Over the past two months shares of gold (NYSE:GLD) and Apple
(NASD:AAPL) have had a sizable bite taken out of their share price.
Active traders along with the longer term investors have had a wild ride
this fall watching these investments slide to multi month lows. The big
question is when will gold and apple shares bounce?
Here we are again with another election behind us and Barack Obama in
the Whitehouse again. Many think this means four years of the same
thing… Printing, Inflation and higher stock prices.
Is this good or bad for Americans or the world for that matter? I
doubt it, but who really knows and who cares because there is nothing
anyone can do about it now. So buckle up your seatbelt and focus on
trading and investing with major trend both within the United States and
abroad using exchange traded funds.
Currently the broad stock market and commodities are in a full blown
bull market so the focus should be to buy the dips until proven wrong.
Below are some charts showing the important breakout levels for Apple,
metals, oil and key indexes like the Russell 2000.
Be aware that during pullbacks
which last more than a month which is the market has done, some of the
biggest drops in price happen just before prices bottom… Scaling into
positions is the key to minimal draw downs.
Apple Inc. – AAPL Stock Chart:
Shares of Apple clearly show the down channel which must be broken
before investors start buying again. This stock seems to have big
potential for $650 to be reached quickly. If Apple shares rise so will
the overall stock market… Follow my live charts free here: http://stockcharts.com/public/1992897
Gold Spot – GLD Exchange Traded Fund:
During August and September investors flooded the gold market in
anticipation of QE3. Since then gold has been drifting lower with profit
taking and because of some slowly strengthening economic numbers in the
USA. Gold looks ready for a run to the $1800 but may stabilize here for
a few weeks first.
Silver Spot – SLV Exchange Traded Fund:
The price of silver moves similar to that of its big yellow sister
(Gold). While the charts look the same silver is highly volatile and can
super charge your portfolio when metals rally.
Crude Oil Spot – USO Fund:
Crude oil has been correcting for a couple months also and still has a
lot of work to do before a new uptrend to be triggered. Currently oil
is trading in the middle of is trading range but once the price breaks
above $93 per barrel a good investment fund would be USO.
Russell 2000 Small Cap Index – IWM
Small cap stocks typically lead the broad market in both directions.
They are the first to rally and the first to rollover and sell off. The
major indexes like the DOW, SP500 and NYSE have not formed clean chart
patterns which is why my focus is on the Russell 2000. Small cap stocks
are now showing a rising relative strength compared to the SP500 large
cap stocks and this is very bullish for stocks in general. The best way
to trade this index is through the exchange traded funds IWM and TNA.
Post-Election Trading Breakout Summary:
In short, history shows that equities tend to rally after an
election. For a detailed outlook of how to trade stocks and indexes
during the election cycles be sure to read my report “The Election Cycle – What to Expect in Stocks & Bond Prices”
11-07-2012 9:50 AM