Years Ending in 7 Stocks do this in October…

It has been proven repeatedly by various market experts that stock market cycles exist. Whether you believe in them or not that is up to you, but as a technical trader myself I see price action repeat on virtually all time frames from the intraday charts, to daily, weekly, monthly, quarterly, yearly, and beyond.

In fact, cycles tend to move in series of 3’s, 7’s and 10’s, and multiples of these as well. So, 3 bars, 7 bars, 10 bars no matter the time frame, though I find the 10min, daily, weekly, and monthly charts work best.

Knowing these cycles lengths, let’s review briefly where the markets are situated in terms of a seasonality, volatility, and the 3, 7 and 10 cycle periods. What I am about to show you is very intriguing.

I will let the charts do all the talking as they show the picture clearly.

 

Example of Last 7 Year Stock Market Cycle

7 year cycle

 

Potential 10 Year Cycle Top Forming

we are here

Seasonality of Monthly Price Action for Years Ending in 7

7 seasonal

Concluding Thoughts:

In short, this is just a quick snap shot of some angles in which I look at the stock market. There are a lot different things happening (cycles, technical analysis patterns, and fundamentals) which have been painting a bearish picture for the stock market.

In fact, last year the US equities market were only a couple down days way from trigging a full-blown bear market. But Trump was elected and that triggered a massive rally which I see as being a final exhaustion move (euphoria) just before a major market top.

emotions

I have been watching and waiting for what I feel will be the next major market top for just over a year now. Why? Because once a market top looks to be in place we must adjust all our long-term portfolio holdings into different asset classes with CASH being a huge portion of it.

Stock prices typically fall 7 times faster than they rise so just imagine being properly positioned for a bear market with a portion of your position knowing you could make 7 years of slow painful growth in only 8-12 months when the bear market starts. I recently did a seminar talking about his and how one can use inverse ETF’s and short selling to profit from the next financial down turn which will eventually happen.

If you want to stay in the loop and be positioned for this massive move over the next two years Bear Market, then back into a Bull Market be sure to join my 2 Year Trading & Investing newsletter plan at http://www.thegoldandoilguy.com/etf-trading-newsletter/

Chris Vermeulen

DOT COM Bubble Do-Over?

Our recent analysis suggests we may be setting up to repeat history in an odd and dangerous manner.  As market technicians, part of our job is to work with numbers, find patterns and attempt to predict future price moves in US and Global markets.  As you can imagine, it is not always easy to accurately predict the future.  Still, we take on the challenge and truly enjoy being able to find and share trading strategy concepts with our ActiveTradingPartners newsletter.  As such, we are sharing this recent technical research data with your today.

Recently, the ActiveTradingPartners research team identified a unique pattern in the VIX that allowed us to accurately predict the June 29 VIX Spike nearly 3 weeks in advance.  Also, on July 30th, we predicted a big decline in the NASDAQ during August. It also allowed us to know that VIX Spikes were possible on other future dates – such as the most recent date near August 4th.  Even though the current VIX Spike did not hit exactly on the August 4th cycle date, the actual VIX Spike move happened only two trading days after our predicted date and the VIX has rallied over 90% from recent lows.  Sometimes, analysis like this allows us to know months in advance that a cycle or critical event may have a higher probability of happening.  This allows us to plan and profit from our research.

Today’s research correlates to the recent price moves in the XCI index (Computer Technology), NASDAQ and US Majors.  The premise of this research is that the past 4+ years have resulted in a global investment in Technology firms as a result of lower ROI in most other sectors.  This focus on technology investing is uniquely similar to the XCI Index DOT COM rally from the late 1990s and early 2000s.  We are attempting to verify our presumptions and analysis by using core technical analysis techniques as well as fundamental price analysis.

We’ll start by looking at the price activity leading up to the 2000 DOT COM bubble burst. Initially, our analysis focused on the similarities in price action setting up this price move. The Accumulation, Exuberation/Pause, Hype and eventual CRASH phase. In 1995, the Accumulation phase initiated after a nearly 95% rally from 13+ months earlier (1994 – 462 days total). Currently, the Accumulation phase initiated after a 100%+ rally from 13+ months earlier (2009 – 427 days total). Subsequently, the Accumulation phase lasted 1057 days resulting in a 238%+ advance in 1998. The current Accumulation phase lasted 1456 days resulting in a 77%+ advance in 2014. Interestingly, the 1998 advance totaled 472.50 pts while the 2014 advance totaled 594.00 pts – resulting in a 125% advance size increase.

The Exuberation/Pause phase in 1999 lasted 252 days and resulted in a 207.19 pt move (+31.51%). The Exuberation/Payse phase in 2016 lasted 889 days and resulted in a 288.26 pt move (+21.15%). The more recent phase took 3.5x longer (time) to result in 139% greater price advance (which was actually a reduced percentage move of only 67% of the 1999 advance.
I advanced the term WEEKS where is should have been days.

Many analysts may be quietly stating, “all of this can be attributed to relationships of percentage values vs higher price valuations”, which is of course true.  Our attempt at dissecting these moves is to try to understand the propensity and strength of any future moves.

Lastly, the HYPE phase lasted 39 weeks in 2000 ending with an advance of 895.23 pts (+97.94%) from the PAUSE/FLAG breakout in 1999.  The current HYPE phase lasted 53 weeks ending with an advance of 674.54 pts (+40.26%)  from the PAUSE/FLAG breakout in 2016.  The resulting current HYPE price advance is 25% lesser than the 2000 move and results in a nearly 60% decrease related to the total percent swings.

2000 DOT COM – XCI Index Chart

XCI_2000_DotComBust_Weekly_F

2017 DOT COM – XCI Index Chart

XCI_2017_DotComBust_Weekly_F

The 2000 total phase advance lasted 220 weeks and resulted in a price advance of +1607.53 pts (+802.39%).  The 2017 total phase advance lasted 436 weeks and resulted in a price advance of +1878.21 (+402.97%).  The percent values of each move represent vastly different results, yet the total price moves differ by only 17%.  We are certain some of these values and percentage representations are sparking interest in some of you as you may understand Fibonacci, Gann and other price analysis techniques.

The key to understanding these similarities is to understand the price sometimes moves in similar, not exact, setups and that we should never discount the possibility that markets are setting up for another massive move.  Considering these price and relationship values, it is our perception that any global event, liquidity collapse or massive terrorist event could present a scenario that may result in a repeat of the 2000 DOT COM market collapse.  Our premise is that the US has been an investment safe harbor for many and that Technology (FANGs and others) have benefited greatly from the global market weakness over the past 7+ years.  It is our opinion that the capital that has been allocated into these global technology giants has, as in the past, setup a potential for history to repeat itself (given the right type of events/circumstances).

COMBINED DOT COM – XCI Index Charts

XCI_2017_DotComBust_Weekly_Combined_F

Our recent VIX Spike analysis shows we should expect future VIX Spikes on Aug 23rd, Sept 11th or 12th and finally Sept 28th or 29th.  Assuming the relationship between the current price setup and the past setup is relative to the types of relationships we’ve studied so far, we can predict the following :

The initial swing low after the ultimate high (2000) resulted in a 572.02 pt move (a 31.62% correction over 10 weeks).  Any current correction could result in an 8~15.5% price correction over 7~15 weeks.  This would put our estimates of a price low near 2152~1980 on or near Sept 25th or Oct 23rd.  This price low would be followed by 4~12 weeks of price advance setting up a right shoulder near 2150~2256 (possibly).  Following that, we would see the low price rotation broken by extreme selling pressure and ultimate low target near 770~581 (resulting in a 63~69% correction from the highs).

Do we know this WILL happen?  NO.  Can we estimate the probability of it happening as we predicted? NO.  How can we tell if this will play out as we are predicting?  If the market continues to break down and begins to form the right shoulder, then we would consider, at least this first phase, to be technically accurate.  If it fails to move lower to establish this move, then we would consider this a technical breach of our research and attempt to reevaluate our theories.

Thus, what we can do at this point is alert you to the potential that a massive Head-n-Shoulders formation may be setting up in the global/US markets related to a potential Tech Bubble.  The proof will come with confirmation of our analysis or the failure of our analysis as price plays out over the next few weeks.

Still, the correlation of the VIX SPIKE dates,  Aug 23rd, Sept 11th or 12th and finally Sept 28th or 29th, are interesting because our initial analysis of any price low indicates a potential low price date range near September 25th.  Should this become true, an 8~15% correction in the XCI would clearly result in a 4~9%+ correction in the NQ and would correlate with our VIX Spike analysis almost perfectly.

The only thing we can do is be aware of these relationships and price patterns that are setting up and plan our trades properly.  Every trade includes risk, attempting to manage that risk is the objective of most traders.  At this point,  Aug 23rd, Sept 11th or 12th and finally Sept 28th or 29th are critical dates to keep in mind as the future plays out before us.  Watching for these moves and being aware that they could be setting up for a massive price swing lower are important factors to consider and being able to protect open LONG positions would not be a bad idea over the next few months.

The only way one can tell if predictions of the future are going to be accurate or not is to wait for the future to get here and see how well these predictions worked out.  So, we wait with the understanding that we are watching for confirmation or failure of our analysis with each week.

If you like our research and analysis and want to learn more about our forecasting and trade alert services, to see what we can offer you. We provide daily market updates, clear and concise trading triggers/signals, advanced research and analysis of the US and global markets and more.

Chris Vermeulen

The Divergences Are Now Appearing!

The loss, of the leadership of the banking and financial sector, BKX ETF, is now a major warning signal which is what is required in order to move the SPX much HIGHER, at this time!

bank1

 

The divergence which is currently being seen between the Dow Industrials and Dow Transportation indexes will be coming into play in the upcoming weeks.

bank2

The U.S. dollar has declined to a 52-week low. When stocks have been at a high and the dollar at a low, historically, the SPX showed a positive return within six months to one year, almost without exception.  I see support in the 92.50 area.

bank3

I would expect to see a very quick “oversold” bounce in GLD, then a correction to the 105 to 107 areas as the final “washout bottom” is put into place.

bank4

My approach to the markets is to be flexible enough to handle the possibilities of much stronger and weaker sustained trends than what we have seen in our investment lifetimes.

Our portfolio has outperformed the SPY by over 114% this year.  Quite a feat when you consider the SPY is up nearly 9% this year and has almost gone straight up since January 2017.

We like to ask our clients and viewers this question, “isn’t it time you invested in your future?”.  We would really like to help you achieve greater success and find greater opportunities in the markets, but you have to subscribe for this to happen.

 

Conclusion:

In short, active traders should be defensive over the next few days as we could have one more bout of selling in stocks and a spike in the vix. I feel the best plays right now will be short metals, short oil, long dollar.

Stay tuned for more updates, and be sure to join our stock picks newsletter, or our ETF trading newsletter for real-time trading signals.

A Reversal Coming To U.S. Major Indexes?

Technically speaking, this week could be very important for the major U.S. equity markets. There is an appearance of a “TOPPING PATTERN” forming. I am now awaiting confirmation by the actions of the equity markets, this week. Expect downward pressure beginning this month of August of 2017.

 

The Only Chart You Need To See!

vxx 

 

There is currently limited upside potential in the SPX relative to potential downside for the months of August, September and the early part of October 2017. There are signs for the short, intermediate and longer-term trends returning for the best six months of trading officially inaugurated in November of 2017! This is the timing framework when The Next Runaway Leg Up In The Stock Market Will Resume.’

In last weeks’ market action as the profit taking rotation out of the high-tech sector rotated into the Dow Industrials, it reflected a more defensive approach while being invested in “Blue Chips” during which time it achieved a new high.  Sector rotation increased especially noticeable in the transports and technology sectors that were leading the markets higher. If they continue lower, more sectors will join the decline. I am expecting a coming pop in the VIX on Aug 4, Aug 23, Sept 11 or 12 and finally Sept 28 or 29. 2017.  There was a flight to safety in the Yen as well as a strengthening of the price of Gold, Silver, Bitcoin and WTI Crude Oil.

 

People are starting to park their money in digital currencies, like Bitcoin and Ethereum, rather than parking them in fiat currencies – I buy and hold my currencies in this crypto wallet CoinBase.

 

An Unusual Anomaly:

Over the past couple of weeks, there was this unusual Anomaly which occurred, as you can see in the chart below.  It now makes me more cautious about our long understanding of risk inter-connectivity”.

How can the equity, gold, silver, crude oil and bitcoin markets ALL go HIGHER together?

Tune in every morning for my video analysis and market forecasts at TheGoldAndOilGuy.com to now where the main ‘asset classes’ are headed tomorrow, this week, and next month.

spxtrend

 

In short, the major equities trend remains to the upside but its likely to take shape in a slow grinding process with downward pressure starting in August fora couple months.

Be sure to follow my daily pre-market video forecasts and ETF trades at www.TheGoldAndOilGuy.com

Chris Vermeulen

Is There A New Flight To Safety?

The dollar has been taken beating on ‘false promises’ of any major fiscal reform from the Trump administration.

bit1

 

On July 18th, 2017, President Trump lacked the support of the U.S.  Senate to pass any new measures on healthcare bill, in the U.S. At least, three Republicans along with the Democrat lawmakers have expressed opposition for any changes to the current “Obamacare”.

All investors have their doubts that the Trump Administration might not be able to implement tax reform. This was the key component of their infrastructure spending proposals which should have been implemented within this year or early 2018.

Bitcoin prices has been able to benefit from the “return in risk aversion” in the markets on fresh catalysts.  Bitcoin prices, http://www.marketwatch.com/story/cybersecurity-legend-bets-his-manhood-that-bitcoin-reaches-500000-mark-with-three-years-2017-07-18?mod=MW_story_top_stories,  plunged more than 25% over the last weekend of July 17th, 2017.  Bitcoin, lost $10 billion, in market cap due to the crash. On Monday morning, July 17th, 2017, the markets recovered 30-40%. There is grave concern about the potential transition on the Bitcoin block chain platform.   On August 1st, 2017, Bitcoin improvement, proposal, 148 (BIP148), is intended to allow the Bitcoin network to scale more efficiently is scheduled to be activated. The majority of developers do not agree on this new proposal. Currently, 43% of bitcoin’s mining power is seeking a new paradigm!

bit2

It is possible that Bitcoin could split into two or more separate cryptocurrencies. Miners are reporting progress in solving ‘hard fork issues’ which is shoring up confidence in the industry, in total.

The Bitcoin Investment Trust Fund, GBTC is the instrument that is very active and tradable. I have put together three charts showing that it is currently at Fibonacci retracement level at 50% reflecting its’ next potential support area.

bit3

I has been involved in the cryptocurrency area since the very beginning and will now start covering new trade setups similar to last years long-term buy signal in Bitcoin I shared last July which, bit coin rallied over 350% since then. There is a great deal of BUZZ now emerging on Main Street and I will make you money in this ‘new asset class’ as well as keeping you regularly informed.

People are starting to park their money in digital currencies, like Bitcoin and Ethereum, rather than parking them in fiat currencies – I buy and hold my currencies in this crypto wallet CoinBase.

Know where the markets are headed and trade my signals at www.TheGoldAndOilGuy.com

Chris Vermeulen

Pop in Gold, Drop In Stocks Pending…

Momentum Reversal Method Strikes Again with MOBL

In early May, 2017, we alerted our follwers to a trading opportunity that resulted in a nearly perfect Momentum Reversal Method (MRM) setup – this trade was MOBL (Mobileiron Inc).  Now that the trade has completed, we wanted to share with you an example of how the  MRM trading strategy works and how successful some of these setups can become.  But first, lets take a bit of time to understand what ActiveTradingPartners.com is and how we provide benefit and services to our clients.

 

ActiveTradingPartners.com is a research and analytics firm that specialized in US Equities, ETFs and major Commodities analysis.  Our objective is to continually provide updated research and analytics for our members as well as to actively deploy our specialized Momentum Reversal Method (MRM) trading strategy for our members use and benefit.  As many of you may remember, on June 11 2017, we posted our research that the “NASDAQ would sell off” and the “VIX would SPIKE” on or near June 29th, 2017.  How many of you would have loved to know that we predicted a 6% swing in the NASDAQ and a 52% swing in the VIX two weeks in advance on the EXACT DAY it happened?  Read the article here (http://www.activetradingpartners.com/active-trader-predicts-vix-spike-nasdaq-selloff/)

 

What we are trying to illustrate to you is that we attempt to provide value beyond our trading signals and beyond our daily updates.  We attempt to keep you aware of what is likely to happen in the global markets and how these swings can be advantageous for you as traders/investors.  So, before we get sidetracked on the extras we provide, lets focus on this MOBL trade.

 

MOBL began to appear on our MRM alerts in early April 2017.  As with many of the MRM type of setups, they can sometimes start to alert us to setups days or weeks in advance of the actual move.  In this case, classic technical and Fibonacci analysis assisted in confirming our MRM trigger.  The MRM setup was valid and we simply wanted to watch the MRM setup for signs of price volume/rotation.  We often use this price/volume rotation trigger as a means of setting up entry functions for pending MRM triggers.

 

In early May 2017, the price/volume rotation trigger was complete and now we had a valid entry into MOBL with projected targets of $5.45 and $6.25.  Our analysts identify the targets based on recent price action, where our entry is located and current price/volume rotation levels.  In other words, if we believe the move will be short-term, then we will adjust our targets to focus on immediate objectives.  If we believe the move will be a bit longer-term, then we will adjust our targets to focus on that objective.

 

Just to be clear, everything originates from the MRM trigger.  We may see 20 or 30 of these triggers each week.  From there, price confirmation MUST occur or have already happened in order for it to be considered for our ATP members.  Additionally, we attempt to gauge the overall global markets in terms of risk parameters for each MRM setup/trigger.  If the US majors or global markets are weak and fearful, then we’ll address that risk by being more selective of our MRM triggers and setups.  If our analysts believe the US and global markets are going to continue to trend, then we may widen our risk parameters a bit more.

 

On May 11th, 2017, we issued a BUY Swing Trade Alert for MOBL @ $4.65 for a FULL Position.  This exact alert read as follows:

Buy Symbol : MOBL
Max Buy Price: $4.85 or lower
Position Size: FULL
Stop loss: Close below $3.95
Target: $5.45, then $6.25 objective for a 17~35%+ swing potential

Enter FULL position below $4.85 today. A move above $5.35 is expected with a potential for a move above $6.50 later.

 

As you can see from these charts, we executed the MOBL trade flawlessly. The first target was hit only 6 trading days after entry for a +17% gain.  The second target took a bit longer, but it was eventually hit  26 trading days after entry (about one month after entry).  It was just prior to the second target being hit that our research team indicated that MOBL could run much higher and that we should alert our members that we are going to use Target #2 as a stop adjustment and attempt to let this position run.  Typically, we get about 2~4 of these types of trades each calendar year for our members – you know, the big breakout runners that can turn into 30%, 50%, 120% or more.

MOBL_OverView_F

 

When all was said and done, Our VIX/NASDAQ analysis was perfect and the rotation in the tech markets resulted in our MOBL trade getting stopped out July 3rd, 2017 @ $5.85 for a +25.6% gain.  This single trade resulted in a +$4000 total return for our members – this one trade will cover their ActiveTradingPartners.com membership for almost FOUR YEARS.  Believe it or not, we are expecting MOBL to generate another MRM setup soon that could allow us to re-enter this trade for the next run higher.

MOBL_OverView_W_F

 

This is an excellent example of how our Momentum Reversal Method strategy works and provides benefits for our clients.  Not only do you receive these timely and accurate triggers, but you also receive our advanced research and market analysis.  Like we said early, we alerted our members to a critical June 29th market move two weeks before it happened and our analysis hit perfectly.  We like to ask our clients and viewers this question, “isn’t it time you invested in your future?”.  We would really like to help you achieve greater success and find greater opportunities in the markets, but you have to subscribe at ActiveTradingPartners.com for this to happen.

 

Isn’t it time you invested in quality, logical trade research your future? CLICK HERE TO JOIN

Gold and Silver in “No Mans Land”

Crude Oil In A New Bear Market?

The newest bear market is in crude oil. The definition of a bear market is when an ‘asset class’ is down more than 20% from its recent high: (Bear Market Rally Definition Investopedia).  It has been more than five years since the market fell so hard so fast from its’ high. Two months later, it was even lower. During the past 20 years, the SPX has struggled when oil fell into a bear market!

oil1

Oil prices broke to a fresh seven-month low on June 21st, 2017, with WTI Crude Oil dropping to $42 per barrel. The renewed and heightened pessimism over the pace of rebalancing has sunk in as O.P.E.C., is struggling to reduce its’ inventory. U.S. shale continues to grow production. There are large volumes of supply back in the market at the worst possible time!

 

WTI Crude Oil Now Technically Bearish

oil2

Most oil companies are now adjusting to “lower for longer.”

The Wall Street Journal reports that most in the oil industry are resigned to low prices for years to come, recognizing that a range of $50 to $60 might be a semi-permanent equilibrium.”

Between 2014 and 2015, 105 oil producers and 120 oilfield service companies went through bankruptcy.

 

Conclusion:

In short, these extreme price movements and key support levels can provide some fantastic opportunities to trade oil like my last trade in SCO for a 21% move a couple weeks ago. If you want to get involved in the next oil ETF trade subscribe here: www.TheGoldAndOilGuy.com

Chris Vermeulen

As FED Hikes Rates, Gold Falls!

The dollar gained strength, after the FED raised rates by 25 basis points raised interest rates as expected from 1% to 1.25% last Wednesday, June 14h, 2017.  This, in turn, dragged gold prices sharply lower. Gold is locked in a seasonally-low time of the year.

Don’t Ignore Technical Analysis If You Are Trading GOLD!

GLD continues to drop in its bearish pattern. The current Head and Shoulders pattern on GLD suggests a critical test of support at $117.00 A break below $116 could likely indicate a further decline to the $110 area.

chart1

 

 

Dollar firms!

The dollar gained strength after the FED increased the policy rate by 25 basis points. The FED also announced its plan to begin trimming its balance sheet this year.

This move was broadly expected by the market, the dollar index fell initially after the outcome of the FED meeting. The index fell to a low of 96.31 on Wednesday, June 14th, 2017, but recovered sharply from that point.

Immediate support for the dollar index is in the 97-96.9 region, which could limit the downside in the near term. A break below 96.9 looks less probable. A from this support may see the dollar index moving higher to 97.50 levels. A further break above 97.50 can take it higher to 97.85 or 98. This potential rise in the dollar index may continue to keep gold prices under pressure. There is the possibility of gold prices falling further in the coming weeks ahead.

If the dollar index fails to break above 98, a pull-back move to 97.5 or 97 is possible once again. The index can remain range-bound between 96.45 and 98 for some more time. A breakout on either side of 96.45 or 98 will determine the next trend.

Targets above 98 are 98.6 and 99.2. On the other hand, 96 and 95 are the levels that can be targeted if the dollar index declines below 96.45.

chart2

Conclusion:

In short, we should continue to expect a stronger dollar and weaker gold for the next 2-4 weeks. When the time comes, plan to load up on metals and miners…

Follow my daily video forecast and trades at www.TheGoldAndOilGuy.com

Chris Vermeulen