,

The New Gold Rush Of 2017!

Gold to Regain Its Gleam!

One question that gold investors are asking now is, will 2017 be as spectacular for the yellow metal as it was in 2016? The short and sweet answer to this is YES.

The dollar, gold and the major U.S. stock exchanges will all see new highs. Gold is currently in a “complex corrective correction” while experiencing its’ last pullback, beforehand.

Both the short-term outlook and the long-term outlook for gold is BULLISH!  Trumps’ victory win is a positive for gold bulls. Policy uncertainty and slowing growth, following a Trump win, will stoke the yellow metals’ price in 2017.

Gold prices have been under pressure since the Trump victory, but the long-term scenario for gold is that it is parabolic. The global economy is still in contraction. Global Center Bankers continue with monetary easing, leading to currency debasement. Interest rates continue to slide into negative territory in Europe and Asia.  Gold’s investment appeal will encounter a period of time before it generates positive yields. Gold, as an investment, will once again be back in vogue. As prices rally, investment demand will only rise further, taking everyone by surprise.

The demand for gold jewelry has been declining within the large gold-consuming nations. The gold investors will call the shots in this new ‘bull’ market of gold.  Current supply constraint has cushioned gold prices from the rally in the U. S. dollar.

This is the last great buying opportunity for gold before it makes its’ next historic run in 2017 and beyond.

 

Excessive Pessimism: 2.0
THIS IS WHEN THE BEST OPPORTUNITY TO BUY GOLD IS PRESENTED

Latest Value(s):

– Last Reading: 1.0

– Extreme Values:

– Excessive Optimism: 8.0

gr1


 

Excessive Pessimism: 30:
THIS IS WHEN THE BEST OPPORTUNITY TO BUY GOLD IS PRESENTED

Latest Value(s):

– Last Reading: 34.0

– Extreme Values:

– Excessive Optimism: 75.0

– Excessive Pessimism: 30.0

gr2


 

Gold Hedgers Positions

Latest Value(s):

– Last Reading: -134022.0

Extreme Values:

The green dotted line is 1 standard deviation above the 3-year average;
the red dotted line is 1 standard deviation below the 3-year average.

gr3


 

The Drivers!

A key factor that has driven investments in gold is the negative interest rate in Europe, Japan, Denmark, Sweden, and Switzerland. The sovereign debt of approximately one third of the developed countries traded with a negative yield while an additional 40% of the countries had yields below 1%.

Gold prices will be driven more by its’ value as an ‘investment asset class’. Gold will supersede investments in other ‘asset classes’ such as equity and bonds in due time.

The massive U.S. debt continues to spiral out of control. The Treasury Department’s printing presses are cranking out hundreds of billions of dollars in new money. European countries are imploding financially and the entire European Union is at risk of a collapse.  These ‘geopolitical’ factors will be driving the demand for gold as a ‘safe haven”.

The global ‘retail’ investment market is well positioned for growth what with demand for gold in China, India, Germany and the U.S. for 2017.

Social media is a ‘key driver’ which is critical in both China and India. Financial advisors and financial websites are the key drivers in the U.S. markets. In Germany, banks play the most important influence; ‘Protect wealth against the system’.  It has a competitive advantage compared to other investment options.

 

Jordan Eliseo, Chief Economist at precious-metals dealer ABC Bullion, says “Gold retreated about 18 percent from its year-to-date high. Afterward, it gained 26 percent in the first half of 2016.  The decline so far, this year has been about 15 percent from its year-to-date high.  Gold, is setting up for another rally in fashion like last year. The recent correction has already drawing in some investors to buy what they see as cheap metal.”

 

On December 14th my trading partner accurately forecasted the recent bottom in gold which you can see in this gold market forecast.

December 14th Forecast chart:

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He then took things a step further and entered into a NUGT (3x long gold miners ETF) with subscribers and recently locked in 50% profit on the first half and is up over 70% on the balance as of Fridays closing price.

 

 

GOLD WEEKLY CHART REMAINS IN DOWNTREND

The constructing on this new infrastructure is going to require a lot of new money. The country is already close to $20 trillion in debt, so if the administration plans to make this one of their priorities, it is going to have to print it.

gr5

 

‘THE GREAT RESET’

Nixon closed the gold window on August 15th, 1971 and consequently, the world entered a new era.  For the first time in history, all the world’s monies were unbacked fiat currencies, adrift on a sea of floating exchange rates.  This stopped the redemption of currency for gold. Today, gold reserves are nothing more than an asset listed on the FEDS’ balance sheet.  Gold had stopped being an integral part of our financial monetary system

At the top of international commerce, money managers had always known the dangers of ‘currency risk’, but now every currency has become a ‘soft currency’. Recognition of ‘currency risk’ seeped down into the knowledge chain, but on the street of personal financial management, despite it being 45 years later, not many have caught on to the concept.

 

To Live And/Or Continue Living the American Dream

Golds’ strength is in the role of ‘wealth protection’. It is a ‘safehaven’ and its ‘independence’ from the global financial system makes it a great investment for the future. Gold is still good value for those who do not own any to accumulate ounces.

In a few days, I will be publishing a piece talking about the shift in the economy and what I call “The Great Transfer of Wealth”. Be sure to join my free newsletter below to receive this special report!

Chris Vermeulen
www.TheGoldAndOilGuy.com

Weekly Forecast & Setup – Jan 18 2017

Will Gold Pull Back from Recent Gains?

Another Price Setup with Oil and Gas Stock

One of the key tenants of my Momentum Reversal trading is “waiting for the right trigger/event and getting in early”. I find this is one of the most difficult aspects for most clients to understand and master. Therefore, in an attempt to further illustrate some components of my thinking and strategy, I have put together these examples to try to help people understand these techniques.

Within this example, I’ve selected Chesapeake Energy Corp and a recent price move that resulted in strong gains. As you are well aware, within the Momentum Reversal Method (MRM) are a number of key factors that drive my investment methodology.

 

details1

 

Additionally, I use Fibonacci and Elliot Wave Theory in all of my analysis and decision making. The Momentum Reversal Method is not foolproof – it does take some losing trades. Generally, though, the winners far outpace the losers. My trading strategy helps to answer these important questions.

 

details2

 

 

Now, onto the setup I promised earlier – Chesapeake Energy Corp.

This chart illustrates three key components to my Momentum Reversal Method trading strategy:

– Established Price Momentum/Trend
– Defined Price Rotation
– Tightening/Coiling of price prior to a breakout

As you can see from the example chart, above, the upward price trend (highlighted in green) followed by the price rotation (highlighted in red) created a primary setup that allowed me to target this stock for potential trigger setups. In other words, this price momentum and rotation created an opportunity for trade signals.

The coiling of price with the flag/pennant formation created another component I often look for – price congestion. Price congestion following a wide range price rotation is usually indicative of a “pre-breakout move”. Therefore, the identification of this type of price action can sometimes be an early warning to watch it more closely for the trade trigger.

I’ve marked the initial breakout bar (not my ideal trade trigger) with a green up arrow. For the average trader, this would likely be your trading trigger. Within the Momentum Reversal Method, we look for early triggers that can allow us to get into these types of trades earlier – and often with much less risk and greater chance of success.

I hope this clear example of a MRM setup can assist you in understanding why this strategy is such a success.

 

chk1

 

The Outcome

This, the outcome of the Setup, shows exactly how quickly these setups can turn into profits. Generally, the Momentum Reversal Method holds trades for 3~7 days for short-term trades and for 14~35 days for longer term trades (in some cases even a bit longer).

You may be wondering why we only hold trades for 3-7 days? The answer is simple, we know that most of the biggest moves happen in a very short period of time. The explosive pops/drops in price only last 3-7 days in most cases. Catching these quick explosive moves provide us with the best risk reward. As you know time is money, and it only makes sense to make as much as possible in the shortest period of time, which has two key benefits:

First is that I provide lower risk. The less time our money is locked into a trade/the markets the better as cash is king!

Second, it means we can rotate some of some/or all of our money into the next stock/leveraged ETF ready for its explosive pop/drop.

You can see from this image the first upward move from the trigger bar resulted in a +27.8% gain in only 10 trading days. The second phase run-up in price resulted in an +83.75% gain in an additional 29 days. Clean, Clear and Consistent.

 

chk2

 

Again, I’m not giving away my successful strategy to anyone. The Momentum Reversal Method has worked for me for years and continues to generate fantastic results. Even if I tried to teach you every aspect of this trading methodology/strategy, you would still need my assistance in understanding the nuances of how to deploy it and how to better understand general market sector rotation, when to avoid false triggers and what you should and should not trade and when.

This article is to help illustrate why the Momentum Reversal Method is a success and to teach you some of the basic concepts of Momentum Reversal triggers. My followers receive detailed analysis, research and trading triggers from my member based trading room. I can provide a source of valuable and timely trading triggers and follow-up research regarding all activity I announce to my clients. A few of our recent trades have been VUZI 16%, UGAZ 74%, and last week NUGT 50% on a portion and we are up over 75% on the balance which could be 100% by the end of week. The NUGT trade was partially based of a Market Trend Forecast we published back in December.

Feel free to visit www.ActiveTradingPartners.com to see how easy it is to profit from my analysis and to see how well the Momentum Reversal Method works in real-time.

I sincerely hope you enjoyed this article and were able to see how you can improve your future trading successes by using some of these components.

John Winston & Chris Vermeulen
TheTechnicalTraders.com

Massive VIX Warning for all Traders

Massive VIX Warning for all Traders

My analysis of the recent VIX action is clearly warning of a potentially massive price volatility increase in the US and global markets.  Many traders use and trade the VIX as a measurement of volatility.  The VIX is a measurement of the expected market volatility over the next 30 days.  As the VIX rises, traders expect larger and more volatile price swings.  As the VIX declines, traders expect smaller and more narrow price swings.

 

Currently, the VIX is near historical low levels and has recently past a critical cycle midpoint.

stock-reversals1

One can see from my cycle analysis, I am tracking to cycle events; a longer term top-to-top cycle event and a smaller bottom-to-top cycle event.  I call these dual-phase and single-phase cycle events, respectively.

 

This analysis tells me we recently past a single-phase bottom cycle (near Nov 30th) and are expecting a dual-phase top cycle event near Feb 17th.  Given the expected opportunity to retest the VIX high channel, the potential price move in the SSO would relate to a 11%~16.5% price swing (approx) – or larger.  The dark blue downward VIX channel is a boundary that we would expect the VIX move to attempt to reach.  It could blow past this level and develop a much larger price correction in the US and Global markets but lets just focus on one target at a time for now.

 

Now, let’s take a look as how this relates on the SSO chart.

 

On the below SSO chart, I have highlighted the critical VIX “Peak” levels with rectangles and I have drawn the VIX Single and Dual phase event cycles.  You can clearly see how these event cycles align with critical price swings and, most recently (after the US election cycle) correlated with a cycle event low and high.

 

stock-reverals-2

On the hard-right edge of the chart, I have drawn what I believe will be the likely VIX cycle event target range and target date range.  I expect the VIX to increase moderately over in the next week or so and explode as stock prices rotate lower.  I expect the US and global markets to react to these time cycles and for an increase in volatility. The chart shows a sharp correction as that is the max potential, but we could only see a 2-5 day dip before it heads higher. Either way volatility should jump soon and I plan to get involved with an ETF.

 

Our last few ETF trades generated some big profits with EDZ 20.7%, NUGT 11%, and UGAZ 74% return. I feel the VIX is starting to show signs of an opportunity unfolding.

 

Join www.ActiveTradingPartners.com to stay up to date with my analysis and learn how to take advantage of my weekly stock picks and market forecasts as we gear up for another incredible year of trading!

 

Chris Vermeulen & John Winston
Investment Strategists

Market Waiting for Small Caps, and Transports

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Happier Days Ahead for Gold Bugs?

History could repeat this January… Stocks sell off, and metals rise.

This is the exact opposite of what the masses are expecting and getting positioned for.

Trump’s Financial Revolution!

Trump’s economic plans will increase national debt!

A Ticking time bomb!

Currently, U.S. debt stands at a mammoth $19.8 trillion and will continue to increase under President-elect Trump considering his lenient tax cuts and plans for infrastructure spending:( http://www.usdebtclock.org/).

The proposed tax cuts, inclusive of accrued interest and macroeconomic effects will increase the national debt by $7 trillion, over the next decade, and by $20 trillion within the next two decades, according to Forbes. There are no details on how the President-elect plans to finance these tax cuts.

trump1

‘Protectionism’ has no winners!

President-elect Trump has radical plans to tear long-standing trade agreements like NAFTA and levy taxes on Chinese imports, etc.

However, in a highly global world, every action that President-elect Trump takes will have an equally strong reaction in an already highly leveraged global economy which is already struggling with anemic growth.  This global trade war is unlikely to benefit either the U.S. or the global economy.

trump2

It is not clear whether the U.S. public embrace paying higher prices for imported goods: (http://www.economist.com/blogs/graphicdetail/2016/11/daily-chart-9?fsrc=scn/tw/te/bl/ed/atrumptradeagenda). After all, offshoring has also given a boost to American corporations which have managed to bring down their cost of production; (i.e.:   costlier iPhone is most likely to reduce the demand for the product, both at home and abroad).

Investors have taken cheap money and used it to buy stocks and property.  The “real economy” is where the money was intended to go.  Trump economic disaster is a train wreck waiting to happen.

I must remind you that nothing has changed in our economy since the Trump market rally: (http://www.zerohedge.com/news/2016-12-09/dont-be-fooled-trump-rally-not-sign-economic-health).

 

President-elect Trump has been critical of Chairperson Dr. Yellen views as she understands that the economy cannot afford higher rates. The economy will collapse if monetary rates rise, as was evidenced over the past few years. Low rates will continue against the expectations of the experts who are calling for a very sharp increase in rates. When President-elect Trump takes office, he is going to need FED Chairwoman Dr. Yellen on his side, however, he has yet to realize this!

Businesses have not invested large amounts in new capital projects but rather have invested only in buying back their stocks.  In addition, they hire labour only on a part-time basis. As there is nothing particularly ‘meaningful’ supporting the markets, it is my opinion that the rise in stocks and property represents a “ticking time bomb”.

The world has been living in a low-interest rate environment for many years now. This environment came about following the global financial crisis of 2008 and has dominated global money transfers. Consequently, it must maintain that status quo. If interest rates rise, the continued huge sell-off U.S. Treasuries and the international bond markets will continue in anticipation of higher yields.

Without knowing the finer details of the proposed policies, the stock markets have run up far ahead of themselves while leaving a very small margin of error!

Therefore, it is prudent for you to be ready to buy gold, in large quantities for the long-term.  The bullish seasonally for gold will begin next month in January of 2017.

Gold is one of the best solutions that can maintain the world’s stability as well as your own future wealth when things start to crumble. Follow my lead as the markets oscillate through 2017 and beyond.

Chris Vermeulen
www.TheGoldAndOilGuy.com

The Short-Term TOP & POP!

Currently, it is still very early days and the dust has not yet settled, however, I will make a bold forecast that the SPX is still in a BULL UPTREND from 2009.

There has been a paradigm shift in the U.S. after Trump’s election. The expected fiscal stimulus and increased government spending have ‘buoyed’ financial markets. The closed at 2213, for the first time in history on November 25th, 2016. The shift in market sentiment has sent 10-year treasury yield topping at 2.3%, for the first time this year, as markets anticipate higher inflation.

The pessimism of Americans suddenly turned around into a “wave of optimism”.  The Trump victory created Investor optimism.  Americans were speaking with their wallets as they have grown tired of all the negativity.  Per the AAII survey, the bullish sentiment rose 3.2% to 49.9%.  This is used as a contrarian indicator indicating that a reversal is near in U.S. Equity markets: (http://www.aaii.com/sentimentsurvey).

Investor optimism about stock prices has risen to the highest level(http://www.forbes.com/sites/investor/2016/11/21/investor-optimism-jumps-to-nearly-47/#7e5dc620792e) Deutsche Bank believes that the SPX will reach the 2,500 level. (http://www.zerohedge.com/news/2016-11-20/why-deutsche-bank-thinks-sp-going-2500-next).

 

The New Golden Era For Investor!

Trump’s election victory speech which promised fiscal stimulus and government spending on infrastructure has inspired optimism among both investors and analysts.

According to a recent Gallup poll, ( http://www.gallup.com/poll/197519/half-americans-confident-trump-election.aspx) more than half of Americans are now more confident in President-elect Donald J. Trump than they were before the election. Americans are embracing a more positive and promising outlook for the future. This pro-business president-elect, who wants a reduction of government red tape and insisting that the U.S. negotiate better trade deals, has certainly brought about great optimism to the equity markets.

The FED is planning on allowing the economy to run HOT. Investors expect inflation to increase and defaults to drop. This is exactly what the market has priced in.

In equity markets, the hot sectors are financials, industrials and materials. These sectors will rotate back into favor in order to take the SPX to new highs. Financial stocks have lead this rally to new highs. This sector will do better under Trump as he will be able to appoint regulators who are more industry friendly than regulators appointed by President Obama.  The whole financial sector (XLF) could outperform most other sectors to have a better four years then they have had. If we start to see higher U.S. interest rates, banks will have better lending practices.

Under the new Trump administration, corporate money that is ‘parked’ overseas would be ‘repatriated’ which, in turn, could lead to huge share buybacks. (https://www.bloomberg.com/news/articles/2016-11-21/goldman-how-corporations-will-spend-their-huge-piles-of-overseas-cash).  Last week, there were cash inflows of $3 billion.

Can the markets continue to rise yet?  Yes.  With indicators being positive, as they are, it is possible that the markets will continue to move yet higher.  We are currently in the Bullish seasonality period associated with rising markets., therefore, the SPX will easily push to another new high.  My preference is for a retracement/correction, NOT a reversal here. The markets are at a level where the markets could have a ‘corrective’ move down (a little profit taking).

Using Candlestick Pattern:

BEARISH ONE BLACK CROW appeared on the last candlestick pattern of November 28, 2016. 🙁http://www.candlesticker.com/Pattern.aspx?lang=en&Pattern=2211).  understand and Implementing Elliot Wave Analysis!

 

Elliott Wave (2) corrects wave (1), but can never extend beyond the starting point of wave one. Typically, the news is still bad. As prices retest the prior low, bearish sentiment quickly builds, and “the crowd” haughtily reminds all that the bear market is still deeply ensconced. Still, some positive signs appear for those who are looking: volume should be lower during wave two than during wave (1). Wave (2) usually unfolds as a simple 3-swing abc pattern. Wave (2) is the first correction following the initial swing off an important high or low.

Elliott Wave (3) is usually the strongest and longest wave.

Elliott Wave (3) is usually the largest and most powerful wave in a trend. The news is now positive and fundamental analysts start to raise earnings estimates. Prices rise quickly, corrections are short-lived and shallow. Traders/Investors desiring to “get in on a pullback” will likely miss the boat. Trading the Wave (3) is usually the most profitable!  Elliott Wave (3) is usually the longest and strongest in a completed 5 wave sequence.

The 4 Hour Time Frame:

This is the SPX 4-hour chart.  It is one of my favorite time frames to monitor.  It gave a BUY signal on November 14, 2016.  It signals an exit, on November 25, 2016, which is when the “correction” started to occur.

 

The market’s attention is shifting back to the economic data being released this week.  These reports are on GDP, personal incomes and nonfarm payrolls making headlines. The U. S. economy is forecast to add 170,000 nonfarm jobs in November 2016. I believe this will support the FED to raise interest rates next month.

The information I am sharing is pure gold. There is always something new to invest in the market place. Currently, I see several areas that are starting to look very interesting!

Last month subscribers and I closed out 3 winning trades: EDZ 20.7%, NUGT 11%, and UGAZ 74%. We did take one loss on TMF of 8.2% but overall it was an awesome month for ActiveTradingPartners.

We are currently in a new wave of winning positions in dollar, corn, and cotton.

If you want to follow my trades in real time be sure to join my trade alert newsletters.

Chris Vermeulen
www.TheGoldAndOilGuy.com
www.ActiveTradingPartners.com

The SPX will turn higher once it completes its correction!

U.S. Stock Markets are in correction!

Professor Shiller’s Adjusted SPX P/E ratio of 27 is the third highest level ever recorded in history. This ratio is right behind the 1929 and 2000 tops. Trying to create any inflationary environment is impossible here!  The perceived stimulus spending by the New Trump Administration will not achieve the desired results in our current environment. The uncertainty remains around President-elect Trump’s administration and policy stances.  Mr. Wouter Sturkenboom, Senior Investment Strategist at Russel Investments, stated ”The markets had a nice run, but it’s also in the process of running out of steam”.

The financial markets have mispriced all the many asset classes.  The increased expectations for the return of inflation are not rooted in the real underpinnings of this economy. The current debt loads are deflationary in nature which is why we are seeing a “contracting economic environment”.  The massive amounts of QE and Zero Interest Rates have been covering up the true economic picture. The reality is that we are currently in a deflationary environment.  

 

Understanding My Implementation Of the Elliot Wave Theory:

The market has moved from extremely oversold conditions to extremely overbought conditions  within a very short period. This move is not sustainable and a correction is required before the next advance will occur.

The Elliott Wave principle is based on Ralph Nelson Elliott’s conviction that social or crowd behaviors tend to trend and reverse in identifiable patterns or cycles.

Elliott used the stock market as his main source of research because it was an easy way to chart both current and past behaviors of a crowd having similar interests. He identified several patterns of movement, or ‘waves’, that reoccurred in combination with larger and/or smaller versions of the same patterns.

 

The SPX just finished WAVE 3 UP:

Wave 3:  Wave three is usually the largest and most powerful wave in a trend. The current news is now positive and fundamental analysts start to raise their earnings estimates. Prices rise quickly whereas corrections are short-lived and shallow. Traders looking to “get in on a pullback” will miss the boat.

 

The SPX is currently in WAVE 4 DOWN:

Wave 4: Wave four is ‘corrective’ in nature. Prices may meander sideways for an extended period. Volume is well below that of WAVE THREE. This is a good place to buy a “pullback” if you understand the potential ahead for WAVE FIVE. FOURTH WAVES are very frustrating because of their lack of progress in the larger trend.

WAVE 5: Is the final leg in the direction of the dominant trend. The news is universally positive and everyone is ‘bullish’. Unfortunately, this is when many traders finally buy in, right before the top!

w4d

 

The SPX sector rotation, of the presidential election, which led to the financial markets new highs.  Now, these leading sectors, financials, energy and industrials are in correction.

sctr

 

FED to Hike Rates in December?

U.S. jobs reports from November 2016 point towards a Fed rate hike in December 2016:

The government’s latest jobs report noted a decline in the unemployment rate.  It was largely embellished with distortions and misrepresentations. John Williams, Shadow Government Statistics, reports on the latest of Uncle Sam’s statistical discrepancies. This report runs completely counter-intuitive to all those glowing reports coming out of Washington D.C. which would have us all believe that unemployment is at a nine-year low and that economy and labor markets are improving. There was a reported decline in average hourly earnings which is the only information, from the report, that I believe to be valid.

Mr. Williams stated that “The 23% unemployment rate is consistent with the declining Civilian Employment-Population Ratio and the declining Labor Force Participation Rate. The rise in discouraged workers is reflected in the decline in these ratios,”

 

Conclusion:

It will be difficult for corporations to continue to grow earnings in this environment. Business investment is falling.  Corporations will continue investing their money into stock buybacks rather than into new capital spending projects. This does not and will not increase construction and/or industrial production. It merely gives the equity markets an artificial sense of security. GDP will never increase!

 cc1

 

Construction spending is slow. President-elect Trump’s proposed infrastructure spending will not be the solution to our economic problems as it will only increase our federal deficit exponentially ((http://www.usdebtclock.org/).

What is necessary is to pay down the federal deficit as the Debt to GDP, (http://www.tradingeconomics.com/united-states/government-debt-to-gdp) is currently at 104.17%!  In financial terms, this means that the U.S. government is slightly bankrupt!

 cc2

Industrial production has been declining since 2014.

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