Utilities – Are They A Buy?

by wai on November 29, 2012

Time To Buy Utilities

As typical, Chris Vermeulen of TheGoldandOilGuy.com gives us his expert attitude on the state of the Utilities.

Over the past week I have been keeping my eye on several key sectors and stocks for potentially large end of year rallies to lock in more gains before 2013.

My recent calls have been RIMM (up 54%), AAPL (up 5%), FB (up 8%) so it’s been a fantastic month thus far. That life said there are three other plays that look incredible and one of them is the utilities sector.

Looking back 30 years clearly utilities have a tendency to rally going into year end. What makes this setup so exciting is that the Obama tax for 2013 has caused many investors to lock in capital gains along with dividend gains so the utility sector has recently been beaten.

I always like to cheer for the underdogs because they can make large moves quickly and this season its utility stocks.

30 Year Seasonality – Utilities Stocks

DJ UTILseasonality Utilities Are They A Buy?

Utility Stocks Seasonality

Utility Sector ETFs:

In the graph below I show the main utility ETFs for trading. Simple analysis clearly shows the selling momentum is slowing and where price should go if it can breakout above the red dotted resistance line. Exchange traded funds XLU, FXU, IDU, and DBU are the funds I found to be setting up.

Utilities1 Utilities Are They A Buy?

Utilities Sector Trading Conclusion:

While I feel utilities are about start moving higher it is vital to mention that the broad market is setting up for a 1-3 day pullback. If the have a supply of market does pullback this week then we should see utilities pullback also. What I am looking for is a minor pullback in XLU with price holding up above $34 while the have a supply of market pulls back.

If you want to get my simple yet profitable ETF & Have a supply of Trading Thoughts then join my newsletter today: www.TheGoldAndOilGuy.com

Chris Vermeulen

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Crude Oil and Oil Stocks – Seasonality and Year-End Outlook

by wai on October 30, 2012

Crude Oil & Oil Stocks Seasonality & Year-End Outlook
Tuesday, October 30th, 2012

By: Chris Vermeulen – www.TheGoldAndOilGuy.com

Crude oil has had some large price swings this year and another one may be on its way. This report shows the seasonality of crude oil along with where oil is trading and what the oil service stocks are telling us is likely to happen going into year end.

Since WTI Crude Oil topped out in September at the $100 resistance amount (Century Number) many traders are looking for a bounce or bottom to form in the next week. Historical charts show that on average the price of oil falls during November and the first half of December.

The charts of oil and oil stocks shown below have formed patterns on both time frames (weekly & daily) that lower prices are to be expected. If you did not read my Gold Seasonality Report I just posted be sure to review it here: Gold Seasonal Report

Crude Seasonality

WTI Crude Oil Weekly Chart:

CrudeSeasonality Crude Oil and Oil Stocks Seasonality and Year End Outlook

Here you can see that price tends to fall going into Christmas and rallies during the last week of trading. This price action falls in line with Dimitri Specks seasonal chart providing us with insight as to what we should expect. Later this week I will end my report on the Election Cycle Seasonality report which shows weakness in the market during Oct & Nov when a president is up for re-election.

 

MORE INFORMATION HERE>>>>>>>CRUDE OIL PRICES

Crude Oil Price

CrudeOilPrice Crude Oil and Oil Stocks Seasonality and Year End Outlook

Oil Services Stocks – Weekly Chart:

If you follow oil closely then you know likely know already that oil related stocks can lead the price of oil by a couple weeks. What this means is that if huge money is flowing into oil stocks (bullish price patterns with strong volume), then you should expect the price of crude oil to rise in the coming days. That said, if money is flowing OUT of oils stocks then lower or sideways oil price should be expected.

The weekly chart oil stocks show a very large bearish head & shoulders pattern. While I do not reckon the neckline will be kaput it is very possible.

One of the most vital pieces of data on the chart is the VOLUME. Notice the lack of it… Volume tells us how much interest and power is behind chart patterns and declining volume clearly tells us these investments are out of act of kindness currently and that huge money is not moving into them.

Oil Stocks Weekly

OilStocksWeekly Crude Oil and Oil Stocks Seasonality and Year End Outlook

Oil Services Stocks – DAILY Chart:

Zooming into the daily chart of the oil service stocks we can see there is yet another bearish pattern unfolding. Another head & shoulders pattern which looks as though it is just starting to breakdown as of this writing. Next support amount is $35-36.

Crude Oil Stocks Daily

CrudeOilStocksDaily Crude Oil and Oil Stocks Seasonality and Year End Outlook

WTI Crude Oil and Oil Service Stocks Trading Conclusion:

Looking forward 1-2 months (November – December) taking the seasonal price swings in oil, re-election cycle seasonality and price action of oil stocks I feel oil will trade sideways or down from here. With that life said, expect crude oil to rally during the last week of the year. I hope this provides some useful info for your trading!

Get my Daily Trading Analysis & Trade Setups at: www.TheGoldAndOilGuy.com

Chris Vermeulen is Founder of the well loved trading analysis website www.TheGoldAndOilGuy.com. There he shares his highly successful, low-risk trade thoughts. Since 2001 Chris has been a leader in teaching others to skillfully trade Currencies, Have a supply of Indices, Bonds, Metals, Energies, Commodities, and Exchange Traded Funds. Reach Chris at: Chris[at]TheTechnicalTraders.com

Disclaimer:
This material should not be considered investment advice. Technical Traders Ltd. and its personnel are not a registered investment advisors. Under no circumstances should any make pleased from this website, articles, videos, seminars or emails from Technical Traders Ltd. or its affiliates be used or interpreted as a sanction to buy or sell any type of security or commodity contract. Our advice is not tailored to the needs of any subscriber so go talk with your investment advisor before making trading decisions This information is for educational purposes only.

Tags: Oil ETF, Oil Trading, Trade Crude Oil, WTI Crude Oil
Posted in How to Trade Oil, Oil Analysis, Oil ETF Analysis, Oil Price Chart | Comments Off
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Investor Gold Buying | Fed Doubling Balance Sheet

by wai on September 27, 2012

Chris Vermulen, the Gold and Oil guy, gives his newest report on Gold and Fed Movements

A leading precious metals consultancy, Thomson Reuters GFMS, has forecast that investors will buy record amounts of gold in the remainder of 2012. GFMS produces the benchmark supply and demand statistics for the gold market. GFMS forecasts that investors will buy 973 tons of gold in the second half of 2012, more than during the wild gold market of the summer of 2011. This surge in demand for the yellow metal, GFMS says, will go gold above the $1850 an ounce amount, not far from the record high of $1920 hit in September 2011.

More Information…….

GFMS may be right. This past week, gold hit its high for this year at $1790 an ounce on the back of the various global stimulus plans launched by a number of countries nearly the globe. Primary among the recently announced stimulus plans was the Federal Reserve’s QE3 or as some in the market have called it, QE infinity. Philip Klapwijk of GFMS said that, for the gold market, “QE3 has become talismanic”.

The Federal Reserve said it would buy $40 billion a month in finance-backed securities indefinitely. In addendum, the Fed will continue Operation Twist – the export of longer-dated U.S. treasury notes and bonds. When all is totaled, the market is looking at about $85 billion a month in regime bond buys for an unlimited period of time.

The main characteristic of QE3 that drives the gold market is the fact that the open-finished buys of all of these Treasuries will be financed by money that does not yet exist! And it’s not just about a dread of future inflation life ignited by all this money creation. It’s a very logical go higher by gold based on recent history of Fed actions and gold prices.

Even ignoring Operation Twist, the Fed will add $40 billion a month, or $480 billion a year, to its balance sheet. If one looks at the Fed’s own website, you will see that it shows current assets of $2.8 trillion. Add $480 billion annually to that and in about five years the Fed’s assets (the foundation of the money supply) will have nearly doubled.

That is exactly what happened in the last five years too…the Fed’s assets doubled. And in what should not be a surprise to gold investors, the price of gold also doubled! For the past decade or so, gold has tracked the increase in Federal Reserve’s assets. Do not be shocked if that pattern continues over the next five or ten years too.

Get my Trading Alerts and Pre-Market Analysis Videos EVERY DAY – www.TheGoldAndOilGuy.com

Chris Vermeulen

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