Precious metals on track.

The following comments were emailed to Myra P. Saefong, Financial Writer at Marketwatch.com, at 7:41 AM EDT.
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The strengthening Dollar has provided no real impediment to the Precious metals complex as APR GOLD now has one daily close above the $600 mark under its belt and Silver and Copper continue to rally sharply with MAY SILVER touching $13.00 briefly in the overnight trade. These are powerful bull markets that just continue to feed on themselves as market momentum is showing no sign of abating. Consecutive closes above $600 will certainly do wonders for the outlook for Gold, and consecutive closes above $13.00 in May Silver would keep that market on track as well is spite of its severe overbought condition. MAY COPPER seems to have its sights set on the $3.00 mark and I, for one, think it will probably achieve that mark.

The Energy markets defy logic, especially Crude Oil, as the price of Crude is not reflecting the current Supply/Demand equation. We're literally awash in the product right now so I believe it's only a matter of time before Crude experiences a sharp retracement and, although I was short MAY CRUDE before getting stopped out on the trade yesterday, I believe the approach to $70 will bring the sellers back in droves which could drive prices below initial support at 65.60. Any close below this level would most likely bring a swift decline which could set up a test of major support at the 60.25 area.

Dale F. Doelling

Chief Market Technician

Trends In Commodities

There are no guarantees when it comes to trading the markets.

The following comments were sent to Myra P. Saefong, financial writer at Marketwatch.com, at 9:35 AM EDT.
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A good employment report wasn't able to keep the Dollar from losing some ground this morning and it certainly didn't do anything for the Precious metals markets either. APR GOLD is still having difficulty closing above the $600 mark and that does make me a little nervous. MAY SILVER is trading above $12.00 but is likely to correct at some point due to its severe overbought condition. If the Dollar should find its footing and break above the 118.00 Yen level, all of the enthusiasm that has been witnessed in the metals markets could evaporate in an instant and those analysts who seem to be able to predict, with 100% certainty, the long-term direction of Gold or Silver or Tulip bulbs, for that matter, may finally learn that the markets simply don't work that way. The fact remains that NO ONE knows where a particular market may go, short or long term. The best that a trader can do is determine whether a trend has developed, trade with that trend, and hope it doesn't end as soon as they enter the market.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Looking for that second wind.

These following comments were emailed to Myra P. Saefong, Financial Writer for Marketwatch.com, at 8:41 AM EDT.
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Traders are pondering the same question that was raised many months ago. When will Gold break the $600 mark? Even with a very nice first quarter gain Gold continues to frustrate those of us who have been advocating the long side of this market. Well, if I had known it would take this long I would have never uttered the phrase "$600 Gold" to begin with. My arms are getting very tired from "carrying the torch" for this market. Now, don't get me wrong. My position on the Precious metals markets remains enthusiastically "bullish" but this is where it really gets tough to hold on to your objectivity. We traders are only human, after all. This is like a marathon runner who has "hit the wall" and is looking for that second wind that is going to allow his to finish the race. I believe Gold is about to get its second wind, i.e. the $600 barrier and, once that hurdle is overcome, the metals markets could kick things into high gear and simply run away from those who were hoping to get in a slightly better price.

Dale F. Doelling

Chief Market Technician

Trends In Commodities

Why they're called "Precious" metals.

This was sent to our basic subscribers on 04/03/06.
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A new quarter has begun and we'd like to just review our positions from the first quarter to see where we've been and where we might be heading. Please don't misconstrue what I just said. We don't attempt to predict anything when it comes to the markets. We follow trends and we manage the risk on the individual trades. We have been blessed with a secular bull market in the commodities markets for over 4 years now. If you have been a participant, congratulations! You should be very wealthy by now. If not, I will try, through this service, to help you get your share of the profits that are yet to come as the commodities bull market is showing no signs of decay.

Precious Metals - Anyone that follows my comments in the financial journals knows that I have been bullish and, of course, LONG the Precious metals for quite some time. All you have to do is go back to August of last year and I was still begging traders to get LONG the market. I am THE "raging bull" when it comes to the Precious metals complex. (See article at http://www.resourceinvestor.com/pebble.asp?relid=11873) So where do I stand today? Well, nothing has changed because the trend remains up. Now, I know what some of you are saying. "Dale, the market has come a long way and I'm just not comfortable buying at these lofty levels." Well, my friends, one of the tenets of trend following is the "Buy high and Sell higher". Could the trend in Gold and Silver end today? Absolutely! That's where the "Manage the Risk" part of the trade applies. No one knows when trends will end but don't sell this bull market short. I believe that Gold will rally to $1,000 and beyond. Remember, that's just one man's opinion. To recap, APR GOLD closed at 523.40 on December 30, 2005. The closing price on March 31, 2006 was 581.80. I'll do the math for you. That's an 11%+ gain for the quarter. But, of course, due to the leverage that can be applied in the futures markets, our actual return was simply phenomenal. MAY Silver? It closes at $8.96 on 12/30/05 and the closing price on Friday was $11.52. That's a quarterly gain of 28.6%! Let me throw in one caveat while you wipe the drool off your face. I like Gold much better than I do Silver right now due to one thing - the new SILVER ETF that should come to market soon. This new trading vehicle has created an artificial demand for Silver and, once the IPO comes to markets, I won't be surprised to see a setback in Silver. But this setback would probably be nothing more than an opportunity to enter the market for further gains.

Here's a link to a very interesting chart on Gold courtesy of The Privateer.

http://www.the-privateer.com/chart/gold-pf.html

More later.

Dale F. Doelling
Chief Market Technician
Trends In Commodities