Trading commodities and indexes through the use of exchange traded funds sure keeps things simple for an average trader. These funds allow individual investors to buy and sell things like gold, silver, oil, the s&p 500 and other investments which where not available only few months ago like “wheat” for example.

One of the nice things with ETFs is that is allows everyone to follow the price of a commodity or index using any charting website and can even apply indicators to help spot key support and resistance levels using volume by price analysis. There is no need for a expensive data feeds, charting programs and you don’t have to worry about contract expiration.

Below are a few charts of the trend and my short term forecast.

Gold Bullion ETF (NYSE:GLD)

As you can see gold broke out of its support zone this week and popped into the next resistance level. This is very typical price action in the stock market. It is important to look at the price charts like an apartment building. It’s nothing but a bunch of floors and ceilings.

How it works; if a ball breaks though a floor it will naturally fall to the next floor and bounce. The same for if a ball breaks through a ceiling, it will hit the next ceiling then bounce back down. This is essentially how the market moves. SPDR Gold ETF (NYSE:GLD)

iShares Silver ETF (NYSE:SLV)

Silver is forming a large pennant and nearing its apex. With the amount of volume traded within this large volume channel I would expect a sharp breakout once a direction is made. iShares Silver ETF (NYSE:SLV)

U.S. Oil ETF (NYSE:USO)

Crude oil had a funky day. Early Wednesday morning in pre-market trading we saw virtually every investment drop at the same time which was strange. Anyways the US dollar dropped sharply and oil when down also. Normally as the dollar drops oil rockets higher but that was not the case today.

Currently oil is trading between two trendlines and is trying to hold up. If we get a breakdown then we could see a sharp drop in oil over the next 1-2 weeks. U.S. Oil ETF (NYSE:USO)

S&P500 ETF Trading Fund (NYSE:SPY)

The SP500 is trading within a high volume channel, similar to silver. Once a breakout in either direction is made I would expect a sizable move lasting a few weeks. SPDR S&P500 ETF (NYSE:SPY)

Mid-Week Commodity and Index ETF Report:

In short, the market looks bearish for the short term of 5-10 trading sessions. This is because everything looks to be trading near resistance levels. That naturally brings sellers out of the woodwork putting pressure on prices.

Silver and gold stocks tend to lead the metals sector on breakouts so it will be important to keep an eye on them as we near a possible breakout or breakdown in the metals. If you see (NYSE:SLV) or (NYSE:GDX) ETFs out performing the (NYSE:GLD) gold fund by 2-3x then I would expect to see gold move higher later that session or the following day.

The US dollar trend usually helps to identify if oil will have downward pressure or not. Also energy stocks tend to lead the price of oil by a few hours and some times a day. I keep an eye on (NYSE:XLE) energy etf for a feel of how the energy stocks are doing and also (NYSE:UUP) US dollar fund.

As for equities tech, financials and the Russell 2K (small cap stock) tend to lead the way for the broad market. Watching (NYSE:XLK), (NYSE:XLF) and (NYSE:IWM) help to confirm breakouts.

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Written By Chris Vermeulen From The Gold And Oil Guy.com

I am a full time daytrader and swing trader specializing in trading (NYSE:GLD), (NYSE:GDX), XGD.TO, (NYSE:SLV) and (NYSE:USO). I provide my trading charts, market insight and trading signals to members of my newsletter service. If you have any questions feel free to send me an email: Chris@TheGoldAndOilGuy.com This article is intended solely for information purposes. The opinions are those of the author only. Please conduct further research and consult your financial advisor before making any investment/trading decision. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

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NYSE:GLD, SLV, SPY, USO, UUP