Metals ETFs bullish following QE3 backing

INTERMEDIATE TERM SIGNALS & MARKET ANALYSIS

KEY TERMS
OVB:  Outside Vertical Bar
VRCB: Volatility Reduced Compression Bar

Core Position:
$50,000,000

SPDR Gold Shares (GLD): 09/14/2012 Closing Price: 171.80 INTERMEDIATE TERM (I.T.) SIGNAL: Intermediate Term Trend is bullish. Current Position: LONG @ 158.81 on 08/21/2012; STOP @ 166.29 Current Upside Target = 165.88 – 176.15: COVER 7,000 (20%) Projected Weekly Range: 5.31 Trading 35,000 Shares; COVERED 3,500 (10%) @ 164.12, COVERED 7,000 (20%) @ 169.35 I.T. ANALYSIS:

  • Initial trade risk was $139,650 or .28%. Current trade risk is $0. Current trade profits are $410,620 or .82%.
  • GLD’s single holding is gold bullion.
  • Gold has rallied more than 190 points since we first issued our bullish upside target back on July 21, 2012. After initiating our long position in GLD, prices have risen 8% and don’t appear to be slowing down. Profits were taken last week by covering an additional 7,000 shares at 169.35. Current locked-in profits are $275,625 or .55% of our core position. Since averaging around 40MM shares weekly in July, trading volume has spiked 40% to average 56MM over the last four weeks. Price action was exceptionally bullish for the fourth consecutive week, confirmed by closing out in the upper 7% of the weekly range. A more aggressive upside target of 176.15 has been added, a price we believe will trade on the current rally. 176.15 also represents our third cover price where we will sell another 7,000 shares. There currently exists an 82% chance of seeing 172.24 before trading back down to 166.29.

iPath DJ-UBS Copper (JJC): 09/14/2012 Closing Price: 48.51 INTERMEDIATE TERM (I.T.) SIGNAL: Intermediate Term Trend is bullish. Current Position: LONG @ 43.67 on 08/21/2012; STOP @ 46.34 Current Upside Target = 47.91 – 52.23 Projected Weekly Range: 2.16 Trading 128,000 Shares; COVERED 25,600 (20%) @ 45.49, COVERED 19,200 (15%) @ 48.20 I.T. ANALYSIS:

  • The upside price target of 47.91, published on July 15, 2012, was achieved last Friday.
  • Initial trade risk was $188,160 or .38%. Current trade risk is $0. Current trade profits are $536,256 or 1.07%.
  • JJC is an ETN that holds only a single commodity, the Copper High Grade futures contract.
  • The accumulation and rounded bottom pattern that JJC formed over the summer has resulted in an explosive rally. Our first attempt to buy JJC was at 43.60, back in June. Although that trade was stopped out, we patiently waited two months and bought back in; we strongly believe persistence and discipline are vital for long-term success. In less than a month, JJC has generated $536,256 in open profits and locked-in $355,712 or .71%. Price action was decisively bullish; last week’s low was higher than the previous week’s high and closed in the upper 10%. All signs indicate trading should be higher this week, with a very high probability of retesting the 2012 high of 51.41 on the current rally.

PowerShares DB Agriculture (DBA):
09/14/2012 Closing Price: 30.76
INTERMEDIATE TERM (I.T.) SIGNAL
:
Intermediate Term Trend is bullish.
Current Position: FLAT
Current Upside Targets = 31.87 – 32.04
Projected Weekly Range: .61
Trading 185,000 Shares
I.T. ANALYSIS:

  • DBA is a comprehensive agricultural ETF. Holdings include fairly equally-weighted futures contracts in sugar #11, live cattle, corn, soybeans, cocoa, coffee, lean hogs, wheat, and cattle feeder.
  • DBA saw strong support last week, largely carried by the lean hogs and coffee. After seven weeks of consolidation at the top of a bullish rally, commodities finally broke out in a substantial move to the upside. Price action was clearly bullish last week, closing at the highest price since October 2011. Friday’s close rejected any chance of confirming a correction had begun, making a new high bar and continuing the bullish pattern. The short-term, intermediate-term, and major-term trends are all bullish with no sign of an impending reversal. Our upside price objective should be achieved before trading 29.49.

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