Gold ETF’s Technicals Says A Rebound Is About To Happen

From John Ross Crooks III: I was recently in the market for some American Blackbelly Sheep. We drove to a little town north of where I live for a breeding pair, and we got a glimpse of a ram that looked just like this one:

Those horns are amazing. Since the pair of Blackbellys for sale wasn’t very tame, I decided to go another route and ended up with a St. Croix ram with similarly impressive horns. Here he is:

The thing I find most fascinating about the horns is how they can predict financial markets.

Errrrrrr.

Let me explain …

You see, the growth pattern of those horns is determined by the golden ratio. So, that growth produces what’s called a golden spiral.

This golden ratio that produces the golden spiral is 1 to 1.6182 …

Both of those numbers are part of the Fibonacci sequence. And my trading system depends upon the Fibonacci sequence.

I use these Fibonacci levels to help pinpoint when price waves — or trends of various duration and magnitude — will begin and end. These levels help me forecast price to optimize my entry price, stop-loss placement and profit targets.

I thought today I would give you three securities in the commodities and basic materials arena that caught my eye from a standpoint of waves and Fibonacci levels. You might consider taking a position in them soon …

Freeport-McMoRan (FCX)

Last Price: $16.37

It appears FCX is finishing up a smaller- and larger-degree three-wave move. Fibonacci levels put a target at about $20 — that’s roughly 21% higher from current levels. Barring a minor corrective pullback in the next few days, this looks like it might be a good opportunity to buy shares of FCX.

A move to that target would be a good place to exit with gains (or place a stop-loss order to protect gains). It would also be a good place to consider taking a bet in the other direction — a bet that this move in FCX is exhausted.

Green Plains Inc. (GPRE)

Last Price: $22.05

I’ve been noticing that three-wave, expanding triangle patterns are occurring more frequently in the last six months or so. It would appear GPRE is carving out such a pattern.

There is an opportunity to sell short shares of GPRE for as much as a 15% gain from current levels if it does fall to my $19 target. After that, though, it looks like there would be an even-bigger opportunity to buy shares of GPRE for a move into the $30s.

SPDR Gold Shares (GLD)

Last Price $113.49

Short-term pressure is weighing on the price of gold and GLD. But if that stabilizes soon, as I suspect it will, then there looks to be an opportunity to ride shares of GLD higher.

This might not pack as much potential punch as some other opportunities — initial target about 8% higher from expected start point — so you could consider a leveraged gold ETF or using a mining company to target this move in gold for larger returns.

That said, if you don’t jump on each of these positions, keep an eye on them to see if they track my expectations closely. If so, you’ll know when the next higher-probability bet can be made on these stocks.

The SPDR Gold Trust ETF (NYSE:GLD) rose $0.22 (+0.19%) in premarket trading Monday. Year-to-date, GLD has gained 3.74%, versus a 2.09% rise in the benchmark S&P 500 index during the same period.

GLD currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #1 of 33 ETFs in the Precious Metals ETFs category.


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