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!

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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

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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.

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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.

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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

Rotation out of the tech and into financial

Last Friday’s, June 9th, 2017, decline of the tech sector continued into Monday, June 12th, 2017.  I expect the NDX to test the range, as illustrated within the red box in the below chart, before continuing higher, but not closing below the red box.

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The banking stocks were among the beneficiaries of the tech slump, with BAC, GS and JPM all defying their head and shoulders break-down setups.

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The volume in the QQQ fund has been excessive. Last Friday, June 9th, 2017, it was 8 standard deviations above its’ normal average volume. On Monday, June 12th, 2017, it was more than 6 standard deviations above its’ normal average volume. It set a new record since back in 1999.

Goldman Sachs sent a memo out to its’ clients late last week.   Goldman worries that the boom has created an “valuation air-pocket,” similar to the ridiculously high valuations for tech stocks during the Dot-Com boom.”

 

The SPX Trade!

The market is in a very bullish posture if we remain over 2420 in the SPX. There is NO market crash in sight. Tune in every morning for my video analysis and market forecasts at TheGoldAndOilGuy.com to know where the main ‘asset classes’ Gold, Oil and SP500 are headed tomorrow, this week and next month. This daily forecast service closed out an oil trade in SCO on June 8th for a quick 21% profit!

As this bullish pattern continues to rise throughout the summer, we should then prepare for the next correction in the SPX. This next pullback can take us from the 2500 – 2550 SPX region and potentially back down towards the 2300 SPX. The next buying opportunity should occur in the fall of 2017, approximately sometime during the Thanksgiving Day holiday.

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How A ‘Market Crash’ Stops:

‘Circuit breakers’!

 Stock exchanges attempt to ease ‘panic selling’ by taking certain steps to halt trading. These moves are called ‘market circuit breakers’.

The purpose is to prevent a market or stock price ‘free-fall’ by trying to rebalance buy and sell orders. ‘Circuit breakers’ halt trading on the nation’s stock markets during dramatic drops and are set at 7%, 13% and 20% of the closing price for the previous day. The ‘circuit breakers’ are calculated daily.

 

Level 1 halt (7%):

Trading will halt for 15 minutes if the drop occurs before 3:25 p.m. (ET)

At or after 3:25 p.m. (ET) — trading shall continue, unless there is a Level 3 halt.

 

Level 2 halt (13%):

Trading will halt for 15 minutes if the drop occurs before 3:25 p.m. (ET)

At or after 3:25 p.m. (ET) —trading shall continue, unless there is a Level 3 halt.

 

Level 3 halt (20%):

At any time during the trading day—trading shall halt for the remainder of the trading day.

 

The De-regulation of ‘RED TAPE’ in the Financial Industry Will Place the Markets at a Greater Risk!

 

The Trump Administration hopes that by unshackling businesses from all the ‘RED TAPE’ regulations, renegotiating trade deals and by cutting tax rates, that this will help the economy to grow faster. The administration hopes that these changes will create new jobs.

Last Thursday, June 8th, 2017, The House of Representatives (http://www.house.gov/) approved legislation to erase the core financial regulations implemented in the Dodd-Frank Act of 2010. Republicans moved a step closer to delivering on their promises to eliminate rules that have been perceived as strangling small businesses and stagnating the economy. The non-partisan Congressional Budget Office estimated that the bill would reduce federal deficits by $24.1 billion over the next decade.

This bill will reverse most of the protections put in place since “The Great Financial Crisis Of 2017”.

(http://frozenmail.net/2017/06/10/us-financial-choice-act-passes-house-of-representatives.html)

The Choice Act would exempt some financial institutions which meet capital and liquidity requirements from many of Dodd-Frank’s requirements that limit risk taking. It would also replace Dodd-Frank’s method of dealing with large and failing financial institutions. This is known as the orderly liquidation authority — which critics say reinforces the idea that some banks are too big to fail — with a new bankruptcy code provision.

This new legislation would weaken the powers of the Consumer Financial Protection Bureau. The bill would also eliminate the Labor Department’s fiduciary rule which requires brokers to act in the best interest of their clients when providing investment advice about retirement.

 

TRADES IN MAY:

FOLD, up 18% in 6 Weeks
TNA, up 5.9% in 11 Days
ERY, up 4.75% in 2 Days
SLV, up 3.2% in 5 Days
MOBL, up 15% in 7 Days
FOLD, up 9.5% in 40 Days
NUGT, up 81% in 27 Days
UGAZ, up 74% in 14 Days

 

If you would like to take FULL Advantage of all of my insight and expertise, tune in every morning for BOTH my daily market forecasts video and my Premium Stock & ETF Trade Alerts services!

Chris Vermeulen

Goldman Sachs Crashes Tech FANG Stocks!

Last Friday June 9th, 2017, Robert Bouroujerdi, a Goldman Sachs analyst, “warned that the $600 billion outperformance by the 5 biggest tech stocks known as ‘FAAMG’ — Facebook, Amazon, Apple, Microsoft and Alphabet — had contributed about 42 percent of all stock market gains over the last year. Goldman worries that the boom has created an “valuation air-pocket,” similar to the ridiculously high valuations for tech stocks during the Dot-Com boom.”

Goldman Sachs comments “market’s over-reliance on FAAMG for growth and appreciation has created positioning extremes, factor crowding and difficult-to-decipher risk narratives.”

Almost like the Dot-Com bubble, investors are piling into the tech stocks with the belief that these companies will continue to generate billions in revenues and branch out into other enterprises to drive innovation and growth. I talked about this two weeks ago;  “The Fourth Industrial Revolution, which will be referred to as: Tech Hypergrowth

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The QQQ’s were trading at $140.15 per share last Friday, June 9th, 2017, but by afternoon, they were down $3.42 (-2.38%). Year-to-date, the QQQ’s have gained 18.29% versus an 8.75% rise in the SPX index during the same period. The heavy losses were focused and contained. It was an orderly coordinated profit taking day!

There was a sector rotation in The Dow Industrials which closed at a new high. Prior to the past year, the last two times that the Dow Jones closed at a high, while the Nasdaq sold off hard, was back in 1999 and 2007.

The Tech sector has been driving the general market yet higher since November of 2016. I keep scanning the horizons in every direction and I just cannot see anything that would trigger more than a minor correction day. Of course, a minor correction could deliver outsized impacts, given the heavy weighting of a few stocks. as well, as passive index investing.

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Are the Financials and The Small Caps Back?

Small Cap stocks, IWM, vaulted all the way up to $139, and it has had a strong follow through on Friday, June 9th, 2017, well above $140. That is a nearly 4% move from trough to peak since Wednesday June 7th, 2017, in a dramatic “V-shaped rally” in Small-Cap stocks.

The DOJI candlestick on the breakout is a sign of INDECISION! I am currently waiting for a re-test of 138.50 before entering this trade. According to decades of studying historical seasonal chart patterns, the month of June almost always closes lower than its’ open. Its’ worst days are June 15th to June 18th. MRM Traders played TNA for the recent run-up in price.

IWM-ATP

In the SPY, impressive asset flows have hit SPY lately, topping more than $6 billion in this move higher in the past week.

Dr. Ed Yardeni discussed why:

“So far, the current bull market has marched impressively forward despite 56 anxiety attacks, by my count. They were false alarms. I remain bullish. My long-held concern is that the bull market might end with a melt-up that sets the stage for a meltdown. The latest valuation and flow-of-funds data certainly suggest that the melt-up scenario may be imminent, or underway.”  Article

 

In the aftermath of “The Great Financial Crisis of 2017”, Global Central Banks began to buy stocks and bonds and other financial assets in very large quantities and they continue to do so!  It is estimated that they will continue to buy $3.6 trillion dollars during 2017. They continue to pump up the global stock markets. This is their response in correcting the forces of past excesses. Their financial engineering may be able to keep this bubble growing bigger and bigger for many years to come. They have reached a point of no return and have no plans to unwind balances sheets.

 

 

Will the Financials Lead the Market Higher?

The banking stocks were among the beneficiaries of the tech slump, with BAC, GS and JPM all defying their head and shoulders setups at this time. The XLF, is suggesting further near-term gains for the financial sector while heading into this coming week’s FOMC meetings on June 13th and June 14th, 2017.

 xlf-2

 

 

Trade Your Way To Success!

On May 25th, 2017, I issued a trade alert, to my membership, a couple of hours before the opening bell!

We at TheGoldAndOilGuy.com purchased the SCO ETF which is a 2x oil ETF, which rocketed higher by 10.4% over the next few hours on May 25th, 2017 which we locked in partial gain and adjusted our stop to eliminate any downside risk. Members were ecstatic with our instant results. Then, oOn June 8th, 2017, we closed the remaining position of SCO for a 22% Profit!

If understanding why the markets move they way they do, and where they are headed tomorrow is something you want to know, become a member and have access to my premium pre-market video forecasts to have the necessary insights that you require to build your trading account!

Chris Vermeulen
www.TheGoldAndOilGuy.com

U.S.Bond and Small Cap Stock Soaring Together?

U.S. Stock Markets just keep going higher and higher! How much higher will they go?  I am FORECASTING another 25% higher for U.S. Stocks! The ‘bullish trend’  from the breakout continues, as expected. Breadth has become strong, once again, including a new all-time high on the SPX Advance/Decline line to match the new all-time high for the SPX. My breath thrust index reissued another buy for the SPX on May 31st, 2017!  Once the markets wake up and realize that there will be no U.S. tradewars, they will then begin their assent.

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THE BIG PICTURE!

The Fourth Industrial Revolution, which will be referred to as ‘Tech Hypergrowth’, will be the enabling attribute of technology’s new central role within the global economy. Through technological innovation and investment, in developing infrastructures, companies are heading into an all new frontier.

Harnessing technology so as to realize undeveloped opportunities is a hallmark of ‘tech hypergrowth’. This approach leads to the now quite familiar phenomenon of  innovation. Tech Hypergrowth Companies are employing both existing and recently developed infrastructures for growth. These new opportunities lie in ongoing and recent technology shifts, industry transformations and demographic and societal changes. Research indicates that ‘tech hypergrowth’ companies are highly data-driven and that data is enabled to adjust the fit between the technology, the business and its’ customers.

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‘Emergency Stimulus’ Is Now Permanent!

Last Friday, June 2nd, 2017’s Jobs Report supported the number of new jobs that are now expected.  If the economy continues to contract, the FED, in alliance with the  Trump Administration,  will increase their money printing which will, in turn, push gold higher. This explains why gold prices rallied in response to the disappointing jobs report.  There is NO market crash on the horizon. In last weeks’ article, May 26th,2017, I wrote (that)  “When short-term sentiment becomes pessimistic, it creates a new ENTRY SIGNAL to re-enter the SPX long!  This is exactly what occurred on May 25th, 2017”. We still remain extremely bullish with a stop/loss at 2400.   There is major support at the 2400 level. This level used to be strong resistance, then became major support in the May 2017 breakout.

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Historically, the best sectors were dominated by staples, utilities and health care which had shown consistent positive returns.

Understanding correlations in complex financial systems is crucial in the face of turbulence, such as the continuing ongoing ‘financial crisis’. The strong breath and new highs support the advance of the SPX as it continues on its’ gains.

 

 

 

The New Bear Market Of Interest Rates!

In recent decades, this has led to a further decline in interest rates, almost every time, along with a rally in the more defensive sectors of the stock market.

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Over the past 36 years, the ten-year Treasury Note Yield has preceded a new downtrend in interest rates, virtually every time,when they have reached major support. Yields dropped an average of a 11% over the following year and declined 9 out of 11 times.

As interest rates continue to decline, it is great for bond funds, but not good for banks. The SPX Banks SPDR, (KBE) is near its’ 2017 low as depicted in the chart below.

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The U.S. dollar index closed last week at a new low for the move at 96.67, down 47 basis points on Friday, June 2nd, 2017 (0.48%). The  dollars’ trouble came when the government jobs report announced only 138,000 new jobs were created last month! This fell short of economist’s expectations and lower than that of April of 2017. Dropping yields are a driver of currency exchange rates and forecast  future lower interest rates.

The U.S. dollar clearly took a hit from the May jobs report with expectations of the FED raising U.S. interest rates beyond June.  From a technical standpoint, the Dollar Index is bearish on the daily charts.  With the lack of confidence that the FED will NOT take any action beyond June, has pushed the dollar further into a new bear market territory but price is nearing critical support and I do feel a short term bounce in dollar is near.

 

The Decoupling Of Correlated Asset Classes!

In financial systems, correlations are not constant, all the time, but rather, vary over time. Reliable estimates of correlations are necessary to protect a portfolio. I find that the result that the correlation among different ‘asset classes’ scales ‘linearly decouple’ with market stress.

Consequently, the diversification effect, which should protect, melts away in our current financial times. If my empirical analysis is consistent with the interesting possibility that one could anticipate diversification breakdowns.

In our very leveraged financial markets, the ‘leverage effect’ can decouple the traditional relationships correlation between the asset classes.

It is crucial to understand the fundamentals of the capital processes that are currently in play!  President Trump is preparing for a major shake-up at the FED. There are three vacancies coming up at the FED’s Board of Governors. President Trump is preparing for a series of new appointments to the FED. He is considering a former Federal Reserve Economist, who advocates the implementation of negative interest rates. The administration has been saying that it plans to deregulate the old rules that were imposed on Wall Street in the aftermath of “The Great Financial Crash of 2007”.

In January 2018, the term of FED Chairwoman Janet Yellen will expire! The president is undecided whether he will reappoint her or seek a new appointee for this position.

In my opinion, President Trump wants a weaker dollar which in return boast profits in U.S. corporation.

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The Anatomy of a Winning Trade!

Tune in every morning for my video analysis and market forecasts at TheGoldAndOilGuy.com to know where the main ‘asset classes’ Gold, Oil and SP500 are headed tomorrow, this week and next month. This daily forecast service closed out an oil trade in SCO June 8th for a quick 21% profit!

Short-term aggressive traders may want to look at my premium newsletter ATP  in which we alert our clients to weekly opportunities in small cap stocks and attempt to keep our members aware of new trade setups by using our proprietary (MRM) Momentum Reversal Method trading strategy, which just locked in $590 in TNA, and another $1800 from FOLD on June 6th.

TRADES IN MAY:

FOLD, up 18% in 6 Weeks
TNA, up 5.9% in 11 Days
ERY, up 4.75% in 2 Days
SLV, up 3.2% in 5 Days
MOBL, up 15% in 7 Days
FOLD, up 9.5% in 40 Days
NUGT, up 81% in 27 Days
UGAZ, up 74% in 14 Days

 

If you would like to take FULL Advantage of all of our insight and expertise, tune in every morning for BOTH our daily market forecasts video and our Premium Stock & ETF Trade Alerts services!

Chris Vermeulen

The New Bull Market of 2017!

I cannot stress strongly enough the importance of understanding where the markets are currently technically located, with regards to different time frames and which help to guide all my trading and investing decisions.

The longer that the SPX is inside a ‘consolidation pattern’ and going sideways, the bigger the ‘Break Out’. There is a very strong bullish posture on all time frames within the markets. A unique ‘Sentiment Indicator’ has now been reset from being overbought to oversold, therefore, there is huge potential to the upside. Momentum has been reset!  In my market article review, from last February 28th, 2017, I discussed that the “Stealth ‘Bull Market’ In Stocks Is Still In Progress!”.

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Additionally, I also wrote about how “Elliott’s theory is based on the Dow theory in that stock prices move in waves. Because of the “fractal” nature of markets, I have broken them down so that you can trade a daily complete wave count”.

The below chart was originally posted in April of 2017 with the potential price paths for the SPX to reach the next price target of 2500. The overall forecast points to higher prices this summer with the potential of a major top forming in late July or August.

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Courtesy of  TMTF website.

 

A close above 2424, of the SPX, would trigger a NEW ENTRY POINT, as well as indicating the continuation to the SPX 2500 level. The next potential target is 2430.

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Have The Markets Changed?

The “FAANGS” describe five major stocks in the index: Facebook, Apple, Amazon, Netflix, and Google. The “FAANGS” could create a huge ‘Melt Up’ in our current stock market environment! The “FAANGS” and other large technology stocks will send the SPX much higher.

The U.S.-listed ETFs had inflows of $7.8 billion during the week ending Thursday, May 25th, 2017.  The year-to-date inflows are $188.6 billion.

These five stocks (FAANGS) represent 9.25% of the SPX index. They also represent 31.45% of the NDX – 100.

 

Stocks Have a Long Way To Go!

The Bank of Japan (BOJ) and the European Central Bank (ECB) are sending the SPX to even newer highs. Easy money policies, and provide cash to invest into the markets, while adding more liquidity.

Therefore, we are in a “risk on” environment.  This is fueling the ‘market bubble’ and will continue for some time yet.  The markets have been resilient as traders “buy the dips”!

Analysts at Morgan Stanley believe that “profit expansion within the S&P 500 is growing at its best rate in nearly six years. Specifically, ratio of companies raising internal earnings estimates versus those lowering future earnings expectations is reaching its highest level since 2012”.

Michael J. Wilson, Morgan Stanley Equity Strategist, wrote in a client note, “The momentum of earnings revisions breadth like that seen recently is often synonymous with higher equity prices over a 12-month horizon.”

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Intermarket Analysis:

Global Central Banks have injected a record $1 trillion in 2017… they will be required to continue to inject more as the year progresses.

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The current focus is on the fundamental key drivers that move the market. The current drivers are Trumponomics, the FED rate hikes, Quantitative Easing and ZIRP.

‘Correlation’ is when you look at one market and it can forecast another markets’ behavior.  For example, if the USD turns higher, it is likely that commodity prices will soon begin to fall. If commodities do not drop right away, they have diverged from their natural relationship and we can expect them to start to fall soon.

Correlations offer useful information for traders.  Linear correlation analysis presupposes the effects which are linear in nature in a one-to-one causal relationship. The correlation of any two markets can range between +1.0 (the price behavior of the two markets is the same) and -1.0 (the price behavior of the two markets is exactly the opposite of one another).

The historical correlation between GLD and the U.S. dollar has been -0.59.

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IS GOLD DUE FOR A BREAKOUT?

Gold is the ultimate hedge for setbacks in the Trump agenda.  If the administration fails to get its’ agenda enacted, gold prices will likely move higher.

Gold is the most (negatively) sensitive precious metal to react to changes in the Federal Funds Futures.

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The FED cannot raise rates, aggressively, without harming the U.S. economy: U.S. debt levels remain ‘astronomically high’. There has been no deleveraging since the Great Financial Crisis of 2007/ 2008.

Total U.S. debt remains above 250% of GDP.  This explains, better than any other factor, why the Federal Funds target rate is still below 1%.

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GLD broke through an important resistance level and remains above all key moving averages. GLD out-performed other safe havens last week.

A close above GLD 120.60 would indicate a great swing trade to GLD 122 and then GLD 126.  This would also reflect the continuation of the bearish move on the U.S. dollar to the 94 and 95 levels.

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In Conclusion:

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.

Short-term aggressive traders may want to look at our premium newsletter ATP where we alert our clients to weekly opportunities and attempt to keep our members aware of new trade setups using our proprietary Momentum Reversal Method trading system.

TRADES IN MAY:

ERY 4.75%, in 2 Days

SLV 3.2%, in 6 Days

MOBL 15%, in 7 Days

FOLD 9.5% in 40 Days

 

If you want to take FULL Advantage of All Our insight and expertise tune in every morning for BOTH our daily market forecasts video and our Stock & ETF Trade Alerts services now!

This week will be most interesting in the markets. It is vital that you understand what the markets are telling you. Attempting to trade stocks, bonds, commodities, and the currency markets, without intermarket awareness, can be very costly.

Chris Vermeulen
TheTechnicalTraders.com

Stock Market & Crude Oil Forecast!

The SPX hit new highs and will see even higher highs! Goldman Sachs, is the latest bank to publish research, to justify the current high prices of the market and its year-end SPX price target. Goldman argues that the index can head higher to 2580 in this bull market trend.

The current rally continues to climb without a quantifiable pullback!

My proprietary technical model has now confirmed a NEW BUY SIGNAL on the SPX!  This is a new signal informing us of the continuation of this rally.  President Trump’s pro-business policies, along with soaring business and consumer optimism, is jet fuel for this bull market to continue even higher.

The correction is OVER and the next leg of this bull market will take the SPX to 2500+.  The bears will be left with nothing, except huge losses. The call and put buying action that is reflected from the CBOE shows that the leveraged money is now on the long side of these equity markets.

In my research report that I released back on April 18th, 2017, I stated that “On a short -term basis, we are at that point where sentiment is overly ‘pessimistic’. Seasonality is turning positive and any further selling should be erased by the time when everyone pays Uncle Sam. When short-term sentiment becomes pessimistic, it creates a new BUY SIGNAL to re-enter the SPX long!”.  This is exactly what occurred on May 25th, 2017.

 

Margin Debt:

The New York Stock Exchange, (NYSE), releases data monthly, of the customers of clearing firms overseen by the NYSE. This data includes margin debt and free credit balances. As you can view, from the chart below, there is a positive correlation between margin debt and the rise of the SPX.  It is now confirming that buying continues to push the SPX much higher!

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Follow the Smart Money!

Company insiders tend to be the smart money. When there is insider buying, it is good for the markets.  Buying and selling, by corporate insiders, often occurs when they believe in the future prospects of their company’s earning potential.

A proprietary ‘insider’ indicator was created to monitor the buying and selling of options.  This indicator measures the net number of insiders among companies in the SPX, that sold minus bought, shares in their own companies. It looks over the past five years to determine the average level of buying or selling during that month, and adjusts the current figure based on those averages.

The bottom green line is when the insiders are buying, meaning when the blue indicator line is low it means stocks should be bottoming and can be bought based on insiders activity.

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The Slippery Slope – Oil

On, Thursday May 25th, 2017, oil prices plummeted 5% after the OPEC and non-OPEC producers agreed to extend the oil output cut deal for nine months. Oil sold-off, aggressively, as market participants were expecting the cartel to announce deeper cuts to output.

I issued a trade alert, to my membership, a couple of hours before the opening bell as I could see what oil what about to do next. We at TheGoldAndOilGuy.com purchased the SCO ETF which is a 2x oil ETF, which rocketed higher by 10.4% over the next few hours on May 25th which we locked in partial profits and adjusted our stop to eliminate any downside risk. Members were elated with our instant results.

Watch Crude Oil Forecast Today Video

crude-oil-forecast-todayCLICK HERE TO WATCH

 

Short-term aggressive stock traders may want to look at our premium newsletter where we alert our clients to these types of opportunities every week at ActiveTradingPartners.com and attempt to keep our members aware of strong trading signals using our proprietary Momentum Reversal Method trading system.

 

TRADES THIS MONTH:

ERY 4.75%, in 2 Days

SLV 3.2%, in 6 Days

MOBL 15%, in 7 Days

FOLD 9.5% in 40 Days

 

If you want to take FULL Advantage of All Our insight and expertise tune in every morning for BOTH our daily stock market forecast video and our Stock & ETF Trade Alerts Newsletter today!

Chris Vermeulen