- GCRU- Weekly Trading Service

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1 - GCRU- Weekly Trading Service GCRU #627 February 25, 215 (in its 14 th year) IN THIS EDITION FED INDUCED MARKETS 2 Open Positions 19 Abbreviations 2 MARKET LEADERS Gold (futures) 6 Silver (futures) 7 US Dollar Index 8 Copper (futures) 9 Crude (futures) 1 D. Industrials & D. Transports 11 HUI & Adv/Dec Line 12 STOCKS ishares 2+ Year Treas Bond (TLT) 14 Physical Palladium (PALL) 15 Agnico Eagle Mines (AEM) 16 Royal Gold (RGLD) 17 Direxion Gold Miners Bear 3x (DUST) 18 And finally, no matter how good the science gets, there are problems that inevitably depend on judgment, on art, on a feel for financial markets Martin Feldstein 1

2 FED DOES A FLIP, AND SO DO THE MARKETS W e all know how sensitive interest rates are to all of the markets. And if you didn't realize this, yesterday was a good example. Janet Yellen, the Fed's chairwomen, changed her stance on interest rates by saying, in other words, they're in no hurry to raise rates. They can't be locked into a time frame until they see a better environment. This reassured investors and pushed the stock market to fresh record highs, while bond prices bounced up from the recent lows. The Dollar held firm but it continues to form a 5 week topping area while gold stayed relatively quiet. Gold has been under pressure for 5 weeks now, declining from the Jan 22 high near $13 to slipping below $12 yesterday. At less than a 1% decline, this correction, we call a B decline, has been moderate so far. Conspiracy theories have been abundant in recent years. But rigging the gold price and precious metals is now coming into the light. According to the Wall Street Journal, U.S. officials are investigating over 1 major banks for possibly rigging this market. It's still to be seen, but considering how well gold is holding up under pressure now and since Nov, the market seems stronger than any manipulation. $119 is a key support for gold, its Nov uptrend. If this levels holds, we'll be witnessing a bullish B decline formation. Keep your position. And we're starting to see some bullish relationships. Silver, for instance, is starting to outperform gold, and gold shares are solidly stronger than the yellow metal. Plus, junior shares are poised to outperform the seniors in the coming months. These are good signs that a turn around isn't too far away. Gold shares have been holding up the best. The HUI index is holding clearly above its 75 day MA at 179. And in fact it could decline further to this level before we see a bottom. We're keeping our open buy orders on several shares, as you'll see inside, and it looks like it won't be too much longer before they're triggered. Meanwhile, speculators picked up some DUST last week to take advantage of ST weakness in the shares. Be quick and ready to take a profit or cut your losses short. The bull market in U.S. bonds looks ready to flex its muscles, which is why we put it as our Chart Of The Week. As you can see on page 1, the February downward correction in bonds is nearing maturity. That is, interest rates are poised to decline while bond prices rise. The 3 year yield resisted at a key level and is now on the decline by staying below 2.74%. Likewise for the 1 year yield below 2.1%. 2

3 We have secured our position in TLT and we're ready for the next move. With consumers feeling less confident with the economy regarding jobs and business outlook in the months ahead, while foreigners bought their biggest purchase of 1 year Treasury notes in an auction in February in 3 ½ years, shows the potential in bonds. The stock market continued its ascent on the news that rates will remain unchanged. The Dow Industrials, together with the S&P5 and the NASDAQ have all reached new highs for the move. Dow Transportations are lagging and should catch up by reaching a record high to trigger a bullish Dow Theory confirmation. The Chart To the Right shows the full leg up in the S&P5 over the last few years. You can see, it has room to rise further, both on a price basis and on the short-term leading indicator, on the lower chart. We'll keep our DIA for further potential. The VIX chart reflects the volatility in the market and it tends to move opposite to the stock market. VIX shows the stock market has room to rise further... a bit further. When it nears the 12 level, it'll flash a red flag warning of an upcoming correction. Complacent extremes would be below 12. Number 6 on the chart identifies this. Copper, together with the rest of the resource sector, had a nice jump up today. Copper broke above a ST downtrend and it's now poised to extend its rebound to the $2.88 level. PALL is following copper as it also rose above a ST resistance level. We continue to hold our positions but we're ready to sell at our first profit target at 79. Crude remains under pressure. It was hit once again, and it's likely to stay weak as the oil glut remains unchanged or expanding. We're keeping our option to get the most possible before maturity. A 3

4 rebound rise to the mid-6s is still likely. We'll look to unload our call spreads then. Our strategy for this week is to keep a close eye on the Dow Transportations. A break into record highs would trigger a bullish Dow Theory confirmation. We ll continue to monitor gold and gold shares to see if the lows of the current decline are in. We'll be buying on weakness. Keep a close eye on DUST. Be quick to sell at our first profit target or if support is broken. Keep your TLT position and buy if you're not in. Keep your cash reserves in US dollars. Good luck and good trading, Omar, Pam and Mary Anne 4

5 MARKET LEADERS 5

6 GOLD APRIL 215 (GCJ15) 2/24/215 CLOSE = TESTING KEY UPTREND & SUPPORT LEVEL DOWNSIDE WEDGE WITH UPSIDE TARGET AT 125 FORMING NOV 1143 IS KEY SUPPORT 1125 BOTTOMING AT AN EXTREME LOW AREA = LIMITED DOWNSIDE? N D J F LT Call Spread Long at: Stops Bought Dec /17 COMEX gold call spreads for approx $1,3 (Nov-2-13) & Dec /16 gold call spreads for approx. $875 (Jan-8-14) (Jan-14-15), 1232 (Feb-6-15), 125 (Feb-17-15). 2dc below 1143 (adjusted). Profit Targets 135 & 142. New Recom Keep your positions. If not in, buy below 12. Downside pressure keeping a lid on gold. Moreover, pressure will remain strong as gold remains below its 75 day MA near Keep in mind, gold s support is at the Nov uptrend near 119. A clear break below this level on a 2dc could push gold to test its intermediate support at On the upside, gold is holding at its Nov uptrend as it forms a bullish downside wedge with an upside target near 125 (Jan downtrend) while Spinner forms a base at an extreme oversold level showing limited downside. If gold holds above 119 followed by a rise above 12 on a 2dc, it ll show strength that could push gold to the wedge target. Keep your positions. 6

7 SEPT SILVER MARCH 215 (SIH15) 2/24/215 CLOSE= NOV SUPPORT GAINS MOMENTUM AS SILVER HOLDS ABOVE NOV SUPPORT LINE IS KEY LT Call Spread Long at: Bought Dec /27 COMEX silver call spreads for approx. $1,1 (Nov-2-13) & Dec 215 (23/24 COMEX silver call spreads for approx. $725 (Dec-24-13) (Dec-1-14), (Feb-23-15) Long Stop 3dc below NOV S O N D J F PRESSURE DOWN, BUT WATCH MT MA Long Profit Target New Recom: 2 & 22. If not in, buy near 16 and lower. Lower highs Silver continued to decline this week after failing to break above its Jan downtrend & resistance. Spinner exposing silver weakness as it remains below its MT MA and zero line. However, silver continues to hold at the Nov support showing signs of strength. If silver remains above 15.9, it'll show strength that could fuel a rise to the top side of the upchannel near Also, recent strength in the resource sector could add to silver's support and/or contribute to the rise. It s starting to outperform gold. 7

8 U.S. DOLLAR INDEX MARCH 215 (DXH15) 2/24/215 CLOSE= AUG TESTING DOWNTREND... RESISTANCE GAINS MOMENTUM OCT A S O N D J F RESISTING BELOW MT MA = WEAKNESS New Recom: Stay out. The US Dollar Index is holding near the highs. But failure to break above key resistance levels are showing strong signs of exhaustion. Notice Spinner holding onto the zero line but resisting below its MT MA. This shows that momentum may be shifting ST and some downside is likely. Keep in mind, the dollar has strong support at the Aug utprend near As long as the dollar holds above this level, it'll be bullish and more upside would be likely. However, a break below this level on a 2dc would show renewed weakness that could push the dollar to the Dec low support near 88. A decline below 93 could be bullish for gold. 8

9 COPPER MARCH 215 (HGH15) 2/24/215 CLOSE= AUG BREAKING ABOVE KEY ST NOV RESISTANCE! NOV FEB DOWNSIDE PRESSURE STILL STRONG ST A S O N D J F -.2 New Recom: Stay out. Breakout! Copper rose above the Nov downtrend showing potential for more upside ST. Copper could now rise to its next resistance level at the Aug downtrend near However, overall pressure remains strong. A break below the Jan uptrend on a 2dc below 2.55 would erase copper's recent gains. Moreover, notice Spinner declining from a high area after failing to break a key resistance level exposing weakness. Stay out for now, but keep in mind that ST strength will continue to add support to the resource sector, including silver and palladium. 9

10 LIGHT CRUDE OIL JUNE 215 (CLM15) 2/24/215 CLOSE= SEPT FAILED TO RISE ABOVE FIRST KEY RESISTANCE NOV SUPPORT IS NEXT TARGET SUPPORT 45 BROKE BELOW MT MA, ZERO & TREND = ROOM TO LINE MORE S O N D J F Call Spread Profit Targets Jun 15 Crude call spread 55 on 45 on 1 on Dec & 8 New Recom: Keep your call spread positions. Failed to break above key resistance Downside pressure continues to push crude lower. Spinner turning bearish showing more downside is likely ST. Keep a close eye on crude's support near 47. If it holds at that level, it'll be a good entry level. However, if it s broken to the downside, it'll add to crude's downward pressure and lower lows could then follow. Continue to hold your call spreads for now as we still have a few months until expiration. 1

11 SPDR DOW JONES INDUSTRIAL (DIA) 2/24/215 CLOSE= US$ Shares Transportation Average (^IYT) 2/24/215 CLOSE= US$ OCT RECORD HIGHS! BULLISH ABOVE MT MA O N D J F O N D J F FEB... WAITING FOR TRANSPORTATIONS TO CONFIRM BULLISH DOW THEORY STILL BULLISH O N D J F MACD (12, 26, 9) STILL RISING... ROOM TO RISE FURTHER MACD (12, 26, 9) STILL ROOM TO RISE FURTHER OCT NOV O N D J F BROKE ABOVE DOWNTREND... NOV HIGHS ARE NEXT KEY RESISTANCE DIA Entry Level Stop (Feb-4-15). 2dc below 171 (adjusted). Profit Target 185 New Recom Keep your positions. Looking to buy more on weakness. Unconfirmed new highs The stock market extended its rise as the Fed kept interest rates unchanged allowing for flexibility in the criteria and timeframe for rising rates. This will continue to fuel demand for stocks for lack of better yielding options. DIA, NASDAQ and the S&P reached new highs showing more upside potential. However, the Dow Transportation Average continues to lag, failing to rise above its Nov high. According to Dow Theory, both the Dow Industrial and Dow Transportation averages must break into new highs to trigger a bullish sign. If one of the averages fails to break into new territory, it'll show weakness that could be the start of a correction. Keep your positions for now as upside potential outweighs downside risk. 11

12 JUL ADEN GOLD STOCKS ADV/ LINE 2/24/215 CLOSE = 451 AUG HOLDING ABOVE 75 DAY MA = STRENGTH HUI GOLD BUGS INDEX (HUI) 2/24/215 CLOSE= HOLDING ABOVE 75 DAY MA = SOLID SUPPORT AT 179 MAR DAY MA WATCH MA! NOV J A S O N D J F NOV NOV/ LOWS ARE KEY SUPPORT N D J F VULNERABLE = PRESSURE STILL DOWN DOWNSIDE PRESSURE STRONG ST - WATCH MT MA MACD (12, 26, 9) BREAKING ABOVE MT MA = RISING MOMENTUM? J A S O N D J F MACD (12, 26, 9) BOTTOM FISHING... LIMITED DOWNSIDE? N D J F Weakness continues to dominate gold shares. However, downside seems limited ST as both HUI and the A/D Line are holding above their 75 day MA levels. Notice the MACDs on the chart above. This indicator is showing limited downside in gold shares. It s also telling us that a rise above 198 on a 2dc could fuel another leg up in the rise that started back in Nov. However, we'll continue to remain on the sidelines for now and see if our buy orders are triggered. We ll also continue to hold DUST as another decline to test the 75 day MA near 179 is possible. 12

13 STOCKS 13

14 ishares Barclays 2+ Year Treas Bond (TLT) 2/24/215 CLOSE= HOLDING AT SEPT UPTREND... DOWNSIDE WEDGE BREAK OUT! UPSIDE TARGET AT 134 UNDERWAY! SEPT RISING FROM EXTREME OVERSOLD ABOVE MT MA! S O N D J F FEB Long at: Stop: Profit Target New Recom: (Feb-1-15), (Feb-11-15), 127 (Feb-17-15). 2dc below & 145 Keep your positions. If not in, buy some at mkt. Holding at support! TLT held at its Sept uptrend and rose above its bullish downside wedge showing impressive strength! TLT's upside target and next resistance level is at the Jan downtrend at 134. A break above this level would push TLT further into its 1+ year bull market and more highs would likely follow. Notice Spinner rising from a bottom at an extreme oversold level. It s now piercing above its MT MA and on its way to test the zero line. A Spinner cross above the zero line would trigger a bullish shift in momentum that could lead strength. On the downside, the 214 utprend & key support continues being TLT's key level. A break below this level could make TLT slide into a bear mkt. Keep your positions for now and buy if you re not in. 14

15 ETFS Physical Palladium Shares (PALL) 2/24/215 CLOSE= BREAKING ABOVE SYMETRICAL TRIANGLE = BULLISH! OCT HOLDING AT ZERO LINE = NEUTRAL TO BULLISH O N D J F ETFS Physical Palladium Shares (PALL) - NYSEArca Long at: Stop: Profit Target 77.5 (Oct-8-14), 76 (Oct-1-14), 74.5 (Oct-15-14), 72.5 (Oct-16-14). 2dc below & 86 New Recom: Keep your positions. Sell all at first profit target. Once again PALL broke above a ST resistance near the 76.5 level showing strength and potential for upside. PALL is now poised to rise to test the top side of the 5+ mo sideways band near 8. However, Spinner is neutral as it struggles to break away from both the zero line and its MT MA telling us to stay cautious. On the downside, keep in mind, the lower end of the band is key support. A break below 75 could push PALL to this low side of the band near 72. Keep your positions and be ready to sell when first profit target is reached. 15

16 Agnico Eagle Mines Limited (AEM) 2/24/215 CLOSE= 3.55 CAD$ NOV BROKE BELOW UPTREND... DOWNSIDE TO BOTTOM OF FEB CHANNEL POSSIBLE N D J F FEB LINING: VULNERABLE BELOW ZERO Agnico Eagle Mines Limited (AEM) -NYSE New Recom: Out. Waiting to get back in. Buy at level or lower. Weakness continues to push AEM lower, breaking below its Dec uptrend showing signs of weakness. However, AEM continues to hold well above its 75 day MA (28). As long as AEM does, it'll show strength and potential for upside. This level is also the Feb channel target. AEM must break above 31 on a 2dc to see renewed strength. On the downside, Spinner showing weakness below both the zero line and its MT MA. This tells us more downside ST is likely. Our ideal entry level is near the 75 day MA. We recommend buying at 29 or lower. 16

17 AUG ROYAL GOLD (RGLD) 2/24/215 CLOSE= US$ DESCENDING TRIANGLE SHOWING INCREASED DOWNSIDE PRESSURE FEB OCT VULNERABLE BELOW ZERO LINE 55 A S O N D J F Royal Gold, Inc (NASDAQ: RGLD) Also traded in TSX:RGL New Recom: Buy again on a decline near 67. Downside pressure increasing as RGLD forms a bearish descending triangle showing more downside is likely Notice Spinner resisting below zero showing weakness and exposing strong ST resistance at the Jan downtrend near 71. However, a decline is likely to be limited to the 214 uptrend near 67. On the downside, a break below 67 on a dc could then push RGLD to the Oct lows near 57. We recommend buying some RGLD near

18 DIREXION GOLD MINERS BEAR 3X Shrs (DUST) 2/24/215 CLOSE= RISING FROM LOW SUPPORT HOLDING ABOVE MT MA & ZERO LINE D J F GOLD MINER BEAR 3X DIREXION (NYSE: DUST) Long at: (Feb-18-15). Stop: Profit Target 2dc below & 3. New Recom: Keep your positions. If not in, buy on a decline below 14. Solid base-building above the Jan lows, reaching a 1+ mo closing high today! DUST continues to edge upward as gold shares remain under pressure. Our main target remains the 75 day MA resistance near 22. On the downside, the Jan low & support near 11.5 is key. A break below this level would be bearish. We recommend protecting profits on a rise to the 75 day MA level. 18

19 OPEN POSITIONS Symbol Trade Update &/or Current Position Status Initial Initial Entry Traders re- Last Stops Target Target (L=Long, S= Entry Date Price bot/ -sold at Closing #1 #2 Short, O= Price Out P= Put C= Call) SHARES TLT Keep your positions. L Feb , dc below PALL Keep your positions. Sell all at first profit target. L Oct , 74.5, dc below AEM Out. Waiting to get back in. Buy at level or lower. O 3.55 DUST Keep your positions. If not in, buy on a decline below 14. L Feb RGLD Buy again on a decline near 67. O DIA Keep your positions. Looking to buy more on weakness. L Feb'4' dc below MARKET LEADERS Gold - GCJ15 Keep your positions. If not in, buy below 12. L, C Jan , dc below Crude- CLM15 Keep your call spread positions. C Oct Jun 15 Call Spread 89/ Silver SIH15 If not in, buy near 16 and lower. L, C Dec dc below US Dollar DXH15 Stay out. O COPPER HGH15 Stay out. O

20 Quoting GCRU is permitted provided GCRU name, website address & subscription price are given. All charts in GCRU are daily prices. Fax subscribers please note this week s password to access GCRU daily edition via our website is: (getready). Subscribers can obtain free online chart updates for all gold shares in GCRU via: To view Canadian stks please use CA as prefix (ie, to view Agnico Eagle (Toronto) you must use CA:AEM). Note: U should NOT feel our recommended prices are set in concrete. If mkts suddenly feel hot or cold to U, or dramatic news occurs, U can buy or sell, or stop at slightly higher or slightly lower prices. It also hinges on your experience level. Some people can use our prices as guides & know when they can take bigger risks. Spinner: Spinner is an in-house momentum indicator (not always shown on charts). Momentum indicators use the rate of change in price to determine predominant energy flows. Spinner trading signals are generated when the faster timing line crosses above or below the ST Sym/tri Tgt Unch short term symmetrical triangle target unchanged slower confirming line. Upside crosses in the lower range of positive Vol volume territory offer the most reliable signals for longs; downside crosses in Wk week the top range of negative territory for shorts. Avoid trading against Ystdy yesterday the timing line, ie, buying/selling if the timing line is in corrective C close mode (against direction of trade) unless the confirming line is positioning for a new 'confirming cycle'. It's important to always be aware of location, direction & cycling phase of the confirming line. Spinner signals are more effective in trending mkt's than in trading ranges where indicators such as Stochastics & Williams %R should be used. NOTE: payments for GCRU services should be made payable to MAP CUSTOMER SERVICE. Gold (& mkts) Charts R Us is published weekly. You may sign up for 3-mos at $3, 6-mos at $585, 9-mos at $855 or 12-mos $1,11. gcru@adenforecast.com 1dc 2dc bot CAD$ H&S LOC LT MT NL PF PO Recom RH&S RS ABBREVIATIONS 1-day close (the share price must close above or below the indicated price level, before our recommendation is activated) 2-day close (consecutive) bought Canadian dollar head & shoulder line on close long term medium term neckline portfolio price objective recommended reverse head & shoulder relative strength - DISCLAIMER - Due to the electronic nature of s, there is a risk that the information contained in this message has been modified. Consequently Gold (& mkts) Charts R Us can accept no responsibility or liability as to the completeness or accuracy of the information. Whilst efforts are made to safeguard messages and attachments, Gold (& mkts) Charts R Us cannot guarantee that messages or attachments are virus free, do not contain malicious code or are compatible with your electronic systems and does not accept liability in respect of viruses, malicious code or any related problems that you may experience. Information in Gold (& mkts) Charts R Us is for general information only & is not intended to be relied upon by individual readers in making specific investment decisions. Appropriate independent advice should be obtained before making any such decisions. Gold (& mkts) Charts R Us do not guarantee or assure that readers will make money, or accept liability for any loss suffered by readers as a result of any such decision. Futures and share trading involves risk and is not for all investors. Past performance is NOT indicative of future results. Trading involves risk and should be pursued with risk capital only! 2