S&P 500 Chart And What It Means For Commodities…

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Commodity Trading Research
SP 500 Chart Tells An Intriguing Story
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• Hi, My name is Justin and Im with Commodity
  Trading Research, today were reviewing our
  recently published article

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• SP 500 Chart Tells An Intriguing Story

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• Something big is brewing in stocks
• Despite some wildly bullish moves for
  individualstocks this year, the market as a whole
  has essentially traded sideways. As a matter of
  fact, the SP 500 is only up a mere 1.9 since
  January 1st.

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• If youre an index investor, 2015 has been quite
  a bore.But that may be about to changeYou see,
  the SP 500 is forming an interesting technical
  pattern- one that foretells a substantialprice
  move in the very near future.
• Take a look

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• Notice how the past few weeks of SP 500 price
  action has the index consolidating into a
  consistently tighter range (contracting red
  lines). With the important index trading into
  thisrestricted range, its a just a matter of
  time before it breaks right back out of it.

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• And once it does, welllikely we see a
  substantial run for stocks.
• The only question is- which way will the market
  break? After all, consolidation patterns like
  the one above are only indicative of looming
  breakout, not a direction.

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• However, theres one technical aspect to the
  chart above leading me to believe the looming
  breakout will be to higher prices, not lower.
  You see, the 200 day moving average (green line)
  is still moving from the lower left of the chart
  to the upper right.

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• In other words, the SP 500 is still in an
  uptrend.
• Since one of the most basic rules of technical
  analysis states- A trend is more likely to
  continue, than to reverse, Im leaning towards
  the bullish side of the equity markets.

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• However, theres always the chance Mr. Market
  throws a curveball. If the SP 500 breaks below
  2,045, the odds increase quickly for a big broad
  market break down.

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• Whats all this equity market information mean
  for commodities?

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• If the SP 500 along with other major
  indexesrally higher like I suspect, well likely
  see bullishness start leaking back into the oil
  market. With West Texas Intermediate (WTI)
  currently trading near the 2015 low of 42.50 a
  barrel, its the perfect time for bulls to start
  making a stand.

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• Of course, a rally in oil prices would be great
  reason for oil exploration companies to follow
  suit, something I talked about in detail here.

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• But while a broad market upturn would be great
  for oil stocks, the same cant be said for gold
  producers
• As weve discussed before, gold and gold stocks
  are suffering from pitiful performancethis year.

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• If the SP 500 breaks to higher ground because of
  the technical pattern above, the odds grow for
  additional downside in gold and the companies
  producing it. After all, if investors are
  feeling more comfortable owning stocks theyll
  likely continue reducing their exposure to the
  yellow metal.

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• Now, before you get too comfortable, heres the
  other side of the coin

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• If technical support at 2,045 fails in the SP
  500 fails, we could see a rather dramatic selloff
  in stocks. Its tough to say how low stocks
  would go, but the February lows near 2,000
  wouldnt be out of the question.

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• In such a scenario, its likely we see continued
  selling in WTI crude along with the companies
  producing it.

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• And in an odd twist of fate, gold will likely see
  a sudden rush of bullish interest. In case
  youre unaware, gold typically sees substantial
  upside in times of equity market panic.

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• How do you capitalize on these scenarios?

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• For ways to play the oil market via commodity
  ETFs, check out this article.If capturing gold
  profits is more your thing, these ETFs are the
  way to go.
• At the very least, Im expecting some big moves
  for stocks in the weeks ahead. Stay tuned for
  more updates and ways to profit!

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