Signals are automatically generated by integrating electronic prices and weekly statistics with proprietary algorithms.

AGQ

The ETF contract closed at 21.75. The market closing below the 9 day MA (23.50) is confirmation that the trend momentum is bearish. A close above the 9 MA would negate the weekly bearish short-term trend to neutral.

With the market closing above the VC Weekly Price Momentum Indicator of 21.47, it confirms that the price momentum is bullish.

Look to take some profits on longs, as we reach the 22.25 and 22.78 levels during the week. Cover short on corrections at the 20.96 to 20.18 and reverse and go long on a weekly reversal stop. If long, use the 28.18 level as a Stop Close Only and Good Till Cancelled order.

SLV

The ETF contract closed at 21.33. The market closing below the 9 day MA (22.05) is confirmation that the trend momentum is bearish. A close above the 9 MA would negate the weekly bearish short-term trend to neutral.

With the market closing above the VC Weekly Price Momentum Indicator of 21.16, it confirms that the price momentum is bullish.

Look to take some profits on longs, as we reach the 21.57 and 21.80 levels during the week. Cover short on corrections at the 20.93 to 20.52 and reverse and go long on a weekly reversal stop. If long, use the 20.52 level as a Stop Close Only and Good Till Cancelled order.

GLD

The ETF contract closed at 134.43. The market closing below the 9 day MA (136.06) is confirmation that the trend momentum is bearish. A close above the 9 MA would negate the weekly bearish short-term trend to neutral.

With the market closing above the VC Weekly Price Momentum Indicator of 133.83, it confirms that the price momentum is bullish.

Look to take some profits on longs, as we reach the 135.43 and 136.42 levels during the week. Cover short on corrections at the 132.84 to 131.24 and reverse and go long on a weekly reversal stop. If long, use the 131.24 level as a Stop Close Only and Good Till Cancelled order.

SPY

The ETF contract closed at 163.18. The market closing above the 9 day MA (162.46) is confirmation that the trend momentum is bullish. A close below the 9 MA would negate the weekly bullish short-term trend to neutral.

With the market closing below the VC Weekly Price Momentum Indicator of 163.29, it confirms that the price momentum is bearish.

Look to take some profits on longs, as we reach the 165.29 and 167.40 levels during the week. Cover short on corrections at the 161.19 to 159.19 and reverse and go long on a weekly reversal stop. If long, use the 159.19 level as a Stop Close Only and Good Till Cancelled order.

ZSL

The ETF contract closed at 82.52. The market closing above the 9 day MA (78.61) is confirmation that the trend momentum is bullish. A close below the 9 MA would negate the weekly bullish short-term trend to neutral.

With the market closing below the VC Weekly Price Momentum Indicator of 83.85, it confirms that the price momentum is bearish.

Look to take some profits on longs, as we reach the 85.85 and 89.17 levels during the week. Cover short on corrections at the 80.53 to 78.53 and reverse and go long on a weekly reversal stop. If long, use the 78.53 level as a Stop Close Only and Good Till Cancelled order.

*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.

TRADING DERIVATIVES, FINANCIAL INSTRUMENTS AND PRECIOUS METALS INVOLVES SIGNIFICANT RISK OF LOSS AND IS NOT SUITABLE FOR EVERYONE. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

Signals are automatically generated by integrating electronic weekly nearest futures statistics with proprietary algorithms.

GOLD

The August gold futures contract closed at 1391. The market closing below the 9 day MA (1407) is confirmation that the trend momentum is bearish. A close above the 9 MA would negate the weekly bearish short-term trend to neutral.

With the market closing above the VC Weekly Price Momentum Indicator of 1383, it confirms that the price momentum is bullish.

Look to take some profits on longs, as we reach the 1400 and 1411 levels during the week. Cover short on corrections at the 1373 to 1355 and reverse and go long on a weekly reversal stop. If long, use the 1355 level as a Stop Close Only and Good Till Cancelled order.

SILVER

The July Silver futures contract closed at 21.99. The market closing below the 9 day MA (22.78) is confirmation that the trend momentum is bearish. A close above the 9 MA would negate the weekly bearish short-term trend to neutral.

With the market closing above the VC Weekly Price Momentum Indicator of 21.86, it confirms that the price momentum is bullish.

Look to take some profits on longs, as we reach the 22.20 and 22.41 levels during the week. Cover short on corrections at the 21.65 to 21.31 levels to cover shorts and reverse and go long on a weekly reversal stop. If long, use the 21.31 level as a Stop Close Only and Good Till Cancelled order.

B POUND

The June B Pound futures contract closed at 1.5703. The market closing above the 9 day MA (1.5563) is confirmation that the trend momentum is bullish. A close below the 9 MA would negate the weekly bullish short-term trend to neutral.

With the market closing above the VC Weekly Price Momentum Indicator of 1.5645, it confirms that the price momentum is bullish.

Look to take some profits on longs, as we reach the 1.5796 and 1.5888 levels during the week. Cover short on corrections at the 1.5553 to 1.5402 levels to cover shorts and reverse and go long on a weekly reversal stop. If long, use the 1.5402 level as a Stop Close Only and Good Till Cancelled ord

EURO

The June Euro futures contract closed at 1.3345. The market closing above the 9 day MA (1.3055) is confirmation that the trend momentum is bullish. A close below the 9 MA would negate the weekly bullish short-term trend to neutral.

With the market closing above the VC Weekly Price Momentum Indicator of 1.3305, it confirms that the price momentum is bullish.

Look to take some profits on longs, as we reach the 1.341 to 1.3518 levels during the week. Cover short on corrections at the 1.3218 to 1.3092 levels and reverse and go long on a weekly reversal stop. If long, use the 1.3092 level as a Stop Close Only and Good Till Cancelled order.

E MINI S&P 500

The June E Mini futures contract closed at 1.6180. The market closing below the 9 day MA (1.6356) is confirmation that the trend momentum is bearish. A close above the 9 MA would negate the weekly bullish short-term trend to neutral.

With the market closing above the VC Weekly Price Momentum Indicator of 1.618, it confirms that the price momentum is bullish.

Look to take some profits on longs, as we reach the 1.637 and 1.657 levels during the week. Cover short on corrections at the 1.598 to 1.579 levels to cover shorts and reverse and go long on a weekly reversal stop. If long, use the 1.579 level as a Stop Close Only and Good Till Cancelled order.

SOYBEANS

The July Soybeans futures contract closed at 15.16. The market closing below  the 9 day MA (15.26) is confirmation that the trend momentum is bullish. A close above the 9 MA would negate the weekly bullish short-term trend to neutral.

With the market closing above the VC Weekly Price Momentum Indicator of 15.14, it confirms that the price momentum is bullish.

Look to take some profits on longs, as we reach the 15.23 to 15.31 levels during the week. Cover short on corrections at the 15.07 to 14.99 levels to cover shorts and reverse and go long on a weekly reversal stop. If long, use the 14.99 level as a Stop Close Only and Good Till Cancelled order.

CRUDE OIL

The July Crude Oil contract closed at 97.89. The market closing above the 9 MA (94.30) is confirmation that the trend momentum is bullish. A close below the 9 MA would negate the weekly bullish trend to neutral.

With the market closing above the VC Weekly Price Momentum Indicator of 96.73, it confirms that the price momentum is bullish.

Look to take some profits, if long, as we reach the 99.41 and 101 levels during the week. Cover shorts on corrections at the 95.21 to 92.54 levels to cover shorts and go long on a daily reversal stop. If long, use the 92.54 level as a Stop Close Only and Good Till Cancelled order.

FEEDER CATTLE

The July F Cattle contract closed at 143.40. The market closing above the 9 MA (149.98) is confirmation that the trend momentum is bullish. A close below the 9 MA would negate the weekly bullish trend to neutral.

With the market closing above the VC Weekly Price Momentum Indicator of 144.21, it confirms that the price momentum is bullish.

Look to take some profits, if long, as we reach the 145.31 and 147.23 levels during the week. Cover shorts on corrections at the 142.29 to 141.18 levels to cover shorts and go long on a daily reversal stop. If long, use the 141.18 level as a Stop Close Only and Good Till Cancelled order.

Patrick MontesDeOca

Equity Management Academy

Toll Free: 877-733-1511

Ph: 805-418-1744 Main

E-Fax: 310-281-6919

Email: support@EMA2Trade.com

Twitter: https://twitter.com/EMA2Trade

Live Video Chat: Click HERE

FaceBook: www.facebook.com/EMA2Trade

YouTube: Trading Talk

TRADING DERIVATIVES, FINANCIAL INSTRUMENTS AND PRECIOUS METALS INVOLVES SIGNIFICANT RISK OF LOSS AND IS NOT SUITABLE FOR EVERYONE. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

Eric Sprott May 31, 2013

Patrick Montes de Oca (PM): This segment is brought to you by Equity Management Academy. Hello, everybody, this is Patrick Montes de Oca. We have the pleasure today of having with us Mr. Eric Sprott, Chief Executive Officer, Senior Portfolio Manager, Eric Sprott has more than 40 years of experience in the investment industry. After earning his designation as a chartered accountant, he entered the investment  industry as a research analyst at Merrill Lynch in 1981. He founded Sprott Securities, now called Cormark Securities, which today is one of Canada’s largest independently owned securities firms. In 2001 Eric established Sprott Asset Management.

Welcome to Trading Talk. Eric.

Eric Sprott (ES): Patrick, very happy to be back again and I look forward to our conversation.

PM: In testimony last week Federal Reserve Chairman Ben Bernanke hinted at the program of Quantitative Easing that has propped up the economy, the markets over the past three years might come to an end before Christmas comes around. What is your opinion, what do you make of it, Eric?

ES: I love the question, because we’ve already…It’s very interesting what’s going on in the world right now because here we have massive quantitative easing on a scale much larger in Japan than even we have in the USA and the bond yields have ratcheted up dramatically. Like the yields have gone up more than 200%. They’ve gone from 30 basis points to, I think, 95 or 96. People are seeing through the printing. And the same thing’s now happening in the US, where the bond rates, the 10-year bond rates, have gone from 160 to as high as 223 two days ago. I think they’re currently around 215, and this is while the Fed is buying. And I, and I’m sure the Fed, would have a total understanding that if they ever stop buying the bonds what would happen to interest rates? Because a lot of this stock market is built on the back of low interest rates and artificially low interest rates with the most important word being artificially low. We know that the zero interest rate policy is ridiculous. And one other thing I should say, you said it was helping the economy or some words to that extent.  And I can tell you that the zero interest rate policy has had two noticeable and meaningful effects in the US market: one is housing recovered, a little, and auto sales have recovered. Both because they are very interest rate sensitive. The cost of each is very much a factor of the interest rates. With rates going back up here, people are going to find out that there’s an immediate effect, a negative impact, on the housing market in the States, and it will also have a meaningful effect on the refinancing of automobiles. Because the interest costs have theoretically gone up by 33 percent as rates went from 160 to 215. So I don’t think there’s a hope in hell of the Fed tapering their purchases because it would have unbelievable consequences in the bond markets which we’ve already seen manifested, both in Japan and in the States within the last month.

PM: Eric, just to follow that train of thought to quote Bill Gross from PIMCO company Chief Investment Officer on a recent interview, “If bond prices go down, stock prices should go down as well. That’s simply because the global leveraged trade is dependent on the stable Japanese Yen and the stable J/GB yield, and a stable treasury yield and once you produce instability, then that leverage starts to unwind. The housing market starts to get affected, and stocks come down.” You’ve been singing the same song for the past couple of years, at least since I’ve been talking with you. Do you still feel as strong now? I mean obviously, you seem to have very strong opinions on that, and…where do you think we’re going from here?

ES: It’s always good to step back a little and whenever I’m presenting in a room and when I’m talking to you and your listeners, I always say to each one of them, do you, in your heart, think that a zero interest rate policy is appropriate? And do you, in your heart, believe that printing money is appropriate? Because if you don’t, you shouldn’t be playing the game that we’re all playing. And the game we’re all playing is basically trying to game the Fed. And so we all love buying bonds. As you know there’s been this huge interest in bonds here, which I think is being completely misplayed. I mean I tell everybody, you should not own bonds in that environment, and a lot of people say, well, I gotta wait for a real sign that it’s not working. Well, we’re getting our first sign by the way. And you can’t wait, because if you’re a long term or even a medium term thinker, you know that interest rates shouldn’t be where they are. And if you imaging that rates were where they normally would be, where would the economy be? It would be a basket case. Housing would plunge again. Car sales would plunge again. Government debt would skyrocket. It would just be the worst possible of all situations. We have totally masked the ability of governments to finance themselves with these low, these abnormally low interest rates. If they ever went back up, the interest costs to those countries would skyrocket and suddenly it’s out of control; not that it wasn’t out of control already. So it would just be a horrible scenario.

PM: You know, just recently, obviously the bond market has been in a tumble the past few weeks, down about 9 basis points, and obviously rates rising and the prices reflecting what they say is strong economic data. Is this real or…? Are we going to see bubbles bursting in world markets, in stocks, bonds, especially in the US?

ES: We are seeing a bubble burst. The bubble that is bursting, is what’s happening in Japan. They announced a good-sized QE2 program and the bond market crashes because people see through it and therefore, once the Japanese bond market start going down, then people think, oh my goodness, the Bank of Japan has been buying all these bonds, yet interest rates are going up. How’s that work? And then they start getting concerned that the same thing is going to happen here in the United States. And even though Bernanke’s buying all the bonds, he still can’t keep rates down. They’ve gone up 50 basis points here in the last 6 or 8 weeks, and that’s with him being almost the sole buyer in the bonds. What would happen if he wasn’t buying the bonds? And the comment you made, you suggested, that Bill Gross made, and he goes right to the problem, there’s so much leverage in the bond business that when it gets off side, everyone has to start doing things and it brings huge volatility into the bond market. So we saw the volatility in Japan. We’re now seeing the volatility in the US bond market, where all of a sudden people are going to scramble because they own these things on a leveraged basis, which of course is ridiculous, as well, and in order to cover off, they’re over-leveraged, they have to sell the bonds. So as rates are going up, they become the seller and it almost becomes self-perpetuating, if they’re too leveraged.

PM: Are we looking at a top on the US dollar?

ES: You know, Patrick, what’ so difficult with that question, I find it almost laughable that we have the Yen, we have the Euro, we have the pound and we have the dollar, and I have no idea, I mean, I wouldn’t want to own any of those currencies. They all have their individual problems. I can say to you that it looks to me like the Yen is the worst of the bunch, but I could also say to you, I would say to you and I have written, that as far as I’m concerned the US government is bankrupt already, so how would I possibly, in the long run, want to own dollars? You look at the carnage that is going on over in Europe, how would I possible want to own the Euro? And the only reason these currencies look good from time to time, is that they look better. One thing you and I know and most people may not appreciate, is that there is one other currency, and that’s gold. And gold has gone up 500% against all currencies in the last 11 years. I grant you that it’s gone down recently, but the fact is that it’s been by far the best performing currency and if we pull ourselves out of this funk that we’re in in the precious metals, that I think we’re in the process of doing right now, gold will yet again reassert itself as the place that’s way better than any fiat currency.

PM: Let’s talk a little more about gold and silver for a minute. Eric, can you verbalize what you think is happening in the physical gold market as opposed to the vapor market?

ES: I’d be happy to. I have my own views on things and I’m, as you know, very much a student of the physical gold market and watching what people are doing in terms of buying and selling, because I wrote an article about gold about a year and a half ago, asking the question, do Western central banks have any gold left? Because you can see all this new demand coming in while at the same time the mining supply has been flat every year for thirteen years. In fact, it’s even down last year and I suspect it’s going to be down this year, by the way. So how’s all this new buying coming in? How’s China get an extra 700 tons and how do central banks, which used to be sellers of 400 tons get to buy 500 tons, all in a 4,000 ton market? I can identify 2,300 tons of new buying and that’s without using the new data we’re now seeing where all of a sudden demand for gold and silver products has been going up by, in April and May, by hundreds of percent greater than the previous year when you look at China, India, the US, the Canadian Mint. I don’t think they have the gold they say they have. I was sensing pre the April crash that there were lots of anecdotal stories of delays and shortages and defaults on deliveries whether they be from commercial banks, from commodity exchanges, et cetera. And it was getting quite apparent that there was a problem. So along comes this take down of gold, which has been described as a eighth derivative event, and eight derivative events can only happen once every million years, which probably means it was perpetuated. I mean it didn’t happen naturally, in other words. I think the intention of that smash was to have people, to make people, to convince people they should not own physical gold. Unfortunately, for the gold cartel, it totally backfired on them. The buyers came out in force and the volumes that we’re seeing are unbelievably large and they’re not going to be able to supply delivery.

Signals are automatically generated by integrating electronic weekly nearest futures statistics with proprietary algorithms

GOLD

The August gold futures contract closed at 1383.5. The market closing below the 9 day MA (1420) is confirmation that the trend momentum is bearish. A close above the 9 MA would negate the weekly bearish short-term trend to neutral. With the market closing below the VC Weekly Price Momentum Indicator of 1395, it confirms that the price momentum is bearish. Look to take some profits on longs, as we reach the 1411 and 1440 levels during the week. Cover short on corrections at the 1366 TO 1350 and reverse and go long on a weekly reversal stop. If long, use the 1350 level as a Stop Close Only and Good Till Cancelled order.

SILVER

The July Silver futures contract closed at 21.61. The market closing below the 9 day MA (23.27) is confirmation that the trend momentum is bearish. A close above the 9 MA would negate the weekly bearish short-term trend to neutral. With the market closing below the VC Weekly Price Momentum Indicator of 22.06, it confirms that the price momentum is bearish. Look to take some profits on longs, as we reach the 22.55 and 23.35 levels during the week. Cover short on corrections at the 21.26 to 20.77 levels to cover shorts and reverse and go long on a weekly reversal stop. If long, use the 20.77 level as a Stop Close Only and Good Till Cancelled order.

B POUND

The June B Pound futures contract closed at 1.5560. The market closing above the 9 day MA (1.5330) is confirmation that the trend momentum is bullish. A close below the 9 MA would negate the weekly bullish short-term trend to neutral. With the market closing above the VC Weekly Price Momentum Indicator of 1.5478, it confirms that the price momentum is bullish. Look to take some profits on longs, as we reach the 1.5764 and 1.5971 levels during the week. Cover short on corrections at the 1.5271 to 1.4985 levels to cover shorts and reverse and go long on a weekly reversal stop. If long, use the 1.4985 level as a Stop Close Only and Good Till Cancelled order.

EURO

The June Euro futures contract closed at 1.3224. The market closing above the 9 day MA (1.3026) is confirmation that the trend momentum is bullish. A close below the 9 MA would negate the weekly bullish short-term trend to neutral. With the market closing above the VC Weekly Price Momentum Indicator of 1.3162, it confirms that the price momentum is bullish. Look to take some profits on longs, as we reach the 1.3369 to 1.3513 levels during the week. Cover short on corrections at the 1.3018 to 1.2811 levels and reverse and go long on a weekly reversal stop. If long, use the 1.2811 level as a Stop Close Only and Good Till Cancelled order.

E MINI S&P 500

The July E Mini futures contract closed at 1.6390. The market above above the 9 day MA (1.6356) is confirmation that the trend momentum is bullish. A close below the 9 MA would negate the weekly bullish short-term trend to neutral. With the market closing above the VC Weekly Price Momentum Indicator of 1.6335, it confirms that the price momentum is bullish. Look to take some profits on longs, as we reach the 1.6490 and 1.6595 levels during the week. Cover short on corrections at the 1.6230 to 1.6075 levels to cover shorts and reverse and go long on a weekly reversal stop. If long, use the 1.6075 level as a Stop Close Only and Good Till Cancelled order.

SOYBEANS

The July Soybeans futures contract closed at 15.29. The market closing above  the 9 day MA (15.18) is confirmation that the trend momentum is bullish. A close below the 9 MA would negate the weekly bullish short-term trend to neutral. With the market closing below the VC Weekly Price Momentum Indicator of 15.30, it confirms that the price momentum is bearish. Look to take some profits on longs, as we reach the 15.40 to 15.51 levels during the week. Cover short on corrections at the 15.19 to 15.09 levels to cover shorts and reverse and go long on a weekly reversal stop. If long, use the 15.09 level as a Stop Close Only and Good Till Cancelled order.

CRUDE OIL

The July Crude Oil contract closed at 96.24. The market closing above the 9 MA (93.89) is confirmation that the trend momentum is bullish. A close below the 9 MA would negate the weekly bullish trend to neutral. With the market closing above the VC Weekly Price Momentum Indicator of 95.38, it confirms that the price momentum is bullish. Look to take some profits, if long, as we reach the 97.04 and 98.05 levels during the week. Cover shorts on corrections at the 94.37 to 92.71 levels to cover shorts and go long on a daily reversal stop. If long, use the 92.71 level as a Stop Close Only and Good Till Cancelled order.

Patrick MontesDeOca

Equity Management Academy

Toll Free: 877-733-1511

Ph: 805-418-1744 Main

E-Fax: 310-281-6919

Email: support@EMA2Trade.com

Twitter: https://twitter.com/EMA2Trade

Live Video Chat: Click HERE

FaceBook: www.facebook.com/EMA2Trade

YouTube: Trading Talk

TRADING DERIVATIVES, FINANCIAL INSTRUMENTS AND PRECIOUS METALS INVOLVES SIGNIFICANT RISK OF LOSS AND IS NOT SUITABLE FOR EVERYONE. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

Signals are automatically generated by integrating electronic weekly nearest futures statistics with proprietary algorithms.

GOLD

The August gold futures contract closed at 1388. The market closing below the 9 day MA (1449) is confirmation that the trend momentum is bearish. A close above the 9 MA would negate the weekly bearish short-term trend to neutral. With the market closing below the VC Weekly Price Momentum Indicator of 1394, it confirms that the price momentum is bearish. Look to take some profits on longs, as we reach the 1416 and 1443 levels during the week. Cover short on corrections at the 1367 to 1345 and reverse and go long on a weekly reversal stop. If long, use the 1345 level as a Stop Close Only and Good Till Cancelled order.

SILVER

The July Silver futures contract closed at 22.23. The market closing below the 9 day MA (22.44) is confirmation that the trend momentum is bearish. A close above the 9 MA would negate the weekly bearish short-term trend to neutral. With the market closing below the VC Weekly Price Momentum Indicator of 22.39, it confirms that the price momentum is bearish. Look to take some profits on longs, as we reach the 22.69 and 23.14 levels during the week. Cover short on corrections at the 21.94 to 21.64 levels to cover shorts and reverse and go long on a weekly reversal stop. If long, use the 21.64 level as a Stop Close Only and Good Till Cancelled order.

B POUND

The June B Pound futures contract closed at 1.5188. The market closing below the 9 day MA (1.5305) is confirmation that the trend momentum is bearish. A close above the 9 MA would negate the weekly bearish short-term trend to neutral. With the market closing above the VC Weekly Price Momentum Indicator of 1.5142, it confirms that the price momentum is bullish. Look to take some profits on longs, as we reach the 1.5277 and 1.5375 levels during the week. Cover short on corrections at the 1.5044 to 1.4909 levels to cover shorts and reverse and go long on a weekly reversal stop. If long, use the 1.4909 level as a Stop Close Only and Good Till Cancelled order.

EURO

The June Euro futures contract closed at 1.29809. The market closing below the 9 day MA (1.3004) is confirmation that the trend momentum is bearish. A close above the 9 MA would negate the weekly bearish short-term trend to neutral. With the market closing below the VC Weekly Price Momentum Indicator of 1.3294, it confirms that the price momentum is bearish. Look to take some profits on longs, as we reach the 1.3749 and 1.2528 levels during the week. Cover short on corrections at the 1.2528 to 1.2073 levels to cover shorts and reverse and go long on a weekly reversal stop. If long, use the 1.2073 level as a Stop Close Only and Good Till Cancelled order.

E MINI S&P 500

The July E Mini futures contract closed at 1.6290. The market above above the 9 day MA (1.6036) is confirmation that the trend momentum is bullish. A close below the 9 MA would negate the weekly bullish short-term trend to neutral. With the market closing below the VC Weekly Price Momentum Indicator of 1.6427, it confirms that the price momentum is bearish. Look to take some profits on longs, as we reach the 1.6591 and 1.6892 levels during the week. Cover short on corrections at the 1.6126 to 1.5926 levels to cover shorts and reverse and go long on a weekly reversal stop. If long, use the 1.5926 level as a S

Close Only and Good Till Cancelled order.

SOYBEANS

The July Soybeans futures contract closed at 15.10. The market closing above  the 9 day MA (14.46) is confirmation that the trend momentum is bullish. A close below the 9 MA would negate the weekly bullish short-term trend to neutral. With the market closing above the VC Weekly Price Momentum Indicator of 15.03, it confirms that the price momentum is bullish. Look to take some profits on longs, as we reach the 15.35 and 15.59 levels during the week. Cover short on corrections at the 14.79 and 14.47 levels to cover shorts and reverse and go long on a weekly reversal stop. If long, use the 14.47 level as a Stop Close Only and Good Till Cancelled order.

FEEDER CATTLE

The August Feeder Cattle futures contract closed at 1.443. The market closing above the 9 day MA (1.3925) is confirmation that the trend momentum is bullish. A close below the 9 MA would negate the weekly bullish short-term trend to neutral. With the market closing below the VC Weekly Price Momentum Indicator of 1.4477, it confirms that the price momentum is bearish. Look to take some profits on longs, as we reach the 1.4588 and 1.4745 levels during the week. Cover short on corrections at the 1.4320 to 1.4209 levels to cover shorts and reverse and go long on a weekly reversal stop. If long, use the 1.4209 level as a Stop Close Only and Good Till Cancelled order.

CRUDE OIL

The July Crude Oil contract closed at 91.97. The market closing below the 9 MA (93.20) is confirmation that the trend momentum is bearish. A close above the 9 MA would negate the weekly bearish trend to neutral. With the market closing below the VC Weekly Price Momentum Indicator of 93.15, it confirms that the price momentum is bearish. Look to take some profits, if long, as we reach the 94.74 and 97.51 levels during the week. Cover shorts on  corrections at the 90.38 to 88.79 levels to cover shorts and go long on a daily reversal stop. If long, use the 88.79 level as a Stop Close Only and Good Till Cancelled order.

Patrick MontesDeOca

Equity Management Academy

Toll Free: 877-733-1511

Ph: 805-418-1744 Main

E-Fax: 310-281-6919

Email: support@EMA2Trade.com

Twitter: https://twitter.com/EMA2Trade

Live Video Chat: Click HERE

FaceBook: www.facebook.com/EMA2Trade

YouTube: Trading Talk

TRADING DERIVATIVES, FINANCIAL INSTRUMENTS AND PRECIOUS METALS INVOLVES SIGNIFICANT RISK OF LOSS AND IS NOT SUITABLE FOR EVERYONE. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

In a recent interview on May 30, 2013, Eric Sprott, founder and CEO of Sprott Asset Management, reiterated his strong belief that the gold market is at a bottom and will soon “skyrocket.”

Sprott argued that the Feds’ qualitative easing program could end as soon as Christmas and Japan may provide a glimpse of what will happen when the bond-buying program ends. Japan has had a much larger qualitative easing program than the United States and in Japan bond yields have gone up more than 200% or 30 basis points to 95 or 96. Sprott argued that the same thing is happening in the United States with bonds moving up from 60 to 215 basis points, even while the Fed continues to buy bonds. Sprott wonders what will happen when the Fed stops buying bonds. When news surfaced that Japan’s program might be ending, the bond market plunged. In the United States, the government continues to buy bonds, yet rates are up 50 basis points over the past 6 to 8 weeks. If the government stops buying, interest rates are bound to rise rapidly.

As many analysts have suggested, zero interest rates are the foundation of the slow recovery in the housing market and in auto sales, since interest rates play a significant role in those markets. Sprott argues that if interest rates go up, there could be an immediate decline in the housing market and in auto sales. I tend to agree, but such a fall will occur in the longer term. In the short term, individuals who are debating whether to buy a car or house may rush to do so as interest rates begin to rise out of fear that the rates will continue to rise and sap the amount they can borrow.

Sprott is unequivocal about his views on bonds; “You should not own bonds in this environment.” He stresses that rates should not be where they are. If rates were where they should be, the “economy would be a basket case.” He argued that the housing and auto markets would plummet, and government debt, already massive, would skyrocket as borrowing costs rose sharply.

If bonds are not the place to invest, what about currencies? Again, Sprott is clear. “I wouldn’t want to own any of those currencies,” he said, including the Yen, Euro or US dollar. “The US government is bankrupt already.” Why would you want to own US bonds, he asks. Many European countries are also bankrupt. However, he said, “There is one other currency, and that is gold.” Gold has gone up 500% against all currencies in the past few years.

Sprott believes there is a shortage of physical gold with buying way up, yet production flat over the past few years. There has been about 2,300 tons of new buying, with April and May buying up hundreds of percent over last year. He cites anecdotes about delays and shortages in delivery. He sees the take-down of gold as a purposeful attempt to convince people that they should not own gold. The attempt, however, “Totally backfired on them.” The demand for gold exploded as the paper price fell.

Sprott said gold is a 4,000-ton market, but with about 8,000 tons of demand. China, India and Russia are all buying. With financial crises in Iceland, Cyprus and the Euro zone, currencies are being devalued. But, if you held gold, you would not have lost a cent.   Japan has undergone a 18% devaluation in the Yen.

Sprott sees the many redemptions from the GLD trust as a sign major bullion banks are using the GLD trust to satisfy the demand for gold. He believes banks are buying GLD and then redeeming the shares to take delivery of physical gold.

“I personally believe that gold has hit bottom,” Sprott said. He cites a huge spike in volume, which, he says, is a “classic sign of a bottom around $1,400.”

As I have argued before, Sprott agrees that all the central planners want people to think the economy will be better in 6 months or so. It will not. US future liabilities top $220 trillion, and is only increasing. For the past year, such liabilities were $6.6 trillion, up from the previous year’s $5 trillion. This year liabilities will hit $7 trillion. Such government liabilities keep growing. Sprott said, “The US government will fail. It will not pay what they say they will pay retirees.” Pension funds are already underfunded by 25% and with the bond market in decline, if stocks start to fall, pension funds will fall even farther behind.

Based in Canada, Sprott mentioned that Canada does have a pension plan with money in it. In the United States, Social Security lacks such a real fund with assets in it. In Canada, workers who are 35 or 40 now must work until they are 67 to receive full retirement benefits, and that is in Canada, which has a funded retirement fund. The United States has no such fund. How long will US workers need to work to collect any Social Security if the government is bankrupt?

Sprott recommends that investors should have at least 10%, if not 20% of their assets in gold. However, gold is about 1% of the world’s paper assets and that 1% is very concentrated amongst a few investors. Sprott believes that gold has gone up 500% in 13 years, and stands a very good chance of going up 100% or 200% in the near future.

Sprott is clearly a gold bug. He has played the gold market for decades and for many years his funds have returned healthy returns. The major issue now is whether the bottom of the gold market really has hit and, in the long term, is gold going to be a profitable investment. Picking the bottom of the market is as difficult as picking the top, so wise investors should cost-average into the gold market, buying a little at a time. If Sprott is right and the bottom is in, then such investors will miss out on some profits. If Sprott is mistaken, and gold continues to fall for a while, such investors will avoid losing too much.

In the longer term, barring a fundamental policy change on the part of governments around the world, it seems clear that inflation will increase, bonds will fall, followed by stocks, housing and the auto market. Gold should rise in value in such a future world. No one can predict when, but it is probably a good time to start moving assets into the precious metals markets.

The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed herein constitutes a solicitation of the purchase or sale of any futures or options contracts.

Friday, May 31, 2013

By Thomas Calvert

Tom’s Weekly Review – Silver: Forming a Swing Trade Bottom (part 2)
For now, this blog is only focused on the silver market. Eventually, I hope to expand the focus into other markets as well. If you want to gain a better perspective on where I see the market headed, you can refer to previous posts as well as this one. This type of trading can take a long time to develop.

Like so many natural processes, the market can express itself as a reaction of energy and mathematics. With the market, we’ve found that energy precedes price changes. On a personal level, think about buying yourself a car. The money you use to pay for the car can be thought of as energy and what you receive in return for it (the car) can be thought of in terms of energy. So, the transaction is an energy exchange.

Changing the way you look at the market and focusing not just current price or predictions, but also on the energy of the market, can take your trading to the next level. Understanding that even the market follows natural law, takes much of the emotion out of trading. Trade energy and everything else falls in line.

The VC price indicator is used to measure the energy within the market. Let’s see what it is says currently on the weekly chart:

This is Heikin Ashi bar chart. It shows the current downtrend in the silver market. Like last week the energy still remains at a 1 when looking at the Code 0-9. (See last blog if you don’t understand these Code #’s.) Divergence in the RSI remains clear and I am expecting a sharp rally back to 26 in the weeks to come. We should get the first signs of confirmation once the Heinkin Ashi bar chart closes green for the week. With current negative sentiment and the strong physical demand that exists under this market, we are not far off from a move occurring. For more details feel free to post or email me @ thomas@ema2trade.com

I am still accumulating AGQ, USLV, PSLV for my swing trades, using VC cyclical analysis. At the same time, I’m daytrading using the VC Price Indicator. For longterm holdings, I’m maintaining a position in physical bullion.

www.ema2trade.com

TRADING DERIVATIVES, FINANCIAL INSTRUMENTS AND PRECIOUS METALS INVOLVES SIGNIFICANT RISK OF LOSS AND IS NOT SUITABLE FOR EVERYONE. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.