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Gold, Silver, Dollar Cycles – Part III

Gold is setting up for a historic rally based on my analysis. Recent news provides further evidence that the Precious Metals and Currencies are in for a wild ride. Just this week, news that China’s reserves fell below $3 Trillion as well as the implications that the fall to near $2T in reserves could happen before the end of 2017. Additionally, we have recent news that the EU may be under further strain with regards to Greece, the IMF and debt. The accumulation of Precious Metals should be on everyone’s mind as well as the potential for a breakout rally.

Based on my analysis, I would estimate that near June or July 2017, Gold will be near $1315 ~ $1341 (+13% from recent lows). This level correlates to a Fibonacci frequency that has been in place for over 3 years now. A second Fibonacci frequency rate would put the project advancement levels, possibly closer to October/November 2017, near $1421 (+21% from recent lows). After these levels are reached, I expect a pullback to near $1261 if the Gold rally ends near $1315~1341 or to near $1308~1309 if the Gold rally ends near $1421. This pullback would setup a massive next wave rally to $1585 or $1731. So, if you need confirmation of this move, just wait for any rally to end above $1315, then wait for a pullback below $1280 or $1315 and BUY.

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Remember, the volatility expansion I am expecting in the VIX near March/April will likely be the precursor event to a much larger volatility expansion later this year. I can’t accurately detail the scale and scope of the projected March/April event other than it will likely be larger than the last VIX expansion. I expect these global debt events to unravel the low volatility activity we have been seeing and shake up global markets/currencies. Within this process, Precious Metals will likely see a massive upside run as a protection from uncertainty and risk.

Silver Rally

Much like Gold, the other shiny metal is set for incredible runs as well. Given my Fibonacci frequency analysis, a similar type of patter may occur in Silver. Before we get too much further into this analysis, let me be clear about one thing. We are already nearly +50% towards the upside rally target in Silver based on simple Fibonacci frequency. This target is $19.10. This does not mean this is the end of the run (yet). It means we have already achieved some success in one level of predictive analysis and now we need to see if the second Fibonacci frequency plays out. The second Fibonacci frequency target is $20.78 (nearly +25% from recent lows)

Much like the Gold analysis, after these levels are reached, I expect a retracement/pullback to levels that reflect the Fibonacci frequencies before a follow through rally continues. The first Fibonacci frequency pullback range is $18.26~$17.85. The second, larger, Fibonacci frequency pullback range is $19.50~$18.82. Case in point, these retracement levels are based on what I can determine as common Fibonacci frequencies. The pullbacks could be deeper and reflect more uncommon frequency functions. As of right now, I don’t believe that will be the case – but I could be wrong on this matter. In any event, once the rally points ($19.10 or $20.78) are reached and Silver pulls back to below my retracement objectives ($18.26~$17.85 or $19.50~$18.82 respectively), look for long entry positions or accumulate more physical metals. Want to know what my upside “second wave” objective might be based on my frequency analysis for Silver?

Silver Charts – Daily & Weekly

Seeing as though you have been so patient in reading my analysis/article regarding these VIX cycle patterns and what I believe could happen with the US and global markets, I’m going to shed a little light into the future cycle phases of Silver. We’ll focus on Silver for one reason, it is a cheaper precious metal for most traders to participate in and it has some very interesting facets of cycle/Fibonacci analysis. One key date range that keeps appearing in my cycle analysis is April 17^th through April 24^th.

Additionally, June 26, July 31 and August 14 appear to be key cycle dates. Given my earlier analysis, I suspect the April dates will be critical to the VIX cycle spike that I’m expecting. It could also drive further expansion or price rotation in the Gold, Silver and OIL charts. What is interesting about these Fibonacci Time/Price “inflection points” is that they can be drivers of many outcomes (rallies, collapses, rotations, tops or bottoms). They simply tell us that we need to be aware of these dates and they may, and will likely, present key information for future decision making.

Now, onto the extended projections for Silver. If my first, shorter, Fibonacci frequency is correct, any subsequent (second wave) rally will likely start near $17.85~$18.15 sometime near or after April 10, 2017. This second phase rally will likely run to near $21.46 before finding resistance (possibly slightly higher). Target objective date ranges for this rally to end are June 19 through July 24.

If my second, longer/larger, Fibonacci frequency analysis is correct, any subsequent (second wave) rally will likely start near $18.80 sometime near or after May 8, 2017 and run to near $24.85 before finding resistance (possibly higher). Target objective date ranges for this rally to end are July 3 through August 7 (or later).

Remember, these second wave projections in Silver represent a 20.5% and 32.85% rally from my projected retracement levels. These are massive moves and I hope you are all able to take advantage of these triggers. Gold should move in somewhat similar manners – so pay attention. Smart traders and followers of ATP newsletter may take advantage of trades to play these moves.

USD (US Dollar) and Foreign Currencies

I touched on this topic earlier, yet I feel the need to provide further documentation regarding my belief that the USD will continue to enjoy renewed strength at least for the next few months. First, I expect the global weakness in foreign markets to continue to propel the USD and the US stock market to greater attempts at new highs. I believe large amounts of money will keep pouring into the US markets for reasons that are obvious to most – US strength and capabilities for growth. As I often tell my clients, if the US is growing, so is the rest of the world. The current situation is a bit different though as the US markets and currency is, as I believe, going to be a standout marketplace in a global pot of debt and confusion.

There is one level of resistance on the USD that we have to be concerned with, the $102.25 level. Beyond that, I believe the USD could reach $104~105 before August 2017. The possibility that a VIX expansion could drive the USD higher would be more highly correlated if there is some external (global) event that provides a catalyst for a stronger US Dollar. For example, a crisis in Europe, Greece or Asia that undermines expected currency valuations and results in strength in the USD. Right now, I would put that possibility at about 50/50 given some of the news items I’m seeing and the continued fundamental strength of the US economy.

USD Daily & Weekly Charts

The EURUSD relationship will continue to see downward pressure with a likely target objective near 1.035 as a first target. This downward pressure could drive the EURUSD valuations well below this level, but I feel the potential for the EURUSD falling below the 1.00 level is still far off. It would take a global cataclysmic event to drive the EURUSD values below PAR. I’m not saying it could happen, but I am saying I don’t see it happening anytime soon (without a global cataclysmic event).

My Fibonacci frequency target levels for the EURUSD are 1.014 and 0.999. As I stated, I don’t believe there is much downside risk below 0.99 unless the EU completely collapses. I still feel the Euro will survive as a global currency near PAR with the USD.

EURUSD Daily & Weekly Charts

Take a look at some of my recent trades to see how we’ve been able to generate profits for our valued members.

I hope you have enjoyed my analysis of the VIX cycle patterns and how the relate to opportunities for all traders? If you find this type of analysis helpful and want to take advantage of clear, concise and profitable trading signals, visit ActiveTradingPartners.com where I share even more detailed analysis and trading triggers with my members.

John Winston
Co-Author: Chris Vermeulen
www.ActiveTradingPartners.com

February 17, 2017

$SPY

Can New President Make Things Better for the People?

Where is this economic boom that Former President Obama and his administration had taken so much credit for?

The Obama Administration, with the assistance of the Federal Reserve and Company, deliberately kept the U.S. economy from creating any growth at all. The money that flowed from the Federal Reserve, over the last 8 years, had a direct pipeline that flowed only into Wall Street Investment Banks. The American people were sold this false bill of sale that “Quantitative Easing” was going to make lending money to “Main Street America” easier to access. They promised that there would be a boost in hiring which would, in turn, increase aggregate demand and thereby reflect a newly stimulated economic growth!

This QE effectively down-sized the middle class into minority status. The largest growth has occurred within the low-income category. Despite the stock market reaching near all-time highs and real estate bubbling over once again, there are now 45 million Americans on food stamps. This number is at an all-time high. People are feeling poorer today than ever, and with sky rocketing real-estate prices those who do not own a home cannot afford to buy anymore!

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This massive disconnect is expanding exponentially. The velocity of money is the number of times that currency is turned over to purchase domestically- produced goods and services. One can see, as in the chart below, that the velocity of money has been steadily decreasing. There are less transactions occurring by individuals in our economy. One can see that the money never reached “Main Street America” which is why there has not been any demand for goods and services.

The average American is now barley scraping by and many do a lot of their shopping at dollar stores. Most the growth in the job market is in low wage jobs which have zero benefits! The clear majority of Americans have bought into the propaganda promoted by the controlled media outlets.

The masses bought into this propaganda as Wall Streets’ big banks kept artificially inflating the equity markets with free and cheap money, which was at the expense of U.S. taxpayers.

The Obama Machinery put on a stellar performance for the American people, however, this was a fictitious story. In fact, the real number, as of January 2017, of unemployed Americans currently stands at 22.9%: (http://www.shadowstats.com/alternate_data/unemployment-charts). The big gains have been largely allocated to the well-connected financial sector.

Corporations took advantage of low interest rates to buy back stock in their own companies. Since 2008, corporate stock buybacks have surpassed $2.2 trillion. These buy backs have only increased the price of corporate stocks and made their companies appear more valuable than they are. This means that stock prices are far above what they would be if it were not for extremely low interest rates. The politicians believed that it was more important to create a false front and to continue the illusion so that they would remain in power.

The Tax Foundation reports that 60% of the population now receives more in government benefits than what they pay in taxes. What does this say about a society in which more than half of the population are living at the expense of the other half? Currently, what is even worse is that the dependent class is steadily growing. The 60% will soon become 70%.

Representative Paul Ryan of Wisconsin, recently stated that “more people have a stake in the welfare state than in free enterprise. This is a road that Hayek perfectly described as the road to serfdom”: (https://en.wikipedia.org/wiki/The_Road_to_Serfdom). (http://www.economist.com/blogs/freeexchange/2014/03/keynes-and-hayek). (https://mises.org/library/road-serfdom-0).

Mr. Hayek stated that “Capitalism is the only system of economics compatible with human dignity, prosperity, and liberty. To the extent, we move away from that system, we empower the worst people in society to manage what they do not understand”.

On March 23^rd, 2009, the then Treasury Secretary, Tim Geithner sent the stock markets soaring. He announced a plan to help banks unload illiquid securities of uncertain worth from its’ balance sheets. The Wall Street headlines read “Toxic-Asset Plan Sends Stocks Soaring”. Federal Reserve Chairman Ben Bernanke implemented “financial engineering” (https://en.wikipedia.org/wiki/Financial_engineering) as the sole solution to all our financial problems.

He was publicly opposed to the nationalization (https://en.wikipedia.org/wiki/Nationalization) of banks and said “the bookkeeping problems of many banks are largely an artifact of foolish federal regulations. Capital standards, accounting rules and other regulations have made the financial sector excessively procyclical.” As we are presently realizing, government control over the financial markets and the economy have failed us. What we needed was the Federal Government to focus on job creation and to restructure our economy for new and future growth.

They were laser focused on merely bailing out Wall Streets’ big banks. In my view, the Federal Government should only be focused on its’ constitutional responsibilities. Keeping the free markets out of their control and protection and serving the American people should be their primary goal.

They needed to allow deflation to play out its’ cyclical role. However, it turned out worse as they attempted to control it. Federal Government bailouts resulted in financial enslavement. There was further unequal distribution of wealth in our society. Today, in 2017, I clearly see the implosion of America, as we once lived and knew it to be.

The economy was being run on non-to low growth policies intentionally. President Obama deliberately took the path of doing absolutely nothing. He did not want to be accountable for any economic growth most likely because a stock market crash would ensue. That would have placed pressure on wages that would cause inflation at which time the Federal Reserve would be forced to raise interest rates. If this had occurred, all the free money which Wall Street investment banks received would not have been invested in the equity markets.

The GDP Annual Growth Rate in the United States merely expanded by 1.90% in the fourth quarter of 2016, over the same quarter of the previous year. A record low of -4.10% was reported in the second quarter of 2009.

They purchased their own shares back which sent stocks higher into unchartered territory. The way that they played the game was to keep inflation at bay and allow us to wallow in a deflationary contracting economy. As stock prices rallied upwards, the corporate executives continued to receive heavy compensation on cheap cash being provided to them. In the term that Chairwoman Yellen resides over, she has only increased interest rates twice by a mere marginal 25 basis points. This was an immaterial rate hike so as the Federal Reserve could maintain their credibility. Increasing interest rates would have killed this game of “cheap money” which kept the wealth flowing into the top 1 percent. The Federal Reserves’ decision to not raise interest rates during their last meeting (http://money.cnn.com/2017/02/01/news/economy/federal-reserve-january-meeting/index.html) sends a clear and powerful message that they do not want to go down the path of normalization (http://www.discovery.org/a/23721) . They want to continue to artificially suppress interest rates. If they had attempted to “normalize”, it would create massive assets and derivative bubbles bursting domestically and globally. Either the bubble will burst or we will return to inflation.

President Trump wants to create the growth which former President Obama never accomplished. He is proposing tax cuts, introducing fiscal stimulus and removing all the red tape that has been so costly for small businesses to implement. He has also promised to lift GDP to 4% by spending $1 trillion to rebuild America’s infrastructure. This will overheat the economy! Trying to implement his plans will call for deep cutbacks in Medicare and Social Security. It will take years to forge ahead with legislative approval.

Conclusion:

Where is this economic recovery that supposedly happened? It exists in the stock market at present as the masses are enduring a poorer quality of life!

Our subscribers are currently in a swing trade with NUGT (http://www.etf.com/NUGT) which is up 95.8% currently and we are expecting further gains going into this week. All the trades are based on our Momentum Reversal Method (MRM) trading system. The strength of the precious metals will continue to drive gains for our NUGT position. Expect some very interesting and exciting new trades this week. We are getting ready for some very explosive moves.

Chris Vermeulen
Co-Author: John Winston
www.ActiveTradingPartners.com

February 6, 2017