the short-term trend positive again. Frankly, this rally leaves me unconvinced that we've seen the bottom of the recent decline. I believe that further price deterioration is inevitable and it will take consecutive closes above the 20-day MA (467.80) to change my opinion. We'll likely see the 20-day cross the 50-day MA in the next day or two and that would not bode well for Gold in the near-term.

Silver looks far more favorable technically and we may actually see a divergence between Gold and Silver where Silver is able to continue its upward momentum in the face of a continued decline in Gold. Considering that Silver has lagged Gold's performance by a large margin, a divergence in prices would not be surprising.

Copper continues to trade sideways and the longer this occurs the more traders will wonder if the market trend has entered the transition from up to down. It's way too early to speculate but the longer the market fails to make further gains the better the chance becomes that this market will suffer a serious setback.

Dale F. Doelliing
Chief Market Technician
Trends In Commodities

Bonds may need more time to form a base.

The Interest Rate futures reversed course today and finished sharply lower giving back most of the gains made on Tuesday. This does not bode well for me as I was a fairly aggressive buyer in the 10's and 30's but, considering the poor finish in the Stock Index futures today, I have to say that I'm willing to give this trade more time before I start to bail.

I traded the 10's and 30's pretty aggressively today and I'm under water in a big way. I'll need some help from stocks before the week ends or I'll have to reassess my position. I started buying the 10's first then I scaled in 4 trades in the 30's before buying more 10's. Here are the trades that I made today.

BOT 10 DEC 10 yr. Notes at 108-08
BOT 10 DEC 10 yr. Notes at 108-02 (Market closed at 107-27)

BOT 5 DEC 30 yr. Bonds at 111-20
BOT 5 DEC 30 yr. Bonds at 111-16
BOT 5 DEC 30 yr. Bonds at 111-12
BOT 5 DEC 30 yr. Bonds at 111-08 (Market closed at 110-27)

These trades leave me under water by $11,875.00 in the 30's and $6,875.00 in the 10's. This is a fairly large position for me and it could end up costing me some serious money but I'm confident that interest rates are ready to fall and that bond prices will rise. I'll exit my position in the in the 30's on a close below 110-00 and 107-16 in the 10's.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Testing resistance and selling into the rally

The DOW futures made a new intraday high but backed off when word came from overseas that terrorist attacks had killed at least 18 people. The market turned down only briefly after the news but has now fought back to trade near 10600. I've entered two new DAY orders:

SELL 10 DEC $5 DOW at 10597
SELL 10 DEC $5 DOW at 10607



If filled I will have made two intraday trades today having bought 20 contracts earlier in the day 10547 and 10537. Will the market continue to squeeze the shorts? Stay tuned!

Dale F. Doelling
Chief Market Technician
Trends In Commodities

UPDATE at 6:00 PM EST- Neither of the orders listed above were filled

More on the DOW

I entered 3 orders in the DOW this morning as there is a bias to lower prices but nothing really developing in the way of a washout in the Stock Index futures. I entered the following orders in the $5 DOW futures:

BUY 10 $5 DOW at 10547 (I was filled on this order and I am now SHORT 70 contracts.)
BUY 10 $5 DOW at 10537
BUY 10 $5 DOW at 10527

If all 3 orders are filled I will be SHORT 50 DEC $5 DOW and will hold for further profit.

I also SOLD 2 DEC GOLD at 465.10 and covered at 463.60 for $300 profit.

I have been buying some 10's and 30's in the Interest Rate futures and will update my position later.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Bonds ready to rally?

There has been a lot of talk in the pits and on the streets that some heavy hitters are gobbling up bonds by the truckload. The technical picture still remains DOWN but remember, it's always darkest before the dawn. I am a major BULL on bonds longer term and I've been waiting patiently for the first sign that we're nearing a bottom to start loading up on them. That opportunity may be at hand. Yesterday's gap up opening and strong close is the first sign that this market may be ready to turn higher. I'm going to start nibbling from the LONG side today and, if I'm right, this market could be several handles higher before the end of the year.

Remember, bonds are the best indicator that I know of futures economic conditions and, if they turn higher, the stock market is destined for much lower prices. I'm already heavily SHORT the DOW futures and I'm expecting a bloodbath soon. Bonds will be the ultimate beneficiary as the "flight to quality" begins to build.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Update on the DOW

I decided to add one last SHORT to my overall DOW position on Monday and sold 30 $5 DOW Futures at 10597. This put my total position at a nice round number - 100. Yesterday I BOT 20 at 10567 and I missed BUYING 20 more at 10537 by 1 tick. So, my current position is:

SHORT 30 @ 10597
SHORT 30 @ 10577
SHORT 20@ 10557

The market is currently trading at 10568. This position is still too large so I'll be placing orders during the day to lower my overall position to a net SHORT 50 contracts. I'll probably wait until the market opens to see what the first 30 minutes tells me before placing my orders. I'll update the weblog later this morning.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Tuesday's metals comments

The following comments were transmitted to Myra P. Saefong, Financial Writer for Marketwatch.com, at 7:52 AM EST.

The outlook for the Precious metals market is looking bleak as the technical picture continues to deteriorate. This may be a short-lived scenario but traders need to exercise caution. The 10-day MA crossed the 20-day MA on 10/24 and that was the first nail in the coffin for this market. Now the 20-day is dangerously close to crossing the 50-day MA and, should that occur, it may be some time before the market regains its footing. The DEC GOLD contract, down $25.00 from the 10/12 high, has been unable to hold above key technical support and is now in danger of giving back half the gain from July to October. Major support now lies in the 451-455 area with the 50% retracement level at 453.65. If the market should move into this support area, traders will be watching the market closely looking for signs that the decline is over and that a new leg up is about to begin. Should the market close below 451.00 I won't be surprised to see a quick retreat back to the July lows.

Silver is actually in better shape than Gold because it continues to trade above its 50-day MA. I expect the slide in this market to continue but it will probably not experience the same level of damage that Gold is seeing due to the fact that Silver has seriously underperformed the Gold market for quite some time.

Copper, on the other hand, remains the only market of the three that is maintaining a very healthy technical picture. The daily chart on DEC COPPER show this market still trading above the 10,20, and 50-day MA's and all the MA's have a positive slope. This is a very good sign that higher prices lie ahead. My only concern with this market is the fact that the momentum is beginning to deteriorate so I'll be watching for additional signs of an potential trend reversal.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Current Mini-DOW Position

My order to sell 30 DEC $5 DOW futures at 10577 was just executed. I have an open order to SELL 20 $5 Dow futures at 10527. If filled, that will be my last sell order in this market.

I will now monitor the position and see if the market breaks the way I expect it to.

Overall position in the DOW Futures:

SHORT 30 $5 Dow futures at 10577
SHORT 25 $5 Dow futures at 10557
SHORT 15 $5 Dow futures at 10497

OPEN ORDERS:

SELL 20 $5 Dow futures at 10527 STOP

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Friday Market Comments

This post was emailed to Myra P. Saefong, Financial Writer for Marketwatch.com, at 7:48 AM EST.


Friday Market Comments

The jobs report is certainly hanging over the markets as the overnight action was choppy and directionless. The Dollar maintains its upward bias against the Yen and the EURO but pre-report volatility has dried up. The Precious metals markets were surprisingly calm in overnight trading. Although I still think we have a 50/50 chance of a break down to the 100-day MA at 451.50, which also corresponds with the June/August highs, DEC GOLD has managed to work off all of its overbought condition in a few short sessions where the daily range never exceeded $10. This could be a signal that the big commodity funds are adding to their positions, not liquidating, and are in this market for the long haul. If that's the case, the selling will dry up quickly and we could see the next advance sooner than later.

Silver is much stronger from a technical perspective as the market didn't even touch the 50-day MA before turning higher. So, until the market closes below that level, which is at 7.433, this market remains positive.

With the exception of a few days in the middle of October, Copper has been a little like waiting for the sun to rise in the east every morning. It's almost been that reliable. The trend in this market is UP, UP, and AWAY!

Dale F. Doelling
Chief Market Technician
Trends In Commodities

In a follow up after the NFP report I wrote at 8:49 AM EST:

If the Dollar's response to the jobs report isn't enough to convince you of its overall strength, then nothing will. An extremely weak Employment report this morning brought the markets out of their slumber but the net effect has been a wash so far. The EURO has managed to tick up somewhat as bond prices firmed. The Precious metals may be the biggest winners so far as DEC GOLD is now trading at its best levels of the day above 465.00. Traders will be watching closely to see if this rally can hold. If momentum starts to wane, it could turn into a quick reversal leaving traders with no choice but to reverse their long positions and begin to square positions as we head into the weekend.
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As we now know, the DOLLAR rallied sharply leaving those long metals running for the exits.

Have a great weekend.

The Dollar marches on.

There is really just one thing that means anything to the Dollar and that is the fact that the FED continues it's "measured" position on interest rates and traders take that as onward and upward for the Fed funds rate for the forseeable future. So, the Dollar continues to rally which eventually is going to cause problems for the economy. But who cares? Technically, the trend is UP for the Dollar and that's all that matters. With Dollar/Yen approaching 117.50 and the EURO breaking well below the 120.00 level today, there's no doubt about the technical condition of the Dollar. How high can the Dollar go? That's a good question. Suffice to say that, until the EURO can close back above 1.22oo, the path of least resistance is DOWN. The one caveat is the fact that, although the EURO is showing every sign of moving lower, it still has some work left before it makes a new yearly low below the 1.1870 mark. So, keep a close eye on the EURO's trading on the break below 1.1900. If the market begins to lose its conviction and begins to rally it may be a good place to BUY Euros using any close below 1.1870 as your STOP.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Back to the Futures!!

It's time to forget about Hurricane Wilma and get back to business. That is, the business of trading the futures markets. If you are currently trading any commodities and you aren't making money, please email me at dale@trendsincommodities.com. I'll be happy to discuss your current trading strategy and help you fine tune it for maximum profits.

For those of you who are new to this blog, I trade the following markets daily:

Stock Index Futures
Interest Rate Futures
Grains
Precious Metals
Cash Foreign Currencies (www.fxsol.com)

That's all I have time for and, after 20+ years of fine tuning my own approach, I've found these markets to be most favorable to my brand of trading.

So, here's my take on all of these markets. These are my positions, this is my opinion and my expectation for the markets listed above.

Stock Index Futures

I trade the DOW and the Russell 2000 futures and I remain EXTREMELY BEARISH on both of these markets. My position as of 3:30 PM EST is as follows:

SHORT 25 DEC $5 DOW at 10527

SHORT 15 DEC $5 DOW at 10497 (Last trade - 10540)

I'm slightly underwater on this position but I believe it will be short-lived. I'm looking for a break all the way back to the mid-October lows at the very least. I won't be surprised to see the DOW trading below 9500 by the end of the year. My primary (proprietary) oscillator is pegged at the most overbought (bearish) reading possible so I'm selling stock index futures like a madman. The last time the DOW futures got this overbought the market fell over 500 points. Tomorrow's NFP number, unless it really is a shocker, should have little effect on the stock market and will probably be the catalyst for an ugly end to an otherwise positive week for stocks. The memory still lingers from 1987 when an ugly Friday turned into Black Monday and the Dow fell over 500 points in a day. And that was when the market was a fraction of the level that it trades at today. So, there's my position. If you are interested in trading either of these markets real-time with me, send me an email at dale@trendsincommodities.com.

I'll bring you up to date on the other markets in my next post.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Back in the land of the (barely) living.

We have returned to Boynton Beach after spending time in Disneyworld and beautiful Clearwater Beach, Florida. If you've never been to Clearwater Beach you just don't know what you're missing. Gorgeous!

The FED raised rates, again, and that means they simply don't have a clue. The damage that has been sustained in South Florida alone will probably push the economy over the edge. Dade, Broward, and Palm Beach counties are a disaster and business, like the traffic, is at a standstill.

I stepped up and SOLD the DOW futures today at 10444 and 10464 and made a nice piece of change. I also BOT some 30 yr. Treasury futures and sold them before the close for a profit. The only position that I added to is the DEC GOLD contract. We managed to close below the previous low at 462.00 and that's bearish. I'm holding for another day just because I've seen the market do this before and it may just be a head fake. I have the luxury of going "against the grain", so to speak, because I have a huge profit in my overall position. So, let's see what tomorrow brings.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Have we seen the worst of it?

This post is being written from the breakfast room at the Comfort Suites Maingate East in Kissimmee, Florida. We have been driven from our home in Boynton Beach, Florida due to Hurricane Wilma. When we left on Wednesday Palm Beach County had no power, no gasoline, no ice, no food. We also had lost all patience. So, we packed up a fully fueled car and headed north. We left anarchy and arrived in paradise! Other than making sure the car was topped off with fuel the day before the hurricane hit, the smartest thing I did was pack up my family and get us out of that mess. So, assuming we have power by Monday I'll begin posting market comments next week.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

WILLLLLMAAAAAAAA!!!!!!!!!

Hurricane Wilma is charting a course for the Southwestern Florida coast. If it continues on its current path it will cross over the Southern peninsula and hit Palm Beach County head on. We are monitoring the storm's progress and will discontinue our market commentary until her actual path becomes more clear. It's time for us to get prepared.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Bonds are walking the tightrope.

To update my post on 10/4, the Bond market is currently testing long-term trendline support on the weekly chart and the market is going to need to bounce off this support at around 112.14-112.16 with conviction or the "stagflation" bears will most likely get the upperhand in this market. Today being Friday and with a host of economic data being released today, expect a significant level of volatility in the markets today. But, once the smoke clears, keep your eye on the bond market and look for signs that a rally is about to ensue. This could be a tremendous trading opportunity which could lead to an eventual rally all the way back to the 117-00 level. The alternative would be that the market closes below yesterday's low which would set the bond market up for a slide to the 110-00 level. Either way, there's an opportunity to make money.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Today's Global Investor article on Marketwatch.com.

I am pleased to announce that Barbara Kollmeyer, a financial writer for Marketwatch.com, included me in her story today on the Gold market. I have developed a wonderful working relationship with Myra P. Saefong, another financial writer, who covers the commodities markets for MarketWatch, a service of Dow Jones Newswires. They are the "best of the best" of financial portals on the Internet. Today's story is in Global Investor.

Stagflation is in the air.

Well, the economic data is out (who cares?) and the Dollar found the data supportive, at least temporarily. Certainly, a consensus seems to be building that inflation is going to be a problem somewhere down the road. How bad it will get is anyone’s guess. So, if the markets are concerned about inflation, then why did the Bond market rally on this morning news? I guess the market got stretched too far on the downside and it had to get some relief. This leads us to the Precious metals markets, which are currently seeing some selling pressure in light of the Dollar’s continued move higher. There’s good news here and the Gold chart supports that opinion. The DEC GOLD contract moved lower and traded briefly below the 20-day MA, which now sits at 472.50, and rallied to close above that area of support. I like the action here and I continue to favor the long side of the metals trade. The markets remain well bid and all attempts to move the metals lower are quashed by continued heavy buying as the markets approach these significant support levels. So, for now, it’s steady as she goes as I’m content to hold long for further gains.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

More on the Dollar.

If the Dollar/Yen breaks through Tuesday's low of 113.80 then I will take that as the first sign that my decision to SHORT the Dollar/Yen at 114.25 and 114.50 was the correct one. If you aren't yet SHORT the Dollar as I am then you may want to make a mental note of this level as a place to consider selling the Dollar. If the Dollar breaks 113.80 I won't be surprised to see the Dollar trading south of the 9/5 low of 108.75 in record time.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Comments on the Dollar.

The Dollar has rallied, from the low on 9/5 of 108.75, to today's high of 104.75 in a little over a month. That's a gain of 3.7% or exactly 6 yen from the daily low to the daily high. I wrote recently that you shouldn't fight the trend but I also believe that the initial stages of a trend reversal are where you can really make a lot of money. Paul Tudor Jones, one of the greatest traders ever, has made a tremendous amount of money by making large trades at tops and bottoms of various markets. I believe that the Dollar is at a crossroad here and I am building a SHORT position above 114.25 Yen and, although I believe as Mr. Jones does that LOSERS AVERAGE LOSERS, I believe that it is warranted when your analysis aligns with your conviction. So, I'm SHORT the Dollar/Yen at 114.25 and 114.50 and I'll cover and stand aside when and if the market closes above the 115.00 Yen level.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Precious metals update - 10/12/05

Today's market action in the Precious metals markets isn't all that surprising as DEC GOLD is currently trading south of the $475 level after hitting $483.10, pushing to a new 18-year high. There's nervousness in the pits and that's a good thing. With Gold still trading well above its 50-day MA of 472.30 this is not the time to bail out of the market. The Gold and Silver markets are still very sound from a technical perspective and, after this small retracement is done, we'll see Gold north of $500 and Silver rallying to test the $10 level. The global commodity markets are entrenched in a secular bull market that will probably last the rest of the decade. I know I've said this before but it's worth repeating. So, don't fret, be patient, but most of all, STAY LONG! There's a long way to go with these markets and a lot of money to be made.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Don't sell your Precious metals just yet!!

It’s hard to say whether today’s strength in the Dollar will continue but, if this rally does finally falter, it will surely provide the fuel that will propel the precious metals higher. I’m betting on failure by SELLING Dollar/Yen above 114.25 while I continue to hold my LONG positions in both Gold and Silver. Confirmation of the end of the Dollar rally will come when the Dollar/Yen closes below the 113.00 level. At that point, I’d expect DEC GOLD to be testing resistance at that critical $500 level. I’ve noticed some traders and metals analysts have become somewhat less bullish on the metals and I find that surprising considering the fact that the metals have been able to continue their move higher in spite of the Dollar’s strength.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

The LONG and the SHORT of it.

If you looked at a chart of the Interest Rate futures and the DOW futures you would probably not see a whole helluva lot at first glance. But I can tell you from firsthand experience that SELLING all rallies in the DOW and BUYING all dips in the treasury market (either the 30's or the 10's) is a strategy that has made a lot of money over the last few weeks. This is very tough for a trend follower but I believe that traders must take what the market will give them. This simply means that you need to be flexible and adapt your trading to market conditions. I believe that, eventually, these markets will break out and continue their respective, long-term trends. And, as long as I'm on the subject, I'll reiterate what I've been saying for a very long time - the recent market action just confirms my long-term forecast for these two markets.

DOW - a slow, grinding decline to 7,000 and then a collapse.
BONDS - yielding 3% eventually.

The only caveat that I must offer regarding the Bond market is the possibility that we will experience an extended period of STAGFLATION (floundering economy with rising inflation), which is looking more and more likely as the months roll by. Under this scenario, should it materialize, bonds would turn out to be as poor an investment as stocks. I'll keep you posted if my opinion on Bonds changes for the worse.

Commodities are HOT! Buy 'em now and hold on for the ride!

Dale F. Doelling
Chief Market Technician
Trends In Commodities

The Trend is your friend, so why fight it!

I recently wrote that the trend in the Dollar was about to come to a screeching halt. This may have been nothing more than wishful thinking. As I sit here tonight observing the early trading in the currency markets it's becoming quite obvious that the trend that began back on January 17th (vs. the Yen) in continuing unabated. With the previous high on 7/20 of 113.71 now history and the Dollar trading above the 114.00 level, the Dollar's overbought condition simply isn't enough to keep it from continuing on its upward path. With the 50-day MA at 111.56, we'll have to wait to see how the market reacts to that level when it finally begins to back off from the current levels. I'd be less than candid if I didn't say that I'm still skeptical of this most recent move higher. Suffice to say that my opinion and $3 will get you an iced latte at your local gourmet coffee shop so, for the time being, I'll stay on the sidelines in the currencies and look elsewhere for better trading opportunities.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Precious metals ready for liftoff! Dollar decline has commenced.

The brief period of selling is behind us and the Precious metals, with a little help from the Dollar, are ready for blastoff! There’s really not a whole lot to say when markets are trending like the vast majority of the commodities markets are these days. All a trader can do is hop on board and hold on for the ride. I have no idea what level Copper, Gold and Silver will eventually reach but I do know that the trend for all three is most definitely up. Copper and Gold have done well and I really think Silver will eventually catch up so, of these three markets, Silver still looks to be the most compelling trade. I have read numerous comments stating all kinds of fundamental reasons why we’re seeing the moves that we’re seeing and, if that’s what someone thinks is important, who am I to argue? But if you’re looking to actually make money in these markets all that really matters is the price.

Sell ALL brief rallies in the Dollar as the next move down has commenced.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

The U.S. Dollar - R.I.P.

The Dollar/Yen is now comfortably above the 113.00 Yen level and is looking to test the mid-July high of 113.71. With the Dollar in nose-bleed levels from an overbought perspective, I’ll be very surprised to see a close above that previous high. The Dollar may breach that high and take out all the stops that lie above but I will be a heavy seller of Dollar/Yen should that occur. The Precious metals are holding up fairly well in light of the Dollar’s overnight strength. This just bolsters my opinion that a low was made in DEC GOLD at my target price of $462-$463 and, should my outlook for the Dollar actually come to fruition, we’ll look back in a few weeks and see that the decline in the Dollar was the catalyst for what should be new highs in Gold and Silver prices.

Nothing has changed in the Copper market except the price. It’s hard to believe that in just a little over 2 years Copper has gone from 75 cents to roughly $1.75. So, it’s onward and upward for this market as it continues to defy gravity. My outlook for Copper remains unchanged as $2.00 is still my upside target.


Dale F. Doelling
Chief Market Technician
Trends In Commodities

Where are the bears?

It looks like the stock market has no place to go but down now that Richard Russell has finally thrown in the towel and gone "neutral" on the market. There are no more bears left! I began shorting the Russell 2000 futures yesterday and I put all of my retirement funds into bonds. How low do I expect the market to go? Let's just say that the market will get ugly enough to cause some serious handwringing. The poor finish to 2005 will set the market up for a real debacle in 2006. I don't like to make predictions because nobody really knows what the markets are going to do but I will say this. I expect to see the DOW below the levels that it reached in 10/02 or around the 7,150 level. That's my initial target. Can Gold reach $1,000? That idea has some serious merit if the financial markets experience the kind of catastrophic event that I have laid out here. What's the probability that this will happen? I'm not a mathematician but I don't believe it to be that far-fetched. Only time will tell.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Tuesday's metals comments

The Dollar broke out vs. the Yen overnight but trading in the EURO has been more rangebound which may be one of the reasons Gold is relatively stable although lower. This is a tough call here with the metals. Will traders ambush the Gold market, pushing prices down by 8 or 10 bucks in one session or will this retracement be more orderly this time? Only time will tell. But we have to watch the Dollar because, if it this rally continues and gains momentum, the Precious metals will eventually feel the effect. With a slew of economic data scheduled for release this week, traders are bracing for the increased volatility that the markets will most likely experience. If DEC GOLD can somehow hold above last week’s low of 447.00, then the market may be able to sustain the rally that began on 8/31.

The Silver market has strong support at the $7.00 mark and traders will be anxious to see if the DEC contract can hold that level. Any close above $7.17 would likely lead to additional gains with an outside chance of testing resistance at $7.40.

Copper continues to consolidate and this is very healthy for the market. As long as the market remains above $1.58, the trend will remain up and Copper will continue to make new contract highs over time.


Dale F. Doelling
Chief Market Technician
Trends In Commodities

Monday's metals comments

This was transmitted to Marketwatch.com on 9/12/05 at 6:30 AM EDT.

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The Dollar/Yen rally which took place last week came to an abrupt end on Friday as traders began to realize that the FED may just stop raising rates if only temporarily. Last week was a perfect example of Gold and Silver rallying in the face of a stronger Dollar. Now, the markets find themselves at a crossroads once again. No one is more longer-term bullish on the metals than I am but the fact remains that the markets have reached extreme overbought levels. Markets have been known to continue for some time even though they are overbought on a technical basis and that could be the case here. But I’m afraid the metals bulls are going to be disappointed once again. If the Dollar does find its footing and breaks out above 110.75 yen, the metals may have no choice but to head south on the charts. The overnight action seems to support that observation as the Dollar began trading much weaker but, after breaking 109.00 yen briefly, turned and rallied. The early Dollar weakness had Gold and Silver moving higher but that early strength has now reversed although the losses are nominal. The best case scenario would be that the markets consolidate in a fairly narrow range for a week or two and work off some of the froth. The worst case would probably put the market back below $425 which would surely push the bulls to the brink.


Dale F. Doellng
Chief Market Technician
Trends In Commodities

Thursday's Precious metals comments

The following comments were emailed to Myra Picache, Financial columnist at Marketwatch.com on Thu 9/1/2005 7:18 AM:

Many times, when I’m asked to predict the future course of a market (and humbly decline!) I like to look at where the market’s been in order to get an idea where a market may be going. To get a better perspective on Gold, I’ve included a monthly chart for your review. The long-term chart clearly shows that Gold continues in a major uptrend and that the current market action is nothing more than a consolidation period which most likely will lead to the next major upleg in Gold. These weak rallies that we are seeing in the Dollar followed by sharp reversals are a pretty good sign that the greenback, for the longer-term, is in trouble. I continue to believe that Gold should be bought when it reaches the lower end of the trading range and I believe that this recent decline may end up being the last dip before the next big move.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Devastation in the fields!

There is near devastation in the corn, wheat, and soybean fields due to drought yet prices continue to plummet.  The December Corn contract made a new contract low today and September Corn touched $2.00 briefly.  December Wheat hit its lowest level since May.  Are the markets near a bottom or will the downtrend continue?  That’s an excellent question!  I don’t have a crystal ball but my experience tells me these markets are ready to turn.  So, if you’re interested in the grains, stay tuned.  I’ll be watching the markets closely and I’ll let you know when I’m ready to buy.

Dale F. Doelling
Chief Market Technician
Trends In Commodities
www.trendsincommodities.com

FOREX for the common man.

The FOREX markets, the most liquid in the world, are now as easy to access for the man on the street as stocks or mutual funds. Strike that. They're easier to access than stocks or mutual fund. I trade with FX Solutions, LLC, a registered FCM. You can find them at www.fxsol.com. Their trading platform is easy to use and their charting package is excellent. You can go to their site and sign up for a free demo which is funded with $10,000 of initial "trading capital". FYI, this is not a solicitation for FX Solutions and, as of right now, I have no professional relationship with the firm. As always, only risk capital should be used when trading in highly leveraged markets such as the FOREX markets.

For those of you who enjoy trading these markets are certainly worth looking at. I can tell you from personal experience that the FOREX markets tend to develop very nice trends which is what every trendfollower is looking for.

Give it a try. It's educational, it's entertaining, and you just may find it to be profitable as well.


Dale F. Doelling
Chief Market Technician
Trends In Commodities
www.trendsincommodities.com

The last trading day on the month

It's January 31st! Investors and money managers like to use January's performance in the stock markets as an indication of how the rest of the year will play out. Frankly, I don't buy into that whole scenario. It's like the old caveat, "Past performance in not an indication of future results". This January really has nothing to do with January's of the past. The markets will do what the markets have always done and that is to outsmart the herd. So, be nimble, be flexible, and don't automatically assume anything when it comes to trading the markets.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

A SELL signal in Gold!

In case you haven't noticed, the 20-day MA crossed the 50-day MA on the daily chart for FEB GOLD on the last trading day of 2004. Since then, the market has broken the December low and is now trading below $430.00. All of this leads me to think that the longer-term trend direction has turned down. $400 is the psychological support and don't be surprised to see that support tested soon.

There seems to be a strong move out of small cap equities as the Russell 2000 is down nearly 6% from its peak on December 31st. It always amazes me how much time it takes for the market to move up and how little time it takes to give back the gains. 16 days of gains vanished in 3 short trading sessions. OUCH!

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Are Gold and the Dollar at a turning point?

With FEB Gold extending its decline which began in the first week of December, could it be that the yellow metal is ready to enter a full-blown bear trend? The outside day in the Dollar on the last trading day of 2004 has turned the first trading day of the new year into a dollar-buying spree. Alas, we've seen these one-day wonder rallies before and it's way too early to call an end to the bearish trend in the greenback. All one has to do is look at a daily chart of the US Dollar Index to realize that these brief, unsustainable rallies have been tremendous selling opportunities and nothing else. So, for all you diehard Trend Followers, remember this: The trend is your friend until the trend reaches the end. It's unlikely that the major trend in Gold or the Dollar are at a turning point. Be patient and let the market tell you its intentions.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

A Key Reversal to begin the New Year!

Today's markets are starting off the New Year with a significant uptick in volatility as the Stock Index futures bolted out of the starting gate this morning only to come up lame before they got to the backstretch! A key reversal day is certainly in the making and, if the MAR05 Dow futures can post a close below 10765, this could turn out to be the beginning of the end for stocks and it's only the 3rd of January! I know that sounds drastic but the technicals are at extremes here so stocks are certainly due for a pullback at the very least. We can't wait to see if the markets can gain their footing before the close.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Money makes people funny!

I have an old friend who is an attorney that used to say, "Money makes people funny". Well, I'd like to make one minor change to that statement. "CHEAP money makes people funny!." The era of low interest rates has allowed drastic changes to take place in Real Estate markets across the country. In this interest rate environment we have people buying homes that, under normal circumstances, would not be able to do so. That's not necessarily a bad thing in and of itself. The problem comes with the eventual downturn that will not only have these people losing their homes but ruining their credit in the process. 100% financing used to be the rare exception. Today, it is the rule. What goes around comes around and, unfortunately, I believe it's going to come around a lot sooner than people think. The reason I say that is because, in my opinion, the market is being manipulated by cheap money and, as they said in the movie, "Stupid is as Stupid does". You have people now using their homes like personal banks. They're stripping out equity at alarming rates to buy "stuff" like cars, boats, motorhomes and, yes, STOCKS!. They're margining their homes to buy STOCKS on margin. This, my friends, is a recipe for disaster! We'll continue to monitor this MARKET TREND and see if our assessment of the situation comes to fruition. But to us it feels like DEJA VU all over again!

Dale F. Doelling
Chief Market Technician
Trends In Commodities