Natural Gas setup for a big move lower

Our proprietary Fibonacci predictive modeling system is suggesting Natural Gas is about to break down below the $4.30 level and move aggressively toward the $3.05~3.25 level.  This could be an incredible move for energy traders and a complete bust for existing longs.

This Weekly Natural Gas chart is showing our Fibonacci Predictive modeling system and highlighting the lower support price targets just above $3.00.  We believe price weakness will break the $4.30 level very quickly and drive prices well below the $3.40 level – very likely towards support near $3.25 over the next few weeks.

 

Our Advanced Adaptive Dynamic Learning predictive price modeling system is showing similar results.  It suggests a major price anomaly is setting up in Natural Gas that will prompt a massive downside price move over the next 2~3 weeks before an equally incredible price recovery takes place.  The total of this predicted price swing is nearly $2.00 ($1.00 down and then $0.85 back to the upside).  If this move takes place as our modeling systems are suggesting, this will drive a massive “washout move” pushing the long traders out of their positions on the way down and then pushing a massive short squeeze on the way back up to near $4.00.

This is the type of price swing that makes for incredible success stories if traders can play this move properly.  Pay attention to the fact that the lower predicted levels of our ADL system (shown near $3.20) may not be reached in this downward price swing.  Our predictive modeling system is suggesting these are the highest probability price outcome based on its internal price and technical analysis.  Still, when one takes a good hard look at this chart, it is easy to see the “price anomaly” setup where the current price of Natural Gas is nearly $0.80 above the currently predicted price levels (shown as YELLOW DASHES) and how the ADL Predictive modeling system is suggesting a big downward move is about to unfold.

Want to keep receiving incredible trade setups like this one and learn how our research team and specialized price modeling systems can help you find and execute better trades?  Then please visit Technical Traders Ltd. to learn more about our services and tools.  We have been helping traders find and execute better educated trading decisions with our specialized tools and research for years.  Visit www.TheTechnicalTraders.com/FreeResearch/ to read all of our most recent public research posts and to see how we’ve been calling these market moves over the past few months.

Chris Vermeulen

 

 

HOW SUSTAINABLE IS THE MOVE INTO SAFE HAVEN ASSETS?

Chris Vermeulen, Founder of The Technical Traders looks at the recent move into safe haven asset, gold, USD, and treasuries. We assess the overall strength of this move and most importantly how long it could last. With it seems the majority of investors now worried about a recession there are some things we can learn from history about how to trade around it. View related posts on: gold, Treasuries, US dollar, Yields

Click download link to listen on this device: Download Show

Is a deleveraging event about to unfold in the stock market?

As 2018 draws to a close and the global equities markets continue to find pricing and valuation pressures driving prices lower, a few questions come to mind for all investors/traders – Is a deleveraging event about to unfold?  What will it look like if it does happen and how can I protect my investments from such an event?  This research article is going to help you answer those questions and should help to resolve any lingering questions you may have regarding the true nature of this market rotation and volatility.

Our research team at www.TheTechnicalTraders.com has been digging through the data and charts in an attempt to identify key elements of this recent price move.  We are starting with our Monthly Adaptive Dynamic Learning Cycles chart of the ES (E-mini S&P).  As you can see from this chart, our ADL Cycles modeling system is showing a deep downside price rotation is likely to unfold over the next 8~12 months.  One thing to remember about this chart is that these cycles and the width of the future cycle peaks and troughs are NOT indicative of price target levels.  Therefore, this downside move is NOT suspected of reaching price lows near 1000 or 1200.  These cycles are representative of a magnitude of cycle events.  In other words, this current cycle, downward, is expected to be a major cycle event that establishes a major price bottom somewhere near the end of 2019 or early 2020.

We urge traders to understand the scope of this cycle event.  Look at the previous cycle events on this chart.  Numerous downside cycle events have taken place over the past 10+ years that represent somewhat similar down-cycle price moves.  The most recent was in 2015~2016.  This event represented a moderately deep down-cycle even that equated to a 300~400 point price rotation in the ES.  If the current cycle event is relative in scope to the last, then this current down-cycle event will likely result in a 600~800 point price rotation, and we have already experienced a nearly 300 point rotation in the ES.  This would suggest a potential price bottom near 2100~2300 on the ES if the scale and scope of the current cycle event are relative to the previous down-cycle event.

 

This next chart highlights key time/price cycles on the SPY Monthly chart to help us keep the timing of these events in perspective.  As we have suggested, above, a major down-cycle even may be unfolding that results in a deleveraging even across the global markets.  If this does, in fact, take place, there are a number of elements that will likely play out.  First, currencies will fluctuate dramatically as deleveraging takes root.  Capital will seek out and identify the safest and most suitable returns by rushing away from risky markets and into safer markets.  Additionally, a prolonged deleveraging of global equities may take place where valuations are reduced as capital attempts to establish a balance between expectations and true market value.  Overall, this is a very healthy event for the markets as long as it does not result in a total collapse of price, as we saw in 2008-09.

This SPY chart highlights three key components of the markets current setup.  First, the RED LINE (a 2.618 Fibonacci extension from the 2015-2016 price rotation at $266.50) is acting like a strong support level in the markets.  This level, along with the 2018 lows near $254.78, are important levels that we are watching to determine if any further downside price activity is unfolding.  As long as these two levels are not breached to the downside, we can confidently say that the upside trend is still intact.  Second, the two BLUE price channels, which originate from the 2009 market bottom, establish a powerful upside price channel that will act as critical support should price reach near the lower level of this channel.  This means that any downside price rotation will likely find solid support near $232.00 or higher.  Lastly, the vertical time/price series cycles are suggesting that May and Oct of 2019 are likely to prompt significant price reversal patterns/setups.  This helps us to understand that any potential breakout moves (up or down) will likely reach some critical inflection point, or reversal points, near May and October of 2019.

 

Next, we fall back to our Custom US Market Index chart on a Monthly basis.  This chart, again, shows the support level originating from the lows of 2009 in a heavy BLUE line as well as two price channel levels that represent current price ranges.  The first thing we want you to focus on is the breadth of the current rotation within the regression channel on this chart (the red/blue shorter price channel).  Currently, the price is within this standard regression channel and has yet to break the longer-term, more aggressive, upward price channel.  Additionally, we can see from this chart that the recent price activity is still measurably above the 2018 price lows near 374.12.  Secondly, the Pitchfork channel, originating from the 2009 lows and spanning the range of the 2015~2016 price rotation, provides additional confirmation that we are still well above the middle and lower areas of this price channel.  Even if the current price did fall by another 4~8%, the price would still be within the normal channel levels of this extended upside price channel.

So, when we consider the scale and scope of this current downside price rotation, we have to be very aware of the real expectations of the market.  Yes, it looks frightening when we see it on a Daily or Weekly chart.  But when we consider the real reality of the long-term perspective, we can begin to understand how the price is reacting to the recent upside acceleration since 2017.

 

Lastly, this Daily ES chart is showing what we believe is the most important data of all and why all traders need to understand the risks involved in this rotating market.  First, this chart shows our Adaptive Dynamic Learning Fibonacci price modeling system and the results of this chart are clear to our team or researchers – although it might be a bit cluttered to you.  So we’ll try to explain the basic components of this chart for you.

The heavy RED and GREEN levels that are drawn above and below the price action are the Fibonacci Price Trigger levels.  These indicate where and when we would consider a new price trend to be “confirmed”  As you can see, the most recent “confirmed” trigger happened on Oct 10 with a huge breakdown of price confirming a bearish price trend.  Since then, these Fibonacci Price Trigger Levels have expanded outside price as volatility and price rotation has also expanded.  This indicates that price will have to make a bigger push, higher or lower, to establish any new confirmed price trend based on this modeling system.

There are two heavy YELLO lines bordering recent price rotation on this chart that help us to understand a rather wide flag/pennant formation appears to be forming within these rotation/channel levels.  For example, the absolute low of the current bar touched this lower YELLOW level and rebounded to the upside very sharply.  It is very likely that a washout-low price pattern executed today that may provide further price support near 2626 in the ES in the immediate future.  Either way, the price will have to exit this YELLOW price channel if it is going to attempt any new upside or downside price trends.  As long as it stays within this channel, we have a defined range that is currently between 2626 and 2800.

Lastly, the LIGHT BLUE oblique has been our estimated critical support level in the ES since our September 17 market call that a 5~8% downside price rotation was about to hit the markets.  This level was predicted by our ADL predictive price modeling system and has been confirmed, multiple times, by price over the past few months.  It is very likely that this level will continue to act as major support going forward and will be the last level of defense if price attempts a downside price move.  In other words, as we stated above, 2600~2680 is a very strong support range in the markets right now.  Any breakdown below this level could push the markets toward the 2018 price lows (or lower).  As long as this level holds, we could see continued deleveraging in the markets as US Dollar, Energy, Commodity, Currency or global market price weakness while the US markets attempt to hold above the 2018 lows.

 

Pay very close attention to our Fibonacci price modeling and US Custom Index charts, above, because we believe these charts paint a very clear picture.  Yes, a deleveraging event is likely already unfolding in the global markets.  It has been taking root in various forms over the past 12+ months in all reality.  The US markets are continuing to shake off the downside pricing pressures that we’ve seen in other global markets, and this is likely due to the “capital shift” event that is also unfolding throughout the globe.

Our advice for active traders would be to consider drastically reducing your trading sizes as well as pare back your open long positions if you are concerned about a market breakdown.  Our modeling systems are suggesting we have many months of rotation within the market to reposition and evaluate our plans for future success.  Unless the 2018 lows and the multiple critical support levels we’ve highlighted are threatened, we believe this rotation is nothing more than standard price rotation with acceptable ranges (see the charts above again if you have questions).  Yes, there is still concern that a price breakdown may unfold and we are certainly seeing a deleveraging event taking place.  We are not calling for a price collapse at the moment, and we have explained the reasons why we believe our research is accurate.

Use the best tools you can to assist you, just as we do for our members.  The only thing you can do in a situation like this is taking factual data, evaluate the true price data and make an educated and logical conclusion about the markets.  If you want to learn how we help our clients find and execute better trades and how we are preparing to make 2019 an incredibly successful year with our members, then visit www.TheTechnicalTraders.com and see what we offer our members.

Chris Vermeulen

Waiting for Gold to Erupt

As we are watching the US and global markets rotate dramatically lower over the past few days, we have been advising our members that we believe this rotation is an over-reaction to economic impetuses and trade issues – not a massive downside price break.  Overall, some of our longer-term technical indicators are currently bearish, as one would think technical indicators would react to price activity and trends.  Our ADL, predictive modeling system, is still suggesting upside price activity and we believe our research team has hit on something that helps to put this end of year turmoil into perspective.

 

Where is the fear?  The news cycles had indicated that much of the “big money” investors had already exited the markets prior to Nov 1.  This leaves the retail investors and the market-makers to manipulate the markets.  Volatility has been much higher than the previous two-Quarters average and volume has been moderately strong in the ES.  This leads us to believe that quite a bit of retail and foreign investor activity has been taking place in the US Equities markets.

Yes, there are concerns arising from the likes of Apple, Caterpillar and other blue-chip symbols.  These arise from some concerns regarding future earnings capabilities in the face of increasingly complicated trade and global market conditions.  Yet, we have yet to see any of this fear fall into the normal outlets – GOLD.

When we take a look at monthly gold using one of our custom pricing indicators, we are seeing very moderate upside gold price activity over the past 60+ days.  All of this is taking place near a very tight pricing channel, setting up as a pennant or flag formation, that should prompt a bigger move in Gold in 2019.  But as of right now, nothing is evident to show that a massive amount of fear has entered the markets and is driving capital into the traditional safe-haven investment.

 

Therefore, we still believe this downside move is more technical in nature and will likely end near the 2620 level on the ES as support continues to hold near recent lows.  As we have been suggesting for many months now, we continue to believe this is the time to establish small long positions near these support levels in preparation for a broader market recovery near the end of December and into early 2019.

Please take a minute to visit www.TheTechnicalTraders.com to learn how we can help you find and execute better trades in 2019 and how we can help you navigate these market moves more clearly.  Our research team is dedicated to helping you understand these markets and find greater success.  Join our other members in making 2019 a fantastic year.

Chris Vermeulen

Renewed Economic Optimism Will Hold Metals Near Recent Lows

The US stocks are already up 1.5%, and gold 1.1% or more on news originating from Argentina from the G20 meeting.  The commitment from the US and China to restore talks and hold off on new trade tariffs for a 90-day period of time allows the markets some breathing room and some time to digest future expectations.  Combine that with the US Fed talking about taking a more dovish approach to rates and that rates are near “neutral” and we have a perfect setup for the global equity markets to rally back towards recent all-time highs.

This type of equity opportunity will push the metals markets towards recent price ranges/lows with almost no attempt at upward price activity.  In our opinion, we are looking for the next 14 days to be quite explosive in the equities markets and quite mute in the metal’s markets.

Gold will likely stay below $1250 for the next 10~14 days as a renewed global equities rally takes hold.  This is an excellent time to establish new long positions as our predictive modeling systems are suggesting that the metals markets should start to move higher near the end of 2018 and into early 2019.

Silver will likely stay below $14.40 for the next 10~14 days with the possibility of falling below $14 on a washout low price rotation near Dec 10th or 11th.  This would be an excellent time to look for and set up positional long trades in metals miners or SIL in preparation for the late December and early Jan price pop that our predictive modeling system is suggesting will happen.

 

The initial upswing price activity in the metals will push prices above recent price peaks ($1260 for Gold and $15.00 for Silver).  Our modeling systems suggest this price move will stall in late Jan 2019 and continue to stay muted till April or May of 2019.  At that point, a new upside price advance will push metals prices much higher.

This may be the last time you see prices near these lows, so be aware of the risks that are ahead of the markets.  Remember, the EU and the Brexit deals will likely play a role in the rise of the metals prices over the next few months, so take advantage of these setups before they vanish.

Follow our analysis to stay on the right side of this move.  Our predictive modeling systems have been calling these market moves 30~60+ days in advance.  Visit www.TheTechnicalTraders.com to learn how we can help you find and execute better trades.

Chris Vermeulen

US and Asian Markets POP on G20 News

This weekend could have turned out extremely positive or extremely negative for the global markets.  It appears the news about the US and China adopting a 90 resolve to prevent escalation of trade issues in an attempt to foster a more suitable outcome for global trade was received by the global equity markets with great success.

The US markets are up well over 1.5% on a massive price gap higher as markets opened Sunday night.  This huge gap above the longer term Moving Average may be an indication that the US markets will attempt to rally to new all-time highs before the end of this year as we have been predicting for the past 50+ days.

 

What we need to see is the target price of 2842 being reached where we expect a bit of consolidation before price attempt to rocket higher towards new all-time highs.

At this point, shorts will be covering positions quickly over the next few days as they were caught on the wrong side of this trade.  A massive short squeeze rally could unravel as a massive upside price move over the next 10~14 days ending just before Christmas 2018.

Follow our analysis to stay on the right side of this move.  Our predictive modeling systems have been calling these market moves 30~60+ days in advance.  Visit www.TheTechnicalTraders.com to learn how we can help you find and execute better trades.

Chris Vermeulen

PART II – Global Economic Perceptions Are Shifting

The continued efforts of our research team to identify and quantify the possibility that the capital shift which has taken place over the past 18+ months may be shifting to other assets is in the interest of all global investors.  Is there a new, more opportunistic investment that will take away from the capital that has been rushing into the US equity markets over the past 2+ years or is the capital shift towards the US equity markets still intact?  These are the questions before us and these are the questions that will determine if the US equity markets continue to rally or continue to top out.

In part one of this research article, we began to explore the aspects of our research that we believe are key to understanding the future of the global capital shift phenomenon. In short, the capital shift is the movement of investment capital from one asset to another asset (from country to country, from one form to another or from one asset class to another) in an attempt to seek out and secure the best, safest and most secure ROI on the planet.  We believe this process has been a driving force behind much of the global markets success or malaise over the past 4+ years (actually starting near 2013 when wealth in China and capital controls forced investors to seek outside investment sources).

Additionally, in part one of this research article, we highlighted the traditional range channels of the US equity market and how these ranges have played an important role in identifying price support.  Currently, the US market is sitting at the middle support level of historical ranges after retracing from recent highs.  This is far from the “crash moment” that many are predicting.  The reality is that this is more of a reversion to support in a strongly upward sloping price channel.

Let’s start out by asking the question “what will happen to Asia/China over the next 2+ years and what will happen with the capital from Asian investors?”  Should we believe that China/Asia capital markets are healthy and robust for sufficient ROI in current form or are these investors seeking outside sources for healthier and safer ROI solutions for their capital?  And what should we expect over the next 18~24+ months beginning in early 2019?

Our Custom China/Asia Index has clearly shown that prices have reflected a downward trend since the top in early 2018.  This price decline has already breached the 50% Fibonacci retracement level and appear to be attempting a deeper price move lower.  We believe the banking/credit/expansion issues in Asia/China are related to this capital contraction and won’t abate until the majority of these issues are resolved.  In other words, there is far too much uncertainty in this area of the investment world to support a change in investor sentiment.  Yes, everyone wants to see Asia/China settle these economic issues and become poised for a stronger growth model going forward, but everyone is also waiting for the next shoe to drop to detail these expectations.  Housing, Trade, Credit Markets, Banking, Global Objectives, Regional Issues, Manufacturing??  Pick one and wait a few months for some news.  At this point, there is so much news originating from China/Asia that is pointing to a broad market correction that we are simply waiting for the next news item to hit.

The One Belt, One Road project is another concerning aspect to what China/Asia is capable of achieving.  This project is incredibly diverse – spanning dozens of nations/countries.  The reality of this project is that uncertainty abounds from all angles when one considers the routs this project is taking and the global uncertainties that originate from many of the areas on these routes.  Tehran, Kenya, Pakistan, Sri Lanka, Kuala Lumpur, Jakarta??  Sure, the land and sea transport solutions offer a very interesting and dynamic shift for economic growth, but this is all based on the assumption that wars, graft, politics and local/regional tensions don’t flame up to halt or block any of these routes and the future success of this project.

Already, Malaysia has terminated multiple projects related to the One Belt, One Road objective because of corruption and fraud against the Malaysian people.  We are reading news stories of Pakistan and other nations questioning the deals made with China in support of this project.  In our opinion, the land routes are much more fragile than the sea routes.  Ships can change course and head to another port if needed.  Train tracks are not easily relocated and shifted around to address regional issues.

 

Additionally, the global commodities pricing index (from Bloomberg) is suggesting that global commodities have reached a peak and are declining.  This puts pricing pressures on larger global projects like the One Belt, One Road project because profits from mining or manufacturing raw commodities and secondary commodity products are dramatically decreased.  This would also suggest that suppliers and manufacturers may be experiencing an economic stall in terms of growth expectations over the next few years.  If the commodities futures prices are declining, then global investors are not seeing any aspect of the global markets that would relate to higher demand, manufacturing or increased general consumption/use of global commodities.

 

Watch Crude Oil for signs of life in the economy.  The price of Oil is often a very good gauge of economic activity and expectations in terms of freight, shipping, consumer activities and more.  Oil has seen a very dramatic selloff over the past 2 months and is nearing levels that should be concerning for producers.  Oil price levels below $40 ppb could be a game changer for much of the Arab world.

Our conclusion is that until global investors see the true opportunity for Asia/China and see real strength in the global commodities markets, risks continue to outweigh opportunities in much of Asia/China.  Therefore, we believe the capital shift phenomenon originating from this region will continue to source more suitable returns in other global investments.  Should the commodity index break down or the Chinese/Asian markets collapse further, we believe the push for outside safety will increase.  This may be likely near the start of 2019.

Want to know what our predictive modeling systems are suggesting will happen in 2019 and beyond?  Are you searching for a dedicated team of researchers that can help you understand where opportunities are and how to find great trades?  Take a minute to visit www.TheTechnicalTraders.com to learn how we can assist you and help you find greater success.  Want to see how we’ve been calling the markets, visit www.TheTechnicalTraders.com/FreeResearch/ to review all of our public research posts.  2019 and 2020 are setting up to be incredible opportunities for investors – get ready for some incredible success with these bigger price swings playing out.

Chris Vermeulen

Global Economic Perceptions Are Shifting – PART I

Our researchers spent a good portion of the holiday weekend researching a continued capital shift that is taking place in the US equities markets and throughout the global market.  Over the past 20+ months, a massive capital shift has taken place where investment capital fled weaker global economies and rushed into the US stock market because of a tremendous value opportunity that existed at that time.  Technology, Biotech and many others equity sectors were skyrocketing – in some cases 2~3% a month.  This ROI, along with the benefit of a stronger US Dollar, created a very unique environment where foreign capital could rush into the US markets, land pretty much anywhere and become relatively safe from foreign risks/devaluation.

Yet, over the past 45+ days, the US equity markets have declined dramatically and our researchers wanted to investigate if this capital shift dynamic had abated or ended recently.  This could be a very important question for investors to understand because the most to safety for capital is one of the most critical functions of capital preservation.

Capital operates under the premise that certain risks will be allowed as long as ROI is sufficient to offset those risks.  Capital tends to move away from hostile environments and towards environments that are stable and capable of generating returns with limited risks.  The only time capital rushes towards high-risk returns is when managers become greedy with their client’s money.  Yes, these types of returns can be tremendous when there is little risk, but these high-risk returns often result in “unknowns” that can be catastrophic for investors (think Greece or Puerto Rico).  Overall, far greater capital is deployed in more traditional investment sources that are lower risk and produce lower ROI as a means of supporting long term objectives.

The question before our research team is “has the capital shift that we believe has taken place over the past 18+ months changed direction or changed focus and how can we profit from this dynamic?”  It is our believe that capital is still searching for the safest and most capable ROI on the planet in comparison to global economic and currency risks.  Has the economic environment changed so much that capital is now searching for new sources of safety and return?

Our researchers focused on four key aspects of the global economy in an attempt to answer these questions :

_  China/Asia Future Economic Expectations/Realities

_  Europe/EU Future Economic Expectations/Realities

_  Arab/Russia Future Economic Expectations/Realities

_  US/North America Future Economic Expectations/Realities

 

By focusing on these different regions of economic power and capital, we believe we can attempt to develop a better understanding of where capital will find suitable investment environments and stability over the next 12 to 18+ months and better understand how capital will be deployed in the future.

The new cycle is full of concerning headlines from all over the planet.  Russia and Ukraine appear to be headed into a conflict.  Turkey and Saudi Arabia have already entered a war (of sorts) over the Jamal Khashoggi murder with could conflate into broader issues for Iran, Syria, Russia, the US, and many other nations.  China is experiencing an economic slowdown that could result in a populous uprising if conditions don’t improve soon – as we are starting to see in Hong Kong.  Regions of Europe are already cracking under a severe banking/credit risk scenario with little to no hope of support from the EU.  And thousands of migrants are rushing the US border attempting to flood into the US illegally as they feel it is their right to invade a nation that is offering entitlements to all invaders.  If we step back and really consider all of this, the world certainly appears to be unraveling before our very eyes.  The fabric of society that was in place 20+ years ago seems to be tearing apart more and more each second.

As long as the US Dollar continues to strengthen above $92 and Gold/Silver continue to form a deep price base (as we recently suggested here: https://www.thetechnicaltraders.com/metals-moving-in-unison-for-a-massive-price-advance-part-ii/) we believe the US equity markets will quickly find support near current lows and attempt a new price rally that should push prices back towards new price highs before the end of January 2019.  Take a look at this Weekly chart of our Custom US Equity Market Composite Index.

Although the recent price decline has been dramatic and concerning, the reality of this price correction is that it has dropped to the middle level of longer-term support originating from the 2012 to 2016 price range.  When we take a very long-term view of the markets, the middle (green area) of price rotation has continued to act as resistance and support for price over the past 2~3 years.  In 2015~2017, this area acted as resistance.  In late 2017 and early 2018, the US equity markets began a dramatic acceleration that resulted in this same area becoming support for the price (seen in Feb 2018).  Overall, this recent price decline is likely a result of the US Fed prompting longer-term concerns and the US elections prompting some levels of uncertainty in the markets.

How will investors digest the remaining 30+ trading days for 2018 and early 2019 in light of this retracement and new price valuation?  Will these price levels be viewed as advantageous buy levels of will further pricing concerns prevent investors from pulling the trigger?  We’ll continue our research and attempt to more clearly illustrate our findings in the next part of this multi-part research article.  Right now, think about how the global markets are set for the next 30~90 days of trading action and think about what you believe will be the likely outcome of the new year (the end of the Christmas season, the start of a new year and the continued shifting global economic headlines).

We believe 2019 and 2020 will be incredible years for skilled traders with big price swings and fantastic opportunities for traders.  Please take a minute to visit www.TheTechnicalTraders.com to learn about our research team and how we can assist you in finding great trades.  We have been calling these market moves with incredible accuracy over the past 18+ months because of our proprietary research tools and skilled researchers.  Try our services and see for yourself how we can help you become a better trader. Stay Tuned for Part II

Chris Vermeulen

Bitcoin Crashes Over 50% From Recent Highs

Crypto enthusiasts were crushed over the Thanksgiving holiday when a fight over Bitcoin Cash and very thin liquidity prompted a massive price breakdown from recent highs.  This downside move reflects a true price breakdown where Bitcoin bulls have to rethink their future strategies.

Back in October 2018, we warned that price MUST rally above the support level near $6986 in order for any future upside advance to take hold.  The following week, we saw a massive price rally that lasted only a few hours and trailed off back below the $6986 support level.  While we waited to see if any future price move would prompt a rally above this level, the Bitcoin price levels continued to congest.

The breakdown move over the past two weeks has been massive and hit our first target of $4000 as expected.  From the recent highs, the downside move totals -52.81% so far.  Our research team believes true support is near $2995 – a further -25% lower from current levels.  This equates to a massive -65.85% decline in the past 40+ days.

There may be an opportunity for fresh long trades near the end of this year.  We’ll alert you to any opportunities we see in the crypto-currencies as they set up.  Right now, we would warn Crypto longs and enthusiasts to be very cautious of any further breakdowns in price.  If the $2995 level does not hold as support, we could very easily the $1860 level before the end of January 2019.

Please visit www.TheTechnicalTraders.com to learn more about how we can help you find and execute better trades.  Our research team and proprietary price modeling systems continue to deliver success for our clients and members.  We target selected sectors and trades for our members and deliver daily video analysis of most of the major markets to help our members stay ahead of market moves.  Learn how we can help you find greater success in 2019 and beyond.

Chris Vermeulen

Metals Moving In Unison For A Massive Price Advance: Part II

As we continue to explore our custom research into the metals markets and our presumption that the metals markets are poised for a massive price rally over the next few months/years, we pick up this second part of our multi-part article illustrating our research work and conclusions.  If you missed the first part of this article, please take a minute to review it by before continuing further (Link to Part I).

We left off in Part I showing a number of supply and demand components and briefly highlighting our newest research using a custom Gold/Silver/US Dollar ratio index.  Our attempt at finding anything new that could help us determine the future outcome of the metals markets and to either support or deny our future expectations that the metals markets are poised for a massive price advance was at stake.  This new research would either help to confirm our analysis or completely blow it out of the water with new data.  Let’s continue where we left off and start by showing even more data related to our new custom metals ratio.

This Monthly chart showing our custom gold pricing ratio and the correlative price of Gold illustrates a number of key features.  If you remember from Part I, the current ratio level (the Blue Area chart) is near the top of the Upper Boundary level (0.80 or higher).  Whenever the ratio level enters this Upper Boundary level, it typically only stays there briefly before falling towards the Lower Boundary level.  We’ve highlighted what we believe to be key elements of this type of ratio/price reaction.  On the chart, below, we’ve highlighted every major ratio level decline from near the Upper Boundary level and the associated reaction to the price of Gold as well as the indicator reaction near the bottom of the chart.  With each instance, we can clearly see that price advanced, in some cases dramatically, as the ratio level declined from the Upper Boundary towards the Lower Boundary.  The biggest move occurred between 2002 and 2012 where two of these ratio rotations occurred.

Near the right edge of this chart, we can see that the ratio levels have already started to decline from recent peaks. We believe this could this be the start of a broader ratio level decrease that prompts a massive price rally in the metals markets.  We believe this ratio swing could be accelerated by rotation and volatility within the US Dollar price and increased demand from Investors over the next 4~6 months.

Again, this Monthly chart paints a very big picture – planning many years in advance of this move.  We believe this new metals market rally is setting up to be something that Gold traders have been thinking about for decades – a potential of Gold reaching $5000 or higher in a dramatic price rally that correlates with broader global market events.  We don’t know what those events are at the moment, but we could certainly guess as to the nature of their origination.

 

Our research supports our opinion that the metals markets are dramatically underpriced in relation to global risk and potential future events.  The only thing, in our opinion, that could prevent a new price rally from forming over the next 6+ months is a continued malaise in investor sentiment or continued strength in the US Dollar.  If either of these two components continues for any length of time, the price of Gold and our custom ratio will likely continue to base near current levels or slightly lower.

Our expectation is that currency issues as well as rotation or some weakness in the US Dollar will likely prompt an impulse rally in Gold where prices rally above $1300 before April 2019 and form a price base for the rest of the expected rally.  Once the conditions ripen within the market and investors begin to pile into the long gold trade, the ratio will reflect this move and demand from the investor side will drive prices higher with the expectation that some type of crisis event cycle is about to unfold.

This next Monthly Gold chart shows what we believe will be the initial impulse move higher (towards and above $1300) before the rally really starts to gain speed.  A rotation above $1300 would establish a new price base near or above recent highs and start the accumulation by Investors – driving the demand side of the equation.  This move would also push the ratio a bit lower in support of our expectations.

This Monthly Silver chart clearly shows the extended opportunity for skilled investors ahead of this move.  We believe Silver is one of the most undervalued investments on the planet right now and that our analysis supports a longer-term view that Silver could reach the $40 to $50 level very quickly if the events we suspect are unfolding actually do unfold as we are suggesting.  This would equate to a 280%+ swing in price before an even bigger move higher unfolds.

This Monthly Platinum chart shows the pricing pressures over the past 5+ years that have plagued the metals markets.  If you were to take a look at the custom metals ratio chart near the top of this article, you would see that this pricing pressure is related to a number of key factors – most of which relate to lack of investor demand and lack of true price exploration (rotation of the ratio levels).  In other words, price levels in the metals markets have been operating in a very narrow “void” or any real price rotation or exploration.  We believe this environment is about to end and we believe the continued “price malaise” will end with a massive impulse move higher.

You can see from this chart we expect Platinum to rally to near $1150~1200 in the initial impulse move, then form a base before a further price advance.

In conclusion, if our longer-term analysis is correct and prices do begin to move higher with a shift in Investor sentiment and a renewed pricing advance supported by US Dollar or foreign currency weakness, our researchers believe $2456 and $3016 levels in Gold could become prime upside price targets.  To put that in relative terms, this would be a 200% to 246% price advance in Gold.  One could expect Silver to advance to near $40 and $50 which would be a 278% to 348% price advance.  Depending on the scope and scale of the event cycle that unfolds, these levels could be considered conservative targets for upward price moves.

Please keep in mind that this research post is very long-term in scope and expectations.  This is not going to happen next week or even over a few weeks.  This is going to be years in the making and it could change how you adapt your investment styles over the next few years.  Our efforts to bring this advanced research to you is our attempt to alert you to a pattern that is unfolding in the metals markets that could provide you with a huge opportunity for future success.  Once this pattern starts to unfold further, expect the global stock markets to start reacting to this new “fear element” and prepare to adjust your trading styles accordingly.

We believe you won’t find a better team of researchers, traders and analysts than with www.TheTechnicalTraders.com. Our proprietary research, price modeling systems, and predictive analysis tools help to keep our members well ahead of the market with each turn.

Chris Vermeulen