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Technical Analysis Points To Key Reversal Of Global Markets

Recently, we received a number of email messages and comments regarding our recent Bitcoin article and how we attempted to explain the market trend/technical analysis.  It appears we were not making our interpretation very clear for our friends and followers.  This article should help to clear up our interpretation of the major market trends and our advanced technical analysis tools and utilities.

As purely technical traders, there are certain things we want to make clear.  First, we do pay attention to what is happening to the fundamentals and global economic data when it posts.  We’ve authored many previous articles stating our belief that “capital is like a living/breathing entity which attempts to survive (generate ROI with little risk) in various global market environments”.  In order for us, as technical traders, to identify real opportunities for superior trades, we must be aware of what is happening in the “environment” that surrounds us.

A perfect example is a recent collapse in oil.  We continue to read articles of how thousands of traders believed super-low oil prices were a GIFT and these traders piled into long trades expecting oil to rebound higher.  This happens when technical traders fail to understand the environment in which the instrument is trading within.  At this time, the supply side for oil vastly outweighs the demand-side – so the environment is skewed towards much weaker price activity.  The chance that any moderate price recovery would take place is minimal until the supply glut is diminished.

One of the easiest ways to think of a truly technical trader is that we don’t care if the price goes up or down, we just care that our technical triggers and indicators present clear opportunities that are superior to more traditional methods of trading.

To accomplish this, we believe we must understand the environment in which we are trading and the technical conditions that are present within the charts.  Technically, the price may be going up within a defined bearish/downtrend. This does not mean the upside price move is a technically valid “trade trigger”.  The opposite may be true for a move down in a bullish trending market.  Without proper confirmation of the overall technical bias, environment, and shorter-term technical triggers – one might as well throw a dart at a wall and hope for the best.

In our view, we issue many published research reports for our friends and followers to read and review every week.  We show both bullish and bearish potential outcomes and depending on which way the market breaks we will execute trades in that direction. What we do not do, is trade based on forecasts/predictions. Instead, we follow the price.

Our interpretation of the technical triggers, economic data, forward expectations, and other setups are designed to help you learn how we conduct our research and to help you find opportunities in the markets.  Our members receive this same research and more – they receive our hand-selected trade triggers.  These are the best technical setups/trade triggers known as BAN Trades (Best Asset Now) so we can find that provide superior opportunities for skilled traders.

Before you 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 & signal!

This chart, below, shows our historical results for the past 2.5 years.  You’ll notice that we do sometimes take losses – yes.  You’ll also notice the consistency of the profits – yes.  We hope you’ll also notice that we work very hard to make sure our member’s success is the first priority in everything we do.

2020 has been a slow year for overall portfolio gains simply because of the market crash and extreme volatility. My #1 goal is to trade when risk is manageable, and the market is predictable. Don’t get me wrong, we have made money on the SPY, over 20% in TLT, 9.5% in GDXJ, and yesterday we locked in 11% on natural gas, so we are trading. But position sizes are small in comparison to our overall portfolio value so we don’t get oversized portfolio growth. When indexes, sectors, and commodities are moving 10-90% a day, it’s a time when position sizing becomes curial for survival.

You will not notice the market crash this year had no impact on our account because we did one of the best trades during the unexpected and unpredictable crash, we moved to 100% cash. Our results are based on a $20K account and over the past 2.5 years we are averaging 33% ROI with very little drawdowns.

Now, back to technical analysis…

Our research team believes the markets have set up a massive downside price advance (creating a much deeper low that confirms Fibonacci price theory and aligns with our Fibonacci Price Amplitude Arcs), which sets up a very unique technical pattern.  Until the price is capable of establishing a series of new higher-high points through consecutive upside price advances AND until the Weekly and Monthly charts confirm a new high price breakout – technically speaking, we’re still in a bearish price trend.

WEEKLY S&P 500 (SPY) CHART

This Weekly SPY chart, below, shows you three key technical factors that tell us there is a greater risk of a breakdown in price than any upside price trend continuation…

A.  The recent low/bottom price level broke below the December 2018 low price level (new lower low).

B.  The GREEN ARC price level is a massive 1.618 Fibonacci Price Amplitude Arc that suggests massive resistance exists at this level.  Price moving above this level then falling back below it suggests a “scouting pattern” type of event took place and FAILED.

C.  Recent price activity has rallied from recent lows too, again, reconfirm the GREEN ARC resistance level.  We believe this Fibonacci Price Amplitude Arc will present a major price ceiling as Q2 and Q3 economic data pushes forward – driving the price lower over time and eventually targeting the RED support level near $208 in July or August.

You may remember that we’ve been suggesting a bottom will not complete until sometime after July or August 2020 in previous research posts.  Now you know where we derive these projections and expectations, we use technical analysis and our advanced predictive modeling tools to “see into the future”.  Believe it or not, we’ve already mapped out SPY price activity 10+ years into the future.

WEEKLY TRANSPORTATION INDEX (TRAN) CHART

This TRAN Weekly chart also helps to confirm our technical analysis research.  We are deploying the same types of technical analysis tools on all of these charts to show you how our research team attempts to identify trends and opportunities.  You can see the heavy LIGHT RED Fibonacci Price Amplitude Arc near the peak in February 2020.  This Arc represents a massive price resistance channel.  You may also notice the thinner ORANGE Fibonacci Price Amplitude Arc that touches recent lows?  This arc acts as Support in its current form.

Our proprietary Adaptive Fibonacci Price Modeling System is drawing a CYAN projected target level from recent lows where the heavy CYAN line is displayed on this chart.  Additionally, a previous BLUE target level is also displayed on this chart which originated from the recent PEAK in February 2020.  Now, pay attention to where the TRAN price has found recent resistance and stalled…  RIGHT AT THOSE LEVELS.

We believe the failure of the SPY and TRAN to move above the ARCs and Fibonacci price targets suggests a critical upward price trend failure.  A failure of this nature will prompt a new downside price move in the near future as price must always attempt to establish new price highs or new price lows based on the Fibonacci Price Theory (technical analysis).

MONTHLY DOW JONES INDUSTRIAL (INDU)

This last chart, the Monthly INDU, is probably the most impressive one so far.  Clear Fibonacci Price Amplitude Arcs suggest massive resistance near the February 2020 peak levels.  A very clear downward price channel originating from the February 2018 lows and transitioning across the December 2018 lows and into current lows.  An Adaptive Fibonacci Price Modeling System target price (CYAN) near 8108 (very near current price levels) and a very clear technical price pattern (Dojis) suggesting a potential top or price reversal is setting up.  Lastly, the recent deep low price stalled very near to the historical YELLOW DASHED price channel that spans the 2000 and 2007 price peaks.

Pulling all of this technical analysis together with simple Fibonacci Price Theory suggests that until the markets can prove to us that price is capable of establishing we upside price structures, the recent deep new price low (near 18,265) suggests future price action may collapse even further and attempt to establish a new, deeper, “new price low” before the real bottoms set up in the markets.  On this INDU chart, it suggests that a “deeper price low” may result in a move well below the YELLOW DASHED price channel from 2000/07 and attempt to move to the RED Fibonacci Price Target level near 14,000.

CONCLUDING THOUGHTS:

Obviously, we are still very bearish in terms of the current overall market trend.  No technical analysis technique has shown us that the intermediate and longer-term trends have changed direction to Bullish.  Yes, our Daily systems did identify a bullish trigger within this bearish trend on the SPY which we executed successfully for our members.  There is an opportunity to take a bullish trade within a bearish price trend when technical analysis confirms the trigger and it is executed properly.

If you are using our free public research for your own trading decision-making and/or using it as an opportunity to find and execute successful trades, please remember you are the one ultimately making the decisions to trade based on our interpretation and free research posts.  We, as technical traders, will continue to post new research articles and content that we believe is relevant to the current market setups.

If you want to improve your accuracy and opportunities for success, then we urge you to visit www.TheTechnicalTraders.com to learn how you can enjoy our research and our members-only trading triggers (see the first chart in this article).  If you are managing your retirement account or 401k, then we urge you to visit www.TheTechnicalInvestor.com to learn how to protect your assets and grow your wealth using our proprietary longer-term modeling systems.  Our goal is to help you find and create success – not to confuse you.

Our researchers will generate free research on just about any topic that interests them.  As technical traders, we follow price, predict future price moves, tops, bottoms, and trends, and attempt to highlight incredible setups that exist on the charts.  What you do with it is up to you.  Visit www.TheTechnicalTraders.com/FreeResearch/ to review all of our detailed free research posts.

In closing, we would like to suggest that the next 5+ years are going to be incredible opportunities for skilled traders.  Remember, we’ve already mapped out price trends 10+ years into the future that we expect based on our advanced predictive modeling tools.  If our analysis is correct, skilled traders will be able to make a small fortune trading these trends and Metals will skyrocket.  The only way you’ll know which trades to take or not is to become a member.

Chris Vermeulen
Chief Market Strategist
Founder of Technical Traders Ltd.

Natural Gas Breaks $2.00 On Upside Rally and Next Target

Overnight, Natural Gas broke above the $2.00 price level as we expected.  On April 6, 2020, we published our research that Natural Gas was setting up a bottom pattern and that our seasonal analysis suggested April and May should prompt a price rally in Natural Gas pushing price levels above $2.40.

The current rally has broken above a price resistance level near $2.00 and the rally up to $2.40 may happen faster than we expect.  Currently, our Daily Fibonacci price modeling system is suggesting the $2.35 area is the first area of resistance.  Beyond that, the next level of resistance would be near $2.90.  Beyond that incredible upside target, the Fibonacci Weekly data is projecting an upper target near $3.60.

We are not suggesting that Natural Gas could rally 90% over the next few weeks, but we are alerting you that a move to $2.40 seems highly likely after our incredible bottom call on April 6, 2020.

Before you 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!

DAILY NATURAL GAS CHART

This Daily Natural Gas chart highlights the rounded bottom setup that prompted us to make the bottom warning.  Skilled traders will see an inverted Head-n-Shoulders pattern where the head consists of a double-bottom pattern near the end of March and into early April.  The opportunity to buy into Natural Gas below $1.70 presented a very clear opportunity with little risk.

WEEKLY NATURAL GAS CHART

This Weekly Natural Gas chart highlights the Fibonacci Price Modeling system’s projected upside targets.  The first target, near $2.40, is an easy target for a first profit level.  The next upside target level for-profits should be near the RED LINE, near $2.55.  Beyond that, if Natural Gas continues to rally, the next area for skilled traders to pull profits would be the $2.95 level.  Any move higher beyond that level would be a gift with a target level near $3.60.

CONCLUDING THOUGHTS:

Overall, this has been an excellent trade.  We got our members into this trade fairly early and are already pulling profits and trailing stops.  It certainly helps to have the modeling systems and seasonal analysis tools we use to find these setups for our members – but you can do it too.  All it takes is a bit of skill and understanding of how certain markets operate within seasonal trends and setups.  Otherwise, if you don’t have the time to research every chart we can do it all for you and just send you the trades we are taking.

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 an incredible year for traders and investors.  Don’t miss all the incredible trends and trade setups.

Subscribers of my Active ETF Swing 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. This week we closed out SPY ETF trade taking advantage of this bounce and entered a new trade with our account is at another all-time high value.

Ride my coattails as I navigate these financial markets and build wealth while others watch most of their retirement funds drop 35-65% during the rest of this financial crisis going into late 2020 and early 2021.

Just think of this for a minute. While most of us have active trading accounts, 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 the next bear market, you could lose 25-50% or more of your 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 Passive Long-Term ETF Investing Signals which we issued a new signal for subscribers.

Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.

US Drives Global Growth

The US is back in the driver seat again as a sustained and growing economic powerhouse – the Trump Economy.  Since the November 2016 elections, the US economic data and outlook have been driving investment in US equities as well as select foreign investment opportunities.  The reduction in regulations and business friendly Trump administration seems to have unleashed the hoard of cash and opportunity of the past 7+ years.  US and foreign business are, again, “wheeling and dealing” with the intent of generating greater profits and more opportunities.

 

This is the reason I believe the US, as well as certain foreign partners, will see nearly immediate and direct advancement of economic objectives.  The amount of capital that could be unleashed over the next 2 years could be well in excess of $2 Trillion as related to business investment, consumer-driven sales and expanded manufacturing capacity will likely drive the US economy into a new leadership role focused on renewed opportunity and activity.

 

US Manufacturing has recently been in a state of decline since late 2011.  I attribute this to uncertainty related to US policies and leadership.  The graph, below, does not show the opportunity I see in the future expansion, but it does show that throughout historical periods of economic expansion, relative growth ratios tend to hover near +2.6% to +5.7%.  This level of expansion, historically, would relate to the US economy feeling optimistic about future capabilities as well as increasing earning potential.

 

US Manufacturing Output Chart

Manufacturing will likely grow to near greater than +1% for Q1 2017

Manufacturing_RealOutput

Keep the two functions in mind, as opportunities increase and the US economic activity increases, typically hiring and earnings increase as well.  This is a sign of a healthy growth phase that may, as it seems it always does, spill over into other foreign markets.  Much like the last 1990s and 2003~2006 US economic expansion phases, the historical rates of expansion averaged +4~5%.  The contraction periods (recessions : 2001 & 2008) were deep and dangerous, yet the growth phases were lengthy and substantial.  Household income growth was a key factor for extended periods of economic expansion.

 

FRED_MedHHIncome Chart

US Household Income Rising Sharply

FRED_MedHHIncome

As business activity increases, Inventory To Sales Ratios decrease.  The rational behind this factor is that sales volumes increase and inventories decrease in relation to new sales activities.  Thus, products start flying out of the warehouses and off the shelves.  Every US economic expansion phase has been paired with decreasing Inventory To Sales Ratios historically.

 

TtlBusInventory2SalesRatio Chart

Sharp increase in sales (Decreasing Inventory) after November 2016 elections

TtlBusInventory2SalesRatio

In short, this looks like “lift-off” for the US economy – at least for the immediate term perspective.  The concerns for investors are still very evident in some of the following graphs.  My opinion that the US is still, and has been for decades, the sole driving force behind much of the global economic expansion phases is based on the concept that the US, along with key partners, are the strongest and most mature economies on the planet.  I consider most of the immediate partners to the US economy as Japan, Canada, Germany and Great Britain.  I’m certain that many of you could add in 2 or 3 others, but I continue to focus on the core elements of the global economic process.  Because none of the other global economies are, in my opinion, capable of functioning well without the economic impetus of the four mature growth economies, I continue to believe these four are, and have been, the drivers of global economic growth.

 

The following chart shows why I believe a dramatic change in US economic activity will drive some level of increased economic activity throughout the world.  The combined European and Asian GDP Output graph shows severe contraction in 2013~2015.  I can only assume the continued contraction of this measurement of economic activity continued in 2016.  An increase of 10~20% of this value would result in a nominal overall increase compared to recent highs.  It would take an increase of over 70% for this measurement of economic output to be restored to 2012~2013 levels – yikes!

 

GDP_EuropAsia Chart

Europe & Asia show sharp declines in economic activities

GDP_EuropAsia

I attribute much of the GDP decreases in Europe and Asia to two factors; lack of economic expansion in the US and difficult/uncertain global economic policies in Europe and Asia.  As the earlier US Manufacturing Output chart shows, the US economic has only recently started to expand.  This is related to fears and uncertainty as related to the US election cycle (at least in part).  The recent BREXIT news as well as other issues that continue to plague Europe are also key driving factors.

 

Additionally, more and more frequent news is relating economic concerns and excessive debt levels in China.  I can attest that China’s economic reach is far and wide in most of Asia.  Any crisis originating in China will result in mini-crisis events throughout most of Asia and parts of Europe.  This is, again, why I believe continued strength in the US markets will drive US equities and economies to new highs while any “spill-over” may begin to improve foreign markets as well.  But we’ll have to wait for that “spill-over” event to actually start to happen before we see any increased valuations or activity.

 

European Economic Policy Uncertainty Index Chart

Europe in the midst of uncertainty and constricting economic leadership

EuropePolicyIndex

How does this relate to me, an active trader?  First off, it means I should be focusing on core US equity opportunities and focusing on uncertainty related commodity markets (Gold, Silver, Oil, Gas and others).  The uncertainty throughout most of the developed world will drive certain commodities to increased valuations.  What has recently happened in India with regards to currencies is already driving global events in precious metals and demand for alternate paper currencies.  What happens in France, soon, may likely drive further impetus for increasing valuations in commodities, equities and other markets.  The supply data in regards to OIL and GAS is pushing a message that oil may drop to near $30 again.  Things are changing quickly and we need to be ready to act and profit from these moves.

 

US DOW Chart

 DOW_Driver_Daily_final

 

Gold Chart

GOLD_Driver_Daily_final

The opportunities in foreign markets and in foreign equities will arise again in the future.  I can’t predict when, but I can predict that any further increased US economic activity will have a “spill-over” effect on foreign markets and will drive increase valuations – unless something acts to destroy that alignment going forward.

 

I keep my members alerted to these opportunities and provide more detailed analysis and trading triggers through ATP .  If you would like to continue to receive my research and analysis, please take a moment to visit ActiveTradingPartners.com to see how I can help you to achieve greater success.  Some of my most recent calls have been outstanding like:

 

UGAZ 10.7% Profit (Feb 21-23)

ERX 7.7% Profit (Feb 8-9th)

NUGT 112%Profit (Dec 16 – Feb 8th)

 

All the trades are based on my Momentum Reversal Method (MRM) trading system.

 

In short, the US stock market is back in full blown bull market with Trump re-energizing things. While I feel a short-term correction is due any day, it is just that, a short-term pullback followed by higher prices into June/July.

 

Follow my lead and start making money every month with www.ActiveTradingPartners.com

 

John Winston

Co-Author: Chris Vermeulen

What Investors Need To Know About U.S. Money Market Funds?

Why Low Risk Does Not Equate To Risk Free!

Charles Schwab has informed its’ clients that “at least 80% of the fund’s net assets will be invested solely in U.S. government securities…”.   Schwab automatically assumes that all clients affected by this change will accept: “if you are in agreement with this change in your cash feature, no response is required from you. They consider a non-response from its’ clients to be notice. “Those who disagree have the “option” of either sweeping their cash into the corporate bank exposing them to greater risk.  They add “you also have the right to close your brokerage account(s) without penalty at any time.”

Who will be the most recent owners of the rest of the current and future new debt?  The answer is:  YOU.  U.S. Mutual funds, U.S. pension funds and American investors. Why?  Because our insolvent government needs Americans to finance it before the entire house of cards come crashing down!  One’s ability to take your savings out of banks and store it in cash is coming to an end. U.S. Institutions are holding up to 99.5% of assets in cash, U.S. government securities, and repurchase agreements that are collateralized solely by the U.S. Government’s good faith.

“Debt-As-Legal-Tender”

This will make it much more difficult for one to be able to access any/all of your personal cash which was always considered to be accessible liquid risk free funds. What will American citizens do when they realize they were conned into “toxic investments” and decide to just pull their cash out of the banks and store it themselves?  If you do take possession of your savings in cash, how secure do you feel when the government comes knocking on your door asking about your stockpile of cash?  Schwab and others are taking preemptive action now to move your money into U.S. debt.

The top complaints and reviews about Schwab refusing to honor its’ clients’ money:( https://www.consumeraffairs.com/finance/schwab.html).  Fidelity is also causing the same problems for its’ clients, as well: (https://www.consumeraffairs.com/finance/fidelity.html).

This is just a new vehicle in which the U.S. Federal Government is taking control of your cash and converting it into “toxic assets” to be spread out amongst us all.  Why? The answer is to cover our enslavement of $19.9 trillion debt which is growing with each passing second.  The Current outstanding public debt of the United States is: $19,926,581,166,878.36 as of Monday, February 20th, 2017. That equates to everyone, in the United States, currently owing $65,586 which represents their share of the U.S. public debt.

chart

Public Debt: $14,403,392,566,439.40
Intragovernmental Holdings: $5,523,188,600,438.96
Total U.S. National Debt: $19,926,581,166,878.36

 

Who owns the public debt?

Foreign governments own the most U.S. debt.

chart1

 

This has been done under the auspices of the S.E.C. (Securities Exchange Commission): (http://www.investopedia.com/terms/s/sec.asp).  They implemented the New Money Fund Reform Rules”:

(https://www.sec.gov/News/PressRelease/Detail/PressRelease/1370542347679). The rules require fund providers to institute liquidity fees and suspension gates as a means of preventing a run on the fund. The requirements include asset level triggers for imposing a liquidity fee of 1% or 2%. If weekly liquid assets fall below 10% of total assets, it triggers a 1% fee. Below 30%, the fee is increased to 2%. Funds may also suspend redemptions for up to 10 business days in a 90-day period. These are the official rule changes; there are several factors investors should know about the reform and how it will affect them during its’ implementation.

The move for money market fund reform grew out of the 2007–2008 ‘financial crisis’. The Reserve Primary Fund recently settled its’ claims:( “ADDITIONAL INFORMATION REGARDING YIELD PLUS FUND-IN LIQUIDATION (Formerly known as Reserve Yield Plus Fund) DATE OF FINAL DISTRIBUTION WEDNESDAY, JUNE 15, 2016” ): (Reserve Primary Fund).  The fund had assets totaling $62 billion. The class action suit brought against them resulted in a mere $10 million settlement: http://www.usatoday.com/story/money/markets/2013/09/08/money-fund-broke-buck-deal-managers/2782931/). The 2008 financial crisis precipitated by The  Reserve Primary Fund (Reserve Primary Fund)  when it was forced to reduce its’ net asset value (NAV) of its’ money market fund below $1, due to huge losses, which were generated by failed short-term loans issued by Lehman Brothers. It was the first time a major money market fund had to break the $1 NAV which caused panic among institutional investors, who consequently began mass redemptions. The fund lost two-thirds of its’ assets within 24 hours and eventually had to suspend operations and commence liquidation.  This event prompted significant redemptions by institutional money market fund investors, putting the funds under severe financial stress.  The Reserve Primary Fund, which invested in Lehman Brothers debt, “broke the buck”: (http://www.investopedia.com/articles/mutualfund/08/money-market-break-buck.asp).

The S.E.C. Chairwoman. Mary Jo White, said “Today’s reforms fundamentally change the way that money market funds operate. They will reduce the risk of runs in money market funds and provide important new tools that will help further protect investors and the financial system. Together, this strong reform package will make our markets more resilient and enhance transparency and fairness of these products for America’s investors.”  This is what the SEC wants Americans to believe and buy into it!

The official final amendments to money market rules, which were made in 2014, for protecting shareholders from the impacts that a flood of redemptions could have on money market funds is how the S.E.C. is rationalizing this dilemma. The amendments are also intended to give fund managers enough time to respond to requests in a more thoughtful, prudent manner and in a much slower period.

  • Fidelity is converting its’ largest prime fund into a U.S. government fund. Federated is taking steps to shorten the maturities of its’ prime funds to make it easier to maintain a $1 NAV.  Vanguard is assuring its’ investors that its’ prime funds have more than enough liquidity to avoid triggering a liquidity fee or redemption suspension.

The Bank of America Corp. sold its’ money market business to BlackRock, Inc. to avoid these types of future problems.

  • Restricts who can invest in retail money market funds.
  • Continues to seek a stable $1 net asset value (NAV) for retail and government funds, but requires institutional funds to have floating NAVs like other mutual funds.
  • Allows certain funds to impose liquidity fees and temporarily suspend withdrawals (known as gates) in certain circumstances.

 

Gold Is Money!

Global negative interest rates have shifted the worlds’ appetite to buying gold and silver, once again. Gold and silver can sit outside the system and remain completely private. It cannot be tracked by the government or banks. Gold and silver have been the world’s greatest wealth protectors for over 5,000 years. It has shielded its’ citizens from government and banking collapses during the worst crises in history. Physical gold and silver cannot be instantly seized with the stroke of a keyboard. This is why I believe we should invest in gold and silver, before we have potentially nothing left to protect. Its two things to me: a store of untraced wealth, and an insurance policy in case something really bad happens. I like feeling financially protected and this is one way I do this.

 

Timing Is Everything!

The next BIG TRADE is setting up. You should take advantage of my hard work and expertise to make you short term profitable trades. Protect your financial future by getting my market and trade alert reports every week. Your portfolio should involve a proven strategy which I provide.

We have just entered a new commodity trade (UGAZ) Feb 21 as its forming a bottoming pattern. We have locked in 10% in 36 hours and hold the remaining for much larger gains. Do you want to be in the next trade of the Next Hot Stock setup?  My subscribers banked a 112% in a swing trade with NUGT (Dec 16 – Feb 8th). All the trades are based on my Momentum Reversal Method (MRM) trading system.

Another trade this month was ERX, in which we took a nice profit of 7.7% in less than 24 hours after entry.  All risks are well contained.

Follow my lead and start making money every month with www.ActiveTradingPartners.com

John Winston
Co-Author: Chris Vermeulen

What has been Pushing S&P 500 Higher?

Subscribe to TheGoldAndOilGuy.com ETF newsletter and profit!CLICK HERE

Another Price Setup with Oil and Gas Stock

One of the key tenants of my Momentum Reversal trading is “waiting for the right trigger/event and getting in early”. I find this is one of the most difficult aspects for most clients to understand and master. Therefore, in an attempt to further illustrate some components of my thinking and strategy, I have put together these examples to try to help people understand these techniques.

Within this example, I’ve selected Chesapeake Energy Corp and a recent price move that resulted in strong gains. As you are well aware, within the Momentum Reversal Method (MRM) are a number of key factors that drive my investment methodology.

 

details1

 

Additionally, I use Fibonacci and Elliot Wave Theory in all of my analysis and decision making. The Momentum Reversal Method is not foolproof – it does take some losing trades. Generally, though, the winners far outpace the losers. My trading strategy helps to answer these important questions.

 

details2

 

 

Now, onto the setup I promised earlier – Chesapeake Energy Corp.

This chart illustrates three key components to my Momentum Reversal Method trading strategy:

– Established Price Momentum/Trend
– Defined Price Rotation
– Tightening/Coiling of price prior to a breakout

As you can see from the example chart, above, the upward price trend (highlighted in green) followed by the price rotation (highlighted in red) created a primary setup that allowed me to target this stock for potential trigger setups. In other words, this price momentum and rotation created an opportunity for trade signals.

The coiling of price with the flag/pennant formation created another component I often look for – price congestion. Price congestion following a wide range price rotation is usually indicative of a “pre-breakout move”. Therefore, the identification of this type of price action can sometimes be an early warning to watch it more closely for the trade trigger.

I’ve marked the initial breakout bar (not my ideal trade trigger) with a green up arrow. For the average trader, this would likely be your trading trigger. Within the Momentum Reversal Method, we look for early triggers that can allow us to get into these types of trades earlier – and often with much less risk and greater chance of success.

I hope this clear example of a MRM setup can assist you in understanding why this strategy is such a success.

 

chk1

 

The Outcome

This, the outcome of the Setup, shows exactly how quickly these setups can turn into profits. Generally, the Momentum Reversal Method holds trades for 3~7 days for short-term trades and for 14~35 days for longer term trades (in some cases even a bit longer).

You may be wondering why we only hold trades for 3-7 days? The answer is simple, we know that most of the biggest moves happen in a very short period of time. The explosive pops/drops in price only last 3-7 days in most cases. Catching these quick explosive moves provide us with the best risk reward. As you know time is money, and it only makes sense to make as much as possible in the shortest period of time, which has two key benefits:

First is that I provide lower risk. The less time our money is locked into a trade/the markets the better as cash is king!

Second, it means we can rotate some of some/or all of our money into the next stock/leveraged ETF ready for its explosive pop/drop.

You can see from this image the first upward move from the trigger bar resulted in a +27.8% gain in only 10 trading days. The second phase run-up in price resulted in an +83.75% gain in an additional 29 days. Clean, Clear and Consistent.

 

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Again, I’m not giving away my successful strategy to anyone. The Momentum Reversal Method has worked for me for years and continues to generate fantastic results. Even if I tried to teach you every aspect of this trading methodology/strategy, you would still need my assistance in understanding the nuances of how to deploy it and how to better understand general market sector rotation, when to avoid false triggers and what you should and should not trade and when.

This article is to help illustrate why the Momentum Reversal Method is a success and to teach you some of the basic concepts of Momentum Reversal triggers. My followers receive detailed analysis, research and trading triggers from my member based trading room. I can provide a source of valuable and timely trading triggers and follow-up research regarding all activity I announce to my clients. A few of our recent trades have been VUZI 16%, UGAZ 74%, and last week NUGT 50% on a portion and we are up over 75% on the balance which could be 100% by the end of week. The NUGT trade was partially based of a Market Trend Forecast we published back in December.

Feel free to visit www.ActiveTradingPartners.com to see how easy it is to profit from my analysis and to see how well the Momentum Reversal Method works in real-time.

I sincerely hope you enjoyed this article and were able to see how you can improve your future trading successes by using some of these components.

John Winston & Chris Vermeulen
TheTechnicalTraders.com