Our continued research into the state and status of the Real Estate market continues to point to a process that is starting to unfold in the US which may put price and activity levels at risk.  Within the past two segments of this research article, we’ve highlighted how market cycles and recent market data point to a Real Estate market that may be in the early stages of a downward price cycle.

Additionally, within Part II of this article, we highlighted the human psychological process of dealing with a crisis event which also suggests a deepening price contraction event may take place within the next 12 to 24+ months.

US NEW HOME SALES DATA WAS JUST RELEASED

We believe the psychological process is just starting to become evident in the current data.  For example, the US New Home Sales data was just released and it shows the sharpest decline in activity since June 2010 (nearly 14 months after the actual bottom in the US stock market in March 2009).

Source: https://www.investing.com

Our researcher team believes investors/traders and many consumers have become complacent with the current data and are simply in denial in attempting to relate future economic outcomes to the current set of circumstances.  There has never been anything like this to disrupt global economic activity and consumer engagement over the past 100+ years.  Not even the Great Depression or WWII was on this scale.

When you stop to consider the scale and scope of this COVID-19 virus event and the process of recovery, one should really ask serious questions about how quickly you believe the global economy will be able to recover to 2018/2019 economic activity levels, how quickly the world can create and sustain 25~75 million new jobs, and how quickly global nations can attempt to regain GDP output levels nearly equal to 2018/2019 levels?

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

IYR MONTHLY CHART

Take a look at this IYR Monthly chart, below.  The initial collapse in the markets in 2007 was the start of a similar type of economic and psychological crisis event.  Notice how IYR started to move lower in early 2007 – well before the real collapse in the US economy began in December 2008. Another aspect to consider is how long it took for IYR to recover back to near 2007 levels.  From the bottom in early 2009, it took nearly 6 years for IYR to reach levels above $80 again.

CASE-SHILLER US HOME PRICE INDEX CHART

This Case-Shiller US Home Price Index chart shows a similar setup taking place.  The peak in home price values on this chart happened in early 2006 – well before the peak on the IYR chart in early 2007.  The interesting component of this Case-Shiller chart is that real home price values didn’t bottom until early 2012 whereas the speculative traders pushed the bottom in IYR in mid-2009.  We believe the speculative side of investment and asset growth paired up near or after the 2011-12 time-frame where improved levels of economic growth and activity prompted real increased asset valuations in Real Estate.

Currently, using the Realtor.com Hotness Index (https://www.realtor.com/research/reports/hottest-markets/ ), we can see that data reported in December 2019 shows a moderate shift away from certain “hot” areas in larger market areas.  Pay attention to how the RED colors in 2018 have changed (in some areas) compared to Q1 2019 levels on these charts below.  We believe the continued shift towards a Real Estate recession is currently taking place and that these Hotness areas will suddenly cool very quickly as new data is published.

CALIFORNIA HOTNESS MAP

FLORIDA HOTNESS MAP

NEW YORK HOTNESS MAP

FRESH DATA RELEASED TODAY FROM REALTOR.COM

Fresh data released today from Realtor.com data (updated on 4/2/2020: https://www.realtor.com) suggests a peak in the housing market may be setting up.  Total active listings have declined steadily over the past 4+ years while median price levels have continued to climb.  This is a sign that the Real Estate market has been within a moderately tight “seller’s market” where buyers are competing for the best properties.  The Increase (Blue) to Decrease (Orange) data suggests that price levels tend to stabilize in Q4 of each year where sellers are unwilling to move away from their expected listing price.  Q1 through Q2 see dramatic increases in both levels of price alterations as the activity level tends to flatten out in the early portion of each year.

CONCLUDING THOUGHTS:

Our conclusion from this data is that sellers may become increasingly desperate to reprice assets if a shift in the Real Estate market dynamics takes place as a result of the COVID-19 virus event. As of July 2019, price level decreases reached the highest levels over the past 4+ years reaching 30% of all total listings.  Currently, this ratio for March 2020 is at 21.8% and is certain to climb higher.

As the human process of dealing with this virus crisis event continues to take place, we are certain that asset values and expectations will shift as they have in the past.  Jobless numbers hit again today with another massive 4.42 million new jobless claims over the past week.  Take a look at the charts below to see just how dramatic this event is turning out to be for American workers.

Source: https://www.investing.com

Anyone expecting the Real Estate market to survive this massive virus event unscathed is simply not seeing the data as clearly as one should.  We believe once the data starts to breakdown to really show the contraction in activity, price, and expectations, then a new Real Estate recessionary trend will take place where real values will attempt to establish a true bottom.   Our belief is this process may take as long as 18+ months to really bottom out and the true bottom really depends on when consumers transition away from the fear and helplessness phases and start to become optimistic again.

I am hoping people can see what I am trying to warn about, which is the next major market crash, much worse than what we saw in March. See this article and video for a super easy to understand the scenario that is playing out as we speak, and real estate will follow.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

Subscribers of my ETF trading newsletter had our trading accounts close at a new high watermark. We not only exited the equities market as it started to roll over in February, but we profited from the sell-off in a very controlled way with TLT bonds for a 20% gain. Yesterday we closed out SPY ETF trade taking advantage of this bounce and our account is at another all-time high value. Exciting times for us technical traders!

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

Chris Vermeulen, CEO & Founder of Technical Traders Ltd., joins Tom Bodrovics at Palisade Radio to discuss the markets and Chris says, “This is the time to really be paying attention to the markets… It could be a bloodbath.”

Chris is seeing uncertainty that could bring equities lower as money is flowing into safe havens. The charts are showing that markets are approaching a major inflection point, which could go either way. Both gold and silver should rise rapidly once they get past resistance.

Time Stamp References:
0:45 – Equities and safe havens.
2:00 – Market weakness – bear rally?
4:45 – Charts show a coming inflection point.
9:20 – Charts testing support on gold.
10:20 – Silvers chart is still ugly.
12:15 – What happened in oil?
20:00 – Equities may top and rollover.

Talking Points From This Episode

  • Equity markets may have a limited upside.
  • If you don’t understand it, don’t buy it.
  • His bullish outlook for gold and silver.
  • Large caps are looking very good.

Chris Vermeulen is CEO & Founder of Technical Traders Ltd. Chris has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and author.

Years of research, trading, and helping individual traders around the world has taught him that many traders have great trading ideas, but they lack one thing. They struggle to execute trades systematically for consistent results. Chris helps educate traders, and his mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility.

He has also been on the cover of AmalgaTrader Magazine and featured in Futures Magazine, Gold-Eagle, Safe Haven, The Street, Kitco, Financial Sense, Dick Davis Investment Digest, and dozens of other financial websites.

As we continue to delve into the looming Real Estate crisis that will likely hit the US and globe over the next 12 to 24+ months, we want to focus on the human psychological process of dealing with a crisis event and how that relates to economic engagement.  In the first part of this research article, we discussed how the time-line and events that have unfolded over the past 120+ days have setup a continuing global crisis event.  The best of our knowledge, there has been nothing like this, other than massive wars like WWII, that have taken place on the planet over the past 75+ years.

This presents a very real possibility that human psychological processes have engaged throughout the planet that may disrupt how effective the recovery efforts are in the near future.  If humans engage in a traditional psychological crisis-cycle process, then there is little chance that the economic recovery will reach 2018-2019 levels very quickly.  Let’s review the psychological process of a crisis event.

THE NORMAL PSYCHOLOGICAL REACTIONS TO A CRISIS EVENT ARE:

Vicarious Rehearsal: People that are distanced from the crisis event (location or expectations) tend to react in a way that reflects their belief that “it won’t result in any dramatic changes to their lives”.  Thus, they continue behaving and acting as they would without the crisis.

Denial: The process of denial takes on many forms.  Some people simply ignore the warnings or information related to the crisis.  Others become agitated or confused.  Some simply chose to believe the threat is not real and others may believe the threat does not relate to themselves.

Stigmatization: Sometimes, segments of society may become stigmatized by their community as anger or blame drives people to believe infected people or segments of society that may promote the crisis event are identified.  We’ve already seen some of this type of activity throughout the globe take place.

Fear and Avoidance: Fear becomes a central psychological element that may drive certain people to act in extreme, and sometimes irrational, ways to avoid the perceived or real threat.  Fear, much like Greed, is to primary element of all human activity and we must understand these components and how they transition throughout this virus event.

Withdrawal, Hopelessness, and Helplessness:  When people realize the threat is real and feel there is nothing they can do or change in their lives to avoid the consequences of the threat – a feeling of Hopelessness and Helplessness begins to set in.  When this happens, people tend to withdraw from normal activities and isolate themselves from the threat and society as a whole. (Source: https://www.orau.gov)

We believe these components of how society reacts to a crisis event are more like a “transitional process” than a series of separate events or actions.  We believe, initially, Vicarious Rehearsal and Denial are the initial reactions to a crisis event.  Then, these transition into Stigmatization and Fear when society realizes the threat of the crisis is very real and tangible.  Lastly, society moves into a balance between the last three elements where Stigmatization, Fear, and Hopelessness permeate as the crisis event continues to unfold.

Can we find any evidence that consumers were acting in a manner consistent with this psychological process within the data?  What would we look for in the data and how would we identify key characteristics of this psychological process?

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

First, we would look for Vicarious Rehearsal and Denial in the form of “opportunity and greed” in the data.  The US Fed lowered interest rates to near ZERO on March 15, 2020.  This may have prompted a surge in refinancing and purchase commitments from qualified buyers.  We would look for a surge in mortgage applications in March 2020 as the expansion and severity of the virus crisis was surging.  Additionally, we would also look for a surge in home prices and sales levels as qualified buyers attempted to profit from lower rates.

When we look at the charts below, pay attention to the spikes on the charts in March 2020 and how they correlate to the US Fed decreasing interest rates just prior to the shut-down “National Emergency” order from President Trump.  The good news in early 2020 related to Q4:2019 earnings and economic data seemed to lull people into believing the risks were minimal.  Well, quite a bit has changed since then…

US MBA Mortgage Applications (WoW): Notice the spike on the week of March 11, 2020, above 50?  This level was nearly double the previous peak levels going back over 2 years.  A flood of buying and refinancing activity took place in early March 2020 near peak price levels.

US Existing Home Sales (MoM): This existing home sales data shows that both January and March 2020 exhibited strong sales numbers of existing homes.  Pay special attention to how quickly this data changed in April 2020.  Existing home sales levels have collapsed from the previous monthly levels as consumers have moved beyond the Denial stage and into the Fear stage.

US House Price Index (MoM):  This chart shows that house price levels are still appreciating while demand has already started to collapse.  Again, pay attention to what happened in March 2020 and what is happening in April 2020.  Mortgage applications have collapsed.  Existing home sales have collapsed.  Yet, prices remain rather high right now.  It would appear that home sellers are reluctant to decrease pricing as aggressively as potential buyers are exiting the market.  Eventually, the lack of real demand will prompt price levels to contract to attract interested buyers.  As we’ve seen before, though, when prices start to decline – a vicious cycle begins where potential buyers wait out the bottom or “low-ball” offers because they know the dynamics of the markets have changed in their favor.

US Jobless Claims 4-Week Average (WoW):  The real kicker, in our opinion, is how the shut-down has resulted in a massive segment of new job losses in the US.  It is hard to argue with the fact that the “average” 4-week jobless claims number shot up to levels above 1,000,000 recently.  This is the highest level we’ve seen in this economic indicator EVER.  These levels are nearly 10x the 2008-09 credit crisis levels – trying to put this into perspective.

When we have massive amounts of people suddenly losing their jobs (sources of income), this creates a massive disruption in the supply/demand side of the Real Estate market.  How massive is this number??  Take a look at the last chart…

Yes, this is a real chart of the jobless situation in the USA.  Please remember, if the situation in the USA is as it is being reported, then the situation throughout the rest of the world may be similarly related to job losses.  The point we are trying to make is that the job losses recently have been massively higher than anything we saw throughout the 2008-09 credit crisis – nearly 800% to 900% more massive.

I am hoping people can see what I am trying to warn about, which is the next major market crash, much worse than what we saw in March. See this article and video for a super easy to understand the scenario that is playing out as we speak, and real estate will follow.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

Subscribers of my ETF trading newsletter had our trading accounts close at a new high watermark. We not only exited the equities market as it started to roll over in February, but we profited from the sell-off in a very controlled way with TLT bonds for a 20% gain. Yesterday we closed out SPY ETF trade taking advantage of this bounce and our account is at another all-time high value. Exciting times for us technical traders!

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

Another great morning talking with the team at TraderTV.live

These guys are nothing short of incredible traders, educators, and entertainers. If you want a morning trading show that timely, gives out trade ideas, and will make you laugh, this is it, guys!

I keep pounding my fists on the table hoping people can see what I am trying to warn them about, which is the next major market crash, much worse than what we saw in March. See this article and video for a super easy to understand the scenario that is playing out as we speak.

If you want to learn more about the Super-Cycles and Generational Cycles that are taking place in the markets right now, please take a minute to review our Change Your Thinking – Change Your Future book detailing our research into these super-cycles.  It is almost impossible to believe that our researchers called this move back in March 2019 in our book and reports.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

Subscribers of my ETF trading newsletter had our trading accounts close at a new high watermark. We not only exited the equities market as it started to roll over in February, but we profited from the sell-off in a very controlled way with TLT bonds for a 20% gain. Yesterday we closed out SPY ETF trade taking advantage of this bounce and our account is at another all-time high value. Exciting times for us technical traders!

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

A very interesting setup is currently taking place in the VIX chart with our Adaptive Fibonacci Price Modeling system that has us quite concerned.  The Daily VIX chart running our Fibonacci Price Modeling system, which is one of our primary price modeling tools, is suggesting upside price targets for the VIX near 110, 134 and 158.  The reason these levels are extended into future price expectations is because of the recent explosion in volatility over the past 90 days.

Yet, the real concern originates from the question “what would it take for the VIX to rally to these levels and is this a real possibility in the current global markets?”.  So, we attempted to answer that question by attempting to identify what it would take for the VIX to skyrocket above 110 in the near future.

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

VOLATILITY INDEX (VIX) DAILY CHART

First, pay attention to this VIX Daily chart and the targeted levels above 100.  Please understand that in order for the VIX to skyrocket higher reaching levels above 100 would require another massive downside price move in the US and global markets – something unexpected and very dramatic.  Is this an unrealistic expectation given the current global market environment headed into Q2 and Q3?  We really don’t believe it is an unrealistic potential expectation at this point.

We’ve recently authored a series of articles suggesting the global markets are marching through a human psychological process related to the virus event (crisis).  Somewhat similar to the “Grieving Process”, a crisis event prompts a similar set of human emotions ending in an angry and helpless feeling.  We believe this early stage crisis event process has positioned the global markets clearly within the Denial and Stigmatization phase of the crisis event. These are the Second and Third human responses to a major crisis event (Source: www.orau.gov/).

If we are correct and the markets are reacting to the Denial and Stigmatization phases of this virus event, then the next transitional phases are Fear and Withdrawal/Hopelessness.  Could this transition into a more fearful human instinct prompt a massive collapse in the US and global markets?  If so, what would be the cause of this transition into fear?

We believe the transition may come from the continued economic strain that is likely to become very evident in Q2 and Q3 of 2020.  Right now, the US stock market is only -10% to -15% from recent all-time highs.  The reality of the virus event for traders is that this is only a minor blip in the markets so far.  Yes, the markets fell much lower recently, but traders/investors have shrugged off the real risks and put their faith into the US Fed and global central banks to navigate a successful recovery.  What if that doesn’t happen as we expect?

What if the real numbers for Q2 and Q3 come in dramatically lower than expected?  What if global GDP contracts by -10% or -15% for the next 12+ months?  What if consumers don’t return as quickly as we expect?

The Race To Cash and Bonds Again: I talked with Cory Fleck from Korelin Economics Report today. Listen to our thoughts on the race to the safe-haven assets, bonds, and cash. What about gold and gold stocks? These have been more correlated to the US markets but the charts of the major stocks and gold are still very bullish.

CLICK TO HEAR OUR CONVERSATION

WEEKLY DOW (YM) CHART

Take a look at this Weekly YM Chart and pay attention to the downward sloping price channels that help guide us to a conclusion.  Additionally, the Adaptive Fibonacci Price Modeling system is showing us a new target near 12,475.  If this is accurate, then a breakdown in price over the next 6+ months may push the YM to levels near 12,500 (-50% from the recent peak in April 2020).  A move like this would certainly prompt a massive increase in the VIX and would frighten traders, investors, and consumers into a “helplessness” mentality.  What can you do when the markets are collapsing like this except wait for the bottom.

The one thing we can be certain of is that at long as humans exist on this planet, economies will continue to function at some level.  Being human in today’s world means we engage in economic activity and trade.  Therefore, we believe there is a moderate risk that the US and global markets have completely misinterpreted the true price valuations and expectations based on this research.  Simply put, we believe a Denial phase has taken root where investors and traders simply deny and ignore the real potential for future collapse.

I keep pounding my fists on the table hoping people can see what I am trying to warn them about, which is the next major market crash, much worse than what we saw in March. See this article and video for a super easy to understand the scenario that is playing out as we speak.

If you want to learn more about the Super-Cycles and Generational Cycles that are taking place in the markets right now, please take a minute to review our Change Your Thinking – Change Your Future book detailing our research into these super-cycles.  It is almost impossible to believe that our researchers called this move back in March 2019 in our book and reports.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

Subscribers of my ETF trading newsletter had our trading accounts close at a new high watermark. We not only exited the equities market as it started to roll over in February, but we profited from the sell-off in a very controlled way with TLT bonds for a 20% gain. Yesterday we closed out SPY ETF trade taking advantage of this bounce and our account is at another all-time high value. Exciting times for us technical traders!

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

The past few weeks and months have been very interesting to see how the global central banks and governments have attempted to position themselves ahead of this COVID-19 virus event.  We continue to suggest that we are just starting the process of navigating through this potentially destructive virus event.  We believe the sudden onset of the virus pandemic has sent a shock-wave throughout the globe in terms of expectations and valuations that are, just now, starting to become “real”.  Let us try to explain our thinking and how this relates to Real Estate…

Before we continue much further, we suggest taking a moment to review our previous research articles related to the Real Estate market which we predicted the selloff and falling values. Both of these articles were at the top of the Yahoo finance and Google with hundreds of thousands the week we posted them:

Real Estate Crash Predicted Part I – Click Here
Real Estate Crash Predicted Part II – Click Here

The COVID-19 virus event is a global crisis event that is currently in the very early stages of consumer psychological processing.  All types of crisis events prompt some forms of typical human reaction.  We believe the Real Estate market may be the next big asset revaluation event as consumers continue to process the COVID-19 virus crisis and the consequences of this event.

REAL ESTATE CYCLES

Real Estate cycles typically transition through the following phases as supply and demand functions work through the markets.  Pay attention to the middle of this cycle chart.  In the Expansion and HyperSupply stages, once supply peaks and prices somewhat peak/stabilize, a transition takes place in the market where buyers chase premium properties and push price levels moderately higher.  The Recession Cycle is typically a disruptive cycle that is the result of an economic/income disruption.  When people can’t earn enough to satisfy their debt obligations and or provide for their families, then the Real Estate cycle begins to contract.

An event like this, the COVID-19 virus event, would typically start out as a regional/local event.  This did happen as it roiled certain areas of China in late 2019.  Watching how China attempted to manage and hide the extent of the virus explosion within their country was painful to watch.

The Chinese state media was pushing out information and numbers which didn’t match anything seen on the streets and being reported by others within China/Hong Kong.  This “disconnect” and the misinformation presented within this early virus pandemic event is critical to understanding how the world will now deal with this mess.  So, keep in mind, everything was somewhat “clicking right along” in late 2019 and early 2020 as China was fooling the world.

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

AS IT UNFOLDED…

The Chinese New Year celebration fell on January 25, 2020 (Year of the Rat).  Near this time in China, hundreds of millions of people travel “back home” to celebrate the New Year with their families and friends.  As this travel starts typically 4 to 5 weeks ahead of the date of the New Year, China allowed potentially infected people to travel throughout the world before shutting down travel within China on January 23, 2020.  This locked infected and uninfected people into areas within China while the Chinese government began extended efforts to control the virus outbreak.

By early February 2020, the virus had been confirmed in India, Philippines, Russia, Spain, Sweden, the United Kingdom, Australia, Canada, Germany, Japan, Singapore, the US, the UAE, and Vietnam.  In essence, the Chinese lock-down presented a very real opportunity for those that had visited China and left to be “locked into location” outside the quarantined areas within China.  If they were infected or asymptomatic carriers, these people now became source-spreaders.  On February 3, 2020, Chinese President Xi Jinping indicated the Chinese government knew about the virus well before the public alarm was raised – as reported by the Chinese state media.

By Mid February 2020, China had over 40,000 infections and over 900 confirmed deaths related to the COVID-19 virus.  Nearly a week later, near February 19, China reported more than 74,000 total cases and 2,100+ deaths.  By this time, general global panic had already been set up and this is the point of this article – how consumers respond to a crisis event like a virus pandemic. (Sources: www.aljazeera.comwww.businessinsider.com)

The reason we went through all of this detail is to illustrate how the virus event started as a localized event in China, near the end of 2019.  Yet, by early February 2020, less than 35 days later, the virus event suddenly became a global event – panicking the world.  The COVID-19 virus event has now turned into a global economic disruption event that has dramatically reduced most people’s ability to earn an income.  Businesses and individuals will feel the consequences of this event and we believe the economic contraction is just starting. How do consumers respond to an event like this?

In PART II of this series, we’ll continue to delve into the reasoning behind our research and why we believe the Real Estate market will become very risky for investors over the next 24+ months.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

I have to toot my own horn here a little because subscribers and I had our trading accounts close at a new high watermark for our accounts. We not only exited the equities market as it started to roll over, but we profited from the sell-off in a very controlled way, and yesterday we locked in more profits with our SPY ETF trade on this bounce.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

Here are a few of the best videos right now on where the financial markets are going next and how to trade them stress-free and with a trading plan.

This covers the S&P500, bonds, gold, silver, miners, natural gas, and crude oil

WHAT YOU NEED TO KNOW ABOUT THIS POTENTIAL MARKET TOP

KILLER MARKET ANALYSIS ON PREDICTING PRICE THIS WEEK

HOW TO TRADE THE MARKETS, AND WHEN DO METALS GO BALLISTIC?

I have to toot my own horn here a little because subscribers and I had our trading accounts close at a new high watermark for our accounts. We not only exited the equities market as it started to roll over, but we profited from the sell-off in a very controlled way, and yesterday we locked in more profits with our SPY ETF trade on this bounce.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

The past three weeks have been filled with intense drama, incredible highs and lows, political battles that continue to this day, and millions of questions from people throughout the world.  Throughout this COVID-19 virus event and the collapse of the US and global markets, one continued belief has prevailed – the US Fed will attempt to rescue the global markets (again).

Late last week, President Trump announced a task force to evaluate how and when to reopen the US economy and more than US nine states have already committed to a staged reopening process.  COVID-19 virus being what it is, the US is going to attempt to lead the way forward.  This means every resource and every effort will be taken to engage in a proper process to protect our future while battling this virus outbreak.

This was also a pivotal week for the US Stock market. With the US Fed in buying mode attempting to counter the recent weakness in the markets, literally trillions of dollars have poured into the US stock market over the past 5+ days.  The Dow Jones Industrial Average rallied 532 points (+2.2%).  The NASDAQ rallied 581.50 points (+7.06%). The S&P 500 rallied 89.25 (+3.2%).  Obviously, capital is pouring into the NASDAQ faster than the other major indexes and this suggests investors believe in the earnings and future capabilities of technology companies over more traditional market segments.

Continued global economic weakness and shuttered US states will have a chilling result on Q2 outcomes and revenue growth.  We continue to believe Q2 and Q3 of 2020 will be much weaker than investors are expecting and we believe the US Fed has lulled many investors into believing a “deep V bottom” is the most likely outcome.  Over time, we believe the loss of 20+ million working Americans and the destruction of the shuttered global economy will translate into much weaker global market price levels.

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

NASDAQ (NQ) WEEKLY CHART

This NQ weekly chart highlights the real potential for downside risks.  The appreciation in price from the 2016 levels are a direct result of investor anticipation of growth after the 2016 election.  What’s changed is that a major risk to the markets has unraveled more than all the growth we’ve accumulated over the past 2+ years.  Investors should stop to consider the real economic outcome over the next 2+ years before jumping into the Fed-backed Twilight Zone.

As the total scope of the global economic environment continues to shift, it does make sense that certain technology companies may benefit from any type of extended virus event.  Gaming companies, technology suppliers and resellers, certain software companies and a host of streaming and content firms may gain users and incomes over the next 12+ months.  Yet, we continue to believe the COVID-19 virus event may continue to present risks in the markets going forward.

The NY Federal Reserve issues a GDP Nowcast which attempts to translate forward economic GDP outcomes in near-real-time.  The current level for Q1 2020 GDP is -0.4% and -7.9% for Q2 2020.  This suggests the second, and possibly third, quarters could be substantially weaker overall than what we’ve just experienced over the past 50+ days.    Even though the stock markets began to collapse on February 25, 2020 – we really didn’t begin to understand the total scope of the economic contraction until nearly the middle of March (very late in Q1).  Q2 may reflect the complete global economic burden of this virus event and we believe investors are failing to comprehend the total scope of this risk at the moment and how it relates to future earning capabilities.

Weakness in Q2 and possibly Q3 earnings for 2020 could have a shock-wave across many sectors of the US and global markets which we are somewhat blindly ignoring.  Asset values, belief in a “V” type bottom setup, lack of disruption for state and local governments and others seem to continue to be the prevailing attitude.  With the US Fed to the rescue, somehow investors seem to believe the recovery process will only take a few weeks or a few months.

We found this information very interesting in terms of how local governments generate revenues and how the virus event may present a very real 20 to 40% revenue contraction for state and local governments over the next 24+ months.  Based on this data, nearly 40 to 50% of annual revenue to state and local governments may be at risk.  When we consider the 20+ million people in the US that have recently filed for unemployment (nearly 6% of the total US population and 8% of the total working population), we can’t expect a stellar economic output.

S&P 500 (ES) MONTHLY CHART

This ES Monthly chart highlights our expectation that the US Stock market will attempt to establish a deeper bottom in price that may take the form of a FLAG formation setup.  We don’t believe the continued disruption to the global markets will do anything to support the past 3+ week recovery in the US markets.  Global investors will likely end up backing the US as the leader in this recovery, yet we believe the actual bottom in the markets will take place over the next 12+ months and likely complete just before the November 2020 elections.

CONCLUDING THOUGHTS:

Our proprietary modeling systems have reflected the recent strength in the US stock market adequately – yet they have failed to result in any changes regarding allocation into the markets.  For right now, everything stays the same as it was.  We do believe the Fed’s buying will potentially prompt a “false trigger” if the rally continues.  We will assess the trigger when and if it happens in the near future.

Until we get a more accurate understanding of the risks, we feel it is much safer to assume the worst-case scenario going forward.  There is simply no way to paint a positive picture when people throughout the globe are losing their jobs, incomes, and all sense of normalcy.  The reality is that this disruption in the global banking and financial sector is certainly a big one that could last well into summer. If you read this article or watch the video you will understand the magnitude of this market top that looks to be forming.

As of right now, skilled investors are preparing for a potentially deeper price bottom and watching what is happening in the markets with interest – waiting for the right trigger to jump on the next big trend.

I have to toot my own horn here a little because subscribers and I had our trading accounts close at a new high watermark for our accounts. We not only exited the equities market as it started to roll over, but we profited from the sell-off in a very controlled way, and yesterday we locked in more profits with our SPY ETF trade on this bounce.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

Big news out today on CNBC about Gilead drug cured all 125 people from serious COVID-19 conditions within 5 days, This is amazing to hear, stocks are popping today up 3-5% which is to be expected for this type of news but the damage to the financial markets has already been done.

But early data recently published suggests the Banking and Finance sector may continue to get crushed under a massive weight of real losses and exposure to risk in the Derivatives Markets.  As with the 2008-09 Credit Crisis, Derivatives losses extended compound risk factors by 10x to 20x or more for in some instances.  We believe the banking and finance sector may be setting up for a massive implosion if global derivatives implode as leveraged accounts collapse.

Two very interesting news articles that may assist readers in understanding the current Financial market contagion event are:

Bank Earnings Armageddon by TheInstitutionalRiskAnalyst.com

Xi fears Japan-led manufacturing exodus from China by Asia.Nikkei.com

The Chinese/Asian economy is built upon the premise that global demand will continue without interruption over the next many decades.  Additionally, China and Asia have leveraged capital systems and financial functions by deploying a very shadowy measure of lending and banking functions.  We’ve all heard the stories of how collateral-based loans were offered many times over as stock in Copper or other raw materials were simply moved from one location to another to secure loans on the same material.

As with any great Ponzi scheme – it all starts to collapse when investors decide they don’t want to play games any longer.

FEDERAL RESERVE – RETAIL & FOOD SERVICES SALES

These recent St. Louis Federal Reserve charts paint a fairly clear picture that retail and food services sales have collapsed to below levels of 4+ years ago – and this is just getting started.

FEDERAL RESERVE – BORROWER DELINQUENCY RATE

This next chart shows that sub-prime borrower delinquency rates have already peaked above both the 2000 and 2008-09 peak levels.  The current virus event collapse is a completely different beast of destruction than what we’ve experienced before.

This is why we believe the Banking and Financial sectors are about to get hammered over the next 6+ months as a massive credit and debt deleveraging process continues to take place.  Consumers recently displaced from the workforce will suddenly find themselves without the ability to pay their bills and credit card balances.  This is not just happening in the US or select areas – this is happening throughout the world right now.  Banking and Finance are staring into a black hole in terms of just how big and destructive the displacement of consumer jobs/earnings capacity really is.

We believe the recent recovery in the US stock market was a reactionary event prompted by the US Fed stepping in to “stick their finger in the dike” as an effort to thwart the downside price collapse.  When the reality of the situation really begins to settle in about 60 days, banks and other financial institutions are going to have a difficult time explaining losses and exposure to derivatives risks that were clearly evident in March and April 2020.

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

WEEKLY CHART – NASDAQ REGIONAL BANKING INDEX

This first Weekly chart of the NASDAQ Regional Banking Index shows just how destructive the initial downside price move has been.  Even though the US Fed stepped in with a massive $5+ trillion rescue plan, the recovery in this sector has been minor.  We believe that is because most investors understand the true risks in this sector are likely in the hundreds of trillions range with derivatives and leveraged positions.

UCC WEEKLY CHART – CONSUMER SERVICES SECTOR

This UCC Weekly chart shows a bit more of a recovery after the US Fed stepped in to save the day.  Yet, we fully believe a deeper price low is likely to set up as the full extent of total newly unemployed put additional strains on expectations.  Consumers without income can suddenly collapse multiple trillions in credit/debt over a very short period of time.

XLF FINANCIAL SECTOR WEEKLY CHART

The XLF Financial Sector Weekly chart paints a very clear picture of the downside risks current in play.  After a massive initial collapse, a brief sideways recovery has taken place.  Yet the true risk for this sector takes place over the next 24+ months as these newly displaced workers attempt to manage with little or no income and attempt to satisfy debt levels that were acquired expecting pre-2020 income expectations.  New cars, new homes, new credit card debt, new everything purchased on credit has suddenly become the beast that destroys the financial/banking sector.

CONCLUDING THOUGHTS:

Our researchers believe the true scope of this crisis won’t be known for at least another 30 to 60+ days.  The closer we get to the end of Q2, the more likely we are to see real data reflecting real risks in the Banking and Financial sectors.

Until we get a more accurate understanding of the risks, we feel it is much safer to assume the worst-case scenario going forward.  There is simply no way to paint a positive picture when people throughout the globe are losing their jobs, incomes, and all sense of normalcy.  The reality is that this disruption in the global banking and financial sector is certainly going to be a big one that could last many months or years and if you read this article or watch the video you will understand the magnitude of this market top that looks to be forming.

I have to toot my own horn here a little because subscribers and I had our trading accounts close at a new high watermark for our accounts. We not only exited the equities market as it started to roll over, but we profited from the sell-off in a very controlled way, and yesterday we locked in more profits with our SPY ETF trade on this bounce.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

This technical analysis video I put together has a lot of great trading opportunities in it while providing a lot of educational content to help you see the markets and trade in a way that will reduce your risk/exposure when needed.

I use my BAN trading strategy which is I focus on the Best Asset Now and only trade the sector, index, or commodity that has the least risk and most upside potential at the current moment.

I won’t lie, im super picky and conservative so trades are few and far between but as a swing trader, or any trader for that matter, the quality of a trade alert trumps quantity. Watch this video below and see what I provide my subscribers every morning before the opening bell. If you like it, then join us and become a technical trader today!

Before we continue, be sure to opt-in to our free market trend signals 
before closing this page, so you don’t miss our next special report!

I have to toot my own horn here a little because subscribers and I had our trading accounts close at a new high watermark for our accounts. We not only exited the equities market as it started to roll over, but we profited from the sell-off in a very controlled way, and yesterday we locked in more profits with our SPY ETF trade on this bounce.

As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders.  Don’t miss all the incredible moves and trade setups.

I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.

We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.

If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.

Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.