Posts

Are We Setting Up For A Waterfall Selloff?

Most traders understand what a “Waterfall event” is if you’ve been trading for more than 3 years.  Nearly every downside price reversion event initiates in a breakdown event (the first tier of the waterfall event) which is followed by additional deeper waterfall price collapses.  Almost like price breaks lower, finds support, settles near support, then breaks lower targeting deeper price support levels.

SPY DAILY CHART

This example SPY chart from October 2018 through December 2018 highlights this type of event almost perfectly.  With each tier in the waterfall event, price searches for new support levels as price weakness drives price lower throughout each breakdown event.  We’ve highlighted these breakdown events with the MAGENTA lines drawn on this chart.

The recent downside price rotation after the world was alerted to the Wuhan virus presented a very clear “first-tier” waterfall event.  This first move lower is often rather condensed in size and scope – yet often within days of this first event, a bigger second downside waterfall event takes place confirming the bearish breakdown has momentum.  We believe this first move lower could be the first real tier in a broader global market waterfall event which may result in a much deeper price reversion event.

We believe the total scope of the Wuhan virus will not be known for at least another 20 to 30+ days.  After that span of time, we’ll know where and how aggressive this pandemic event has spread and what real capabilities we have for containment.  Therefore, we believe the downside price concern within the global markets is very real and just starting.

Very much like what happened in October 2018, the initial downside price move initiated on the US fed news and expectations.  When the Fed announced a rate cut, which shocked the markets, investors waited to see how the markets would react and within only 5+ days, the markets reacted violently to the downside.

Friday, January 24 was the “trigger date” for the breakdown in global markets from the news of the Wuhan virus.  We believe any further downside risk to the global markets will be known within another 5 to 10+ trading days – as more information related to the spread and containment capabilities of the virus are known.  Therefore, we are attempting to alert our followers and friend to the very real potential of a price breakdown event, a “Waterfall Event”, that may be set up in the global markets.

DAILY TRANSPORTATION INDEX CHART

This Daily TRAN chart highlights the recent breakdown in price that could be considered the first tier of the waterfall event.  The support level, highlighted in LIGHT BLUE, suggests price may attempt to stall near 10,800 before any further price breakdown happens.  A second waterfall tier could push the price well below the 10,000 level as the next real support exists near 9,9250.

DAILY 400 MIDCAP INDEX CHART

This Daily MC (S&P 400 MidCap) futures chart highlights a similar price pattern.  The initial breakdown tier is very clearly illustrated where the price fell to immediate support near 2050.  We believe any further waterfall tier even may push the price below the 2000 level and target real support near 1952.

DAILY FINANCIAL SECTOR INDEX CHART

This XLF (Financial Sector SPDR ETF) Daily chart, again, highlights the first tier breakdown in the price of the potential Waterfall event.  This is actually one of the clearest examples of how price operates within this type of rotation.  The initial downside tier broke through support near $30.00 and has begun to rally back above this level.  The LIGHT BLUE highlighted support range shows us where the first tier may stall.  Any further breakdown in price may push the price below the $28.50 level as price searches for new support.

We’ve referenced the 1855 “Third Plague Event” that hit in China and quickly spread to India, SE Asia, and other neighboring countries as an example of what may happen with the Wuhan virus.  The 1855 event killed over 15 million people (nearly 1.25% of the total global population at the time) and lasted until 1960 when the Plague cases dropped below 200.

We urge all traders and investors to prepare for a broader downside market event in the future – possibly a “waterfall event”. We’ll know more about the size and scope of this potential pandemic within 30+ days – but this may become a much bigger issue across the globe very quickly.  The volatility this event may create in the global markets is an ideal setup for skilled technical traders.  In the last week, we locked in profits on two trades SSO for 6.5% and TLT for 3%. Learn how we can help you find and execute great trades related to this wildly volatile event.

Join my ETF Trade Alert Newsletter – Wealth Building Newsletter if you like what you read here and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own.

Chris Vermeulen
www.TheTechnicalTraders.com

NOTICE: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research.  It is provided for educational purposes only.  Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed.  Visit our web site to learn how to take advantage of our members-only research and trading signals.

Is The Technology Sector about to break lower?

We believe the current capital shift in the US stock market may be settling into the Technology sector as investors move away from growth and into value.  Technology has recently recovered very nicely from the late December 2018 lows and is currently setting up a very eerily similar pattern across multiple charts.

If our analysis is correct, we believe the Technology sector may be setting up for a downside price breakdown near the APEX of these Pennant/Flag formations that appear in our charts.  Near recent, all-time highs, this downside breakdown could be rather large in size, possibly as much as -20% to -35% or more, and could result in a global stock market decline that could shock most investors/traders.

The economic data that has recently been announced in the US continues to show moderate strength overall.  The jobs numbers are decent.  The consumer is still moderately active and we are getting into the Christmas Rally season.  Yet we are also in the midst of a Presidential Election cycle that continues to heat up and drive almost daily new headlines.  Our opinion is that the US consumer will become fixated on the political theater while we get closer to the November 2020 elections and may curb Christmas/holiday spending if news/perspective suddenly darken.

One of the first sectors we believe could break is the Technology sector – where foreign investors have poured billions into this sector while chasing price gains and to protect against foreign currency devaluation.  Once investors determine Technology is no longer “safe”, then a downside price event (true price exploration) will likely happen and we are concerned the downside risks could be much greater than 20~25%.

This AMD weekly chart provides one of the clearest pictures of the tight Pennant/Flag formation setting up in price.  After a Double-Top type of formation near $35, any further price advance was rejected near $36.  The current tight price rotation after the August 2019 peak suggests a very tight Pennant/Flag formation is setting up.  If our analysis is correct, the APEX/breakout/breakdown event is only a few days away.  Our count of the Pennant rotation suggests the breakdown move (lower) is the most likely outcome.

This AMZN chart highlights a similar pattern to the AMD chart.  Although the current Pennant/Flag formation is a little more defined, the structure is still the same.  An August 2019 high after a Double-Top formation, downward price rotation after the August 2019 peak and a clear APEX setting up RIGHT NOW.  The downside risk in AMZN is clearly a drop to near previous support (near $1310) – -20% or more.

GOOG provides a very clear example of the price volatility that is setting up a major Pennant/Flag formation.. Although the current setup is broader than the previous two examples, the potential for a breakdown event in GOOG is still strong.  The Double-Top pattern near $1280 provides clear resistance.  The recent narrowing price channel sets up a very clear Pennant/Flag formation.  We believe the downside price move in GOOG will initially target the lower price channel, then break that channel and continue lower.

Netflix has already broken below the lower price channel.  This is what brought this entire sector to our attention recently.  If Netflix continues lower, it could draw the entire Technology sector and US major indexes much lower over the next few days/weeks.  The downside price risk in Netflix is easily -25% to -45% – or more.

Our Custom Technology Index chart shows how the overall Technology sector is struggling to stay above the lower price channel.  Our concern is that one or more of the major technology firms may break the lower Pennant channel and attempt to start a breakdown in the US stock market.  If this is the case, then a panic may setup in the markets where investors dump technology very quickly.

CONCLUDING THOUGHTS:

Skilled technical traders are adept at finding ways to profit from nearly any price trends.  A quick trade in TECS or an Inverse NASDAQ ETF would allow many skilled traders to attempt to profit from this APEX/breakdown potential. We don’t have confirmation of the breakdown event just yet, but it certainly appears that the Technology sector could come under some severe pressure over the next 30+ days

Also, take a look at all my precious metals trade signals this year (2019) with a total gain for subscribers of my Wealth Building Newsletter of 41.74% profit. More than double the return than if you bought and held GDXJ gold miners ETF.

My point here is that no matter how much you love metals or technology stocks (and I LOVE them both), you do not need to always be in a position with them. There are times to own, and times to watch with your money safely in cash.

As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are life-changing events in a good way if traded correctly.

Chris Vermeulen
www.TheTechnicalTraders.com

NOTICE : Our free research does not constitute a trade recommendation, or solicitation for our readers to take any action regarding this research.  It is provided for educational purposes only.  Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed.  Visit our web site (www.thetechnicaltraders.com) to learn how to take advantage of our members-only research and trading signals.

Is A Price Revaluation Event About To Happen?

Skilled technical traders must be aware that price is setting up for a breakout or breakdown event with recent Doji, Hammer and other narrow range price bars.  These types of Japanese Candlestick patterns are warnings that price is coiling into a tight range and the more we see them in a series, the more likely price is building up some type of explosive price breakout/breakdown move in the near future.  The ES (S&P 500 E-mini futures) chart is a perfect example of these types of price bars on the Daily chart (see below).

Tri-Star Tops, Three River Evening Star patterns, Hammers/Hangmen and Dojis are all very common near extreme price peaks and troughs.  The reason they form is that price is unable to rally or fall far enough within a normal trading day to project broader range types of Japanese Candlestick patterns and these rotational/top/bottom types of Japanese candlestick patterns are often found at or near key reversal points in price.  When they form in a series, like we are seeing currently, it is a very ominous warning that price will react in an explosive movement – either UP or DOWN. Be sure to opt-in to our Free Trade Ideas Newsletter.

Here are some examples of how these types of Japanese Candlesticks may appear in a chart.

Hammer type of patterns are similar to Doji pattern because the difference between the open/close price is very narrow.  Yet, instead of the Open/Close range forming near the middle of the price bar, Hammers form when this range forms near the high or low of the price bar.  They fall into the “umbrella” group of patterns and warrant a bit of extra consideration depending on where they form in price.  The can often create very clear warning signals just prior to a major price reversal.

SP500 (ES) DAILY CHART

This ES Daily chart highlights the sideways DOJI/HAMMER price channel that is setting up over the past 5+ trading days.  We believe this sideways, narrow price range, is going to prompt a massive price breakout or breakdown in the near future.  Historically, this current price level is strong resistance, thus, until we see any price move above 3035 on the ES, we must assume this resistance will continue to hold and a breakdown event may be the likely outcome.  The only way we can determine if price is capable of attempting to move higher is to wait for price to actually make a new high price above previous resistance.

MID CAP INDEX DAILY CHART

This MC, MidCap, Daily chart highlights the same period of time, but notice the range of the price bars on this MC chart are broader in range and scope.  We are not seeing Dojis bars like we are seeing on the ES chart.  This suggests that the real price action is taking place in the MidCap market, the Transportation Index and other trading instruments.  We would likely need to watch how the rest of the market is reacting to this sideways trading while attempting to understand that the S&P is setting up for a big breakout or breakdown event.

MID CAP INDEX WEEKLY CHART

This MC Weekly chart hSP500 (ES) Daily Chartelps us to understand the past 2+ years price rotation and why the current price levels, near 2000, are so important.  In January 2018, price collapsed from these levels.  In October 2018, price again collapsed from these levels – into a massive -24.85% downside move.  Currently, we’ve seen price test the 1995 level multiple times and fail.  Will it fail again and what is the potential for a broader downside price move?

As we stated earlier, until price is able to clear the 2000 price level, we must assume that resistance near 2000 will continue to hold and that price is more likely to move lower than higher at this time.  The only way we can determine if price is going to attempt to rally is to wait for it to attempt to reach a new high price from within recent price rotation.

Headed into this weekend, we would strongly suggest that all skilled technical traders plan for and prepare for some type of external new events, crisis events or anything that could drive price higher or lower.  It seems news is one of the biggest driving factors in the global markets recently.  Traders/investors are waiting for an impetus to drive trends.  The US Fed dropping rates really didn’t do much to improve investor sentiment.  It appears global traders want something BIGGER and BROADER to push prices higher at this time.  Improved global trade and economic ties would do it – but we don’t think that is going to happen within the next 3+ months.

Get ready for a wild ride and be sure to subscribe to my ETF trading newsletter so you don’t miss these opportunities www.TheTechnicalTraders.com

Chris Vermeulen
Technical Traders Ltd.

Rising US Dollar Mutes Metals Moves and Puts Pressures on Global Markets

The Rising US Dollar continues to shift the investing landscape as a stronger US Dollar mutes the price acceleration in precious metals and continue to put pricing pressures on the global economy.  The current levels of the US Dollar Index, above 99, clearly illustrates how the shifting landscape of the global economies has changed.  Prior to 2014/2015, when a minor currency/market crisis hit China and capital controls were installed in China to help reduce capital outflows, the US Dollar Index average price range was between 73 and 90.  Of course, the US Dollar Index weakened in 2008-09 and rotated within this range after 2010 – settling near 80 near the beginning of 2014. Before we get into the details, be sure to opt-in to my Free Market Forecast and Trade Ideas Newsletter So, this impressive rally in the US Dollar throughout the 2015-2016 US Presidential election cycle, as well as the continued rally since the lows near December 2018, is not something that we can simply chalk up to normal price rotation.  Something dramatic has shifted in the global markets since 2015/2016 and the new trend is US Dollar strength. We believe the recent rallies in Gold and Silver related to this US Dollar strength are something every trader should consider relative to the real perspective of the global markets.  Gold and Silver have become extremely expensive in certain foreign markets because of currency price levels and the stronger US Dollar typically mutes price rallies in precious metals.  Therefore, the combination of a strong US Dollar and a rising metals price suggests “this time is different”. We are starting to see news posts of how unique this setup really is in relation to traditional market dynamics. https://finance.yahoo.com/news/gold-breaks-away-emerging-market-103653513.html https://www.msn.com/en-in/money/personalfinance/why-is-gold-suddenly-so-expensive/ar-AAGqZKE?li=AAggbRN https://www.bloomberg.com/news/articles/2019-08-28/gold-gains-set-off-silver-scramble-as-investors-play-catch-up https://timesofindia.indiatimes.com/business/india-business/gold-crosses-record-rs-40000-mark-as-recession-fears-seep-in/articleshow/70892512.cms The reality is that no matter what happens in the US Dollar or other foreign currencies, Gold and Silver are in very high demand as investors continue to pour assets into precious metals – which have quickly become one of the best-performing assets for 2019 and very likely for 2020 and beyond. This Daily US Dollar Index chart highlights the strength of the US Dollar over the past 6+ months.  The ability of the US Dollar to continue to trade above 96~97 and push higher towards the 99 ~ 100 level shows the very high demand for US Dollars throughout the globe and the strength of the US Dollar in comparison to much weaker foreign currencies.  With the expectation of a weakening global economy, trade issues, negative interest rates, and bankrupt nations watching their futures spiral completely out of control, investors are naturally seeking out the strongest, safest assets – and are not seeking the highest potential returns.  This is a shift to safety.
We believe that gold is about to launch into a new upside leg once it breaches our Fibonacci Price Amplitude Arc resistance level near 1550.  The new upside target is $1625 or higher – where $1700+ could be the real upside objective for Gold.  If the US dollar rotated a bit lower after setting the new highs near 99, Gold could explode to the upside on moderate US Dollar weakness.
This Weekly chart of the Gold to Silver ratio highlights what we believe will be the next upside price leg for Gold over the next 6+ months.  We believe the true upside for Gold is 25 to 30% from current levels.  That puts our upside target near $2000 to $2100 near the end of 2019.  If that is the case, and silver continues to rally faster than Gold, then Silver could easily rally 30 to 50% from current levels.
If gold does what we believe is possible over the next 6+ months, then Silver will likely target the $26 price level fairly quickly, then push even higher and attempt to reach levels above $31 to $40 before the end of 2019.  We believe the strength of the US Dollar will continue and the rally in metals will continue as the shifting environment of the global markets continues to drive investors into safety.

CONCLUDING THOUGHTS:

This could be the “once in a lifetime” trade fore those of you that followed our research.  We’ve been warning about this move for many years and have clearly illustrated the breakout opportunities in both Gold and Silver related to the US Dollar and foreign currencies over the past 12+ months. You still have time to get into both the Gold and Silver trade if you believe our analysis is correct.  This move will likely continue for many months into the future – well into and past the 2020 US presidential election event.  The markets wait for no man or woman.  This shift in the global markets is different than 2008-09.  The reason it is different should be clearly evident in the strength of the US Dollar and the early shift in the precious metals markets that didn’t happen in 2008-09.  Something is spooking global investors into metals and we believe we know what it is – the mature credit cycle rooted in foreign market credit/debt exposure/liability. It is our opinion that the falling foreign currencies and lower economic expectations are related to the fact that global foreign markets took advantage of the cheap US Dollar between 2010 and 2014, borrowed like fools and leveraged their economies to the max while never expecting the economic shift to happen quite like this.  Now, with credit and debt piled up in the expensive US Dollar, weak economic and trade data and outlooks and further concern originating from the “grey/shadow banking sector” – we believe the dance has already begun and investors know the tune.  Run into safety – run into Gold/Silver and the US Dollar. We believe our super-cycle research and other proprietary modeling systems are suggesting that price weakness will dominate the markets for the next few months. Ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis and recession. In short, you should be starting to get a feel of where commodities and asset class is headed for the next 8+ months. The next step is knowing when and what to buy and sell as these turning points take place, and this is the hard part. If you want someone to guide you through the next 12-24 months complete with detailed market analysis and trade alerts (entry, targets and exit price levels) join my ETF Trading Newsletter.

FREE GOLD OR SILVER WITH SUBSCRIPTION!

Chris Vermeulen – www.TheTechnicalTraders.com

S&P500 Candlestick Pattern On Friday Signals Price Breakdown

As we close out the week and watched the markets trade in a rotational price manner, it became very clear to us that the patterns setting up in price continue to support our overall analysis of the markets and the potential for a bigger downside price move.  We issued a call that an August 19th breakdown was expected on or near the trigger date (Aug 19th).  We’ve taken some heat from our followers and readers regarding this call and the fact that the markets have yet to really breakdown below current support levels. As we’ve learned from our experience and previous analysis/calls – the markets can continue to act in ways that run counter to our analysis for much longer and in a much more irrational manner than we can survive the risks associated with any irrational price moves.  Yet, at this point, we don’t see anything irrational in the markets – we see opportunity. Our last few trades for our members have been incredible successes – totaling more than +30% over the past 5 trades.  We believe our research team and proprietary price and predictive modeling systems have clearly identified price weakness in the markets.  Until price confirms otherwise, our believe is that price will attempt to move lower – establishing new lows. Before we get into the details, be sure to opt-in to our Free Market Forecast and Trade Ideas Newsletter

Important Japanese Candlestick Reversal Patterns

The Doji Star and Shooting Star Japanese Candlestick patterns are part of a unique group that identifies potential price reversals, support/resistance and can often build into other types of patterns.  Our belief is these setups in the current chart will eventually create an Evening Star formation with a downside price move early next week.  This type of pattern would confirm resistance near the body of the current Doji or Shooting Star candlestick and also confirm our analysis that a price breakdown should continue.

SP500 – ES Daily Chart Highlights the Doji Reversal Pattern

This ES Daily chart highlights the Doji pattern created by the close of Friday trading near 2923.75.  The fact that price narrowed on Friday into a Doji pattern forming below the previous highs suggests general weakness in price and a possibility that early next week we may see price breakdown to complete a Harami or Doji Star Reversal Pattern.

Dow Jones – YM Daily Chart Highlights the Doji Star Reversal Pattern

This YM Daily chart shows a similar pattern – another Doji Star setup.  The Doji pattern sets up right at a key resistance level, near 26,400, and aligns with other chart and patterns to warn that price may weaken into a strong Candlestick reversal pattern.  All it would take is for the price to move below 26,000 and begin a new downside leg.

Transportation – TRANS Daily Chart Highlights the Shooting Star Reversal Pattern

This TRAN chart shows a true Shooting Star pattern.  The unique shape of the Inverted Hammer candlestick (part of the Umbrella Group) shows clearly.  The gap between the last to candlestick bodies sets up the Shooting Star pattern.  This is a classic Top Reversal setup.  Found at this point in price action suggests price may be set up for a big breakdown.  At the very least is shows clear resistance is at 10,130 and that we must be aware that price was rejected at this level.

Financials – XLF Daily Chart Highlights the Doji Start Pattern

Lastly, this XLF Daily chart shows a true Doji Star pattern where a Doji candlestick sets up with a gap between the real bodies of the last two candlesticks.  Again, this pattern sets up just below $27 which has continued to operate as strong resistance.  Any breakdown in this sector early next week will confirm this pattern and set up a Three River Evening Star pattern – a Sell Signal.

CONCLUDING THOUGHTS:

Every one of these patterns provides a clear definition of resistance and also show price weakness set up near the end of last week.  At this point, we are just waiting to see what happens early next week after a long holiday weekend.  Based on our past research, we believe the downside potential far outweighs the upside potential – unless some major news event pushes the price much higher – like the news of the new US/China trade talks. We would advise traders and investors to take advantage of these higher prices to pull profits out of open long positions and take some risk off the table at this juncture in price. We entered a new trade today and our portfolio is primed and ready for big moves going into next week. We believe our super-cycle research and other proprietary modeling systems are suggesting that price weakness will dominate the markets for the next few months. Ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis and recession. In short, you should be starting to get a feel of where commodities and asset class is headed for the next 8+ months. The next step is knowing when and what to buy and sell as these turning points take place, and this is the hard part. If you want someone to guide you through the next 12-24 months complete with detailed market analysis and trade alerts (entry, targets and exit price levels) join my ETF Trading Newsletter.

FREE GOLD OR SILVER WITH SUBSCRIPTION!

Chris Vermeulen – www.TheTechnicalTraders.com

ES Must Hold Above 2800 Or The Selling Will Intensify

First off, we were so happy to hear from all of our followers over the weekend and early today regarding their support for our incredible market predictions – specifically the call about the August 19th breakdown prediction.  We stuck to our guns believing in our predictive modeling systems and our research team.  We knew it would be just a matter of time before the weakness our models were showing us to actualize in a real price breakdown.  We want to thank all of you who wrote to us and thanked us and our team for their hard work and dedication. Now, we’ll highlight some recent events in the ES chart (S&P500 E-Mini Futures) and how it related to the bigger picture in the markets. Before we get into the details of the market recovery today, we want all of you to understand that is natural for the markets to move in rotational waves as price establishes new highs or lows.  In fact, it is essential and healthy for the markets to do this.  When the markets move in an unnatural way by trending excessively over short periods of time, it reflects an imbalance in the fundamentals of the markets or the core elements of supply/demand economics.  When the bottom falls out of a market, for example, it is usually because of some type of external news item or some other type of external factor/event.  The markets themselves naturally have a way of processing expectations and price value through the process of buying and selling in an open market. Therefore, as we continue this research post, please understand that any further price breakdown will likely become a process of price waves or rotations over the next few days and weeks that continue to break the most recent series of upward sloping highs and lows (from January 2019 till July 2019). But first, be sure to opt-in to our free stock market forecast newsletter. Let’s get started with the analysis.

240 Minute ES Chart Highlights

This first 240 minute ES chart highlights the intraday rotational price structure and how the Fibonacci price modeling system is currently identifying 2850 to 2897 as a key Support/Resistance level for the price.  Initially, as the breakdown in price happened on Friday and late Sunday, price blew past the projected Fibonacci target levels.  This can sometimes happen in extended trending or when outside news drives market price one direction or another.  The basics of Fibonacci price theory are that price will attempt to revert to within the last trending range before attempting to establish a new price highs or new price low.  So with each subsequent higher or lower move within a trend, the price will attempt to revert within that range before attempting another trend/move. In this case, the 2850 to 2897 level is the target level identified by the Fibonacci Target Levels that we want to watch.  This is where the price will likely initiate the next big move from and we believe it will be to the downside.

Daily Chart Highlights

This Daily chart highlights the 2887 level for both the LONG and SHORT Fibonacci Trigger Price Level.  The one thing we want you to take away from this research article is how the levels all seem to align with one another.  This Daily chart is suggesting levels that align with the 240-minute chart.  This is very important and provides consistency across multiple intervals for the Fibonacci system. At this point 2887 is critical for price.  Any measure to stay above this level would provide greater confidence that some type of price recovery may form in the future.  Any failure to stay above this level would mean the breakdown should continue lower. The last item we want to highlight on this Daily chart is the 2817 level (the BLUE projected Fibonacci target level).  This aligns very closely with the data you’ll see on the next Weekly chart.  Pay attention to how these levels work together to pinpoint price structures.

Weekly ES chart

This Weekly ES chart shows the bigger Fibonacci price modeling system and the key levels we are watching on the longer-term charts.  Obviously, the 2790 to 2800 level is critical on this chart.  That is a price level that aligns with the BLUE Fibonacci downside target level and the past Bearish Fibonacci Trigger Level from June 2019.  It is very likely that this level will be the last level of defense for a price if the breakdown continues.  This weekly chart also highlights that we need to see price move below 2575 to qualify as a “new Bearish Trend” on this chart.   So we have a long way to go before we can really attempt to confirm a new longer-term Bearish trend is in place. The way the Fibonacci modeling system address volatility can sometimes extend the range of the Trigger levels based on how price reacts and sets up.  In this case, because of the extended volatility in the markets and because of how the price has rotated recently, the Fibonacci price modeling system will not confirm a new bearish price trend until price moves below 2575.

CONCLUDING THOUGHTS:

This sets up a type of “ladder pricing event” in our future.  First, the 2887 level (from the Daily chart).  Then 2850 (from the 240-minute chart).  Then the 2795 to 2817 level.  After that – LOOK OUT BELOW. Over the next few days and weeks, we’ll see how these levels are targeted and/or breached as the price continues to rotate.  We believe this downside rotation is just starting at this point and we have yet to really break below the 2728 lows from June 2019.  Price MUST break these levels if the true breakdown move we are expecting is going to take place.  Get ready for some really great trades – they are about to unload on all of us. Check out these other exciting charts full of opportunities that we will be sharing with our followers. Join us with a subscription to lock in the lowest rate possible and ride our coattails as we navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. Be prepared for these incredible price swings before they happen and learn how you can identify and trade these fantastic trading opportunities in 2019, 2020, and beyond with our  Wealth Building & Global Financial Reset ETF Newsletter.  You won’t want to miss this big move, folks.  As you can see from our research, everything has been setting up for this move for many months. As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities starting to present themselves will be life-changing if handled properly.

FREE GOLD OR SILVER WITH MEMBERSHIP!

Kill two birds with one stone and subscribe for two years to get your FREE PRECIOUS METAL and get enough trades to profit through the next metals bull market and financial crisis! Chris Vermeulen – www.TheTechnicalTraders.com

PART II – Fed Too Late To Prevent A Housing Market Crash?

In Part I of this research, we highlighted the Case-Shiller index of home affordability and how it relates to the US real estate market and consumer economic activity going forward.  We warned that once consumers start to shift away from an optimistic view of the economy, they typically shift into a protectionist stance where they attempt to protect wealth, assets and risk of loss while attempting to weather the economic storm. We’ve seen this happen in 2008-09 as well as after the 9/11 attacks in the US in 2001.  The process is always somewhat similar.  Consumers start to react to pricing levels that are unaffordable and do so by trying to skimp on extraneous purchases like travel, new cars, credit card debt or other items that are not essential.  The other thing that happens is that the lower tier borrowers (the “at-risk borrowers”) typically begin to become delinquent on debts and fall behind on their mortgage payments.  This is how the process starts. Once it starts, a shift takes place in the market that can be sudden or it can be transitional.  The shift is often termed as a change from a “Seller’s Market” to a “Buyer’s Market”.  This terminology is used to describe who is in control of the transaction and who has the advantage within the transaction.  When it is a “Seller’s Market”, buyers are typically offering to pay MORE for an item/home and the seller does not have to stress about trying to sell their property/items.  When it is a “Buyer’s Market”, the buyer is able to negotiate with the seller, demanding more concessions, lower prices, better deals and often has a wide variety of sellers wanting to court the buyer away from other property/items.  See how this shift in market dynamics can really change the way a marketplace works. Now, lets take a look at how the US consumer is doing, overall, and how it might reflect a change in the marketplace if certain fundamental change. This chart of the delinquency rates for All Loans and Leases in the US shows an increase in the levels of delinquencies starting near the 2016 year.  This aligns with the year that the US Fed began raising the Fed Funds Rate and is exactly 1 year after the Chinese initiated capital controls to attempt to prevent local currency (Chinese Yuan) from leaving the country and landing in other countries as foreign assets.  In 2015, the delinquency rate for All Loans and Leases was near 2004~05 levels (below  30,000).  Right now, the level is above the 2008 level near 36,000.
Consumer Credit Card Delinquencies are rising sharply.  Since 2016, the increase in sub-prime credit card delinquencies has skyrocketed above the peak levels of 2008-09 and continues to stay above 5.5%.
Meanwhile, those nasty Mortgage Backed Securities held outright are still massively higher than in 2008/09 based on this Fred data.  We are unsure why the data is reported as ZERO in 2008, but we can safely assume that a $1.55 Trillion risk factor in these MBS levels is not something that we would consider a minor risk factor.
Now, in the first part of this article, we promised to show you some data from our proprietary Fed modeling utility and to show you what we use to determine if the US Fed is ahead of the curve or behind it.  Here you go.. Our original research model of the US economy and the Fed Rate levels into the future are shown below.  You can see that our model suggests the US Fed, as of 2013, should have been raising rates towards the 1.5% level then gradually raising them further towards 2.0% to 2.25% before 2017.  This type of increase would have slowed the advance of the real estate price levels and moderated the expansion of the debt levels that are currently associated within this sector.  Instead, the US Fed was late in their efforts to raise rates – starting only in late 2016.

CONCLUDING THOUGHTS:

Based on our model, current rates should be dropping toward levels near 1.25% to 1.75% as US debt, GDP and population levels continue to increase.  In the 4 years after the 2020 election, rates should stay below 2% as the US Fed is somewhat trapped until GDP increases dramatically.  Our modeling system suggests there are only two ways the US Fed can attempt to raise rates above 2.5% in the future; a. the US GDP increases dramatically (increasing to levels more than 1.5x total US debt annually), or b. US debt is dramatically reduced while GDP continues to grow at moderate rates. In the last part of this 3 part article series, we’ll show you more data that will allow you to prepare for the future events that may unfold and show you how to watch for some of these trigger events yourself. If you are like me and have friends who know nothing about real estate like cops and techie programmers building spec homes and thinking its easy money, then you know the market is or has already topped. In fact, take a look at home sales month over month in Canada.

House Values Declining Month Over Month

Real Estate has already run through the price advance cycle and the price maturity cycle.  There is really only one cycle left to unfold at this point which is the “price revaluation cycle”.  This is where the opportunity lies with a select real estate ETF I am keeping my eye on to profit from falling real estate prices. I can tell you that huge moves are starting to folding not only in real estate, but metals, stocks, and currencies. Some of these supercycles are going to last years. Brad Matheny goes into great detail with his simple to understand charts and guide about this. His financial market research is one of a kind and a real eye-opener. PDF guide: 2020 Cycles – The Greatest Opportunity Of Your Lifetime As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly. I urge you to visit my ETF Wealth Building Trading Newsletter  and if you like what I offer, join me with the 1 or 2-year subscription to lock in the lowest rate possible, get a FREE BAR OF GOLD and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next set of crisis’. Chris Vermeulen www.TheTechnicalTraders.com

August 19 Turn Date is Tomorrow – Are You Ready?

Our August 19 breakdown prediction from months ago has really taken root with many of our followers and readers.  We’ve been getting emails and messages from hundreds of our followers asking for updates regarding this prediction.  Well, here is the last update before the August 19th date (tomorrow) and we hope you have been taking our research to heart. First, we believe the August 19 breakdown date will be the start of something that could last for more than 5 to 12+ months.  So, please understand that our predicted date is not a make-or-break type of scenario for traders.  It means that we believe this date, based on our cycle research, will become a critical inflection point in price that may lead to bigger price swings, more volatility and some type of market breakdown event.  Thus, if you have already prepared for this event – perfect.  If this is the first time you are reading about our August 19 breakdown prediction, then we suggest you take a bit of time to review the following research posts. August 12, 2019: AUGUST 19 (CRAZY IVAN) EVENT ONLY A FEW DAYS AWAY August 7, 2019: OUR CUSTOM INDEX CHARTS SUGGEST THE MARKETS ARE IN FOR A WILD RIDE July 30, 2019: AUGUST 19 PRICE PEAK PREDICTION IS CONFIRMED BY OUR ADL PREDICTIVE SYSTEM July 13, 2019: MID-AUGUST IS A CRITICAL TURNING POINT FOR US STOCKS Originally, our research team identified July 2019 as a market top potential back in April/May 2019.  Later, our research team updated our analysis to include the August 19 breakdown date prediction based on our advanced predictive modeling tools and cycle analysis tools.  This became a critical event in the minds of our research team because it aligned with much of our other predictive research and aligned perfectly with what we were seeing in the charts as we neared the Summer. The top prediction for July 2019 by our research team became true as we entered early August.  This confirmation of our research and prediction back in April/May helped to solidify our belief that our August 19th breakdown prediction would likely become valid as well.  Whenever we make a prediction many months in advance, one has to understand that we are using our predictive analysis tools to suggest what price “wants” to try to do in the future.  External events can alter the price level by many factors to create what we call a “price anomaly”.  When the external events and price predictive outcomes align as they have been doing over the past 4+ months, it lends quite a bit of credibility to our earlier predictive research. In other words, we couldn’t be happier that our research team has been able to deliver incredible insight and analysis regarding the global markets and how the price will react over the past 4+ months.  This is something no other investment research firm on the planet is capable of doing with any degree of accuracy right now.  In fact, it is amazing to us that we’ll read some research post by a multi-national investment firm that may suggest something now that we’ve alerted our followers to 90 days earlier.

Now, onto some new details about the August 19th breakdown event…

First, be very cautious about investing in Cryptos throughout this event.  The initial move, if our research continues to play out, maybe an upside rally in BitCoin based on fear as the global markets start a breakdown process.  But we believe this move in Cryptos will be very short-lived as our current research suggests central banks, governments, and other institutions are getting ready to pounce on unregulated Crypto Currencies.  It is our belief that the breakdown event will possibly push Bitcoin higher on a “move to safety” rotation.  But once Bitcoin investors understand that governments and institutions are targeting these digital currency exchanges as criminal enterprises that threaten central banks and that there is no real safety in putting capital into a digital enterprise that can be shut down in minutes, we believe a rush to the exits will begin to take place. We believe the shift to real physical assets will take place as a shift in asset valuations continues to take place.  We believe the downside risk in Bitcoin is currently at least 30 to 40% from current values.  Our initial downside target is a level near $5570 for Bitcoin with potential for price support near $7900.

Daily Bitcoin Chart

This Daily Bitcoin chart highlights arrows that we drew in mid-July based on our expectations for future price rotation.  You can see that price, for the most part, followed our expectations and stayed within the Fibonacci price channel, near the lower price levels, while navigating the MAGENTA Fibonacci price amplitude arc (across the tops in price) as it moved towards our August 19th breakdown date.  It is critical to understand that price will attempt to either establish new price highs or new price lows based on Fibonacci price theory.  It is our belief that an upside rally towards the $11,300 level will be the “last rally” before a breakdown price trend pushes Bitcoin much lower.  This is likely the reaction of the “flight to safety” that we suggested earlier.

Weekly Bitcoin Chart

This Weekly Bitcoin chart provides a broader picture of the same event and how it will likely play out in the near future.  Remember, initially, global investors will attempt to pike into anything that is quick, easy and efficient to protect against perceived capital risks.  We are certain that some investors will attempt to pile into Cryptos as the breakdown event starts.  The question is, will this transition of capital stay safe long enough for investors to capitalize on the move?  We don’t believe so based on our research. If the price of Cryptos breaks through that Magenta Fibonacci price amplitude arc and initiates a move to new higher highs, then we’ll have to rethink our analysis.  But for right now, we are sticking to our belief that Cryptos will see an impulse rally that will quickly be followed by a breakdown event (likely the result of some government intervention or broader risk event).

Weekly S&P 500 Chart

This Weekly S&P 500 chart highlights what we believe is the most likely immediate price trend related to the October 2018 price decline.  If a downside price move does initiate as we expect because of the August 19 breakdown inflection point, we believe the S&P will target immediate support above $2400.  If you’ve followed any of our research, you already understand we believe the move dynamic economies on the planet are uniquely situated to actually benefit from this downside price event.  Therefore, we must understand that a “price exploration event”, like this, is a mechanism for investors to seek out true value levels for global assets.  All major price corrections are, in essence, a process of seeking out price levels where investors believe “true value” exists.

NASDAQ Weekly Transportation Index

The NASDAQ Transportation Index paints a very clear picture for our research team.  In fact, we find the TRAN particularly useful in our research of the global and US markets.  Even though we follow dozens of symbols and instruments, one of our key objectives is to attempt to validate our analysis across multiple instruments/charts and to attempt to identify faults in our expected outcomes. The recent downside price move in the TRAN aligns perfectly with our August 19 breakdown expectation.  It is very likely that some news or pricing event over the next 7+ days pushes the TRAN below the RED price channel and downward towards the middle Standard Deviation level near $3900.  Once the TRAN breaks the RED support level, you should expect the US and global markets to also begin a broader move lower. Ideally, the $3500 level should operate as a moderately hard price floor for this downside move.  $3900 would be considered the initial target of the downside price move whereas $3500 would be considered the initial “hard floor” support level.  Given these expectations, we have to consider the potential for a -15% to -25% initial downside price move in TRAN which would translate into a -18% to -35% downside price move in the S&P or NASDAQ.

CONCLUDING THOUGHTS:

In closing, August 19th is tomorrow (Monday).  This is where we’ll find out if our prediction will be viewed in the future as accurate or not.  The one thing about making public predictions for many months in advance is that you can’t go back and try to lie to your followers/readers.  Either it works out as we suggested or it does not.  We believe in the skills of our research team and predictive modeling systems.  We’ve seen how accurate they have been in the past and we believe we’ve delivered top-tier analysis to all of our followers and readers.  In fact, we know you can’t find anything like this type of research from other investment or research firms. Over the next 10 to 30+ days, we’ll be able to look back at our August 19th prediction and say “we were right” or “we were wrong” – that is part of trading, folks.  You use your best tools to make an educated assessment of current and future expectations, then act on it (if you want).  We’ll follow up on the other side of August 19th with all of you. Stay fluid as this event plays out, and most importantly, know that we don’t blindly trade on predictions, we use our short-term technical analysis and current market trends to enter and exit trades. The reality is, no matter if the markets roll over and crash or rocket higher, we will follow and trade with the market. The best thing about being technical traders is we don’t care which way the markets go. We just analyze and trade with the current market trend and make money in both directions and at the drop of a hat! If you want to trade and invest without the stress of a pending market collapse or missing out on another extended rally to new highs then join my Wealth Building Newsletter today and copy my proven technical trading setups and trade with me! Chris Vermeulen www.TheTechnicalTraders.com

August 19 (Crazy Ivan) Event Only A Few Days Away

Our researchers have created this research post to highlight a big price move based on super-cycle research and patterns that should begin on or near August 19, 2019.  Back in April/May 2019, we started warning of a critical top formation we believed was aligned for July 2019.  In May/June, we altered this date to align more closely with our super-cycle research and determined the August 19, 2019 date. It is our belief that this date will initiate a breakdown price move that may align with external news related or economic related data.  Our research continues to point to the potential for a large global breakdown in equity prices related to some type of near-crisis event.  It could be related to something within the US or outside the US – but either way, we slice it, August 19 looks to be the date we need to focus on. – Crazy Ivan Market Prediction for Stock Market and Volatility Article – Crazy Ivan Precious Metals Prediction Article

FANG Custom Index Weekly Chart

This FANG custom index weekly chart highlights how our Fibonacci Price Amplitude Arcs work in alignment with price rotation and trends.  The theory behind this analysis is that price trends operate at a frequency and amplitude that we can map out – much like Tesla’s theory of Mechanical Resonance. In our studies, we have learned how to identify relative price amplitude and frequency factors, then align these to price peaks and valleys.  The result is that we can see where hidden support and resistance channels form and where the price will potentially reach an “inflection point”. Right now, this week and next on this FANG chart are likely to see increased volatility and the potential for a price breakdown as the current RED arc level sets up a massive resistance channel.

Custom Smart Cash Index Chart

Our custom Smart Cash Index chart is also highlighting an overall weakness in the US and global markets.  Once this chart breaks the lower price channel level, there is a very strong possibility that this index will break down toward the $134 level (or lower) as the global markets attempt to identify price support.  Overall lows could target the $111 level (seeing in 2016) if the breakdown is excessive.

Custom Volatility Index

This Custom Volatility Index is suggesting a deeper price low is setting up if the August 19 breakdown date acts as we suspect.  If the global markets break lower, then this Custom Volatility Index will be pushed into an extreme low territory (below 5.5) were a very deep bottom/base will setup (as we have seen before).  If it reaches levels below 4.0, then we should be very close to a very deep “V” type bottom. The recovery from this base/bottom will likely be somewhat extended as the shift in the capital around the globe seeks out the best, safest locations and returns.  We believe this bottom will complete near the end of 2019 or into early 2020 where the US markets will quickly gain acceptance as the location for global assets to avoid extended risks.

What Does All This Mean?

August 19 is only a few days away and we could see fireworks start in the global financial market place. If our analysis is correct, we have only 4 to 7+ days before a major breakdown in price starts and we are yet unsure of the source or intensity of this event if there is one. Multiple analysis types are pointing to August as a key turn date and the market could fall by as much as 16-25% if there is a trigger event to spark the crisis. What should you do? Well, being a pilot, quasi engineer, and technical trader using logic, rules, and processes to do things. I always wait for the price to confirm a new trend before taking action and entering a position. This is how we profited last week from the SP500 index falling. We traded the 2x bear fund SDS and locked in a quick profit. The days are long gone where I would buy or sell stocks or trends based on tips and forecasts. That type of trading is really called legal gambling and the odds generally are not in your favor unless you tips are coming from insiders who actually know something. Using technical analysis and proven strategies we can follow the market trends and profit from them no matter which the market moves. We bet with the market (the house) and provide entry, target, and stops for all trades we initiate.

Join Me And Trade With a Proven Strategy Today!

Chris Vermeulen www.TheTechnicalTraders.com

August 19 Price Peak Prediction Is Confirmed By Our ADL Predictive System

Our Adaptive Dynamic Learning (ADL) predictive price modeling system is one of the most unique and incredible predictive price utilities anyone has ever seen. Over the past 24+ months, the ADL system has been able to call nearly every market rotation in the US major indexes (the ES, NQ, and YM) as well as our incredible call in Gold from October 2018 till now.  There is really nothing on the planet that can make accurate predictions for future price activity like our ADL predictive modeling tool.

Weekly chart of the NQ – NASDAQ

This Weekly chart of the NQ (NASDAQ futures) highlights the ADL predictive modeling systems results from a price peak in late April 2019.  The results consist of 52 unique price instances that make up the future predictive price levels.  This prediction suggested that price would fall to levels near $7200 by May 27, 2019, then rally from that date to a peak level near August 19, 2019.  This new August 19 peak level will likely be near $8500 – nearly +500 pts from the current price level. Traders that have setup short positions may feel quite a bit of pressure over the next 4+ weeks as this move higher extends to align with our ADL predictive modeling system.  Overall, we believe a volatile price period in the markets may extend near this August 19 prediction where price volatility will increase and a potential for a downside price rotation may occur. Additional ADL predictive results suggest a downside potential for price to levels near $7200 as volatility increases near August 19, 2019.  These predictions are suggesting that the key date, August 19, 2019, will likely be the peak in the price for a period of time.  The downside predictions where the price is suggested to reach $7200 indicates the range of potential volatility after the August 19 peak. We have been suggesting that traders continue to scale back long positions before this peak is reached.  Ideally, we urge traders to pull some profits off the table and to prepare for this potential rotation in price as well as to prepare for increased volatility near or after August 19, 2019.  Our extended research suggests deeper support is found near $6700 and we believe a volatility increase could drive prices towards these levels in a reversion price rotation.
As of right now, the most logical expectation for the price is for a continued upside price bias lasting 3 to 4 more weeks reaching a price peak near August 19, 2019 – just as we originally predicted. The Fed rate cut we just talked about could be what spurs the market on for this final exhaustion rally. As we near that critical date, we expect to see increased volatility throughout the global stock market and we would expect the VIX to begin a spike move higher. Currently, an ADL price anomaly is setting up that may prompt a quick downside move on or after the August 19 date.  It is because of this price anomaly setup that we are suggesting the bottom for the price could be anywhere between $6500 and $7200 (ADL predicted levels).  In other words, get ready for some increased volatility and a very strong potential for a price reversion to unfold. We have seen some really strange price action in small-cap stocks this week which I will cover shortly as well, so stay tuned!

CRUCIAL WARNING SIGNS ABOUT GOLD, SILVER, MINERS, AND S&P 500

In early June I posted a detailed video explaining in showing the bottoming formation and gold and where to spot the breakout level, I also talked about crude oil reaching it upside target after a double bottom, and I called short term top in the SP 500 index. This was one of my premarket videos for members it gives you a good taste of what you can expect each and every morning before the Opening Bell. Watch Video Here. I then posted a detailed report talking about where the next bull and bear markets are and how to identify them. This report focused mainly on the SP 500 index and the gold miners index. My charts compared the 2008 market top and bear market along with the 2019 market prices today. See Comparison Charts Here. On June 26th I posted that silver was likely to pause for a week or two before it took another run up on June 26. This played out perfectly as well and silver is now head up to our first key price target of $17. See Silver Price Cycle and Analysis. More recently on July 16th, I warned that the next financial crisis (bear market) was scary close, possibly just a couple weeks away. The charts I posted will make you really start to worry. See Scary Bear Market Setup Charts.

CONCLUDING THOUGHTS:

In short, you should be starting to get a feel of where each commodity and asset class is headed for the next 8+ months. The next step is knowing when and what to buy and sell as these turning points take place, and this is the hard part. If you want someone to guide you through the next 12-24 months complete with detailed market analysis and trade alerts (entry, targets and exit price levels) join my ETF Trading Newsletter. Be prepared for these incredible price swings before they happen and learn how you can identify and trade these fantastic trading opportunities in 2019, 2020, and beyond with our  Wealth Building & Global Financial Reset Newsletter.  You won’t want to miss this big move, folks.  As you can see from our research, everything has been setting up for this move for many months. Join me with a 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial market and build wealth while others lose nearly everything they own during the next financial crisis. As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities starting to present themselves will be life-changing if handled properly.

FREE GOLD OR SILVER WITH MEMBERSHIP!

Kill two birds with one stone and subscribe for two years to get your FREE PRECIOUS METAL and get enough trades to profit through the next metals bull market and financial crisis! Chris Vermeulen – www.TheTechnicalTraders.com